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<s>[INST] Summarize the judgementAppeal No. 246 of 1967.
Appeal from the judgment and order dated October 19, 1966 of the Punjab High Court in Civil Writ No. 739 of of 1966.
N. C. Chatterjee, section C. Agarwala, R. K. Garg, K.M.K. Nairand L. M. Singhvi, for the appellant.
Niren De, Additional Solicitor General, Chetan Das Dewan, Deputy Advocate General for the State of Haryana and N. H. Hingorani, for the respondent.
436 The Judgment of the Court was delivered by Shah, J.
The State of Madhya Pradesh held an enquiry against the appellant Dr. ' Bool Chand a member of the Indian Administrative Service on charges of "gross misconduct and indiscipline" in respect of the conduct of the appellant when he was Collector District Rajgarh.
The Enquiry Officer held that in recording certain remarks "regarding association of tile Commissioner of Bhopal with one B.L. Gupta a pleader of Zirapur", the appellant was "actuated by malice" and his conduct "offended against official propriety, decorum and discipline", and that the appellant had without permission removed a safe from the Rajgarh Treasury.
The President of India served notice upon the ap pellant requiring him to show cause against the order of compulsory retirement proposed to be passed in regard to him.
The President also consulted the Union Public Service Commission.
The Union Put", Service Commission was of the view that "in the light of the findings and conclusions stated by them and having regard to all the circumstances relevant to the case.
the penalty of compulsory retirement on proportionate pension should be imposed upon" the appellant.
and they advised the President accordingly.
By order dated February 28, 1963.
the President directed that the, appellant be compulsorily retired from the Indian Administrative Service with immediate effect.
In March 1965 the appellant was appointed Professor and Head of the Department of Political Science in the Punjab Univer sity.
On June 18, 1965, the appellant was appointed Vice Chancellor of the Kurukshetra University by order of Mr. Hafiz Mohd Ibrahim who was the Chancellor of the University.
After Mr.
Hafiz Mohd. Ibrahim vacated the office of Chancellor of the University, Sardar Ujjal Singh, Governor of Punjab.
held the office of Chancellor.
On March 31, 1966, the Chancellor Sardar Ujjal Singh ordered that the appellant be Suspended from the office of Vice Chancellor, and by another order the Chancellor issued a notice requiring the appellant to show Cause why his services as Vice Chancellor of the Kurukshetra University be not terminated.
The appellant submitted his representation, and shortly thereafter filed a petition in the High Court of Punjab for a writ in the nature of mandamus quashing the order and the notice dated March, 31, 1966.
On May. 8, 1966 the Chancellor passed an order in exercise of the power under sub cl.
(vi) of cl. 4 of Sch. 1 to the Kurukshetra University Act, 1956, read with section 14 of the Punjab General Clauses Act, 1898, terminating with immediate effect "the services" of the appellant "from the office of Vice Chancellor of the Kurukshetra University".
The petition was then amended by the appellant.
and a writ of certiorari or appropriate writ calling for the record and quashing the order dated May 8. 1966, terminating the services of the appellant was also claimed.
The High Court rejected the petition filed by the appellant.
Against that 437 order, with certificate granted by the High Court, this appeal has been preferred.
The first argument raised on behalf of the appellant is that the Chancellor had no power to terminate the tenure of office of a Vice Chancellor.
It is necessary, in considering the validity of that argument, to read certain provisions of the Kurukshetra University Act 12 of 1956.
By section 4 the University is invested with the power, inter alia, to do all such things as may be necessary, incidental or conducive to the attainment of all or any of the objects of the University.
By section 7.
amongst others, the Chancellor, the Vice Chancellor and the Registrar are declared to be officers of the University.
By section 8 the powers, duties of officers, terms of office and filling of casual vacancies are to be prescribed by the statutes.
Section 14(1) provides that the statutes in Sch.
I shall be the statutes of the University and that the "Court of the University shall have the power to make new or additional statutes and to amend or repeal the statutes.
By section 21 it is provided that every salaried officer and teacher of the University shall be appointed under a written contract, which shall be lodged with the University.
By cl. 4 of Sch.
I the Vice Chancellor is declared the principal executive and academic officer of the University, and also the ex officio Chairman of the Executive Council, the Academic Council, and the Finance Committee, and is invested with authority to see that the Act.
the Statutes, the Ordinances and the Regulations are faithfully observed, and to take such action as he deems necessary in that behalf.
The Vice Chancellor is also authorised to exercise general control over the affairs of the University and to give effect to the decisions of the authorities of the University.
Sub clauses (vi) & (vii) of cl. 4 provide: "(vi) The 'Upa Kulapati ' (Vice Chancellor) shall be appointed by the 'Kulapati ' (Chancellor) on terms and conditions to be laid by the 'Kulapati ' (Chancellor).
(vii) The 'Upa Kulapati ' (Vice Chancellor) shall hold office ordinarily for a period of three years which term may be renewed. '. '.
From a review of these provisions it is clear that the Vice Chancellor is an officer of the University invested with executive powers set out in the Statutes and his appointment is to be made ordinarily for a period of three years and on terms and conditions laid down by the Chancellor.
There is no express provision in the Kurukshetra University Act or the Statutes thereunder which deals with the termination of the tenure of office of Vice Chancellor.
But on that account we are unable to accept the plea of the appellant that the tenure of office of a Vice Chancellor under the Act cannot be determined before the expiry of the period for which he is appointed.
A power to appoint ordinarily implies a power to determine the 438 employment.
In section R. Tiwari vs District Boarel, Agra,(1) it was observed by this Court at p. 67: "Power to appoint ordinarily carries with it the power to, determine appointment, and a power to terminate may in the absence of restrictions express or implied be exercised, subject to the conditions prescribed in that behalf, by the authority competent to appoint.
" A similar view was also expressed in Lekhraj Sathramdas Lalvani vs N. M. Shah, Deputy Custodian cum Managing Officer, Bombay (2) .
That rule is incorporated in section 14 of the Punjab General Clauses Act I of 1898.
That section provides: "Where, by any Punjab Act, a power to make any appointment is conferred, then, unless a different intention appears, the authority having for the time being power to make the appointment shall 'also have power to suspend or dismiss any person appointed whether by itself or any other authority by it in exercise of that power." Counsel for the appellant urged that since the general rule is given a statutory form, the validity of the exercise of the power to determine the tenure of the office of the appellant must be found in section 14 of the, Punjab General Clauses Act.
Counsel says that section 14 has no application to the interpretation of the Kurukshetra University Act, because cl.
4(vii) of the Statutes which prescribes that the appointment of a Vice Chancellor shall ordinarily be for a period of three years discloses a different intention.
But cl.
4(vii) of the Statutes does not purport to confer upon a person appointed Vice Chancellor an indefeasible right to continue in office for three years: the clause merely places a restriction upon the power of the Chancellor, when fixing the tenure of the office of Vice Chancellor.
Counsel also urged that under section 14 of the Act power to ap point includes power to dismiss, but not to determine employment.
In support of that contention he urged that in relation to the tenure of service of a public servant, the expression "to dismiss" has come to mean to determine employment as a measure of punishment.
But section 14 of the General Clauses Act is a general provision: it does not merely deal with the appointment of public servants.
It deals with all appointments, and there is no reason to hold, having regard to the context in which the expression occurs, that the authority invested with the power of appointment has the power to determine employment as a penalty, but not otherwise.
The expression "dismiss" does not in its etymological sense necessarily involve any such meaning as is urged by counsel (1) ; (2) ; 439 for the appellant.
The implication that dismissal of a servant involves determination of employment as a penalty has been a matter of recent development since the Government of India Act, 1935, was enacted.
By that Act certain restrictions were imposed upon the power of the authorities to dismiss or remove members of the civil services, from employment.
There is no warrant however for assuming that in the General Clauses Act, 1898, the expression "dismiss" which was generally used in connection with the termination of appointments was intended to be used only in the sense of determination of employment as a measure of punishment.
The expression "Punjab Act" is defined in section 2(46) of the Punjab General Clauses Act as meaning an Act made by the Lieutenant Governor of the Punjab in Council under the Indian Councils Acts, 1861 to 1909, or any of those Acts, or the Government of India Act, 1915, or by the Local Legislature or the Governor of the Punjab under the Government of India Act, or by the Provincial Legislature or the Governor of the Punjab, or by the Provincial Legislature or the Governor.
of East Punjab under the Government of India Act, 1935, or by the Legislature of Punjab Linder the Constitution.
By section 14(1) of the Kurukshetra University Act 12 of 1956, it was declared that on the commencement of the Act, the Statutes of the University shall be those as set out in the Schedule 1.
The Statutes incorporated in the First Schedule were made by the Legislature and must for the purpose of section 14 of the Punjab General Clauses Act be regarded as "Punjab Act".
They do not cease to be "Punjab Act" merely because they are liable to be altered by the University Court in exercise of the power conferred by section 14(2) of the University Act.
It was also urged that whereas provision was made by cl. 6 of the Annexure to Ordinance XI that the services of the tea hers may be summarily determined on the ground of misconduct, .here was no such provision for determination of the employment of the Vice Chancellor and that also indicated an intention to the contrary within the meaning of section 14 of the Punjab General Clauses Act.
We are unable to agree with that contention.
It is true,.
the office of the Vice Chancellor of a University is one of great Responsibility and carries with it considerable prestige and authority.
But we are unable to hold that a person appointed a Vice Chancellor is entitled to continue in office for the full period of ' his appointment even if it turns out that he is physically decrepit, mentally infirm, or grossly immoral.
Absence of a provision setting up procedure for determining the employment of the Vice Chancellor in the Act or the Statutes or Ordinances does not, in our judgment, lead to the inference that the tenure of office of Vice Chancellor is not liable to be determined.
The first contention raised by counsel for the appellant must therefore fail.
It was then urged by counsel for the appellant that the Chancellor was bound to hold an enquiry against the appellant before 440 determining his tenure, and the enquiry must be held in consonance with the rules of natural justice.
The Additional Solicitor General submitted that since the claim for relief by the appellant was founded on an alleged breach of contract, the remedy of the appellant, if any, lay in an action for damages, and not in a petition for a high prerogative writ.
The Additional Solicitor General invited our attention to the averments made in the petition filed by the appellant that the Chancellor "was bound by the letter of appointment which created a tenure of office for three years" and which the Chancellor could not unilaterally determine in the purported exercise of an assumed power, and that in any event no such circumstances had been disclosed which would entitle the Chancellor to avoid the contract of service which was binding on the University, and submitted that since it was the appellant 's case that his appointment as Vice Chancellor was purely contractual, and the Chancellor had no power unilaterally to determine the contract, no relief of declaration about the invalidity of the order of the Chancellor may be granted in exercise of the jurisdiction of the High Court to issue high prerogative writs, and the only remedy which the appellant is entitled to claim is compensation for breach of contract, in action in a Civil Court.
It is true, as pointed out by the Judicial Committee of the Privy Council in A. Francis vs Municipal Councillors of Kuala Lumpur(1), that when there has been purported termination of a contract of service, a declaration that the contract of service still subsisted would rarely be made and would not be made in the absence of special circumstances, because of the principle that the Courts do not grant specific performance of contracts of service.
The same view was expressed in Barber vs Manchester Regional Hospital Board and Anr(2) and in Vidyodaya University of Ceylon and Ors.
vs Silva(3).
In these cases the authority appointing a servant was acting in exercise of statutory authority but the relation between the person appointed and the employer was contractual, and it was held that the relation between the employer and the person appointed being that of master and servant, termination of relationship will not entitle the servant to a declaration that his employment bad not been validly determined.
If the appointment of the Vice Chancellor gave rise to the relation of master and servant governed by the terms of appointment, in the absence of special circumstances, the High Court would relegate a party complaining of wrongful termination Of the contract to a suit for compensation, and would not exercise its jurisdiction to issue a high prerogative writ compelling the University to retain the services of the Vice Chancellor whom the University does not wish to retain in service.
But the office of a (1) (2) (3) 441 Vice Chancellor is created by the University Act: and by his appointment the Vice Chancellor is invested with statutory powers and authority under the Act.
The petition filed by he appellant in the High Court is a confused document.
Thereby the appellant did plead that the relation between him and the University was contractual, but that was not the whole pleading.
The appellant also pleaded, with some circumlocution that since he was appointed to the office, of Vice Chancellor which is created by the Statute, the tenure of his appointment could not be determined without giving him an opportunity to explain why his appointment should not be terminated.
The University Act, the Statutes and the Ordinances do not lay down the conditions in which the appointment of the Vice Chancellor may be determined, nor does the Act prescribe any limitations upon the exercise of the power of the Chancellor to determine the employment.
But once the appointment is made in pursuance of a Statute, though the appointing authority is not precluded from determining the employment, the decision of the appointing authority to terminate the appointment may be based only upon the result of an enquiry held in a manner consistent with the basic concept of justice and fairplay.
This Court observed in State of Orissa vs Dr. (Miss) Binapani(1) it p. 1271: "It is one of the fundamental rules of our constitutional set up that every citizen is protected against exercise of arbitrary authority by the State or its officers.
Duty to act judicially would, therefore, arise from the every nature of the function intended to be performed, it need not be shown to be super added.
If there is power to decide and determine to the prejudice of a person, duty to act judicially is implicit in the exercise of such power.
If the essentials of justice be ignored and an order to the prejudice of a person is made, the order is a nullity.
That is a basic concept of the rule of law and importance thereof transcends the significance of a decision in any particular case.
" The power to appoint a Vice Chancellor has its source in the University Act: investment of that power carries with it the power to determine the employment; but the power is coupled with duty.
The power may not be exercised arbitrarily, it can be only exercised, for good cause, i.e. in the interests of the University and only when it is found after due enquiry held in manner consistent with the rules of natural justice, that the bolder of the office is unfit to continue as Vice Chancellor.
In Ridge vs Baldwin and Others(1) a chief constable who was subject to the Police Acts and Regulations was, during the pendency of certain criminal proceedings in which he was arrested (1) ; (2) [1964] A.C. 41.
442 and charged together with other persons, with conspiracy to obstruct the course of justice, was suspended from duty by the borough watch committee.
The chief constable was acquitted by the jury on the criminal charges against him and he applied to be reinstated.
The watch committee at a meeting decided that the chief constable had been negligent in the discharge of his duties and in purported exercise of the powers conferred on them by section 191(4) of the Act of 1882 dismissed him from office.
No specific charge was formulated against him, but the watch committee in arriving at their decision, considered his own statements in evidence and the observations made by the Judge who acquitted him.
in support of the order of dismissal.
The chief constable appealed to the Home Secretary who held that there was sufficient material on which the watch committee could properly exercise their power of dismissal under section 191(4).
The decision of the Home Secretary was made final and binding on the parties by section 2(3) of the, Police Appeals Act, 1927.
The chief constable then commenced ' an action for a declaration that the purported termination of his appointment as chief constable was illegal, ultra vires and void,, and for payment of salary.
The action was taken in appeal to the House of Lords.
The House of Lords (Lord Evershed dissenting) held that the decision of the watch committee to dismiss the chief constable was null and void, and that accordingly notwithstanding that the decision of the Home Secretary was made final and binding on the parties, that decision could not give validity to the decision of the watch committee.
Lord Reid observed at p. 65: "So I shall deal first with cases of dismissal.
These appear to fall into three classes: dismissal of a servant by his master, dismissal from office held during pleasure, and dismissal from an office where there must be something against a man to warrant his dismissal.
The law regarding master and servant is not in doubt.
There cannot be specific performance of contract of service, and the master can terminate the contract with his servant at any time and for any reason or for none.
But if he does so in a manner not warranted by the contract he must pay damages for breach of contract.
So the question in a pure case of master and servant does not at all depend on whether the master has beard the servant in his own defence: it depends on whether the facts emerging at the trial prove breach of contract.
Then there are many cases where a man holds an office at pleasure.
Apart from judges and others whose tenure of office is governed by statute, all servants and officers of the Crown hold office at pleasure, and this has been held even to apply to a colonial judge (Terrell vs Secretary of State for the Colonies It has always been held, I think rightly, and the reason is clear.
As the person having the power of dismissal need 443 .lm15 not have anything against the officer, he need not give any reasons.
So I come to the third class, which includes the present case.
There I find an unbroken line of authority to the effect that an officer cannot lawfully be dismissed without first telling him what is alleged against him and hearing his defence or explanation.
" The case of the appellant falls within the third class mentioned by Lord Reid, and the tenure of his office could not be interrupted without first informing him of what was alleged against him and without giving him an opportunity to make his defence or explanation.
The Chancellor Sardar Ujjal Singh did issue a notice upon the appellant requiring him to show cause why the tenure of his service should not be terminated.
The appellant made a representation which was considered, and his tenure was determined because in the view of the Chancellor it was not in the public interest to retain the appellant as Vice Chancellor.
The appellant was informed of the grounds of the proposed termination of the tenure of his office and an order giving detailed reasons was passed by the Chancellor.
But the appellant contended that in arriving at his decision.
the Chancellor misread the order of the President and took into consideration evidence which was not disclosed to the appellant, and failed to consider evidence in his favour which was on the, record.
It is true that the order of the President only recites that the appellant was compulsorily retired as an officer of the Madhya Pradesh Cadre of the Indian Administrative Service: it does not expressly state that the order of compulsory retirement was imposed as a penalty.
But a review of the disciplinary proceedings against the appellant which culminated in the order of the President leaves no room for doubt.
The order of compulsory retirement was passed against the appellant as a penal order.
There is no substance in the plea that the order of the Chancellor was vitiated, since the Chancellor in ascertaining the true.
effect of the order of the President took into consideration a letter from the Secretary (Services), Government of India, Ministry of ' Home Affairs, dated May 6, 1966.
The letter which has been set out in the order of the Chancellor merely catalogues the various, steps taken by the different authorities which considered the case of the appellant before the order of compulsory retirement of the appellant from the Indian Administrative Service was passed by the President.
That letter contains no new material.
The plea that the Chancellor was influenced by evidence which was not disclosed to the appellant is also without substance.
444 It appears that before he passed the order of suspension the Chancellor had received letter from Prof. D.C. Sharma and Dr. A. C. Joshi in answer to enquiries made by him relating to the circumstances in which the appellant was appointed to the post of Professor of Political Science in the University of Punjab, and these letters were not disclosed to the appellant.
Counsel for the appellant says that these letters indicate that the University authorities fully knowing that the appellant was compulsorily retired from the Indian Administrative Service, appointed him as Vice Chan cellor.
But the appellant did not specifically plead or make out the case that the Chancellor Mr. Hafiz Mohd. Ibrahim was made aware of the order of compulsory retirement.
The Chancellor Sardar Ujjal Singh in passing the impugned order considered the grounds set up in the representation and then posed the question whether his predecessor in office, when he made the appointment of the appellant was aware of the fact that the appellant had been compulsorily retired as a measure of punishment from the Indian Administrative Service, and came to the conclusion that there was nothing to show that he Mr.
Hafiz Mohd. Ibrahim was aware of the order of compulsory retirement.
In paragraph .13 of his order, the Chancellor Sardar Ujjal Singh observed: "At the time of his appointment as Vice Chancellor, the fact of his compulsory retirement was not known to the Chief Minister or the then Chancellor.
The alleged knowledge of the fact of compulsory retirement on the part of the Chief Minister, Cabinet or the previous Chancellor is, therefore, without any basis.
" Unless he was moved in that behalf by the appellant it was not the duty of the Chancellor Sardar Ujjal Singh, before he passed the order against the appellant determining the tenure of his appointment, to enquire of Mr. Hafiz Mohd. Ibrahim who passed the order of appointment and of the Chief Minister, Punjab, whether they had come to know of the order of the President.
In the petition filed before the High Court the petitioner merely averred in ground (iv) (d) that "the order of the Chancellor was vitiated, inter alia, because the Chancellor had without any material come to a conclusion that there was no basis to allege knowledge of the fact of compulsory retirement on the part of the Chief Minister or the Cabinet or the previous Chancellor": he did not set up the case that the Chancellor had information about the order of the President.
His principal plea was that he was under no obligation to disclose that he was compulsorily retired from the Indian Administrative Service.
In the affidavit filed by Sardar Ujjal Singh, the assertion made in ground (iv) (d) is denied.
Affidavits of Mr. Hafiz Mohd. Ibrahim and Mr. Ram Kishan.
Chief Minister.
Punjab, were also filed before the High Court.
and it was averred that neither of them knew at the time when the appointment was made that the appellant bad been compulsorily retired by the President from the Indian Administrative Service.
445 Mr. Hafiz Mohd. Ibrahim further averred that "this information did not also come to his notice so long he remained Chancellor of the Kurukshetra University", and that if the fact of compulsory retirement of the appellant as a penalty had been within his know .
ledge, he would not have appointed the appellant as Vice Chancellor.
Even after the affidavits by Mr. Hafiz Mohd. Ibrahim and Mr. Ram Kishan were filed, the appellant by his supplementary affidavit which was filed on July 27, 1966, did not contend that, Mr. Hafiz Mohd. Ibrahim or the Chief Minister had information about the determination of his employment in the Indian Administrative Service.
His plea was that the members of the syndicate.
the members of the senate and the Vice Chancellor of the Punjab University had knowledge about determination of his employment.
when lie was appointed Professor of Political Science; and that plea.
we agree with the High Court, was wholly irrelevant.
It is true that the Chancellor in his order recorded that Mr. Hafiz Mohd. Ibrahim did not know at the time of making the appointment of the appellant to the office of Vice Chancellor that he was compulsorily retired from the Indian Administrative Service.
But no inference arises therefrom that Sardar Ujjal Singh before he passed the orders made any enquiries or had access to evidence which was not disclosed to the appellant.
We are unable to agree with counsel for the appellant that before a conclusion could be recorded, it was the duty of Sardar Ujjal Singh to ascertain from Mr. Hafiz Mohd. Ibrahim and Mr. Ram Kishan whether they were aware before the appellant was appointed Vice Chancellor of the order passed by the President.
The Chancellor, Sardara Ujjal Singh.
was, in Our judgment, under no obligation.
unless moved by the appellant, to hold such enquiry.
It was for the appellant to take up the defence that Mr. Hafiz Mohd. Ibrahim was informed of the order of the President and to take steps to prove that fact.
He did not take up that defence, and he cannot no,, seek to make out the case that the order was vitiated because the Chancellor Sardar Ujjal Singh did not make an enquiry which the Chancellor was never asked to make.
The reference to the letter of Prof. D. C. Sharma in the order of the Chancellor has no bearing either on the true effect of the order of the President or on the question whether the Chancellor was cognizant of the order passed by the President.
The argument that when considering the letter of Prof. D.C. Sharma, the Chancellor should have also considered the letter of Dr. A.C. Joshi requires no serious consideration.
The letters of Prof. D. C. Sharma and Dr. A. C. Joshi are.
in our judgment.
irrelevant in considering whether the Chancellor Mr. Hafiz Mohd. Ibrahim was aware of the order passed by the President.
It is impossible to raise an inference that because the order of the President was gazetted and certain members of the syndicate and senate were aware of tile order of the President, knowledge must also be attributed to the Chancellor.
446 The proceeding resulting in the order passed by the Chancel lor does not suffer from any such infirmity as would justify this Court in holding that the rules of natural justice were not complied with.
It is unnecessary in the circumstances to consider the argument advanced by the Additional Solicitor General that even if Mr. Hafiz Mohd. Ibrahim was aware of the order passed by the President ordering compulsory retirement of the appellant from the Indian Administrative Service, it was still open to his successor Sardar Ujjal Singh to determine the tenure of office of the appellant as Vice Chancellor, if in his view it appeared, having regard to the antecedents of the appellant, that the appellant was unfit to continue as Vice Chancellor.
We agree with the High Court that.
the appellant had the fullest opportunity of making his representation and that the enquiry held by the Chancellor was not vitiated because of violation of the rules of natural justice.
In the very scheme of our educational set up at the Univer sity level, the post of Vice Chancellor is of very great importance, and if the Chancellor was of the view, after making due enquiry, that a person of the antecedents of the appellant was unfit to continue as Vice Chancellor, it would be impossible, unless the plea that the Chancellor acted maliciously or for a collateral purpose is made out, for the High Court to declare that order ineffective.
The plea that the Chancellor acted mala fide was raised, but was not pressed before the High Court.
The appeal therefore fails.
There will be no order as to costs.
R. K. P. section Appeal dismissed.
[/INST]The appellant was a member of the Indian Administrative Ser vice in the Madhya Pradesh Cadre and was compulsorily retired from the Service for misconduct by an order of the President in February, 1963.
In June, 1965 he was appointed Vice Chancellor of the Kurukshetra University, by the then Chancellor of the University.
On March 31, 1966 the new Chancellor who Was in office at the time, ordered the suspension of the appellant from the office of Vice Chan cellor and also issued to him a notice to show cause why his services I should not be terminated.
The appellant filed a petition in the High Court seeking a writ in the nature of mandamus to quash the Chancellor 's order of suspension.
In the meantime the Chancellor passed an order on May 8, 1966, in exercise of the power under Clause 4(vi).
of Schedule I to the Kurukshetra University Act, 1956, read with s.14 of the Punjab General Clauses Act, 1898, terminating the services of the appellant with immediate effect.
The appellant then amended his petition and sought a writ of certiorari to quash the order of May 8, 1966.
The High Court rejected the petition.
In appeal to this Court, it was contended on behalf of the appellant, inter alia, (i) that the Chancellor had no power under the Act or the Statutes to terminate the tenure of office of a Vice Chancellor; and (ii) that the Chancellor was bound to hold an enquiry in accordance with the rules of natural justice before determining the appellant 's tenure, but the appellant had not been given a proper opportunity to explain why his services should not be terminated and, furthermore, the Chancellor had taken into consideration evidence which was not disclosed to the appellant.
On the other hand, it was contended for the respondent that since the claim for relief by the respondent was founded on an alleged breach of contract, the remedy of the appellant, if any, lay in an action for damages and not in a petition for a high prerogative writ.
HELD, dismissing the appeal: (i)The absence of a provision setting up the procedure for determining the employment of the Vice Chancellor in the Act or the Statutes or Ordinances does not lead to the inference that the tenure of office of Vice Chancellor is not liable to be determined.
[439H] A power to appoint ordinarily implies a power to determine employment and this rule is incorporated in s.14 of the Punjab General Clauses Act I of 1898.
[437H 438A] S.R. Tiwari vs District Board, Agra, ; and Lekhraj Sathramdas Lalvani vs N. M. Shah, Deputy Custodian cum Managing Officer, Bombay; , ; referred to.
435 An intention contrary to the rule was not evidenced either by the fact that under Clause 4(vii) of the Statutes the appointment of a Vice Chancellor is for three years or because there was no express provision covering the determination of service of a Vice Chancellor for misconduct as there was in the case of teachers.
Clause 4(vii) of the Statutes does not purport to confer upon a person appointed Vice Chancellor an indefeasible right to continue in office for three years; the clause merely places a restriction upon the power of the Chancellor, when fixing the tenure of the office of Vice Chancellor.
It could not be held that a person appointed a Vice Chancellor is entitled to continue in office for the full period of his appointment even if it turns out that he is physically decrepit, mentally infirm, or grossly immoral.
[438E F; 439G H] S.14 of the General Clauses Act is a general provision: it does not merely deal with the appointment of public servants.
It deals with all appointments, and there is no reason to hold, having regard to the context in which the expression occurs, that the authority invested with the power of appointment has the power to determine employment as a penalty, but not otherwise.
[438G H] (ii)The new Chancellor did issue a notice upon the appellant requiring him to show cause why the tenure of his service should not be terminated and the appellant made a representation which was considered; the appellant was informed of the grounds of the proposed termination of the tenure of his service and an order giving detailed reasons was passed by 'the Chancellor.
The High Court had rightly held on the facts that the appellant had the fullest opportunity of making his representation and that the inquiry held by the Chancellor was not vitiated because of any violations of the rules of natural justice.
[443D; 446C] (iii) The power to appoint a Vice Chancellor has its source in the University Act: investment of that power carries with it the power to determine the employment but that power may not be exercised arbitrarily; it can be only exercised for good cause, i.e. in the interests of the University and only when it is found after due enquiry held in a manner consistent with the rules of natural justice, that the holder of the office is unfit to continue as Vice Chancellor.
[441G] A.Francis vs Municipal Councillors of Kuala Lumpur, ; Barber vs Manchester Regional Hospital Board and Anr., ; Vidyodaya University of Ceylon and Ors.
vs Silva.
; State of Orissa vs Dr. (Miss) Binapani, ; ; Ridge vs Baldwin and Ors.
[1964] A.C. 41; referred to.
</s>
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<s>[INST] Summarize the judgementN: Criminal Appeal No. 238 of 1988.
From the Judgment and Order dated 4.8.1986 of the Punjab and Haryana High Court in Criminal Appeal No. 329 DB of 1986 and Murder Reference No. 2 of 1986.
Mrs. Urmila Kapoor and Ms. section Janani for the Appellant.
R. section Suri for the Respondent.
The Judgment of the Court was delivered by OJA, J.
This appeal has come to this Court on grant of leave against the conviction of the appellant under Section 302 and sentence of death and also his conviction under Section 201 IPC and sentence of 7 years rigorous imprisonment and fine of Rs.200 awarded by Sessions Judge, Ferozepur and confirmed by the High Court of Punjab & Haryana.
The appellant is convicted for having committed the murder of his father and son.
It is alleged that deceased Banta Singh father of the present appellant owned 4 5 killas of land situated at Ferozepur Road where a tube well was also installed by the side of a samll kotha where he alongwith his grandson Seva Singh used to live away from the house where the appellant resided.
It is alleged that Seva Singh was crippled and used to move about on a tricycle Banta Singh and Seva Singh used to go to Gurudwara of their village to render services.
Banta Singh had only one son i.e. present appellant whereas the appellant had a son Seva Singh the deceased from his first wife (since deceased).
Later he married second time and had two children, but she also died.
At present he has the third wife and with her, he has two sons.
616 It was alleged, as motive for the offence, that the appellant used to quarrel with his father and son in connection with land owned by father as the latter wanted to transfer his land in the name of Seva Singh who used to live with the grandfather.
According to the prosecution a day prior to Amawasaya of Chet 1985 (May 1985) when Nihal Singh (PW 2) was rendering services with Banta Singh and Seva Singh at Gurudwara at about 5 p.m. the appellant went to the Gurudwara and told his father and son that in the evening a truck of Car Seva would come from Fazilka and that they would go to Amritsar to take the holy bath.
On this representation, appellant took Banta Singh and Seva Singh from the Gurudwara.
It is alleged that on the same day at about 10 p.m. when Nihal Singh was proceeding to his fields for guarding his tubewell he met the accused on the way and found carrying dang with him.
On being questioned by Nihal Singh as to why he was there and why he did not go to Amritsar, the appellant replied that Banta Singh and Seva Singh were sent to Amritsar by him in a truck of Car Seva.
It is further alleged that when Nihal Singh did not see for sometime Banta Singh and Seva Singh he felt suspicious and lodged a report dated 10 October 1985 in the Police Station Mamdot.
That became the FIR (exhibit PG).
S.I. Puran Singh who recorded the statement of Nihal Singh raided the house of the appellant who it is alleged was not present.
On 13 of August 1985, it is alleged that the appellant made an extra judicial confession to one Amrik Singh and Amrik Singh produced the appellant before the Police.
On 15 August, 1985, a memorandum under Section 27 of the evidence Act was recorded by the Investigating officer at the instance of the appellant and later the dead bodies of Banta Singh and Seva Singh were recovered from a field.
It is also alleged that at that time there was a Jhinjan crop standing in the field.
The dead bodies were identified by one Channan Singh who was a Panch witness.
The tricycle and other articles were recovered from the Kotha at the instance of the appellant.
On the basis of this evidence, the courts below convicted the present appellant.
The circumstances which have been found against the appellant are: (i) Last seen with the deceased at the Gurudwara by.
Nihal Sing (ii) extra judicial confession made to Amrik Singh (iii) the statement under Section 27 leading to discovery of dead bodies and (iv) recovery of tricycle and other articles from the Kotha where the two deceased used to reside and the motive alleged against the appellant.
617 Learned counsel for the appellant contended that as against the motive is concerned.
the appellant at the trial had produced a will A executed by deceased Banta Singh wherein he has given away all his lands to the appellant.
In the cross examination of prosecution witnesses it was suggested that . that his brother in law Manjit Singh was interested in getting the property transferred in his name or in his wife 's name.
It was also argued that extra judicial confession even otherwise is a very weak piece of evidence and in this case it is strange that the appellant chose this Amrik Singh to make an extra judicial confession and the reasons suggested by Amrik Singh also do not appear to be justifiable.
Similarly it was said that the recovery of dead bodies and the memorandum of the statement leading to the discovery are of no consequence as even according to the Investigating officer he had learnt from Amrik Singh that the dead bodies were in the field but he felt that the information he had got was not sufficient and therefore he recorded the information under Section 27 given by the appellant.
In our opinion, these contentions are well founded and must be accepted as correct.
The field where the bodies were recovered is an open place.
It is alleged that there was Jhinjan crop standing in the field and prosecution has not led any evidence to indicate as to who was in possession of the field and who cultivated the crop which was standing at that time.
We will discuss this part of the case in detail a little later.
It is very significant to note that according to the medical opinion bodies were recovered about three months after the death.
The bodies were found disintegrated.
It was difficult to identify.
The disintegration has gone to such an extent that the bodies could not be removed and sent for postmortem and therefore medical expert was called to the spot to perform the postmortem.
The prosecution did not examine any one of the relatives or the daughter of deceased Banta Singh or the son in law Manjit Singh to identify the dead bodies although it has appeared in evidence that during the trial Manjit Singh was present in the Court.
As to the extra judicial confession, it may be noted that Nihal Singh claims to be a person who had seen the deceased Banta Singh and Seva Singh alongwith the appellant in the month of May in the Gurudwara.
On the same night he again met the appellant and enquired about them.
The witness also stated that when he did not see the old man for some time, he became suspicious about the missing of those two persons.
This witness in order to justify his meeting with the appellant at 10 P.M.
On that day said that although his own land was at 618 a distance, he had taken some land on lease which was adjacent to the land of the appellant and so he had to go near the appellant 's house.
But in cross examination he had to admit that for the lease he had no document to support.
The prosecution has suggested that the appellant did not search for his father, but according to the appellant, the deceased had been taken away by Manjit Singh to their place on the pretext that Manjit Singh 's wife i.e. the appellant 's sister was not well and this was also put in cross examination to Nihal Singh.
In the absence of evidence of Manjit Singh, the suggestion of the appellant cannot be brushed aside.
On 10 August, 1985 F.I.R. was lodged by Nihal Singh (PW 2)1 and on 13.8.85 the appellant went to Amrik Singh (PW 3) to make an extra judicial confession.
Amrik Singh says that the appellant told him that as the Police was after him he had come and confessed the fact so that he might not be unnecessarily harrased.
There is nothing to indicate that this Amrik Singh was a person having some influence with the Police or a person of some status to protect the appellant from harrassment.
In his cross examination he admits that he is neither the Lumbardar or Sarpanch nor a person who is frequently visiting the Police Station.
He further admits that when he produced the appellant there was a crowd of 10 to 12 persons.
There is no other corroborative evidence about the extra judicial confession.
As rightly conceded by the learned counsel for the State that extra judicial confession is a very weak piece of evidence and is hardly of any consequence.
The council however, mainly relied on motive, the evidence of last seen, the evidence of recovery of dead bodies and the conduct of the appellant in not making a report about the missing father and son.
As regards the motive the will in question is sufficient to dislodge it.
An attempt was made by the learned counsel for the State to suggest that even after the will the appellant could have done away with the old man to avoid changing the will.
But the will was executed on 31 December, 1984 and it is a figment of imagination that the murder was committed apprehending that the will likely to be changed.
There is also no evidence to indicate that appellant was not having good relations with his father or that there was ever any trouble between father and the son.
In fact Nihal Singh was asked in cross examination as to whether there was any dispute between the father and son? He had to admit that there was no dispute or difference.
As regards the evidence of last seen it was the case of appellant 619 that Manjit Singh had taken Banta Singh and Seva Singh to his place on the pretext that the wife of Manjit Singh was not well.
There is no evidence led by the prosecution to negative this stand of the appellant.
Manjit Singh has not been examined although it has come in evidence that he was present in the Court when Nihal Singh was examined.
The sister of appellant was also not examined and in the absence of any such evidence to negative this stand of the appellant it could not be said that the prosecution has proved that suggestion was false.
In these circumstances, the presence of deceased Banta Singh and Seva Singh along with the appellant at the Gurudwara on the Amawasaya day in Chet could not be said to be the last seen before the murder in question.
May be, Nihal Singh saw them on that day but it is significant that no other person connected with the deceased has been produced to suggest that he was not seen thereafter.
Therefore, the evidence as to last seen also can not be considered as a piece of circumstantial evidence against the appellant.
Then we are left with the recovery of the dead bodies.
Investigating officer S.I. Puran Singh (PW 8) admitted in cross examination that after recording the statement of Amrik Singh he could not know the correct place where the bodies and other articles were kept buried and concealed.
This clearly indicates that he could get some information from the statement of Amrik Singh.
As seen earlier, the field is an open place surrounded by other fields and according to Nihal Singh the adjacent field is his own as he had taken it on lease and therefore it cannot be said that any one else could not have known about the bodies being buried in the field.
The Investigating officer himself admitted that after recording the statement of Amrik Singh he knew that the bodies were buried in the field but he felt that information was not sufficient.
It cannot therefore, be said that the place from where the bodies were recovered was such a place about which knowledge could only be attributed to the appellant and none alse.
Since the exclusive knowledge to the appellant cannot be attributed, the evidence under Section 27 also cannot be said to be a circumstances against the appellant.
As regards the recovery made from the Kotha where the deceased Banta Singh and Seva Singh used to reside there is nothing significant.
The tricycle and other belongings of the deceased were bound to be there and on that basis no inference could be drawn against the appellant.
620 In view of all these circumstances, the charge against the appellant cannot be said to have been proved beyond doubt and the conviction of the appellant Therefore cannot be sustained.
The appeal is therefore allowed.
Conviction and sentence passed against the appellant are set aside.
He is in custody.
He be set at liberty forthwith if not wanted in connection with any other case.
P.S.S. Appeal allowed.
[/INST]This was a reference under article 143(1) of the Constitution made by the President of India for obtaining the opinion of the 996 Court upon certain questions relating to the constitutional validity of some of the provisions of the Kerala Education Bill, 1957, which had been passed by the Kerala Legislative Assembly but was reserved by the Governor for the consideration of the President.
The Bill, as its title and preamble indicated, had for its object the better Organisation and development of the educational service throughout the State, presumably, in implementation of the provisions of article 45 of the Constitution and conferred wide powers of control on the State Government in respect of both aided and recognised institutions.
Of the four questions referred to this Court, the first and third impugned cl.
3(5) read with cl. 36 and cl. 15 of the Bill as being discriminatory under article 14, the second impugned cls.
3(5), 8(3) and cls.
9 to 13 Of the Bill as being violative of minority rights guaranteed by article 30(1) and the fourth, cl. 33 of the Bill, as offending article 226 of the Constitution.
Clause 3(5) of the Bill made the recognition of new schools subject to the other provisions of the Bill and the rules framed by the Government under cl.
(36), Cl.
(15) authorised the Government to acquire any category of 'Schools, cl.
8(3) made it obligatory on all aided schools to hand over the fees to the Government, cls.
9 to 13 made provisions for the regulation and management of the schools, payment of salary to the teachers and the terms and conditions of their appointment and cl.
(33) forbade the granting of temporary injunctions and interim orders in restraint of proceedings under the Act.
This Court took the view that since cl.
3(5) attracted the other provisions of the Bill, in case anyone of them was found to be unconstitutional, cl.
3(5) itself could not escape censure.
Held (per Das C. J., Bhagwati, B. P. Sinha, Jafer Imam, section K. Das and J. L. Kapur JJ.), that although article 143(1) Of the Constitution, which virtually reproduced the provisions of section 213(1) of the Government of India Act, 1935, gave this Court the discretion, where it thought fit, to decline to express any opinion on the questions referred to it, the objection that such questions related, not to a statute brought into force but, to the validity of a Bill that was yet to be enacted, could be no ground for declining to entertain the reference.
Article 143(1) of the Constitution had for its object the removal of the doubts at the President and was in no way concerned with any doubts that a party might entertain and no reference could be incomplete or incompetent on the ground that it did not include other questions that could have been included in it and it was not for this Court to go beyond the reference and discuss them.
The Advisory jurisdiction conferred by article 143(1) was different from that conferred by article 143(2) of the Constitution in that the latter made it obligatory on this Court to answer the reference.
In re Levy of Estate Duty, , relied on.
997 Attorney General for Ontario vs Hamilton Street Railway, , Attorney General for British Columbia vs Attorney General for Canada, , ln re The Regulation and Control of Aeronautics In Canada, [1932] A. C. 54, In re Allocation of Lands and Buildings, [1943] F. C. R. 20 and In Ye ; , , considered.
A directive principle of State policy could not override a fundamental right and must subserve it, but no Court should in determining the ambit of a fundamental right, entirely ignore a directive principle but should try to give as much effect to both as possible by adopting the principle of harmonious construction.
State of Madras vs Smt.
Champakam Doraiyajan, [1951] S.C.R. 525 and Mohd. Hanif Quayeshi vs The State of Bihar, ; , referred to.
In answering the questions under reference, the merits or otherwise of the policy of the Government sponsoring the Bill could be no concern of this Court and its sole duty was to pronounce its opinion on the constitutional validity of such provisions of the Bill as were covered by the questions.
judged in the light of the principles laid down by a series of decisions of this Court explaining article 14 Of the Constitution, the clauses of the Bill that came within questions 1 and 3 could not be said to be violative of that Article.
The restriction imposed by cl.
3(5) read with cl. 26 of the Bill, which made it obligatory on the guardians to send their wards to a Government or a private school in an area of compulsion and thus made it impossible for a new school in such area, seeking neither aid nor recognition, to function, could not be said to be discriminatory since the State knew best the needs of its people, and such discrimination was quite permissible, based, as it was, on geographical classification.
Mohd. Hanif Ouareshi vs The State of Bihar, [1959] section C. R. 629, Chiyanjit Lal Chowdhury vs The Union of India, , Ramkrishna Dalmia vs Sri justice section R. Tendolkar; , , referred to.
No statute could be discriminatory unless its provisions discriminated, and since the provisions of the Bill did not do so, it could not be said to have violated equal protection of law by its uniform application to all educational institutions although not similarly situate.
Cumberland Coal Co. vs Board of Revision, (1931) 284 U. section 23; ; , held inapplicable.
The policy and purpose of a statute could be deduced from its long title and the preamble.
The impugned Bill laid down its policy in the long title and the preamble and reinforced it by 998 more definite statements in the different clauses and, consequently, such discretion as it left to the Government had to be exercised in implementing that policy.
The use of the word may in cl.
3(3) could make no difference, for once the purpose was established and the conditions of the exercise of the discretion were fulfilled, it was incumbent on the Government to exercise it in furtherance of that purpose.
If it failed to do so, the failure, and not the Bill, must be censured.
Biswambar Singh vs The State of Orissa, ; and Julius vs Lord Bishop of Oxford, (1880) 5 App.
CaS. 214, referred to.
Discretionary power was not necessarily discriminatory, and abuse of power by the Government could not be lightly assumed.
Apart from laying down the policy, the State Legislature provided for effective control by itself by cl. 37 and the proviso to cl. 15 of the Bill.
It could not, therefore, be said that the Bill conferred unguided or uncontrolled powers on the Government.
Article 30(1) Of the Constitution, which was a necessary concomitant to article 29(1) and gave the minorities the right to establish and administer their institutions, did not define the word 'minority ', nor was it defined anywhere else by the Constitution, but it was absurd to suggest that a minority or section envisaged by article 30(1) and article 29(1) could mean only such persons as constituted a numerical minority in the particular region where the educational institution was situated or resided under a local authority.
Article 350 A of the Constitution, properly construed, could lend no support to such a proposition.
As the impugned Bill extended to the entire State, minorities in the State must be determined on the basis of its entire population, and thus the Christians, the Muslims and the Anglo Indians would be its minority communities.
Article 30(1) of the Constitution made no distinction between minority institutions existing from before the Constitution or established thereafter and protected both.
It did not require that a minority institution should be confined to the members of the community to which it belonged and a minority institution could not cease to be so by admitting a non member to it.
Nor did article 30(1) in any way limit the subjects to be taught in a minority institution, and its crucial words " of their own choice ", clearly indicated that the ambit of the rights it conferred was determinable by the nature of the institutions that the minority communities chose to establish and the three categories into which such institutions could thus be classified were (1) those that sought neither aid nor recognition from the State, (2) those that sought aid, and (3) those that sought recognition but not aid.
The impugned Bill was concerned only with institutions of the second and third categories.
999 The word 'aid ' used by articles 29(2) and 30(2) included grant ' under article 337 of the Constitution and that word occurring in the Bill must have the same meaning.
Consequently, such clauses of the Bill mentioned in question No. 2 as imposed fresh and stringent conditions precedent to such grant over and above those to which it was subject under articles 337 and 29(2), violated not only article 337 but also, in substance and effect, article 30(1) of the Constitution and were to that extent void.
Rashid Ahmad vs Municipal Board, Kaiyana, ; , Mohd. Yasin vs The Town Area Committee, jalalabad; , and The State of Bombay vs Bombay Education Society, ; , referred to.
Although there was no constitutional right to the grant of aid except for Anglo Indian educational institutions under article 337 Of the Constitution, State aid was indispensable to educational institutions and Arts:, 28(2), 29(2) and 30(2) clearly contemplated the grant of such aid and articles 41 and 46 charged the State with the duty of aiding educational institutions and promoting such interests of the minorities.
But the right of the minorities to administer their educa tional institutions under article 30(1), was not inconsistent with the right of the State to insist on proper safeguards against maladministration by imposing reasonable regulations as conditions precedent to the grant of aid.
That did not, however, mean that the State Legislature could, in the exercise of its powers of legislation under articles 245 and 246 of the Constitution, override the fundamental rights by employing indirect methods, for what it had no power to do directly, it could not do indirectly.
So judged, cl.
3(5) of the Bill by bringing into operation and imposing cls.
14 and 15 as conditions precedent to the grant of aid, violated article 30(1) of the Constitution.
Similar considerations applied to the grant of State recognition as well.
No minority institution could fulfill its real object or effectively exercise its rights under article 30(1) without State recognition, as otherwise it would not be open to its scholars under the Education Code to avail of the opportunities for higher education in the University or enter the public services.
While it was undoubtedly true that there could be no fundamental right to State recognition, denial of recognition except on such terms as virtually amounted to a surrender of the right to administer the institution, must, in substance and effect infringe article 30(1) of the Constitution.
Clause 3(5), read with Cl. 20 of the Bill, in forbidding the charging of tuition fees in the primary classes, deprived the minority institutions of a fruitful source of income without compensation, as was provided by cl.
(9) for aided schools, and thus imposed a condition precedent to State recognition which was in 127 1000 effect violative of article 30(1) and was, therefore, void to that extent.
No rules, when framed under the Act, could cure such invalidity.
Article 45 of the Constitution did not require the State Government to provide free and compulsory education to the detriment of minority rights guaranteed by the Constitution,if the Government so chose it could do so through the Government and aided schools, and this Court was in duty bound to uphold such fundamental rights as the Constitution had thought fit to confer on the minority communities.
The wide powers and jurisdiction conferred on the High Courts by article 226 of the Constitution could not be affected by a provision such as cl.
(33) of the Bill, which forbade Courts to issue temporary injunctions or interim orders in restraint of any proceedings thereunder, and it must be read as subject to the overriding provisions of article 226 of the Constitution.
Venkatarama Aiyar J.
It was obvious that article 30(1) Of the Constitution did not in terms confer a right on the minority institutions to State recognition, nor, properly construed, could it do so by implication, for such an implication, if raised, would be contrary to the express provisions of article 45 Of the Constitution.
Article 30(1) was primarily intended to protect such minority institutions as imparted purely religious education and to hold that the State was bound thereunder to recognise them would be not only to render article 45 wholly infructuous but also to nullify the basic concept of the Constitution itself, namely, its secular character.
There was no conflict here between a fundamental right and a directive principle of State policy that must yield, and the principle of article 45 must have full play.
Clause (20) of the Bill was designed to enforce that principle and cl.
3(5) Of the Bill in making it a condition precedent to State recognition could not violate article 30(1) Of the Constitution.
Nor could a consideration of the policy behind article 30(1) lead to a different conclusion, assuming that the question of policy could be gone into apart from the language, since that policy was no other than that the majority community of the State should not have the power to destroy or impair the religious or linguistic rights of the minority communities.
The only two obligations, one a positive and the other a negative, that article 30(1) read with articles 25, 26, 29 and 30(2) of the Constitution imposed on the State were (1) to extend equal treatment as regards aid or recognition to all educational institutions, including those of the minorities, religious or linguistic, and (2) not to prohibit the establishment of minority institutions or to interfere with their administration.
To hold that the State Government was further bound under article 30(1) to accord recognition to minority institutions would be 1001 to put the minorities in a more favoured position than the majority community, which the Constitution never contemplated.
City Winnipeg vs Barrett : City of Winnipeg vs Logan, , referred to.
</s>
|
<s>[INST] Summarize the judgementN: Criminal.
Appeal No. 330 of 1980.
From the judgement and Order dated 3.4.1980 of the Madras High Court in Crl.
Appeal No. 360 of 1974.
Hardev Singh and Ms. Madhu Moolchandani for the Appellants.
V.C. Mahajan, B. Parthasarthi and Ms. A. Subhashini for the Respondents.
The Judgment of the Court was delivered by KULDIP SINGH, J.
The appellant N.M. Parthasarathy is the sole proprietor of a firm called "Elector technik".
He was formerly working as Inspector of Industries.
He along with an Inspector of Industries, was prosecuted on the allegations that between February, 1967 and February, 1969 they entered into a criminal conspiracy to obtain Small Scale Industries Registration Certificate for additional lines of manufacture, Essentiality Certificate and import licences on false representations made to the Director of Industries, Assistant Director of Industries, Joint Chief Controller of Imports/Exports and the Iron and Steel Controller.
The first 251 charge framed against both of them was for an offence of conspiracy punishable under section 120 B read with section 420 IPC and section 5(1) (b) read with section 5(2) of the Prevention of Corruption Act, 1947.
Charges 2, 4 and 6 framed against him were for offence of cheating punishable under section 420 IPC.
Charges 3, 5 and 7 were framed against the second accused for abetment of cheating punishable under section 420 read with section 109 IPC.
The 8th charge was also against the second accused under section 5 (1) (b) read with section 5 (2) of the Prevention of Corruption Act, 1947.
The trial court acquitted both of them on all the charges.
The State went in appeal against the judgment of acquittal and the High Court on re appreciation of evidence set side the acquittal and convicted both of them on all the counts.
The appellant was sentenced to undergo rigorous imprisonment for two years under Section 120 B IPC and rigorous imprisonment for two years for each of the three counts of cheating under section 420 IPC.
The sentences were to run concurrently.
We have heard Mr. Hardev Singh, learned counsel for the appellant and Mr. V.C. Mahajan, Senior Advocate for the respondents.
Mr. Hardev Singh has taken us through the judgment of the trial court and that of the High Court.
Mr. Hardev Singh has primarily argued that the High Court has grossly erred in reversing the judgment of acquittal rendered by the trial court.
According to him even if two views were possible the High Court was not justified in taking a different view than the trial court and reversing the acquittal.
This precise argument was raised before the High Court on behalf of the appellant.
The High Court rejected the same as under: "In the circumstances, I am of the opinion that this is not a case where, on the evidence available on record, two conclusions are possible and therefore this Court could not interfere with the acquittal of the accused by the learned Special Judge.
I am of the opinion that only one conclusion is possible on the evidence on record and that it is that the accused are guilty of all the charges framed against them and that interference with the acquittal of the accused by the learned Special Judge is called for in this case.
" We are of the view that the High Court was justified in reaching the above conclusion.
The High Court examined the evidence on the record in detail and rightly came to the conclusion that the guilt against the appellant was established beyond reasonable doubt.
The High Court on re appreciation of the evidence, independently reached the following findings: 252 "Thus it is established by Exhibit D 36 as well as the evidence of P.Ws 3 and 6 that the first accused had only a single phase domestic supply of electricity at his premises in Katpadi Extension even in August, 1969, that he could not have used that supply of electricity validly for any non domestic purposes and that it would not have been possible to produce any industrial machinery with that single phase power.
" "The evidence of P.W.s 6, 13, 15 and 19 shows that the machinery found in the premises of Electro technic during their inspections were worth only about Rs. 9,200 or Rs. 10,000 and not of the value of Rs. 94,000 as represented by the first accused in the list submitted by him along with his application, Exhibit P 18." "It has already been found that with the 230 Volts domestic supply he could not have produced any of the new end products.
The additional machinery required for producing these new end products had not been installed in the first accused 's factory.
It is hardly likely that all the alleged additional machinery could have been installed in the factory whose dimensions are only 18 feet by 12 feet." "It is made clear by the evidence that the second accused had made false statements in Exhibit P 96 about the alleged installation of the additional items of machinery in the first accused 's factory.
For the reasons stated above I find that the prosecution has proved charges 2 and 3 satisfactorily, beyond all reasonable doubt." "The first accused has succeeded in obtaining the Essentiality Certificate, Exhibit P.5, by making these false representations and the 2nd accused has induced P.W.5 to recommend in Exhibit P.24 the issue of the Essentiality Certificate and P.W.12 to issue the Essentiality Certificate and Exhibit P 14 by making the false representations Exhibit P 22 and P 23, as in Exhibit P 19, which have been found to be false in the earlier part of his judgment.
Therefore, I find that the prosecution has proved these two charges 4 and 5 against the accused satisfactorily and beyond all reasonable doubt." "In the present case both the accused have acted in concert in the first accused obtaining the S.S.I. registration certificate, Exhibit P 20 as amended by Exhibit P 21, the Essentiality Certificate, Exhibit P 5 and the import licenses, Exhibits P 6 and P 7, and the second accused enabling him to obtain the 253 same by his recommendations, Exhibits P 19, P 22 and P 23 which contain false particulars.
This would show that both the accused have acted in concert for committing these offences and that they would not have done so if there had been no conspiracy.
In these circumstances I find that the prosecution has established the charge of conspiracy framed against both the accused satisfactorily and beyond reasonable doubt.
" We agree with the above quoted reasoning and the conclusions reached by the High Court.
We, therefore, uphold the conviction and sentence awarded by the High Court.
While upholding the judgment of the High Court, we are inclined to agree with the learned counsel for the appellant that this is fit case where benefit of section 360, Criminal Procedure Code be extended to the appellant.
The occurrence in this case relates to the period between February, 1967 and February, 1969.
The Special Judge, Madras by his judgment dated July 23, 1973 acquitted the appellant.
The High Court on April 3, 1980 reversed the trial court and convicted the appellant.
This Court granted bail to the appellant on April 29, 1980.
Mr. Hardev Singh has placed before us documents showing several achievements of the appellant in the industrial field since then.
The appellant 's industry has manufactured the largest Hot Air Kiln in India for Ministry of Railways, largest Degreasing plant for Nuclear Fuel Complex, Sintering Furnace for anti tank missiles and various other items for the Ministry of Defence and other Departments of the Government of India.
The appellant claims that he has set up 100 per cent export unit with Rs. 75 crores export per annum.
For all these reasons we are of the view that it is expedient that the appellant be released on probation.
We, therefore, direct that he be released on his entering into a bond to the satisfaction of the Special Court, Madras.
The Special Court shall pass an order in terms of Section 360, Criminal Procedure Code, 1973 to its satisfaction.
A copy of this order be sent to the Special Court, Madras immediately.
The appellant is directed to appear before the Special Court, Madras within two months from today to enable the Special Court, Madras to pass an order as directed by us.
In the event of appellant 's failure to present himself before the Special Court as directed he shall undergo the original sentence awarded by the High Court.
The appeal is disposed of in the above terms.
T.N.A Appeal disposed of.
[/INST]The respondent was the daughter of the original landlord who had let out the premises to the appellant on October 1, 1961.
She purchased the property from her father on June 27, 1964 and thus stepped into his shoes as the `landlord ' as defined under section 2 (e) of the Delhi Rent Control Act, 1958.
The respondent sought eviction of the appellant from the demised premises on the ground of personal bonafide requirement.
The appellant resisted the eviction petition on the grounds that the premises were not let out for residential purpose only but for commercial purpose also i.e. for keeping foreign students as paying guests, and that the respondent does not have a bonafide need or requirement as such.
Relying upon the Rent Note and the appellant 's letters dated October 7, 1961 and August 18, 1962 addressed to the respondent 's father, and the earlier proceedings between them for eviction of the appellant on the ground of sub letting the premises for commercial purpose, both the statutory authorities the Additional Rent Controller and the Rent Control Tribunal found that the premises which had also been used incidentally for commercial purposes so as to exclude the application of section 14(1) (e) read with the explanation thereto, and dismissed the respondent 's application for eviction.
473 This finding was reversed by the High Court in the respondent 's second appeal under Section 29 of the Act.
The High Court found that there was no evidence for the statutory authorities to come to the conclusion, which they did, as regards the premises having been used for commercial purpose.
The High Court accepted the appeal and set aside the judgment and order of the Rent Controller and the Rent Control Tribunal, and allowed the eviction application.
The tenant appealed to this Court by Special appeal.
On behalf of the respondent landlord it was submitted that even if the High Court was wrong in coming to the conclusion that there was no evidence about foreign students being lodged by the tenant, the mere fact that foreign students stayed as paying guests in the premises did not imply either that they lodged with the consent of the landlord or that such lodging amounted to a commercial use of the building, and that the High Court was right in saying that the ground contained in clause (e) of sub section (1) of section 14 was attracted.
Allowing the appeal, and setting aside the judgment of the High Court, and restoring the orders of the Additional Rent Controller and the Rent Control Tribunal, this Court, HELD: 1.
The finding of the High Court is unsustainable.
The High Court was not justified in saying that there was no evidence to hold that the premises were used for boarding and lodging foreign students.
The specific plea of the landlord in the earlier proceedings was that the tenant had sub let the premises for commercial purposes.
The tenant contended that she had never parted with her exclusive possession of any part of the premises and the foreign students who were lodging with her were her paying guests and were not her tenants.
The plea of sub tenancy raised by the landlord was thus rejected on the ground that those who lodged with her were not sub tenants but only paying guests.
[476 G H] 2.
The letters dated October 7, 1961 and August 18, 1962 clearly disclosed the fact that foreign students were lodged in the premises as the guests of the appellant.
The evidence let in by the appellant and not contradicted by the respondent clearly showed that apart from the appellant all the other inmates of the premises were foreign students staying with her as her paying guests.
The appellant testified that she earned her livelihood from the income she received as lodging fee from students who lodged with her, and 474 that is was out of that income that all her personal expenses including the rent payable by her for the premises had been met.
These are the findings of the two fact finding authorities, and those findings are based on oral and documentary evidence.
To have reversed those findings by the High Court in Second Appeal on the ground that they were perverse was totally uncalled for.
[477 A C] 3.
In the absence of any question of law, much less any substantial question of law, the High Court was not justified in reversing the concurrent findings of the statutory authorities.
[480 B] 4.
Clause (e) of section 14(1) of the Act is applicable only if the landlord is in a position to establish that the premises let for residential purposes are required bona fide by him for occupations as residence.
Assuming that the bona fide requirement of the landlord is established the landlord must still prove that the premises had been let for residential purposes.
The Explanation of clause (e) makes it clear that the words `premises let for residential purposes ' included any premises let for residential purposes but used incidentally, without the consent of the landlord, for commercial or other purposes.
The Explanation is attracted when : (1) the premises have been let for residential purposes, (ii) the premises have been used incidentally for commercial or other purposes,and (iii) the landlord has not given his consent for such incidental use for commercial or other purpose.
[478 D F] 5.
If the premises have never been used for any non residential purpose, the aid of the explanation is unnecessary to attract clause (e).
The Explanation is called in aid only where premises let for residential purpose have been used incidentally for commercial or other non residential purpose, but without the consent of the landlord.
[478 G] 6.
If the landlord is in a position to establish that the premises have been let for residential purposes and that he has never consented to the user of the premises for any other purpose, the mere fact that such premises have been incidentally used for commercial or other purposes would not change or affect the residential character of the premises.
[479 A] 7.
If the premises have been regularly and openly used for non residential purposes, the knowledge and consent of the landlord, unless proved to the contrary, are ordinarily presumed and in 475 that event the explanation would be of no avail to save the ground under clause (e).
[479 B] 8.
In the instant case, it is not disputed that the premises had been let for residential purposes, but it is also beyond doubt that to the knowledge of the landlord the premises have been regularly used by the tenant not only for her own residence but also for her foreign guests.
The landlord has as all material times known or is presumed to have known that foreign students have been staying with the appellant as her paying guests and that she has been ever since 1961 running a boarding house in the premises.
At no time did the landlord object to the user of the premises by the appellant for such purpose.
[479 C D] 9.
The continued user of the building ever since 1961 for the purpose of lodging paying guests shows that the respondent landlord and her father have not only been aware of such user of the building, but have also impliedly consented to such user.
This presumption is irresistible from the evidence on record.
Such user takes the premises in question out of the ambit of `premises let for residential purpose ' so as to exclude the ground contained in clause (e).
[479 E] Dr. Gopal Dass Verma vs Dr. S.K. Bhardwaj & Anr., ; ; Kartar Singh vs Chaman Lal & Ors., (SC) (1969) IV All India Rent Control Journal 349; Hobson vs Tulloch, [1898] 1 Chancery Division 424; Thorn & Ors.
vs Madden, [1925] All E.R.321 and Tandler vs Sproula , referred to.
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<s>[INST] Summarize the judgementAppeal No. 517 of 1958.
Appeal from the judgment and order dated October 31, 1957, of the Kerala High Court in O. P. No. 215 of 1957.
G. B. Pai and Sardar Bahadur, for the appellant.
Hardyal Hardy and D. Gupta, for the respondents.
November 29.
The Judgment of the Court was delivered by SHAH, J.
C. A. Abraham hereinafter referred to as the appellant and one M. P. Thomas carried on business in food grains in partnership in the name and style of M. P. Thomas & Company at Kottayam.
M. P. Thomas died on October 11, 1949.
For the account years 1123, 1124 and 1125 M.E. corresponding to August 1947 July 1948, August 1948 July 1949 and August 1949 July 1950, the appellant submitted as a partner returns of the income of the firm as an unregistered firm.
In the course of the assessment proceedings, it was discovered that the firm had carried on transactions in different commodities in fictitious names and had failed to disclose substantial income earned therein.
By order dated November 29, 1954, the Income Tax Officer assessed the suppressed income of the firm in respect of the assessment year 1124 M.E. under the Travancore Income Tax Act and in respect of assessment years 1949 50 and 1950 51 under the Indian Income Tax Act and on the same day issued notices under section 28 of the Indian Income Tax Act in respect of the years 1949 50 and 1950 51 and 767 under section 41 of the Travancore Income Tax Act for the year 1124 M.E., requiring the firm to show cause why penalty should not be imposed.
These notices were served upon the appellant.
The Income Tax Officer after considering the explanation of the appellant imposed penalty upon the firm, of Rs. 5,000 in respect of the year 1124 M. E., Rs. 2,O00 in respect of the year 1950 51 and Rs. 22,000 in respect of the year 1951 52.
Appeals against the orders passed by the Income Tax Officer were dismissed by the Appellate Assistant Commissioner.
The appellant then applied to the High Court of Judicature of Kerala praying for a writ of certiorari quashing the orders of assessment and imposition of penalty.
It was claimed by the appellant inter alia that after the dissolution of the firm by the death of M. P. Thomas in October, 1949, no order imposing a penalty could be passed against the firm.
The High Court rejected the application following the judgment of the Andhra Pradesh High Court in Mareddi Krishna Reddy vs Income Tax Officer, Tenali (1).
Against the order dismissing the petition, this appeal is preferred with certificate of the High Court.
In our view the petition filed by the appellant should not have been entertained.
The Income Tax Act provides a complete machinery for assessment of tax and imposition of penalty and for obtaining relief in respect of any improper orders passed 'by the Income Tax authorities, and the appellant could not be permitted to abandon resort to that machinery and to invoke the jurisdiction of the High Court under article 226 of the Constitution when he had adequate remedy open to him by an appeal to the Tribunal.
But the High Court did entertain the petition and has also granted leave to the appellant to appeal to this court.
The petition having been entertained and leave having been granted, we do not think that we will be justified at this stage in dismissing the appeal in limine.
On the merits, the appellant is not entitled to relief.
The Income Tax Officer found that the appellant had, with a view to evade payment of tax, (1) 768 deliberately concealed material particulars of his income.
Even though the firm was carrying on transactions in food grains in diverse names, no entries in respect of those transactions in the books of account were posted and false credit entries of loans alleged to have been borrowed from several persons were made.
The conditions prescribed by section 28(1)(c) for imposing penalty were therefore fulfilled.
But says the appellant, the assessee firm had ceased to exist on the death of M. P. Thomas, and in the absence of a provision in the Indian Income Tax Act whereby liability to pay penalty may be imposed after dissolution against the firm under section 28(1)(c) of the Act, the order was illegal.
Section 44 of the Act at the material time stood as follows: "Where any business,. carried on by a firm. has been discontinued . every person who was at the time of such discontinuance . a partner of such firm,. shall in respect of the income, profits and gain of the firm be jointly and severally liable to assessment under Chapter IV for the amount of tax payable and all the provisions of Chapter IV shall, so far as may be, apply to any such assessment.
" That the business of the firm was discontinued because of the dissolution of the partnership is not disputed.
It is urged however that a proceeding for imposition of penalty and a proceeding for assessment of income tax are matters distinct, and section 44 may be resorted to for assessing tax due and payable by a firm business whereof has been discontinued, but an order imposing penalty under section 28 of the Act cannot by virtue of section 44 be passed.
Section 44 sets up machinery for assessing the tax liability of firms which have discontinued their business and provides for three consequences, (1) that on the discontinuance of the business of a firm, every person who was at the time of its discontinuance a partner is liable in respect of income, profits and gains of the firm to be assessed jointly and severally, (2) each partner is liable to pay the amount of tax payable by the firm, and (3) that the provisions of Chapter, so far as may be, apply to such assessment.
The liability declared by section 44 is 769 undoubtedly to assessment under Chapter IV, but the expression "assessment" used therein does not merely mean computation of income.
The expression "assessment" as has often been said is used in the Income Tax Act with different connotations.
In Commissioner of Income Tax, Bombay Presidency & Aden vs Khemchand Ramdas (1), the Judicial Committee of the Privy Council observed: "One of the peculiarities of most Income tax Acts is that the word "assessment" is used as meaning sometimes the computation of income, sometimes the determination of the amount of tax payable and sometimes the whole procedure laid down in the Act for imposing liability upon the tax payer.
The Indian Income tax Act is no exception in this respect. . ".
A review of the provisions of Chapter IV of the Act sufficiently discloses that the word "assessment" has been used in its widest connotation in that chapter.
The title of the chapter is "Deductions and Assessment".
The section which deals with assessment merely as computation of income is section 23; but several sections deal not with computation of income, but determination of liability, machinery for imposing liability and the procedure in that behalf.
Section 18A deals with advance payment of tax and imposition of penalties for failure to carry out the provisions there in.
Section 23A deals with power to assess individual members of certain companies on the income deemed to have been distributed as dividend, section 23B deals with assessment in case of departure from taxable territories, section 24B deals with collection of tax out of the estate of deceased persons; section 25 deals with assessment in case of discontinued business, section 25A with assessment after partition of Hindu Undivided families and sections 29, 31, 33 and 35 deal with the issue of demand notices and the filing of appeals and for reviewing assessment and section 34 deals with assessment of incomes which have escaped assessment.
The expression "assessment" used in these sections is not used merely in the sense of computation of income and there is in our judgment no ground for holding (1) 770 that when by section 44, it is declared that the partners or members of the association shall be jointly and severally liable to assessment, it is only intended to declare the liability to computation of income under section 23 and not to the application of the procedure for declaration and imposition of tax liability and the machinery for enforcement thereof.
Nor has the expression, "all the provisions of Chapter IV shall so far as may be apply to such assessment" a restricted content: in terms it says that all the provisions of Chapter IV shall apply so far as may be to assessment of firms which have discontinued their business.
By section 28, the liability to pay additional tax which is designated penalty is imposed in view of the dishonest contumacious conduct of the assessee.
It is true that this liability arises only if the Income tax Officer is satisfied about the existence of the conditions which give him jurisdiction and the quantum thereof depends upon the circumstances of the case.
The penalty is not uniform and its imposition depends upon the exercise of discretion by the Taxing authorities; but it is imposed as a part of the machinery for assessment of tax liability.
The use of the expression "so far as may be" in the last clause of section 44 also does not restrict the application of the provisions of Chapter IV only to those which provide for computation of income.
By the use of the expression "so far as may be" it is merely intended to enact that the provisions in Ch.
IV which from their nature have no application to firms will not apply thereto by virtue of section 44.
In effect, the Legislature has enacted by section 44 that the assessment proceedings may be commenced and continued against a firm of which business is discontinued as if discontinuance has not taken place.
It is enacted manifestly with a view to ensure continuity in the application of the machinery provided for assessment and imposition of tax liability notwithstanding discontinuance of the business of firms.
By a fiction, the firm is deemed to continue after discontinuance for the purpose of assesment under Chapter IV.
The Legislature has expressly enacted that the provisions of Chapter IV shall apply to the assessment of 771 a business carried on by a firm even after discontinuance of its business, and if the process of assessment includes taking steps for imposing penalties, the plea that the Legislature has inadvertently left a lacuna in the Act stands refuted.
It is implicit in the contention of the appellant that it is open to the partners of a firm guilty of conduct exposing them to penalty under section 28 to evade penalty by the simple expedient of discontinuing the firm.
This plea may be accepted only if the court is compelled, in view of unambiguous language, to hold that such was the intention of the Legislature.
Here the language used does not even tend to such an interpretation.
In interpreting a fiscal statute, the court cannot proceed to make good deficiencies if there be any: the court must interpret the statute as it stands and in case of doubt in a manner favourable to the tax payer.
But where as in the present case, by the use of words capable of comprehensive import, provision is made for imposing liability for penalty upon tax payers guilty of fraud, gross negligence or contumacious conduct, an assumption that the words were used in a restricted sense so as to defeat the avowed object of the Legislature qua a certain class will not be lightly made.
Counsel for the appellant relying upon Mahankali Subbarao vs Commissioner of Income Tax (1), in which it was held that an order imposing penalty under section 28(1)(c) of the Indian Income Tax Act upon a Hindu Joint Family after it had disrupted, and the disruption was accepted under section 25A(1) is invalid, because there is a lacuna in the Act, submitted that a similar lacuna exists in the Act in relation to dissolved firms.
But whether on the dissolution of a Hindu Joint Family the liability for penalty under section 28 which may be incurred during the subsistence of the family cannot be imposed does not fall for decision in this case: it may be sufficient to observe that the provisions of section 25A and section 44 are not in pari materia.
In the absence of any such phraseology in section 25A as is used in section 44, no real analogy between the content of that section and section 44 may be assumed.
Undoubtedly, (1) 772 by section 44, the joint and several liability which is declared is liability to assessment in respect of income, profits or gains of a firm which has discontinued its business, but if in the process of assessment of income, profits or gains, any other liability such as payment of penalty or liability to pay penal interest as is provided under section 25, sub section
(2) or under section 18A sub sections
(4), (6), (7), (8) and (9) is incurred, it may also be imposed, discontinuation of the business notwithstanding.
In our view, Chief Justice Subba Rao has correctly stated in Mareddi Krishna Reddy 's case (supra) that: "Section 28 is one of the sections in Chapter IV.
It imposes a penalty for the concealment of income or the improper distribution of profits.
The defaults made in furnishing a return of the total income, in complying with a notice under sub section
(4) of section 22 or sub section
(2) of section 23 and in concealing the particulars of income or deliberately furnishing inadequate particulars of such income are penalised under that section.
The defaults enumerated therein relate to the process of assessment.
Section 28, therefore, is a provision enacted for facilitating the proper assessment of taxable income and can properly be said to apply to an assessment made under Chapter IV.
We cannot say that there is a lacuna in section 44 such as that found in section 25A of the Act.
We are unable to agree with the view expressed by the Andhra Pradesh High Court in the later Full Bench decision in Commissioner of Income Tax vs Rayalaseema Oil Mills (1), which purported to overrule the judgment in Mareddi Krishna Reddy 's case (supra).
We are also unable to agree with the view expressed by the Madras High Court in section V. Veerappan Chettiar vs Commissioner of Income Tax, Madras (2).
In the view taken by us, the appeal fails and is dismissed with costs.
(1) Appeal dismissed.
[/INST]An agreement for a lease, which a lease is by the Indian declared to include, must be a document which effects an actual demise and operates as a lease.
It must create present and immediate interest in land.
Where a litigation between two persons A and B who claimed to be tenants under C was settled by a compromise decree the effect of which was to create a perpetual underlease between A and B which was to take effect only on condition that A paid Rs. 8,000 to C within a fixed period: Held, that such a contingent agreement was not "a lease" within el.
(a) of section 17 (t) of the Indian , and even though it was covered by cl.
(b) of the said sec tion it was exempt from registration under el.
(vi) of subs.
(2) of section 17.
Hemanta Kumari Debi vs Midnapur Zamindari Co. (I P.C.) relied on.
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<s>[INST] Summarize the judgementAppeals Nos. 235 and 236 of 1960.
Appeals from the judgment and decree dated January 23, 1959 of the Assam High Court at Gauhati in Civil Rules Nos. 138 and 139 of 1958.
N. C. Chatterjee, Amjad Ali and K. R. Chaudhari, for the appellant (in C. A. No. 235 of 1960).
D. N. Mukherjee, for the appellant (In C. A. No. 236 of 1960).
section M. Lahiri, Advocate General, Assam and Naunit Lal, for the respondents.
April 4.
The Judgment of the Court was delivered by GAJENDRAGADKAR, J.
These two appeals arise out of two writ petitions Nos. 138 and 139 of 1958 filed respectively by the two appellants, Sonapur Tea Co. Ltd., of 15 D Sambhunath Pandi Street, Calcutta 9, and Musst.
Mazirunnessa, wife of Abdul Gafur of Village Bhoknamari, District Kamrup, in which they challenged the validity of the Assam Fixation of Ceiling on Land Holdings Act I of 1957 (hereafter called the Act).
The said writ petitions have been dismissed by the Assam High Court substantially on ground that since the impugned Act falls within the protection of article 31A the challenge made by the two appellants to the several provisions of the Act under articles 14, 19(1)(f) and 31(2) cannot be entertained Having dismissed the writ petitions principally on this ground the High Court granted certificates to both the appellants to come to this Court in appeal, 726 and so it is with the said certificates that the two appeals have been brought to this Court.
It is not necessary to set out the material facts leading to the two writ petitions in any detail.
It would be enough to say that under section 5 of the, impugned Act notices had been served on both the appellants by the respondent Deputy Commissioner and Collector of Kamrup calling upon them to submit a return giving the particulars of all their lands in the prescribed form and stating therein the selection of plot or plots of land (not exceeding in the aggregate the limits fixed under section 4) which they desired to retain under the provisions of the Act.
The appellants contended before the High Court that the impugned Act under which this notice had been served on them was invalid and ultra vires and so they wanted the notice issued under section 5 to be quashed.
That is the only relevant fact which needs to be stated for deciding the present appeals.
The Act received the assent of the President on December 7, 1956, and was published in the official State Gazette on January 16, 1957.
Subsequently it was amended by the amending Act XVII of 1957 and assent was obtained to the amendment thus made on November 8, 1957.
By a notification issued by the State Government on February 7,1958, the amended Act came into force on February 15, 1958.
It is relevant to consider briefly the broad features of the Act.
It has been passed because the Legislature deemed it necessary to make provision for the imposition of limits on the amount of land that may be held by a person in order to bring about an equitable distribution of land.
That being the object of the Act the principal provision of the Act imposes a ceiling on existing holding by s.4.
The act extends to the seven Districts specified in section 1(2), and from its operation are excepted the lands specified in cls.
(a) to (c) of s.2.
These clauses refer to lands belonging to any religious or charitable institution of a public nature, lands held for special cultivation of tea or purposes ancillary thereto and lands exceeding 150 bighas utilised for large scale cultivation of citrus in a compact block by any person before January 1, 1955, lands 727 utilised by efficiently managed farms on which heavy investments or permanent structural improvements have been made and whose break up is likely to lead to a fall in production, and lands held by a sugar factory or a co operative farming society for cultivation of sugarcane for the purpose of such factory.
It would thus be noticed that the measure of agrarian reform introduced by the Act has made exceptions in regard to lands which it thought should be left out of the operation of the Act in the interest of the economy of the State.
Section 3 is the definition section.
It defines land as meaning land which is or may be utilised for agricultural purposes or purposes subservient thereto and includes the sites of buildings appurtenant to such land.
Under section 3(g) the word 'landholder ' has the meaning assigned to it in the Assam Land and Revenue Regulation, 1886 (Regulation I of 1886).
'Landlord ' under section 3(h) is a person immediately under whom a tenant holds but does not include the Government; and 'owner ' under section 3(i) includes proprietor, land holder or settlement holder as defined in section 3 of the Assam land and Revenue Regulation I of 1886 but it does not include Government.
Section 3(o) defines 'tenant ' as meaning a person who holds land under another person and is, but for a special contract would be, liable to pay rent for that land to the other person, and includes a person who cultivates the land of another person on condition of delivering a share of the produce.
These are the only definitions which are relevant for our purpose.
Section 4 which is the key section of the Act prescribes ceiling on existing holding.
The limit prescribed is 150 bighas in the aggregate subject to its provisos.
Section 5 empowers the appropriate authorities to call for submission of returns by persons holding lands in excess of the ceiling.
Section 8 empowers the State Government to acquire such excess lands by publishing in the official gazette a notification to the effect that such lands are required for public purpose, and such publication shall be conclusive evidence of the notice of acquisition to the person or persons holding such lands.
Acquisition of excess lands prescribed by section 8 is followed by the vesting of the said 728 lands in the State under section 9.
On publication of the notification under section 8 all such excess lands shall stand transferred to the State Government from the date of the publication of the said notification free from encumbrances by their original owner or owners.
Under section 11 the Collector is authorised to take possession of the said lands.
Section 12 prescribes the principles of compensation.
and provides the manner in which the said compensation should be apportioned between the owner and the tenant; and s.13 provides for the manner of payment of such compensation.
Under section 14 ad interim payment of compensation can be made as specified.
These are the relevant provisions in Chapter 11 which deals with ceiling on existing holding and acquisition of excess land.
Chapter III deals with the disposal of excess land.
Under section 16(l) if there is any cultivating tenant in occupation of the land acquired from an owner then he shall have the option of taking settlement of such land within a prescribed period on the following conditions, namely, (a) that the area of land so settled together with any other lands held by him or any member of his family either as tenant or as owner shall not exceed in the aggregate the limit fixed under section 4, and (b) that he shall pay to the State Government in one or more equal annual installments not exceeding five an amount fixed by it but not exceeding the compensation payable by the State Government for acquisition thereof, provided that he shall have the right to adjust any amount which he is entitled to receive as compensation under the provisions of the Act against an equal amount which he is liable to pay under el.
Section 16(2) provides that on payment of full amount under sub section (1) above the land shall be settled with a tenant with the status of a landholder.
Under section 18 it is provided that if a tenant in occupation of any land acquired under section 8 does not take settlement of such land he shall acquire no right, title and interest in the land and shall be liable to be ejected.
Chapter IV deals with excess land under annual lease and provides for its taking over.
Chapter V puts a ceiling on future 729 acquisition, and chapter VI provides for ceiling for resumption of land from tenants for personal cultivation by the landlord.
Chapter VII provides for the establishment of a Land Reform Board, and lays down its functions,while chapter VII contains miscellaneous provisions.
That briefly is the scheme of the Act.
The question which arises for our decision is whether this Act is protected under article 31A of the Constitution.
This Article has been construed by this Court on several occasions in dealing with legislative measures of agrarian reforms.
The object of such reforms generally is to abolish the intermediaries between the State and the cultivator and to help the actual cultivator by giving him the status of direct relationship between himself and the State.
Article 31A(l)(a) provides that, notwithstanding anything contained in article 13, no law providing for the acquisition by the State of any estate or of any rights therein or the extinguishment or modification of any such rights, shall be deemed to be void on the ground that it is inconsistent with or takes away or abridges any of the rights conferred by article 14, article 19 or article 31, provided that, where such law is a law made by the Legislature of a State, the provisions of this Article shall not apply thereto unless such law, having been reserved for the consideration of the President, has received his assent.
We have already seen that the assent of the President has been obtained both for the Act as it was originally passed and for the amending Act which subsequently modified some of the provisions of the original Act, and so the requirement prescribed by the proviso to article 31A(l)(a) is satisfied.
That raises the question as to whether the rights of the appellants which are undoubtedly taken away or abridged constitute rights in relation to an "estate" as defined by article 31A(2)(b).
We have already seen the definitions of land, landholder, landlord and tenant prescribed by section 3(f),(g),(h) and (o).
It is common ground that the lands sought to be acquired fall within an "estate" as defined by article 31 A(2).
Do the rights vesting in the appellants amount 92 730 to rights in relation to an "estate"? For deciding this question it would be necessary to consider the provisions of the existing law relating to tenure in force in Assam at the relevant time.
The existing law relating to land tenure is to be found in the provisions of the a Assam Land and Revenue Regulation, 1886 (Regulation I of 1886).
Section 3(g) of the said Regulation provides that a 'landholder ' means any person deemed to have acquired the status of a landholder under section 8.
No hen we turn to section 8 we find that it provides the manner in which the status of a landholder can be acquired; and section 9 provides for the rights of such landholders.
Under section 9 a landholder shall have a, permanent, heritable and transferable right of use and occupancy in is land subject to the payment of revenue, taxes, cesses and rates from time to time legally assessed or imposed in respect of the land.
The remaining two clauses of this section need not be considered.
It would be noticed that the expression "rights in relation to an estate" is of a very wide amplitude and as such the context requires that it must receive a very liberal interpretation.
Thus considered there can be no doubt that the rights of the appellants which have been extinguished undoubtedly constitute "rights in relation to an estate" as defined by article 31A (2) (b).
Indeed this position is not seriously disputed by Mr. Chatterjee who fairly conceded that having regard to the decisions of this Court in Thakur Raghubir Singh vs The State of Ajmer (Now Rajasthan) (1), Sri Ram Ram Narain Medhi vs The State of Bombay( ') and Atma Ram vs The State of Punjab (3 ) he would not be able to contend that the view taken by the High Court is erroneous.
Faced with this difficulty Mr. Chatterjee attempted to argue that the Act is a colorable piece of legislation and should be struck down as such.
His argument is that though ostensibly it purports to be a measure of agrarian reform its principal object and indeed its pith and substance is to acquire the property covered by its provisions and make profit by disposing of the (1) [1959] Supp. 1 S.C.R. 478.
(2) [1959] Supp. 1 S.C.R. 489.
(3) [1959] Supp. 1 S.C.R. 748. 731 same in the manner provided by Chapter III.
Mr. Chatterjee seemed to suggest that the Legislature should not have made it necessary for the tenants to exercise an option for taking settlement under section 16 because the exercise of the said option involves the liability to pay the prescribed amount though in five installments, and that, according to Mr. Chatterjee indicates that the State wanted to make profit out of the bargain.
Mr. Chatterjee 's grievance is against the provisions of section 18 also under which a tenant who does not opt for settlement is liable to be evicted.
We are not impressed by this argument.
The doctrine of colorable legislation really postulates that legislation attempts to do indirectly what it cannot do directly.
In other words, though the letter of the law is within the limits of the powers of the Legislature, in substance the law has transgressed those powers and by doing so it has taken the precaution of concealing its real purpose under the cover of apparently legitimate and reasonable provisions (Vide: K. G. Gajapati Narayan Deo vs The State of Orissa) This position is not and can not be disputed.
Is Mr. Chatterjee, however, right when he contends that the pith and substance of the Act and indeed its main object is to acquire property and dispose of it at a profit? That is the question which calls for our decision.
In our opinion the answer to this question must obviously be against the appellants.
The whole object of the Act which is writ large in all its provisions is to abolish the intermediaries and leave the lands either with the tiller or the cultivator.
With that object ceiling has been prescribed by section 4, provisions have been made for the acquisition of excess.
lands, and disposal of excess lands in favour of the tenants have been provided for.
It is significant that in settling the lands upon the tenants it is expressly provided that the payment which the tenant may have to make and that too in one or more easy installments not exceeding five will never exceed the compensation payable by the State Government for acquisition (1) ; 732 thereof.
This provision clearly negatives the assumption made by Mr. Chatterjee that any profit is intended to be made in the matter of disposal of excess lands.
The State is paying compensation to the persons dispossessed under the principles prescribed by section 12; amongst the persons entitled to such compensation tenants are included, and when the State proceeds to settle lands on tenants it expects them to pay a fair amount of price for the land and puts a ceiling on this price that it shall never exceed the amount of compensation payable in respect of the Paid land.
In our opinion this provision is very fair and reasonable and it would be idle to attack it as a piece of colorable legislation.
We have already seen that the settlement of land on the tenants would make them landholders and that is the basic idea of the Act.
If a tenant does not agree to take settlement it cannot be helped and so the land would then have to be taken from him and given over to somebody else who would be prepared to take settlement.
It is thus clear that the object of putting ceiling on existing holding is to take over excess lands and settle them on actual cultivators Or tenants and that is the essential feature of agrarian reform undertaken by several States in the country.
The Act conforms to the pattern usually followed in that behalf and the attack against its validity on the around that it is a colorable piece of legislation must therefore fail.
In the result we hold that there is no substance in the two appeals.
They are accordingly dismissed with costs one set of hearing.
Appeals dismissed.
[/INST]One Viswanatha Iyer who had two minor daughters but no male issue treated his brother Seetharama Iyer 's son, the appel lant, as a foster son and before his death made a will by which he left the management of his properties to his brother and provided that as soon as his minor daughters attained majority Seetharama should give them each one Veli of nanja land and one Veli of punja land in vattam No. 149 in village Nagampadi and should give possession of the remaining property to the appellant on his attaining majority.
The daughters after attaining majority claimed possession of their land alleging that they were entitled under the will to select their respective one Veli of nanja land and one Veli of punja land out of the land in Vattam 149.
A suit filed by the daughters on that allegation was decreed by the trial court and the decree was affirmed by the High Court holding that the English rule of benevolent construction that a legatee has a right to choose in such circumstances applied to India and that on the construction of the will in this case the right to choose was in the legatees and not in Seetharama.
Held, that section 89 of the , which lays down that "a will or bequest not expressive of any definite intention is void for uncertainty", applies only to those cases where a will is so indefinite that it is not possible to give any definite intention to it at all; but there may be wills which use words which are not so uncertain that a definite intention cannot be ascribed to the testator under those words and it is to meet such cases that the English rule of selection by legatees was evolved.
This rule of benevolent construction which is based on common sense and by which wills not quite uncertain can be made certain cannot be called an artificial rule and there is no reason why it should not be extended to India in appropriate cases.
Narayanasami Gramani vs Periathambi Gramani, (1895) I.L.R. , approved.
Bharadwaja Mudaliar vs Kolandavelu Mudaliar, (1915) 29 M.L.J. 717, discussed.
Hobson vs Blackburn, ; ; , Peck vs Halsey, ; (1726) 2 P. Wms. 387; , Tapley vs Eagleton, , Duckmanton vs Duckmanton ; (1860) 5 H. & N. 220; and Knapton vs Hindle, , referred to.
975 Asten vs Asten, and Bishop vs Holt, , held inapplicable.
The gift in the present case was not void for uncertainty within the meaning of section 89 of the Succession Act for it could be made certain by the selection of the daughters.
The testator had clearly indicated what he intended his daughters to get but the difficulty arose because the area of the vattam was more than what was given to the daughters; it must be held in the circumstances of the case that the testator intended that each daughter would select the land devised out of the vattam.
There were no words in the will from which it could be inferred that Seetharama was nominated by the testator to make the selection.
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<s>[INST] Summarize the judgementCivil Appeal Nos.
626 & 629 of 1971.
From the Judgment and Order dated 5 8 1970 of the Rajasthan High Court in R.F.A. No. 31/60.
630 section T. Desai and Naunit Lal for the Appellant.
P. R. Mridul, B. P. Sharma, Krishna Bhatt and R. K. Bhatt for the Respondents.
The Judgment of the Court was delivered by VENKATARAMIAH, J.
These two cross appeals by certificate arise out of a suit for possession of a house situate in Bikaner and for damages for use and occupation thereof filed in Civil Original Case No. 17 of 1957 on the file of the District Judge, Bikaner.
The plaintiffs in the suit are the appellants in Civil Appeal No. 626 of 1971 and the defendant is the appellant in Civil Appeal No. 629 of 1971.
The genealogy showing the relationship between the parties is given below: Sur Singh | | | | | Gad Singh Bharat Singh Bhim Singh Kan Singh | (Died in (P.I.) (Deft.) | Sept. 1955) | | | | | | | | Duley Dhaney Deep | Singh Singh Singh | | | Himmat Dalip Singh Singh (P.2.) (Died in Sept. 56) Gad Singh, Bharat Singh, Bhim Singh (plaintiff No. 1) and Kan Singh (defendant) are the sons of Sur Singh.
Bharat Singh died unmarried in September, 1955.
Gad Singh died thereafter leaving behind him three sons, Duley Singh, Dhaney Singh and Deep Singh.
Dalip Singh, the second son of plaintiff No.1 died in September, 1956.
Bharat Singh and the defendant were residing in the house which was the subject matter of the suit.
After the death of Bharat Singh, the plaintiffs Bhim Singh and Himmat Singh filed the suit out of which this appeal arises against Kan Singh, the defendant for recovery of possession of the suit house and other ancillary reliefs.
In the plaint, they 631 pleaded that the suit house belonged to them by virtue of a patta dated July 12, 1940 issued in their names; that the defendant who was the brother of plaintiff No. 1 and uncle of plaintiff No. 2 was living in a part of the house with their consent; that plaintiff No. 2 and his younger brother Dalip Singh were also living in the house till the year 1956; that the defendant had refused to receive a notice issued by them in the month of September, 1957 calling upon him to hand over possession of the house to the plaintiffs; that the defendant had done so on account of personal ill will and that the plaintiffs were, therefore, entitled to recover possession of the suit house and damages from the defendant.
These were briefly the allegations made in the plaint.
On the above basis, the plaintiffs prayed for a decree for the reliefs referred to above.
In the written statement, the defendant did not admit the existence of the patta on the basis of which the plaintiffs claimed title to the suit house.
He denied the allegation that the plaintiffs were the owners in possession of the suit house.
He claimed that he was the exclusive owner of the suit house, and in support of the said claim stated as follows: There was a partition amongst the sons of Sur Singh in the year 1929.
At that partition, Gad Singh and plaintiff No. 1 became separated and they were given all the family properties which were situated in their village, Roda.
As Bharat Singh and the defendant had been educated at the expense of the family, they were not given any share in the property.
Bharat Singh and he settled in Bikaner and lived together as members of joint Hindu family.
Bharat Singh died on September 2, 1955 leaving the defendant as a surviving coparcener.
On his death, the defendant became the owner of the properties of Bharat Singh 'as a member of joint Hindu family '.
He further pleaded that from the year 1928, Bharat Singh and he who were working as the Aid de Camp and Private Secretary respectively of the Maharaja of Bikaner were living in the suit house which then belonged to the Maharaja.
The defendant filed an application for purchasing the house.
The proceedings had not terminated when the defendant left the service of the Maharaja and went to Banaras for higher studies.
On his return from Banaras, he joined the service of the Maharaja in the civil department of Bikaner.
After a long time on account of the joint efforts of Bharat Singh and the defendant, the sale of the house was sanctioned.
Bharat Singh who was living jointly with him paid the consideration for the sale on November 4, 1939 'out of the joint income. ' Thus according to the defendant, Bharat Singh and he became its owners from the date of payment of the consideration.
He 632 further pleaded that 'if the patta of the property had been granted in the names of the plaintiffs due to some reasons, political and other surrounding circumstances and for the safety of the property, it cannot affect the right of the defendant '.
It was also stated that Bharat Singh and the defendant had not executed any sale deed in favour of the plaintiffs and so they could not become owners of the suit house.
In another part of the written statement, the defendant pleaded thus: "The plaintiffs have taken the entire ancestral property of the village.
Still they are harassing the defendant due to avarice.
The defendant and Thakur Bharat Singh had been doing Government service.
So there was always danger or removal or confiscation of the property.
Even if Thakur Bharat Singh might have written or given his consent for entering the names of the plaintiffs in the patta in this view, it is not binding.
The plaintiffs are at the most 'benami ' even though the patta which is not admitted might be proved.
" It is thus seen that the defendant put forward a two fold claim to the suit house one on the basis of the right of survivorship another on the basis of a joint purchase along with Bharat Singh.
Even though in one part of the written statement, he declined to admit the existence of the patta, in paragraph 13 of the written statement which is extracted above, he put forward the plea that the plaintiffs were at the most holding the property as benamdars.
He, however, did not claim that he was entitled to the property as an heir of Bharat Singh alongwith plaintiff No. 1.
and Gad Singh who would have inherited the estate of Bharat Singh on his death being his nearest heirs.
In the reply, the plaintiffs denied that the defendant was entitled to the suit house as a surviving coparcener on the death of Bharat Singh.
They, however, pleaded that plaintiff No. 1 had purchased the suit house out of his income; that Bharat Singh used to love plaintiff No. 2 'as his son ' and was thinking of adopting him but he died all of a sudden and that the defendant had not disclosed in his written statement the special political circumstances under which the names of the plaintiffs were entered in the patta.
They denied that the defendant had any interest in the suit house.
On the basis of the oral and documentary evidence produced before him, the learned District Judge who tried the suit held that Bharat Singh had secured the house from the Government of Bikaner for the plaintiffs with their money; that the patta of the house had been granted by the Patta Court in favour of the plaintiffs; that the plaintiffs were in possession of the suit house till September, 1956 and that the 633 defendant being their close relative was living in the house not on his own account but with the plaintiffs ' permission.
The learned District Judge also held that the defendant had failed to prove that the suit house had been acquired by him and Bharat Singh with their joint fund.
Accordingly he decreed the suit for possession of the house in favour of the plaintiffs and further directed that the defendant should pay damages for use and occupation at the rate of Rs. 50 per month from September 20, 1956 till the possession of the house was restored to them.
Aggrieved by the decree of the trial court, the defendant filed an appeal before the High Court of Rajasthan in Civil First Appeal No. 31 of 1960.
The High Court rejected the case of the plaintiffs that the consideration for the house had been paid by Bharat Singh out of the funds belonging to them and also the case of the defendant that the house had been purchased by Bharat Singh with the aid of joint family funds belonging to himself and the defendant.
The High Court held that the house had been purchased by Bharat Singh out of his own money in the names of the plaintiffs without any intention to confer any beneficial interest on them.
It further held that the suit house belonged to Bharat Singh and on his death, Gad Singh, plaintiff No. 1 and the defendant succeeded to his estate which included the suit house in equal shares.
Accordingly in substitution of the decree passed by the trial court, the High Court made a decree for joint possession in favour of plaintiff No. 1.
The rest of the claim of the plaintiffs was rejected.
Dissatisfied with the decree of the High Court, the plaintiffs and the defendant have filed these two appeals as mentioned above.
The principal issue which arises for consideration relates to the ownership of the suit house.
It is admitted on all hands that though Bharat Singh and the defendant were living in the suit house from the year 1928, it continued to be the property of the Maharaja of Bikaner till the date on which the patta (Exh. 4) was issued by the Patta Court of Bikaner and that on the issue of the patta, the State Government ceased to be its owner.
It is also not disputed that the patta constituted the title deed in respect of the suit house and it was issued in the names of the plaintiffs on receipt of a sum of Rs. 5,000.
On January 11, 1930, the defendant had made an application, a certified copy of which is marked as Exhibit A 116 to the Revenue Minister of the State of Bikaner making enquiry about the price of the suit house on coming to know that the State Government intended to sell it.
After the above application was made, the defendant left the service of the State of Bikaner and went to Banaras for studies.
Bharat Singh who was also an employee of the State Gov 634 ernment was working as the Aid de Camp of the Maharaja in 1939.
At the request of Bharat Singh, an order was made by the Maharaja on May 4, 1939 sanctioning the sale of the suit house for a sum of Rs. 5,000.
Exhibit A 118 is the certified copy of the said order.
Exhibit A 120 is a certified copy of the order of Tehsil Malmandi showing that a sum of Rs. 5,000 had been deposited on behalf of Bharat Singh towards the price of the suit house.
It also shows that Bharat Singh was asked to intimate the name of the person in whose favour the patta should be prepared.
Presumably, the patta was issued in the names of the plaintiffs as desired by Bharat Singh and Exhibit A 121 shows that it was handed over on September 30, 1940.
The patta was produced before the trial court by the plaintiffs.
By the time the patta was issued in the names of the plaintiffs, the mother of plaintiff No. 2 had died.
He was about eight years of age in 1940 and he and his younger brother, Dalip Singh were under the protection of Bharat Singh who was a bachelor.
They were staying with him in the suit house.
The defendant also was residing in it.
The plaintiffs who claimed title to the property under the patta in the course of the trial attempted to prove that the sum of Rs. 5,000 which was paid by way of consideration for the patta by Bharat Singh came out of the jewels of the mother of plaintiff No. 2 which had come into the possession of Bharat Singh on her death.
The plaintiff No. 2 who gave evidence in the trial court stated that he had not given any money to Bharat Singh for the purchase of the house but he had come to know from his father, plaintiff No. 1 that it had been purchased with his money.
Jaswant Singh (P.W. 2) and Kesri Singh (P.W. 3) to whose evidence we will make a reference in some detail at a later stage also stated that they had heard from Bharat Singh that the jewels of the mother of plaintiff No. 2 were with him suggesting that they could have been the source of the price house.
Plaintiff No. 1 who could have given evidence on the above question did not enter the witness box.
It is stated that he was a person of weak mind and after the death of Bharat Singh was behaving almost like a mad man.
The defendant stated in the course of his evidence that the mother of plaintiff No. 2 had gold jewels weighing about 3 4 tolas only.
In this state of evidence, it is difficult to hold that the plaintiffs have established that the consideration for the suit house was paid by them.
The finding of the trial court that the house had been purchased by Bharat Singh for the plaintiffs with their money cannot be upheld.
The case of the defendant that the price of the suit house was paid out of the funds belonging to him and Bharat Singh has been rejected both by the trial court and the High Court.
On going 635 through the evidence adduced by the defendant, we feel that there is no reason for us to disturb the concurrent findings arrived at by the trial court and the High Court on the above question.
We shall, therefore, proceed to decide the question of title on the basis that the consideration for the purchase of the house was paid by Bharat Singh out of his own funds.
It was contended by the learned counsel for the defendant that since the plaintiffs had failed to establish that they had contributed the price paid for the suit house, the suit should be dismissed without going into the question whether Bharat Singh had purchased the suit house with his money in the names of the plaintiffs for the benefit of plaintiff No. 2.
The plaint does not disclose the name of the person or persons who paid the sale price of the suit house.
The suit is based on the patta standing in the names of the plaintiffs.
In the written statement of the defendant, there was an allegation to the effect that even though the patta was standing in the names of the plaintiffs, they were only benamidars and the real title was with Bharat Singh and the defendant.
The particulars of the circumstances which compelled Bharat Singh or the defendant to take the patta in the names of the plaintiffs were not disclosed although it was stated that it had been done owing to some political and other surrounding circumstances and for the safety of the property.
From the evidence led by the parties, we are satisfied that they knew during the trial of the suit that the question whether the transfer effected under the patta was a benami transaction or not arose for consideration in the case.
Even in the appeal before the High Court, the main question on which arguments were addressed was whether the transaction was a benami transaction or not.
Merely because the plaintiffs attempted to prove in the trial court that the money paid for purchasing the house came out of their funds, they cannot in the circumstances of this case be prevented from claiming title to the property on the basis that even though Bharat Singh had paid the consideration therefor, plaintiff No. 2 alone was entitled to the suit house.
Reference may be made here to the decision of this Court in Bhagwati Prasad vs Shri Chandramaul(1) where the Court observed as follows: "There can be no doubt that if a party asks for a relief on a clear and specific grounds, and in the issues or at the trial, no other ground is covered either directly or by necessary implication, it would not be open to the said party to 636 attempt to sustain the same claim on a ground which is entirely new. .
But in considering the application of this doctrine to the facts of the present case, it is necessary to bear in mind the other principle that considerations of form cannot over ride the legitimate considerations of substance.
If a plea is not specifically made and yet it is covered by an issue by implication, and the parties knew that the said plea was involved in the trial, then the mere fact that the plea was not expressly taken in the pleadings would not necessarily disentitle a party from relying upon it if it is satisfactorily proved by evidence.
The general rule no doubt is that the relief should be founded on pleadings made by the parties.
But where the substantial matters relating to the title of both parties to the suit are touched, though in directly or even obscurely in the issues, and evidence has been led about them, then the argument that a particular matter was not expressly taken in the pleadings would be purely formal and technical and cannot succeed in every case.
What the Court has to consider in dealing with such an objection is: did the parties know that the matter in question was involved in the trial, and did they lead evidence about it ?" After holding that the parties to the said case were not taken by surprise, the Court granted the relief prayed for by the plaintiff on the basis that defendant was a licensee even though the plaintiff had pleaded in his plaint that the defendant was tenant.
In the above case, the Court distinguished the decision in Trojan & Co. Ltd. vs RM.
N. N. Haggappa Chettiar(1) on which much reliance was placed by the learned counsel for the defendant before us.
In the case of Trojan & Co. Ltd. (supra), this Court came to the conclusion that the alternative claim on which relief was sought was not at all within the knowledge of the parties in the course of the trial.
The case before us is not of the nature.
In Ismail Mussajee Mookerdum vs Hafiz Boo(2) the plaintiff laid claim to a property which had been transferred in her name by her mother alleging that she had paid the purchase money to her mother.
The court came to the conclusion that she had failed to prove that she had paid the consideration.
Still a decree was made in her favour holding that she had become the owner of the property by virtue of the transfer in her favour even though consideration had not been 637 paid by her since it had been established in the case that her mother intended to transfer the beneficial interest in the property in her favour.
This is borne out from the following passage at page 95: "In her evidence, which was very confused, she tried to say that she paid that purchase money to her mother.
This was clearly untrue: as both Courts have found.
The fact, therefore, remains that the properties purchased by the sale proceeds were purchased no doubt in Hafiz Boo 's name, but were purchased out of funds emanating from her mother 's estate.
This circumstance no doubt, if taken alone, affords evidence that the transaction was benami, but there is, in their Lordships ' opinion, enough in the facts of the case to negative any such inference." Moreover no plea was raised on behalf of the defendant before the High Court in this case contending that the High Court should not go into the question whether the transfer under the patta was a benami transaction or not.
We, therefore, reject the above contention and proceed to examine whether the High Court was right in arriving at the conclusion that the plaintiffs were only benamidars holding the property for the benefit of its real owner, Bharat Singh as the consideration therefor had emanated from him.
Under the English law, when real or personal property is purchased in the name of a stranger, a resulting trust will be presumed in favour of the person who is proved to have paid the purchase money in the character of the purchaser.
It is, however, open to the transferee to rebut that presumption by showing that the intention of the person who contributed the purchase money was that the transferee should himself acquire the beneficial interest in the property.
There is, however, an exception to the above rule of presumption made by the English law when the person who gets the legal title under the conveyance is either a child or the wife of the person who contributes the purchase money or his grand child, whose father is dead.
The rule applicable in such cases is known as the doctrine of advancement which requires the court to presume that the purchase is for the benefit of the person in whose favour the legal title is transferred even though the purchase money may have been contributed by the father or the husband or the grandfather, as the case may be, unless such presumption is rebutted by evidence showing that it was the intention of the person who paid the purchase money that the transferee should not become the real owner of the property in question.
The doctrine of advancement is not in vogue in India.
638 The counterpart of the English law of resulting trust referred to above is the Indian law of benami transactions.
Two kinds of benami transactions are generally recognized in India.
Where a person buys a property with his own money but in the name of another person without any intention to benefit such other person, the transaction is called benami.
In that case, the transferee holds the property for the benefit of the person who has contributed the purchase money, and he is the real owner.
The second case which is loosely termed as a benami transaction is a case where a person who is the owner of the property executes a conveyance in favour of another without the intention of transferring the title to the property thereunder.
In this case, the transferor continues to be the real owner.
The difference between the two kinds of benami transactions referred to above lies in the fact that whereas in the former case, there is an operative transfer from the transfer to the transferee though the transferee holds the property for the benefit of the person who has contributed the purchase money, in the latter case, there is no operative transfer at all and the title rests with the transferor notwithstanding the execution of the conveyance.
One common feature, however, in both these cases is that the real title is divorced from the ostensible title and they are vested in different persons.
The question whether a transaction is a benami transaction or not mainly depends upon the intention of the person who has contributed the purchase money in the former case and upon the intention of the person who has executed the conveyance in the latter case.
The principle underlying the former case is also statutorily recognized in section 82 of the which provides that where property is transferred to one person for a consideration paid or provided by another person and it appears that such other person did not intend to pay or provide such consideration for the benefit of the transferee, the transferee must hold the property for the benefit of the person paying or providing the consideration.
This view is in accord with the following observations made by this Court in Meenakshi Mills.
Madurai vs The Commissioner of Income Tax, Madras(1): "In this connection, it is necessary to note that the word 'benami ' is used to denote two classes of transactions which differ from each other in their legal character and incidents.
In one sense, it signifies a transaction which is real, as for example when A sells properties to B but the sale deed mentions X as the purchaser.
Here the sale itself is genuine, but the real purchaser is B, X being his benamidar.
This is 639 the class of transactions which is usually termed as benami.
But the word 'benami ' is also occasionally used, perhaps not quite accurately, to refer to a sham transaction, as for example, when A purports to sell his property to B without intending that his title should cease or pass to B.
The fundamental difference between these two classes of transactions is that whereas in the former there is an operative transfer resulting in the vesting of title in the transferee, in the latter there is none such, the transferor continuing to retain the title notwithstanding the execution of the transfer deed.
It is only in the former class of cases that it would be necessary, when a dispute arises as to whether the person named in the deed is the real transferee or B, to enquire into the question as to who paid the consideration for the transfer, X or B. But in the latter class of cases, when the question is whether the transfer is genuine or sham, the point for decision would be, not who paid the consideration but whether any consideration was paid." In Mohammad Sadiq Ali Khan vs Fakhr Jahan Begum & Ors.(1) the facts were these: A Mahemmodan bought an immovable property taking the conveyance in the name of his daughter who was five years of age.
The income was credited to a separate account, but it was in part applied to purposes with which she had no concern.
Upon her marriage, the deed was sent for the inspection of her father in law.
After the death of the donor it was contended that the property was part of his estate, the purchase being benami.
The Judicial Committee of the Privy Council held that there was a valid gift to the daughter because there was proof of a bona fide intention to give, and that intention was established.
In the course of the above decision, it was observed thus: "The purchase of this property was a very natural provision by Baqar Ali for the daughter of his favourite wife, and though there may be no presumption of advancement in such cases in India, very little evidence of intention would be sufficient to turn the scale.
The sending of the deed for the inspection of the lady 's father in law, which the Chief Court held to be established, was clearly a representation that the property was hers, and their Lordships agree with the learned Judges in the conclusion to which they came.
" 640 In Manmohan Dass & Ors.
vs Mr. Ramdei & Anr.
(1) Lord Macmillian speaking for the Judicial Committee observed: In order to determine the question of the validity or invalidity of the deed of gift in question it is of assistance to consider. 'the surrounding circumstances, the position of the parties and their relation to one another, the motives which could govern their actions and their subsequent conduct. ' Dalip Singh vs Nawal Kanwar 35 I.A. 104 (P.C.) always remembering that the onus of proof rests upon the party impeaching the deed.
The principle enunciated by Lord Macmillan in the case of Manmohan Dass & Ors.
(supra) has been followed by this Court in Jayadayal Poddar (deceased) through his L. Rs. & Anr.
vs Mst.
Bibi Hazara & Ors.(2) where Sarkaria, J. observed thus: "It is well settled that the burden of proving that a particular sale is benami and the apparent purchaser is not the real owner, always rests on the person asserting it to be so.
This burden has to be strictly discharged by adducing legal evidence of a definite character which would either directly prove the fact of benami or establish circumstances unerringly and reasonably raising an inference of that fact.
The essence of a benami is the intention of the party or parties concerned; and not unoften such intention is shrouded in a thick veil which cannot be easily pierced through.
But such difficulties do not relieve the person asserting the transaction to be benami of any part of the serious onus that rests on him; nor justify the acceptance of mere conjectures or surmises, as a substitute for proof.
The reason is that a deed is a solemn document prepared and executed after considerable deliberation and the person expressly shown as the purchaser or transferee in the deed, starts with the initial presumption in his favour that the apparent state of affairs is the real state of affairs.
Though the question, whether a particular sale is benami or not, is largely one of fact, and for determining this question, no absolute formulae or acid tests, uniformly applicable in all situations, can be laid down; yet in weighing the probabilities and for gathering 641 the relevant indicia, the courts are usually guided by these circumstances: (1) the source from which the purchase money came; (2) the nature and possesion of the property, after the purchase; (3) motive, if any, for giving the transaction a benami colour; (4) the position of the parties and the relationship, if any between the claimant and the alleged benamidar; (5) the custody of the title deeds after the sale and (6) the conduct of the parties concerned in dealing with the property after the sale.
" The principle governing the determination of the question whether a transfer is a benami transaction or not may be summed up thus: (1) The burden of showing that a transfer is a benami transaction lies on the person who asserts that it is such a transaction; (2) if it is proved that the purchase money came from a person other than the person in whose favour the property is transferred, the purchase is prima facie assumed to be for the benefit of the person who supplied the purchase money, unless there is evidence to the contrary; (3) the true character of the transaction is governed by the intention of the person who has contributed the purchase money and (4) the question as to what his intention was has to be decided on the basis of the surrounding circumstances, the relationship of the parties, the motives governing their action in bringing about the transaction and their subsequent conduct etc.
Now we shall refer to the facts of the present case.
When the suit house was purchased from the Maharaja of Bikaner, Bharat Singh was a bachelor and he did not marry till his death in the year 1955.
The wife of Bhim Singh had died before 1939 leaving behind her two young children.
Plaintiff No. 2 was about eight years old in the year 1939 and his younger brother Dalip Singh was about two years old.
These two children were living with Bharat Singh.
Bhim Singh, plaintiff No. 1 was almost in indigent condition.
The defendant had by then acquired a degree in law and also had practised as a lawyer for some time.
It is stated that the defendant had again been employed in the service of the State of Bikaner.
The patta was issued in the names of plaintiffs 1 and 2 at the request of Bharat Singh.
Even though the defendant stated in the written statement that the patta had been taken in the names of the plaintiffs owing to certain political circumstances, he had not disclosed in the course of his evidence those circumstances which compelled Bharat Singh to secure the patta in the names of the plaintiffs, though at one stage, he stated that it was under his advice that Bharat Singh got the patta in the names of the plaintiffs.
Bharat 642 Singh had no motive to suppress from the knowledge of the public that he had acquired the property.
It was suggested in the course of the arguments that he had taken the patta in the names of the plaintiffs because he was in the service of the State.
We do not find any substance in this submission because the property was being purchased from the State Government itself and there was no need for him to shield his title from the knowledge of the State Government.
It appears that Bharat Singh acquired the suit house for the benefit of plaintiff No. 2 for the following circumstances: The first circumstance is that the original patta had been handed over by Bharat Singh to plaintiff No. 2 on his passing B. Sc.
Examination.
This fact is proved by the evidence of plaintiff No. 2 and it is corroborated by the fact that the patta was produced by the plaintiffs before the Court.
In the course of his evidence, the defendant no doubt stated that the patta had been stolen by plaintiff No. 2 from the suit house during the twelve days following the death of Bharat Singh when the keys of Bharat Singh 's residence had been handed over to plaintiff No. 2 by the defendant.
It is difficult to believe the above statement of the defendant because of two circumstances (i) that the defendant did not state in the written statement that the patta had been stolen by plaintiff No. 2 and (ii) that within a month or two after the death of Bharat Singh, plaintiff No. 2 wrote a letter which is marked as Exhibit A 124 to the defendant stating that the rumour which the defendant was spreading that plaintiff No. 2 had stolen some articles from the suit house was not true since whenever plaintiff No. 2 opened room or any of the almirahs of Bharat Singh in the suit house, Devi Singh the son of the defendant was keeping watch over him.
That letter has been produced by the defendant and there is no reference in it to a false rumour being spread about the theft of the patta by plaintiff No. 2.
Plaintiff No. 2 however, while asserting his claim to the suit house in the course of that letter stated that he had seen that the patta had been executed in his favour; and that the patta contained his name.
The defendant does not appear to have sent any reply to Exhibit A. 124 nor did he call upon the plaintiffs to return the patta to him.
He did not also file a complaint stating that the patta had been stolen by plaintiff No. 2.
We are of the view that there is no reason to disbelieve the evidence of plaintiff No. 2 that the patta had been handed over to him by Bharat Singh on his passing the B.Sc.
examination.
This conduct of Bharat Singh establishes that it was the intention of Bharat Singh when he secured the patta from the State Government in the names of the plaintiffs the plaintiff No. 2 whom he loved should become the owner.
It is no doubt true that the name of plaintiff No. 1 is also included in the patta.
It may have been so included by way 643 of abundant caution as plaintiff No. 2 was a minor when the patta was issued.
The above circumstance is similar to the one which persuaded their Lordships of the Privy Council in the case of Mohammad Sadiq Ali Khan (supra) to hold that the property involved in that case belonged to the person in whose favour the conveyance had been executed.
The second circumstance which supports the view that Bharat Singh intended that plaintiff No. 2 should become the owner of the suit house is proved by the declarations made by Bharat Singh regarding the title to the suit house.
Jaswant Singh (P.W. 2) was a former Prime Minister of the State of Bikaner.
His wife was a cousin of plaintiff No. 1, Bharat Singh and the defendant.
Being a close relative of Bharat Singh who was also the Aid de Camp of the Maharaja of Bikaner, he was quite intimate with Bharat Singh who used to discuss with him about his personal affairs.
P.W. 2 has stated in the course of his evidence that Bharat Singh thought it proper to purchase the house in the name of plaintiff No. 2 and that he intended to make plaintiff No. 2 his heir and successor.
He has also stated that Bharat Singh had expressed his desire to give all his property to plaintiff No. 2 by a will and that he had told Kesri Singh (P.W. 3) just a day prior to his (Bharat Singh 's) death that a will was to be executed.
This statement of Jaswant Singh (PW. 2) is corroborated by the evidence of Kesri Singh (P.W. 3) whose wife was also a cousin of Bharat Singh, plaintiff No. 1 and the defendant.
The relevant portion of the deposition of Kesri Singh (P.W. 3) reads thus: "I came from Jaipur to Bikaner by train one day before the death of Bharat Singh and when I was returning after a walk I found Bharat Singh standing at the gate of his house.
I asked Bharat Singh to accompany me to my house to have tea etc.
Bharat Singh came with me to my house.
Bharat Singh told me at my house that he was not quite all right and that he might die at any time.
He wanted to execute a will.
He further told me that his house really belonged to Himmat Singh.
It has been purchased in his name.
He wanted to give even other property to Himmat Singh.
By other property which Bharat Singh wanted to give to Himmat Singh was meant Motor car, bank balance and the presents which he had.
The house regarding which my talk took place with Bharat Singh at my house was the house in dispute.
" There is no reason to disbelieve the evidence of these two witnesses.
Their evidence is corroborated by the deposition of Dr. Himmat Singh (D.W. 6) who was the Secretary of a Club in Bikaner 644 of which Bharat Singh was a member.
He was examined by the defendant himself as his witness.
In the course of his cross examination, Dr. Himmat Singh (D.W. 6) referred to what Bharat Singh had told him a few months prior to his death.
The substance of his deposition is found in the judgment of the trial court, the relevant portion of which reads thus: "D.W. 6 Dr. Himmat Singh is the Secretary of the Sardul Club, Bikaner.
He is the Senior Eye Surgeon in the Government Hospital, Bikaner.
He has stated that Bharat Singh was the member of Sardul Club.
A sum of Rs. 425/6/ remained outstanding against him till the year 1955.
This amount was received on 28 10 1955.
He has said that he does not know who deposited this amount.
On the merits of the case, he has stated that he intimately knew Bharat Singh and members of his family.
Bhim Singh and his sons Himmat Singh and Dalip Singh used to live in this house.
Bharat Singh took this house for Bhim Singh and Himmat Singh.
Four months before his death, Bharat Singh told the witness that he had already taken the house for Bhim Singh and Himmat Singh and that whatever else would remain with him shall go to them.
Dr. Himmat Singh refutes the defendant 's stand and supports the plaintiff 's case.
" It was argued on behalf of the defendant that there is some variation between the deposition of Dr. Himmat Singh (D.W. 6) and the above passage found in the judgment of the trial court and that the evidence of D.W. 6 should not be believed as he had turned hostile.
The deposition of Dr. Himmat Singh (D.W. 6) was read out to us.
It was also brought to our notice that an application had been made by the defendant to treat D.W. 6 as hostile and that it had not been granted by the trial court.
Even though there is a slight variation between what is stated by D.W. 6 and what is contained in the judgment of the trial court with regard to certain details, we do not feel that the said variation is of any substantial nature.
The evidence of D.W. 6 suggests that Bharat Singh was of the view even during his life time that the suit house belonged to plaintiffs and not to himself.
Even though an application had been made by the defendant to treat D.W. 6 as hostile, we feel that this part of the evidence of D.W. 6 cannot be rejected on that ground since it is consistent with the evidence of Jaswant Singh (P.W. 2) and Kesri Singh (P.W. 3).
It is seen from the judgment of the High Court that the effect of the statement of Kesri Singh (P.W.3) in his deposition that Bharat Singh 645 had told him that the suit house was the property of plaintiff No. 2 has not been considered.
The High Court while dealing with the evidence of Jaswant Singh (P.W. 2) and Kesri Singh (P.W. 3) laid more emphasis on those parts of their evidence where there was a reference to the alleged utilisation of the jewels or moneys belonging to the plaintiffs by Bharat Singh for the purpose of acquiring the suit house.
The High Court has also observed in the course of its judgment that neither of them had stated that Bharat Singh had told them that he was purchasing or had purchased the suit house as a gift to Bhim Singh and Himmat Singh.
The above observation does not appear to be consistent with the evidence of Kesri Singh (P.W. 3) discussed above.
It was, however, contended on behalf of the defendant that the statement made by Bharat Singh in the year 1955 could not be accepted as evidence in proof of the nature of the transaction which had taken place in the year 1940.
It was contended that the question whether a transaction was of a benami nature or not should be decided on the basis of evidence about facts which had taken place at or about the time of the transaction and not by statements made several years after the date of the transaction.
In support of the above contention, the learned counsel for the defendant relied on the decision of the House of Lords in Shephard & Anr.
vs Cartwright & Anr.(1).
The facts of that case were these: In 1929, a father, with an associate, promoted several private companies and caused a large part of the shares, for which he subscribed, to be allotted in varying proportions to his three children, one of them being then an infant.
There was no evidence as to the circumstances in which the allotments were made.
The companies were successful and in 1934 the father and his associate promoted a public company which acquired the shares of all the companies.
The children signed the requisite documents at the request of their father without understanding what they were doing.
He received a cash consideration and at various times sold, and received the proceeds of sale of, their shares in the new company.
He subsequently placed to the credit of the children respectively in separate deposit accounts the exact amount of the cash consideration for the old shares and round sums in each case equivalent to proceeds of sale of the new shares.
Later he obtained the children 's signatures to documents, of the contents of which they were ignorant, authorising him to withdraw money from these accounts and without their knowledge he drew on the accounts, which were by the end of 1936 exhausted, part of the sums withdrawn being dealt with for the benefit of the children but a large part remaining unaccounted for.
He died in 646 1949.
In the action filed against his executors, it was contended by them that the subsequent conduct of the father showed that when the shares were got allotted by him in the names of the children in 1929, he did not intend to make them the real owners of the shares and that the presumption of advancement had been rebutted.
This contention was met by the plea that the subsequent conduct of the father in dealing with the shares as if they were his own could not be relied upon either in his favour or in favour of his representatives, executors and administrators to prove that he had no intention to create any beneficial interest in his children in the shares in question when they were obtained.
On these facts, the House of Lords held that the subsequent acts and declarations of the father could not be relied upon in his favour or in favour of his executors to rebut the presumption of advancement.
Viscount Simonds in the course of his judgment observed thus: "My Lords, I do not distinguish between the purchase of shares and the acquisition of shares upon allotment, and I think that the law is clear that on the one hand where a man purchases shares and they are registered in the name of a stranger there is a resulting trust in favour of the purchaser; on the other hand, if they are registered in the name of a child or one to whom the purchaser then stood in loco parentis, there is no such resulting trust but a presumption of advancement.
Equally it is clear that the presumption may be rebutted but should not, as Lord Eldon said, give way to slight circumstances: Finch vs Finch ; It must then be asked by what evidence can the presumption be rebutted, and it would, I think, be very unfortunate if any doubt were cast (as I think it has been by certain passages in the judgments under review) upon the well settled law on this subject.
It is, I think, correctly stated in substantially the same terms in every text book that I have consulted and supported by authority extending over a long period of time.
I will take, as an example, a passage from Snell 's Equity, 24th ed., p. 153, which is as follows: "The acts and declarations of the parties before or at the time of the purchase, or so immediately after it as to constitute a part of the transaction, are admissible in evidence either for or against the party who did the act or made the 647 declaration.
But subsequent declarations are admissible as evidence only against the party who made them, and not in his favour.
" The above passage, we are of the view, does not really assist the defendant in this case.
What was held by the House of Lords in the case of Shephard & Anr.
(supra) was that the presumption of advancement could be displaced only by a statement or conduct anterior to or contemporaneous to the purchase nor could any conduct of the children operate against them as admissions against their interest as they acted without the knowledge of the facts.
In the instant case, we are concerned with the conduct and declarations of Bharat Singh subsequent to the transaction which were against his interest.
The evidence regarding such conduct and declarations is not being used in his favour but against the legal representative of Bharat Singh i.e. the defendant who would have become entitled to claim a share in the suit house if it had formed part of his estate.
Such conduct or declaration would be admissible even according to the above decision of the House of Lords in which the statement of law in Snell 's Equity to the effect `but subsequent declarations are admissible as evidence only against the party who made them, and not in his favour ' is quoted with approval.
The declarations made by Bharat Singh would be admissible as admissions under the provisions of the Indian Evidence Act being statements made by him against his proprietary interest under section 21 and section 32(3) of the Indian Evidence Act The defendant cannot also derive any assistance from the decision of this Court in Bibi Saddiqa Fatima vs Saiyed Mohammad Mahmood Hasan(1).
The question before the Court in the case of Bibi Siddiqa Fatima (supra) was whether a property which had been purchased by a husband in his wife 's name out of the fund belonging to a waqf of which he was a Mutawalli could be claimed by the wife as her own property.
This Court held that the wife who was the ostensible owner could not be treated as a real owner having regard to the fact that the purchase money had come out of a fund belonging to a waqf over which her husband who was the Mutawalli had no uncontrolled or absolute interest.
In reaching the above conclusion, this Court observed thus : "We may again emphasize that in a case of this nature, all the aspects of the benami law including the 648 question of burden of proof cannot justifiably be applied fully.
Once it is found, as it has been consistently found, that the property was acquired with the money of the waqf, a presumption would arise that the property is a waqf property irrespective of the fact as to in whose name it was acquired.
The Mutawalli by transgressing the limits of his power and showing undue favour to one of the beneficiaries in disregard to a large number of other beneficiaries could not be and should not be permitted to gain advantage by this method for one beneficiary which in substance would be gaining advantage for himself.
In such a situation it will not be unreasonable to say rather it would be quite legitimate to infer, that it was for the plaintiff to establish that the property acquired was her personal property and not the property of the waqf.
" It was next contended that the defendant had spent money on the repairs and reconstruction of the building subsequent to the date of the patta and that therefore, he must be held to have acquired some interest in it.
We have gone through the evidence bearing on the above question.
We are satisfied that the defendant has not established that he had spent any money at all for construction and repairs.
Even if he has spent some money in that way with the knowledge of the actual state of affairs, it would not in law confer on the defendant any proprietary interest in the property.
It is also significant that neither Gad Singh during his life time nor his children after his death have laid any claim to a share in the suit house which they were entitled to claim alongwith the defendant if it was in fact a part of the estate of Bharat Singh.
Their conduct also probabilities the case of the plaintiffs that Bharat Singh did not intend to retain for himself any interest in the suit house.
On the material placed before us, we are satisfied that the transaction under which the patta was obtained was not a benami transaction and that Bharat Singh had acquired the suit house with his money with the intention of constituting plaintiff No. 2 as the absolute owner thereof.
Plaintiff No. 2 is, therefore, entitled to a decree for possession of the suit house.
The trial court passed a decree directing the defendant to pay damages for use and occupation in respect of the suit house at the rate of Rs. 50/ per month from September 20, 1956 till the 649 possession of the house was delivered to the plaintiffs.
The operation of the decree of the trial court was stayed by the High Court during the pendency of the appeal before it.
In view of the decree passed by the High Court, the defendant has continued to be in possession of the suit house till now.
Nearly twenty years have elapsed from the date of the institution of the suit.
In the circumstances, we are of the view that the defendant should be directed to pay mesne profits at the rate of Rs. 50/ per month till today and that an enquiry should be made by the trial court under Order 20, Rule 12 of the Code of Civil Procedure to determine the mesne profits payable by the defendant hereafter till the date of delivery of possession.
In the result, the decree passed by the High Court is set aside and a decree is passed directing the defendant to deliver possession of the suit house to plaintiff No. 2 and to pay mesne profits to him at the rate of Rs. 50/ per month from September 20, 1956 till today and also to pay future mesne profits as per decree to be passed by the trial court under Order 20, Rule 12 of the Code of Civil Procedure.
For the foregoing reasons, Civil Appeal No. 626 of 1971 is accordingly allowed with costs throughout.
Civil Appeal No. 629 of 1971 is dismissed but without costs.
C.A. 626/71 allowed.
P.B.R. C.A. 629/71 dismissed.
[/INST]Plaintiff No. 1 and plaintiff No. 2 were father and son while defendant was the brother of plaintiff No. 1.
The plaintiffs in their suit against the defendant claimed that the suit house in which the defendant was living, belonged to them by virtue of a patta issued in their names.
They alleged that the deceased brother of plaintiff No. 1, who remained a bachelor till his death, loved plaintiff No. 2 as his son and had thought of adopting plaintiff No. 2 but since he died all of a sudden it could not be done.
The defendant on the other hand claimed that he and his deceased brother lived as members of a joint family after the partition of their family that as a result of the joint efforts of himself and his deceased brother the Maharaja, of Bikaner sanctioned sale of the house to them, that the purchase money was paid out of their joint income but that the patta was granted in the names of the plaintiffs due to political reasons and therefore the plaintiffs were at the most benamidars.
The trial court held that the house was acquired by the deceased brother from the Government of Bikaner for the plaintiffs and the patta was granted in favour of the plaintiffs and that they were in its possession till 1956.
It rejected the defendant 's claim that it was acquired with the joint funds of himself and his deceased brother.
On appeal the High Court held that the house had been purchased by the deceased brother out of his own money in the names of the plaintiffs without any intention to confer any beneficial interest on them and on his death plaintiff No. 1 and the defendant succeeded jointly to the estate as his heirs. ^ HELD: The transaction under which the patta was obtained was not a benami transaction.
The house was acquired by the deceased brother with his money and with the intention of constituting plaintiff No. 2 as the absolute owner thereof.
[648G] Where a person buys property with his own money but in the name of another person without any intention to benefit such other person, the transaction is called benami.
In that case the transferee holds the property for the benefit of the person who has contributed the purchase money and he is a real owner.
The second case which is loosely termed a benami transaction is a case where a person, who is the owner of the property, executes a conveyance in favour of another without the intention of transferring the title to the property thereunder.
In this case the transferor continues to be the real owner.
The difference between the two kinds of benami transactions is that whereas in the former there is an operative transfer from the transferor to the transferee, though the transferee holds the property for the benefit of the person who has 629 contributed the purchase money, in the latter there is no operative transfer at all and the title rests with the transferor notwithstanding the execution of the conveyance.
One common feature in both cases is that the real title is divorced from the ostensible title and they are vested in different persons.
The question whether a transaction is a benami transaction or not depends upon the intention of the person who has contributed the purchase money in the former case, and upon the intention of the person who has executed the conveyance in the latter case.
The principle underlying the former case is statutorily recognized in section 82 of the Indian Trust Act, 1882.
[638B E] Meenakshi Mills, Madurai vs The Commissioner of Income Tax, Madras, ; at p. 722; Mohammad Sadiq Ali Khan vs Fakhr Jahan Begam & Ors.
59 I.A. 1; Manmohan Das & Ors.
vs Mr. Ramdai & Anr.
A.I.R. 1931 P. C. 175; Jaydayal Poddar (deceased) through his L.Rs. & Anr.
vs Mst.
Bibi Hazra & Ors.
referred to. 2.
The principles governing the determination of the question whether a transfer is a benami or not are: (1) The burden of showing that a transfer is a benami transaction lies on the person who asserts that it is such a transaction; (2) if it is proved that the purchase money came from a person other than the person in whose favour the property is transferred, the purchase is prima facie assumed to be for the benefit of the person who supplied the purchase money, unless there is evidence to the contrary; (3) the true character of the transaction is governed by the intention of the person who has contributed the purchase money and (4) the question as to what his intention was, has to be decided on the basis of the surrounding circumstances, the relationship of the parties the motives governing their action in bringing about the transaction and their subsequent conduct.
[641C E] In the instant case the deceased brother was a bachelor.
On the death of the wife of plaintiff No. 1, plaintiff No. 2 and his younger brother were staying with the deceased brother.
Plaintiff No. 1 was almost in an indigent condition while defendant practised law for some time and later entered into service.
The patta for the house was issued in the name of plaintiffs nos.
1 and 2 at the request of the deceased brother for the benefit of plaintiff No. 2 and was handed over to him after he completed his education.
This conduct of the deceased brother established that it was his intention that, when he secured the patta from the State Government in the names of plaintiffs it was his intention that plaintiff No. 2 whom he loved, should become the owner.
[641F H] 3.
The declaration made by the deceased, who had contributed the purchase money subsequent to the date of purchase to the effect that the property belonged to plaintiff No. 2 was admissible in evidence either under section 32(3) or section 21 of the Indian Evidence Act to prove his intention that he intended that plaintiff No. 2 should become its owner.
[647E] Shephard & Anr.
vs Cartwright & Anr.
; , distinguished.
</s>
|
<s>[INST] Summarize the judgementAppeal No. 131 of 1993.
From the Judgment and Order dated 17.12.1991 of the Himachal Pradesh High Court in Civil Revision No. 210 of 1990.
P.P. Rao and Ashok K. Mahajan for the Appellants.
D.D. Thakur, N.N. Bhat, E.C. Agrawala, A.V. Palli and Ms. Purnima Bhat for the Respondent.
The Judgment of the Court was delivered by YOGESHWAR DAYAL J.
Special leave granted.
With the consent of learned counsel for the parties, the appeal itself was heard.
The respondent is a tenant at the rate of Rs. 183.33 per month in the premises in dispute i.e. Shop No. 50, The Mall Shimla.
On 7th March, 1983, late Smt.
Dhani Devi, Predecessor in interest of appellant No. 2 and Shri Madan Mohan, appellant No.1, filed an application for eviction of the respondent on various grounds.
One of the grounds on which the eviction was claimed was non payment of rent.
It was stated in eviction petition that the respondent was in arrears of rent with effect from 1.3.1980 to 28.2.1983.
The Rent Controller on 29.7.1986 passed an order of eviction on the ground of non payment of arrears of rent.
The operative part of the said order is as under: "In the tight of my finding on issue No.1 above, the application is allowed on the ground of non payment of arrears of rent and the petition fails on other grounds.
However, the respondent shall not be evicted from the premises in question if he pays to the petitioner or deposit in this court a sum of Rs. 6,600, being arrears of rent from 1.3.1980 to 28.2.1983 @ 2,200 p.a. plus interest thereon @ 6% p.a.
amounting to Rs. 609.39, upto 28.2.1983and further interest on Rs. 6,600/ @ 6% p.a.
from 1.3.1983 till 28.8.1986 plus costs assessed at Rs. 100 within a period of 30 days from today. ' On 13.8.1986 the respondent deposited a sum of Rs. 8,500 in the court of the Rent Controller, Shimla.
According to the appellants, decree holders, the amount due inclusive of interest and costs upto 29.7.1986 was Rs. 8,661.29 and till the date of deposit it worked out to Rs. 8,677.79 if the 113 interest was to be calculated at the ordered rate till 13.8.1986.
According to the appellants the amount deposited was not in accordance with the order of the ejectment dated 29th July, 1986 and was short, and they filed the execution petition before the Rent Controller seeking possession of the suit premises.
On the execution petition being opposed, the Rent Controller framed the following two issues: "(a) Whether the tender made by the respondent of the rent amount is short as alleged? (b) Relief" By an order dated 18.5.1990 the Rent Controller while deciding issue No. 1 held that the tender made by the respondent was short to the tune of Rs. 161.29.
However, while deciding issue No.2, the Rent Controller allowed 15 days ' time from the date of the order for deposit of the said amount.
The appellants being aggrieved by the order of the Rent Controller dated 18.5.1990 filed revision petition in the High Court.
It was submitted on behalf of the appellants that the executing court had no jurisdiction to extend the time for making good the deficiency of.
161.29 inasmuch as since period of 30 days has been fixed by the Himachal Pradesh Urban Rent Control Act, 1987 (hereinafter referred to as 'the Act ') itself, the court could not either enlarge or abridge this period.
By the impugned judgment dated 17.12.1991, the High Court dismissed the revision petition.
The High Court while interpreting the words "amount due" occurring in the third proviso to Section 14(2) (i) of the Act held that these words referred to arrears of rent only and do not include interest and costs.
It will be noticed that neither of the parties had challenged the order 29.7.1986 by which the order of eviction was passed on the ground of non payment of rent against the respondent but the respondent had been given the liberty of avoiding eviction provided he deposited the amounts as stated in the order within the period of 30days from the date of the said order.
Before the High Court it was submitted on behalf of the appellants 114 that the executing court had no jurisdiction to extend the time to make good the deficiency in the amount as directed by the order dated 29.7.1986.
It was submitted on behalf of the appellants that since the period of 30 days had been fixed in the Act itself the court could not enlarge or abridge this period.
The High Court agreed with this submission but posed a question for itself, whether short fall of Rs. 161.29 which had been ordered to be deposited constitutes arrears of rent or interest and costs.
While following an earlier decision of the same High Court reported as Om Parkash vs Sarla Kumari & Ors., 1991 (1) Sim.
L.C. 45 interpreted the word "amount due" occurring in the third proviso to Section 14(2)(i) of the Act wherein it had been held that in order to save eviction the tenant is required to deposit only arrears of rent due at the time of filing application for eviction and not arrears of rent together with interest and costs within the statutory period of 30 days from the date of eviction order.
After answering the question the High Court took the view that the deficiency of Rs. 161.29 pertains to interest and costs.
So far as the arrears of rent which amountedto Rs. 6,600 for the period in question i.e. from 1.3.1980 to 28.3.1983 at the rate of Rs. 2,200 p.a. is concerned, it had been deposited within 30days.
In view of this finding the High Court was of the view that the respondent was not liable to be evicted.
High Court also held that the order of the executing court extending time to deposit Rs. 161.29 in pursuance of its order dated 29.7.1986 is of no consequence.
The relevant part of Section 14 of the Act may be noticed: '14.
Eviction of tenant (1) A tenant in possession of a building or rented land shall not be evicted therefrom in execution of a decre passed before or after the commencement of this Act or otherwise, whether before or after the termination of the tenancy, except in accordance with the provisions of this Act.
(2) A landlord who seeks to evict his tenant shall apply to the Controller for a direction in that behalf.
If the Controller, after giving the tenant a reasonable opportunity of showing cause against the applicant, is satisfied (i) that the tenant has not paid or tendered the rent due from him in respect of the building or rented land within fifteen days 115 after the expiry of the time fixed in the agreement of 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: Provided that if the tenant on the first hearing of the application for ejectment after due service pays or tenders the arrears of rent and interest at the rate of 9 per cent per annum on such arrears together with the cost of application assessed by the Controller, the tenant shall be deemed to have duly paid or tendered the rent within time aforesaid: Provided further that if the arrears pertain to the period prior to the appointed day, the rate of interest shall be calculated at the rate of 6 per cent per annum: Provided further that the tenant against whom the Controller has made an order for eviction on the ground of non payment of rent due from him, shall not be evicted as a result of his order, if the tenant pays the amount due within a period of 30 days from the date of order; or (ii).
; or (iii) . ; or (iV).
; or (v). ; the Controller may make an order directing the tenant to put the landlord in possession of the building or rented land and if the Controller is not so satisfied he shall make an order rejecting the application:" A reading of the aforesaid relevant part of the Section shows that sub section (1) of Section 14 creates a ban against the eviction of a tenant except in accordance with the provisions of the Act.
The ban is liable to be lifted.
Sub section (2) of Section 14 provides the circumstances in which the ban is partially lifted.
It contemplates that where an eviction petition is filed, inter alia, on the ground of non payment of rent by the landlord, 116 the Controller has to be satisfied that the tenant has neither paid nor tendered the rent in the circumstances mentioned in clause (i) of sub section (2) of Section 14.
He has to arrive at this satisfaction after giving a reasonable opportunity of showing cause against it to the tenant.
But there may be cases where the tenant, on being given notice of such an application for eviction, may like to contest or not to contest the application.
The tenant is given the first chance to save himself from eviction as provided in the first proviso to clause (i) of sub section (2) of Section 14.
This first proviso contemplates that the tenant may on the first hearing of the application for ejectment pay or tender in court the rent and interest at the rate mentioned in the proviso on such arrears together with the cost of application assessed by the Controller and in that case, the tenant is deemed to have duly paid or tendered the rent within the time as contemplated by clause (i) of sub section (2) of Section 14.
Where the tenant does not avail of this opportunity of depositing as contemplated by the first proviso and waits for an ultimate decision of the application for eviction on the ground of non payment of rent, the Controller has to decide it and while deciding, the Controller has to find whether the ground contained in clause (i) of sub section (2) of Section 14 has been made out or not.
If the Controller finds that the ground as contemplated by clause (i) of sub section (2) of Section 14 is made out, he is required to pass an order of eviction on the ground of non payment of rent due from him.
A second opportunity to avoid eviction is provided by the third proviso to clause (i) of sub section (2) of Section 14.
But the second opportunity is provided after the order of eviction.
The benefit of avoiding eviction arises if the tenant pays the "amount due ' within the period of 30 days of the date of order.
The question is what is the meaning of the words 'amount due" occurring in the third proviso to clause (i) of sub section (2) of Section 14 of the Act.
It will be noticed that there is no provision in the Act for giving powers to the Controller to direct payment or deposit of 'Pendente lite" rent for each month during the pendency of the petition for eviction of the meant.
First Proviso to sub section (2) of section 14 shows that in order to show payment or valid tender as contemplated by clause (i) of sub section (2) of Section 14 by a tenant in default, he has to pay on the first date of hearing the arrears of rent alongwith interest and costs of the application 117 which are to be assessed by the Controller.
Surely where a tenant does not avail of the first opportunity and contests the eviction petition on the ground of non payment of arrears of rent and fails to show that he was not in default and court finds that the ground has been made out, an order of eviction has to follow.
Therefore, it does not stand to reason that such a tenant who contests a claim and fails to avoid order of eviction can still avoid it by merely paying the rent due till the date of the filing of the application for ejectment.
The third proviso to clause (i) of sub section (2) of Section 14 should also receive an interpretation which will safeguard the rights of both the landlord and tenant.
The "amount due" occurring in the third proviso in the context will mean the amount due on and upto the date of the order of eviction.
It will take into account not merely the arrears of rent which gave cause of action to file a petition for eviction but also include the rent which accumulated during the pendency of eviction peti tion as well.
If the tenant has been paying the rent during the pendency of the eviction petition to the landlord, the "amount due" will be only arrears which have not been paid.
The landlord, as per the scheme of the section, cannot be worse off vis a vis a tenant who was good enough to deposit in court the arrears of rent together with interest and costs on the first date of hearing.
If the interpretation given by the High Court is accepted the result would be that the tenant will be better off by avoiding to pay the arrears of rent with interest and costs on the first date of hearing and prefer suffering order of ejectment after contest and then merely offer the amount due as mentioned in the application for ejectment to avoid eviction.
This could not be the intention of the legislature.
In such cases it will be advisable if the Controller while passing the order of eviction on the ground specified in clause (i) of sub section (2) of Section 14 of the Act specifies the "amount due" till the date of the order and not merely leave it to the parties to contest it after passing of the order of eviction as to what was the amount due.
Surely the Rent Control Acts, no doubt, are measures to protect tenants from eviction except on certain specified grounds if found established.
the grounds are made out and subject to any further condition which may be provided in the Act, the tenants would suffer ejectment.
Again the protection given in the Acts is not to give licence for continuous litigation and bad blood.
118 Surely the legislature which made the Act could not have envisaged that after the parties finish off one round of litigation, the party should be relegated to another round of litigation for recovery of rent which accrued pendente lite.
Whatever protection Rent Acts give they do not give blanket protection for "non payment of rent".
This basic minimum has to be complied with by the tenants.
Rent Acts do not contemplate that if one takes a house on rent, he can continue to enjoy the same without payment of rent.
The order which the Controller passed was a composite order of eviction in the sense that if the tenant wanted to save himself from eviction, he had to comply with the order.
The order which was passed by the Controller cannot be said to be an order without jurisdiction.
It may be a right order; it may have been a wrong order.
It was not a nullity that the executing court will ignore it.
But at the stage when the execution application was filed, the rent Controller could not go behind its own order dated 29.7.1986.
If the Controller could not go behind its own order in execution proceedings, surely the High Court could not also go behind the order in revision against the order of Controller refusing execution.
It was not the appropriate stage for the High Court to examine what order ought to have been passed or to limit the efficacy of the order to its interpretation of the words "amount due" as mentioned in the third proviso to clause (i) of sub section (2) of Section 14.
The question which the High Court posed never arose.
Mr., Thakur, who appeared on behalf of the respondent submitted: (1)that sub section (2) of Section 14 gives discretion to the Controller to pass an order of eviction or not to pass an order of eviction even if the ground mentioned in clauses (i) to (v) of sub section (2) of Section 14 are made out; (2)that the order of eviction which was passed is not the final order in the sense that it is an interim order.
The final order is passed only after the expiry of 30 days if the tenant fails to avail of the second opportunity provided by the third proviso to clause (i) of sub section (2) of Section 14.
With due respect to learned counsel for the respondent we are not able to persuade ourselves to agree with either of his submissions.
It is true that sub section (2) uses the expression "the Controller may make an order 119 directing the tenant to put the landlord in possession of the building or rented land and if the Controller is not so satisfied he shall make an order rejecting the application".
It will be noticed that the Controller is required to dismiss the eviction application if he is not satisfied to the existence of any ground mentioned in clauses (i) to (v) of sub section (2) of Section 14 of the Act but where the Controller is satisfied with existence of any of the grounds mentioned in clauses (i) to (v) of sub section (2) of Section 14 the Controller has no discretion to decline to pass the order of eviction.
In the context in which the expression "may" is used it means "shall '.
Otherwise the section would read that "not only the Controller can reject an application when he is not satisfied with the ground but is also entitled to dismiss the application when he is so satisfied".
Such an intention cannot be attributed to the legislature particularly when the consequences of non satisfaction is expressly mentioned.
Even if the consequences of non satisfaction was not mentioned, we are of the view that the expression "may" occurring would still mean "shall" and all that would mean is that if the grounds are not made out, he will be bound to dismiss the application and if the grounds are made out, he is bound to pass the order of eviction.
If any other interpretation is given to the word "may" the section may itself become subject matter of challenge under Article 14 of the Constitution of India.
The Court shall avoid interpretation which make the provisions violative of the Constitution, if possible.
Coming to the second submission, as we have noticed earlier, subclause (i) of sub section (2) of Section 14 gives two opportunities to the tenant to avoid eviction.
The first opportunity to avoid eviction is if the tenant avails of the benefit of first proviso.
This opportunity is before the passing of the order of eviction.
The second opportunity is after the order of eviction.
The order, which is passed for eviction, is final in the sense as it is not an interim order.
If the tenant avails of the second opportunity as provided in the third proviso then the order of eviction becomes inexecutable and he saves himself from eviction.
Having found that the question posed and answered by the High Court was not relevant at the stage it was posed, namely during the execution proceedings and, therefore, the order is bad.
The validity of the order of the executing court dated 18th May, 1990 120 now needs to be considered.
The executing court, on consideration of the evidence recorded during the execution proceedings held that the judgment debtor, respondent, himself calculated the interest for the period 1.3.1983 to 28.2.1986 with the result that Rs. 161.29 ps. was deposited less by the judgment debtor and thought that it had power to extend the time for making up the deficiency and accordingly extended the time.
So far as the Himachal Pradesh High Court is concerned it has consistently taken the view that the executing court has no such power since the time is fixed by the statute.
R.S. Pathak, CJ.
(As His Lordship then was) in Shri Krishan Kumar vs Shri Gurbux Singh, while interpreting the third proviso to Section 14(2) (i) of the Act took the view thus: "It is apparent that the statute itself provides a period of 30 days from the date of the order for payment of rental arrears by the tenant.
On such payment, the statute declares, effect will not be given to the order of eviction.
The statute does not leave the determination of the period to the Rent Controller.
It is not open to the Rent Controller, when disposing of the petition for eviction, to make an order either abridging or enlarging the period of 30 days.
Indeed, the period having been determined by the statute itself, no order was necessary by the Rent Controller.
There being no power in the Rent Controller to vary the period mentioned in the statute, it is apparent that the order made by him in the execution proceedings is a nullity.
The Appellate Authority is right in the view taken by it." Mr. Thakur, learned counsel for the respondent, referred us to Shyamcharan Sharma vs Dharamdas, ; ; Miss Santosh Mehta vs Om Prakash and others; , ; Ram Murti vs Bhola Nath and another, and Ganesh Prasad Sah Kesari and another vs Lakshmi Narayan Guptta ; and submitted that this Court had, in spite of there being no express provisions to extend time taken the view that the Court has inherent powers to extended time for deposit of rent.
We are of the view that the reliance placed on these cases is wholly misplaced.
It may be noticed that the case of Shyamcharan Sharma (supra) related to the powers of the Court under Section 13(6) of the Madhya 121 Pradesh Accommodation Control Act, 1961.
This Act contemplated an eviction petition being filed under Section 12 and one of the grounds for eviction was for failure of the tenant to pay or tender within two months from the date of service of notice of demand of rent and Section 12 (3) thereof provided that the order of eviction will not be passed on this ground if the tenant makes the payment of deposit as required by Section 13.
Section 13(1) contemplated that when a suit has been instituted on any of the grounds against the tenant for his eviction, the tenant shall, within one month of the service of summons on him or within such further time as the court may, allow in this behalf, deposit in the court or pay to the landlord the arrears of rent and shall also continue to pay, month by month, the future rent as well.
Sub section (5) of Section 13 contemplated that if the deposit was made as contemplated by sub section (1) of Section 13 no order for recovery of possession should be made on the ground of default in the payment of rent.
Sub section (6) of Section 13 provide that if the tenant fails to pay any amount as required by Section 13 the court had the power to strike out the defence and proceed with the hearing of the suit.
While dealing with the powers under Section 13(6) of the said Act this Court took the view that the court had discretion to strike off the defence or not even if there is delay in depositing rent falling due after institution of suit for eviction.
The Court held : "In case of non deposit or non payment of rent by the tenant, Section 13(6) vests a discretion in the Court to order striking off the tenant 's defence against eviction; it neither clothes the landlord with an automatic right to an eviction decree nor visits the tenant with the penalty of such a decree being automatically passed.
If the court has the discretion to strike off or not to strike off the defence, it has further discretion to condone the default and extend the time for making the payment or deposit.
Such a discretion is a necessary implication of the discretion not to strike off the defence.
A different construction might lead to perversion of an object of the Act, namely 'adequate protection of the tenant '.
" An express provision for extending time for deposit or payment was not made in Section 13(1) because the consequences of non payment was proposed to be dealt with separately by Section 13(6) and the discretion to extend time is incidental to the discretion in the said section to strike 122 off or not to strike off the defence.
This view in Shyamcharan Sharma 's case (supra) was followed by this Court in Miss Santosh Mehta 's case (supra) and Ram Murti 's case (supra), which were the cases under the Delhi Rent Control Act, 1958, which also had the provisions similar to the Madhya Pradesh Accommodation Control Act, 1961 contemplating direction by the court to direct the tenant to pay the pendente lite rents which have become due and consequences for not complying with such directions.
Again the case of Genesh Prasad Sah Kesari (supra) related to the provisions for striking out the defence for failure of the tenant to deposit arrears of rent within 15 days of date of the courts 's order and this court again followed the decision in the case of Shyamcharan Sharma.
These cases have no application where the final orders were passed after satisfaction of the Controller for entitling the landlord to seek eviction on the grounds specified in the Act.
Mr. Thakur then submitted that this Court should not exercise its powers under Section 136 of the Constitution of India as the rent laws are meant for protection of the tenants.
Rent Control Acts are necessary social measures for protection of tenants.
The Rent Control Laws have tried to balance the equity.
Landlord is duty bound to satisfy the ground of eviction mentioned in various Rent Acts and if he does not satisfy, he cannot get the order of eviction merely because the Act restricts his rights.
There are certain Rent Acts which, even when a ground of eviction is satisfied, still confer powers on the Rent Controllers to consider the question of comparative hardship and it is only in those types of cases, if the Controller is satisfied, he can decline passing orders of eviction.
But if there is no such limitations, the Rent Controllers.
after the ground of eviction specified in the Act is made out, have no discretion to reject the application.
Once the order of eviction is passed, in the circumstances like the present, the executing court is duty bound to execute its orders.
No question of equity or hardship arises at that stage.
We are in complete agreement with the view expressed by R.S. Pathak, CJ (as His Lordship then was ) in the aforesaid case of Shri Krishan Kumar.
123 In the present case the tenant spared no efforts to harass the landlords.
After the order of eviction dated 29th July, 1986 the matter did not rest there.
The tenant again failed to pay the rent and the landlord was forced to file another eviction petition on the ground of non payment of rent for the period from 1.3.1983 to 30.11.1986 and it was only after the filing of the said eviction petition and in order to avoid eviction he deposited the rent.
The matter did not rest there even and it was only after the notice of the Special Leave Petition was issued in the present case that the tenant chose to pay the rent from 1.12.1986 after keeping it in arrears for practically six years.
In view of the aforesaid facts and circumstances of the case we set aside the impugned order of the High Court dated 17th May, 1991 and the order of the Rent Controller dated 18th May, 1990 and direct the Rent Controller, Shimla, to issue the warrants of possession for ejectment of the respondent from the premises in dispute and place the landlords/appellants in possession.
V.P.R. Appeal allowed.
[/INST]The dispute between the appellant and the respondent in respect of their Interests In certain properties, was referred to arbitration by this Court and a retired Chief Justice of a High Court was appointed as the sole Arbitrator with direction to make a speaking award, and the Arbitrator submitted his Award.
Against this award the appellant objector filed objections under Section 30 of the , contending that the Arbitrator had misconducted himself in that he did not take into consideration several documents which were placed on record before him to support the objector 's case and, hence, the award was invalid under clauses (a) and (c) of Section 30.
Disposing of the Appeal, this Court HELD : 1.1.
There is no infirmity on the face of the award which would entitle this Court to exercise jurisdiction under Section 30 of the .
The Arbitrator has made a speaking award setting out his reasons for the conclusions reached by him and has thus complied with the direction of this Court given earlier.
[56D, 55E] 12.
The documents in question mainly relate to the rights and interests of the parties In the properties situate in that part which now belongs to the Dominion of Pakistan.
Since they were refugees they had made certain claims under the law governing rehabilitation of displaced persons in respect of the properties left behind by them.
The claim was sanctioned in the joint same of the objector 's predecessor in Interest and the respondent in respect of the properties left behind by the family.
On the strength of that 52 claim, one of the houses was purchased in the said name.
The Arbitrator, however, came to the conclusion, that the property in question was purchased from the funds contributed by the objector 's predecessor in interest and the respondent.
The share of the objector was held to be 1/7th in the share of the predecessor in interest, since deceased.
Since the contribution made for payment of the price was not equal, the Arbitrator allotted a larger share to objector 's predecessor in interest and consequently, the objector has got a share on the basis thereof, when inheritance opened on the death of the predecessor in interest.
[55B D.H, 56A] 1.3.
It is clear from the award that the Arbitrator did not go into the rights and interests of the parties including the HUF in the properties left behind in the Dominion of Pakistan.
That was not necessary because the fact that the claim was sanctioned in the joint name of the Objector 's predecessor in interest and the respondent was never in dispute.
The short question, which the Arbitrator was required to consider, was as regards the title of the properties, which were the subject matter of the reference, which included a house purchased on the strength of that claim.
It is not necessary for the Court to go into the question of the rights and interests of the parties in the properties left behind in the Dominion of Pakistan since the Arbitrator was right that he was called upon to decide the interest of the parties in respect of two houses alone, which were the subject matter of the reference.
Therefore, the Arbitrator had not misconducted himself by refusing to enumerate all those documents in question in his award because he was bound by the scope of the reference which was limited to the two houses and not the properties left behind in the Dominion of Pakistan by the parties.
[55F, 56B C] 2.
In order to interfere with an award, the Court must rind out whether the Arbitrator has misconducted himself or there was any infirmity in the procedure, such as, the Arbitrator having travelled beyond the terms of the reference or there being an error apparent on the face of the award.
It is not misconduct on the part of an Arbitrator to come to an erroneous conclusion on a disputed issue.
The Court does not sit in appeal and does not reassess the evidence.
Even if the Court feels that had it been left to it, it would have assessed the evidence differently that would not be a valid ground for setting aside the award.
[56E, G] 3.
Therefore, in the facts and circumstances of the case, there is no reason to interfere with the award, which is made the rule of the 53 Court.
[56H, 57A B] Food Corporation of India vs
Joginder pal Mohinderpal & Anr., [1989]2 S.C.C. 347 and Hind Builders vs Union of India, [1990] 3 S.C.C. 338, relied on.
</s>
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<s>[INST] Summarize the judgement: Criminal Appeal No. 17 of 1975.
Appeal by Special Leave from the Judgment and Order dated 7 6 1974 of the Himachal Pradesh High Court in Criminal Appeal No. 40/73.
Hardyal Hardy and P.P. Juneja for the Appellants.
Badri Das Sharma and Miss A. Subhashini for the Respondent.
The Judgment of the Court was delivered by SARKARIA, J.
This appeal by special leave is directed against a judgment, dated June.
7. 1974, of the High Court of Himachal Pradesh, whereby it upheld the conviction of Rama Nand accused under Section 302, Penal Code, and that of the co accused Shish Ram and Kali Datt under Section 201, Penal Code, and also the sentences awarded to each of them by the learned Sessions Judge, 446 Mandi.
The prosecution story, as it emerged from the record, was as follows: Sumitra deceased, aged 19 years, was the daughter of Som Krishan (P.W. 33).
Rama Nand, appellant is her husband and Shish Ram, appellant 2, is her father in law while Kali Datt appellant 3, is the younger brother of Rama Nand.
Sumitra 's father wished to see his daughter highly educated, and employed in Government service and married to a suitable, highly educated person, settled in life.
Sumitra had passed Higher Secondary Examination and wanted to pursue her studies further according to the wishes of her father.
About two years before Sumitra 's reported death, Shish Ram appellant approached Som Krishan (P.W. 33) and persuaded him to give Sumitra in marriage to his son, Rama Nand.
While negotiating this matrimonial alliance, Shish Rama told Som Krishan that his son was suitably employed on a Government job in the Office of the Deputy Commissioner, Kasumpti.
He further falsely represented to Som Krishan that his son, Rama Nand was a graduate.
Believing this representation to be true, Som Krishan about 1 1/2 or 2 years before Sumitra 's murder in question, married her to Rama Nand; Before this marriage it was settled by Som Krishan with Shish Ram and Rama Nand accused that even after her marriage, Sumitra would continue to pursue further studies and take up employment as a teacher.
After the marriage, her father got his daughter, Sumitra, employed as a teacher in Village Nursery School at Chanyana which was situated near her parents ' village.
While teaching at Chnayana, she continued to reside with her parents.
She used to visit village Jherwin occasionally to be in the society of her husband who also used to come to Jherwin from Kasumpti.
The accused persistently demanded that Sumitra should give up her employment at Chanyana, and start residing permanently and continuously in her matrimonial home at Jherwin.
Sumitra tenaciously refused to do so.
Rama Nand wrote several letters to Sumitra urging her to give up her adamant attitude.
These letters furnished evidence of a strong motive for Rama Nand to put an end to the life of Sumitra.
Rama Nand was employed as a Clerk in the Office of the Deputy Commissioner Kasumpti.
On May 12, 1972, he came to Jherwin from Kasumpti.
He had earlier written to his wife, Sumitra, strongly urging her to come to village Jherwin.
On May 13, 1972, Sumitra came to Rama Nand 's house at Jherwin and stayed with him in his room on the night between 13th and 14th May, 1972.
The other 447 rooms of the house were in occupation of the other members of Shish Ram 's family.
Thereafter, on May 14, 1972, she disappeared from the house of the accused.
The accused gave out that Sumitra had gone towards the Sutlej river on the pretext of attending to the call of nature; that thereafter her Salwar and shoes were found on the bank of the river, which indicated that she had jumped into the river and committed suicide.
After pretending to make a search for her body in the river and nearabout, Shish Ram on May 16, 1972, went to Police Station Karsog at 5.30 p.m. and lodged a report (exhibit PAQ).
It was recorded by Head Constable Nand Lal.
After recording it in the Roznamacha, the Head Constable read it in the presence of one Inder Pal to the informant, who, after hearing the same to be correct, signed it in Hindi and his companion Inder Lal signed it in English.
As this report, according to the prosecution, shows that an attempt was made by Shish Ram accused to lay a false trail and manufacture false clues as to the cause of the death of Sumitra and to screen the offence, it is necessary to reproduce the material parts of that report (rendered into English), hereunder: . "my daughter in law Smt.
Sumitra Devi aged about 18/19 years, was married about 1 1/2 years ago, to my son Rama Nand who is employed in the office of D.C. Kasumpti as a clerk.
Sumitra Devi herself was employed as a Mistress in Nursery School, Chanyana and was residing with her parents.
Whenever my son used to come home on leave, she also used to visit her house at such time.
Similarly my son Rama Nand had come on leave to his house on 12 5 72 and in the evening of 13 5 72, my daughter in law, Smt.
Sumitra Devi had also come to his house.
As usual, because of Sunday holiday, in the morning on 14 5 72, myself, my daughter in law and other members of the family were planting chilly seedlings in the fields near our house.
My son (Rama Nand) was lying in bed on account of stomach trouble.
After plantation work, at about 9/10 a.m. my daughter in law, Smt.
Sumitra Devi along with Sheela Devi aged about 7 years, who is daughter of my brother, had gone downward on the pretext of easing herself.
After some time, Sheela returned home and reported that she had been turned back from the way by her aunt.
Sumitra Devi, who had gone ahead towards the river side.
For some time it was believed that she might have gone to answer the call of nature.
The river is about 2 furlongs from my house towards downside.
When sufficient time passed and she did 448 not return home, then calls were given hither and thither and search was also started but her whereabouts could not be known.
After a thorough search on the Sutlej river bank, the Salwar and shoes of Smt.
Sumitra were found which Smt.
Sumitra was wearing at the time of her going that side.
This created a suspicion that she might have committed suicide by jumping into the river.
She was searched at the river bank as also in the nearby villages. but her dead body was not found, nor any clue of her going is available.
Sumitra was married in a good family and her character was also good, her relations with her husband were cordial.
No quarrel on that day or prior to that, took place between her and my son, nor is there any reason for her disappearance.
I have come to report, which may be recorded.
After locating her alive or dead, separate report will be lodged.
" Daulat Ram, Station House Officer (P.W. 38) then visited the scene of occurrence on May 13, 1972.
He was not satisfied about the correctness of the information given by Shish Ram accused.
He, therefore, got a case under Section 364, Penal Code, registered.
Shis Ram accused produced before him the Salwar (exhibit P 14) and shoes (exhibit P 15/12) which, according to Shish Ram 's report, belonged to Sumitra deceased and were found lying on the river bank.
The investigator also prepared a rough sketch of the spot where these clothes and shoes were stated to have been found.
Som Krishan upon receiving the information, suspected that her daughter had been murdered at the instance of Rama Nand and others.
Som Krishan reached the spot and made enquiries.
Rama Nand and Shish Ram accused were arrested by the Investigating Officer on June 5, 1972.
The Investigating Officer took into possession the Locket chain (exhibit P 1) and the watch (exhibit P 2) belonging to the deceased from the room which was in the occupation of Rama Nand, in the deceased from the room which was in the occupation of Rama Nand, in the presence of Kanshi Ram and Hira Mani and prepared the Memo (exhibit P A) in this behalf.
Rama Nand accused, whilst in police custody, produced Sumitra 's clothes (exhibit P 5 to exhibit P 10) which were taken into possession by the Investigator in the presence of Mastu and Hari Ram, witnesses (vide exhibit P Y).
These clothes, according to the prosecution, were the same which Sumitra was wearing when she arrived at the house of Rama Nand accused on May 13, 1972.
449 On June 5, 1972, a legless and armless dead body in a highly decomposed state was found at a distance of four kilometers down stream on the bank of the river Sutlej near village Randaul.
Kali Datt appellant was found near that skeleton in the early hours or June 5,1972.
He dragged the skeleton from the river upto some distance.
It appeared that dogs etc.
had eaten away the flesh.
A part of the skull was found in tact, while the remaining part of it was lying at some distance.
On receiving information, Som Krishan (P.W.33) and his brother 's wife, Laxmi (P.W. 2), came and identified the skeleton to be that of Sumitra.
There was some flesh on the buttock portion and there was a mark on it.
According to these identifying witnesses, this mark was that of a burn which Sumitra had received during her infancy.
One of the teeth found in the inaudible was carious, while another tooth was jutting out.
Daulat Ram got the dead body measured from shoulder to the cut portion of the thies by Mehar Chand.
The measurement came to 2 ' 4".
Daulat Ram prepared the inquest report (exhibit P/F) which was attested by Kundan witness.
He sent the dead body along with the inquest report (exhibit PF) to Simla for post mortem examination.
The dead body reached the Hospital at 1 p.m on June 7, 1972.
There, they directed the police to take the dead body to Ripon Hospital.
The post mortem examination.
was conducted by Dr. J. R. Sharma (P.W. 14) on the following day.
The post mortem report was handed over to the police by the Doctor on June 21, 1972.
A few components of the skeleton, including the mandible, were sent to the Dental Surgeon, Dr. R. section Pathania (P.W. 15) and Radiologist, Dr. M. L. Ahuja (P.W. 16) for examination and opinion.
These Doctors, however, opined that the mandible belonged to a child of not more than 10 years of age.
The components of the skeleton were, also, sent to Dr. O. P. Bhargave (P.W. 31), Professor of Anatomy in the Medical College of simila.
His opinion about the age of the deceased was also the same.
The Doctor could not determine the sex of the skeleton.
On August 24, 1972, a Paranda (cotton headtail), alleged to be of Sumitra deceased was recovered from the jungle of Ghangar.
Some human hair were found entangled in the Paranda.
These hair were sent for comparison with the hair of the deceased found embedded in her Dupatta.
The forensic expert opined that the two sets of hair belonged to one and the same person.
After investigation, the four accused, namely, Rama Nand, his father Shish Ram, his brother Kali Datt and Shish Ram 's brother Kesar Chand, were sent up before a Magistrate who committed them 450 for trial to the Court of Session.
At the trial, in his examination under Section 342, Rama Nand admitted that after her marriage, Sumitra got employment as a teacher.
He, however, denied the prosecution allegation that he and his father were opposed to her employment as a teacher.
He expressed ignorance as to whether there was any settlement between his father, Shish Ram, and Som Krishan Shastri, father of Sumitra that she would continue her studies even after the marriage and would be free to take up service as her career.
He added that his matrimonial alliance with Sumitra was not negotiated and settled in his presence.
He admitted that the letters dated December 13, 1971, December 16, 1971 and May 9, 1972 (the English rendering of which is marked exhibit PAH, exhibit PAB, and exhibit PC, respectively) were written by him to Sumitra, and that the letter (exhibit PAJ) dated October 14, 1971, was written by him to his father in law.
Som Krishan Shastri (P.W. 33).
He further admitted that on May 13, 1972, Sumitra came to his house in village Jherwin from her parents ' place, and that she was then wearing the golden chain (exhibit P 1), wrist watch (exhibit P 2), Dupatta (exhibit P 5), suit (exhibit P 6 and exhibit P 7), socks (Ex.
P 8 and 9), banian (Ex.
P 10) and was carrying the basket (exhibit P 11) and umbrella (exhibit P 12).
He, however, added that when she (Sumitra) reached home on May 13, 1972 with the articles mentioned above, she was wearing pink ribbon on her head and not any threadbunch like exhibit
Question No.9 put to him was: "It is in prosecution evidence that on May 14, 1972 Sumitra was not seen at your house or in the village at Jherwin at all or thereafter.
What have you to say?" He replied: "On 14 5 72 morning at about, say upto 11 a.m., she was working in the field at Jherwin and thereafter she was not seen there and later on I was arrested and so I cannot say about her whereabouts." He admitted that his father Shish Ram had lodged the report (exhibit PAQ) in the Police Station, Karsog.
When the circumstance appearing in the prosecution evidence, "that after the occurrence on May 16, 1972, he (Rama Nand) went away to Simla from Jherwin and returned home three or four days thereafter" was put to Ramanand, he replied: "It is wrong.
I went to Simla on 17 5 72 evening and returned on 19th morning".
He denied that he and his father implored Som Krishan Shastri that he should save them from the police at Jherwin.
When the negative circumstance appearing in evidence, to the effect that the Salwar (exhibit P 14) was not of Sumitra, was put to him, he asserted that the Salwar (exhibit P 14) was that of Sumitra; and that his father had shown the Salwar (exhibit P 14) indicating that his daughter in law, Sumitra had gone in the river when the (Ramanand) was weeping.
In reply to the last question, Rama Nand narrated more or less the same story which was given by them (accused) to 451 the police in the Report, PAQ.
Among other things, he stated: "It was found on the river side that her Salwar (exhibit P 14) and shoes (exhibit P 15) were lying by the river bank giving indication that she had jumped into the river.
Then we were in mourning and the villagers also verified that Sumitra was seen going to the river".
Shish Ram accused admitted that Sumitra had come to their house at Jherwin on May 13, 1972 and had disappeared on May 14, 1972.
He admitted having lodged the report (exhibit PAQ) in the Police Station, Karsog.
He admitted that he had produced the Salwar (Ex.
P 14) and shoes (exhibit P 15) before the police during investigation.
He also maintained that the Salwar (exhibit P 14) belonged to Sumitra.
He denied that he and his co accused were threatening to teach Sumitra and her father the lesson of life for keeping Sumitra employed against their wishes at Chanayana.
He repeated the substance of the story which he had earlier stated in the report (exhibit PAQ), and reiterated that since Sumitra 's Salwar and shoes were found on the river bank, she had either jumped into the river or run away somewhere.
The learned Additional Sessions Judge by his judgment, dated December 1, 1973, convicted Rama Nand under Section 302, Penal Code, and sentenced him to rigorous imprisonment for life.
He further convicted Kali Datt and Shish Ram accused under Section 201, Penal Code, and sentenced each of them to one year 's rigorous imprisonment and a fine of Rs. 500/ .
Keshar Chand accused was given the benefit of doubt and acquitted.
The appeal by the convicted persons was dismissed by the High Court as per its judgment, dated June 7, 1974.
Hence this appeal by special leave.
The conviction of the appellants is based entirely on circumstantial evidence.
In convicting Rama Nand, appellant under Section 302, Penal Code, for the murder of his wife, Sumitra, the courts below have concurrently relied upon these circumstances which, according to them, had been established by the prosecution.
(1) Rama Nand accused had a strong motive to murder his wife, Sumitra.
(2) Sumitra was last seen alive with Rama Nand, appellant in the family house at Jherwin on the night between 13th and 14th May, 1972.
The other two co accused were also present in the same house (3) (a) Rama Nand and the other co accused falsely gave out that she had committed suicide by jumping into the river.
They 'planted ' a Salwar and a pair of shoes on the bank of the Sutlej and gave out that they belonged to the deceased, and Shish Ram lodged 452 a false report with the police to the effect that she had committed suicide by jumping into the river.
The Salwar and the shoes, which had been 'planted ' there to manufacture false clues by the accused, did not belong to Sumitra, and the accused have falsely asserted that these articles belong to the deceased.
(b) The story given out by the accused persons that upto 11 a.m. on May 14, 1972, Sumitra was planting chillies along with Sheela and other members of the family of the accused, was false.
(4) The gold chain (exhibit P 1) and the watch (exhibit P 2) which Sumitra used to wear on her person all the 24 hours, and the clothes (exhibit P 5 to P 10) which she had on the person and the basket (exhibit P 11) and umbrella (exhibit P 12) which she was carrying when on the evening of May 13, 1972 she came to the house of the accused at Jherwin, were recovered from the house of the accused.
(5) Some days after the occurrence, one Paranda was found from the jungle near this village.
There was a bunch of hair in the plaited tail of this Paranda.
The tail appeared to have been cut.
These hair sticking in the Paranda and those found entangled in the Dupatta of the deceased were according to the Forensic Expert of one and the same person.
(6) A legless decomposed corpse was recovered from the Sutlej near village Randol in a mutilated condition.
From a burnt mark on the flesh sticking to the buttock of the corpse it was identified as that of Sumitra, deceased.
The High Court further held that even if any doubt remained with regard to the identity or recovery of the corpus delicti, the telling circumstances otherwise complete the chain of evidence to establish beyond doubt that Sumitra had been murdered and the charges had been established against the accused as held by the trial court.
In the result it dismissed the appeal of the accused respondents.
Shri Hardayal Hardy, learned counsel appearing for the appellants contents that these circumstances have not been satisfactorily established.
He has placed great emphasis on the evidence of the medical experts, according to which the mutilated corpse found at Randol was that of a child, aged about 8 or 9 years.
It is submitted that the dead body found was not that of Sumitra deceased, and as a result, the courts below were not justified in holding that the death of Sumitra had been established by the prosecution.
On the other hand, the learned counsel for the State has argued in support of the judgment of the High Court.
453 It is well settled that where the inference of guilt of an accused person is to be drawn from circumstantial evidence only, those circumstances must, in the first place, be cogently established.
Further, those circumstances should be of a definite tendency pointing towards the guilt of the accused, and in their totality, must unerringly lead to the conclusion that within all human probability, the offence was committed by the accused and none else.
The first circumstance which has been found to be established by the courts below against the appellant is that he had "a very strong motive" to commit the murder of Sumitra.
To substantiate this fact, the prosecution produced four letters written by Rama Nand appellant.
There are: exhibit PAJ, exhibit PAH, exhibit PAB/1 and exhibit PC.
The accused also tendered in evidence the letter (exhibit DA) dated November 14, 1971 written by Som Krishan to Sumitra.
As already mentioned, Rama Nand accused has admitted that the letters (exhibit PAJ, PAH, PAB/1 and P.C.) were written by him.
exhibit PAJ purports to have been written by him from village Jherwin on October 14, 1971.
In this letter, Rama Nand very clearly informed his father in law that his father Shish Ram was not in favour of Sumitra taking up service and residing away from the accused 's house at Jherwin.
In this letter, Rama Nand urged his father in law that the latter should either come to Jherwin along with Sumitra or send her alone.
This letter also indicates that Sumitra was persisting in taking up service elsewhere against the wishes of the accused persons.
Chronologically, the next letter is exhibit DA dated November 14, 1971.
It is addressed by Som Krishan to his daughter, Sumitra.
In this letter, the father informs the daughter that he had obtained her appointment letter and she would be required to join by the 17th to start the Nursing School at Balwari.
He wanted her to come to his house to take up the appointment.
In this letter, he also wishes her daughter to convey to Rama Nand appellant and his brother, Kesar Chand (acquitted accused) that they should agree to Sumitra 's taking up this employment and that they should further bring round Shish Ram by reminding him that they had earlier consented to her taking up Service.
This letter further indicates that Sumitra was much distressed because of the hostile attitude adopted by her in laws towards her.
To console her, the father wrote: "Don 't worry.
Whatever God does is good.
Have self confidence and do not repent on any failure".
The third letter, dated December 13, 1971, (exhibit PAH), written by Rama Nand to Sumitra, shows that the opposition of the appellant, 454 his father Shish Ram and brothers to Sumitra 's taking up service away from the matrimonial home, had passed from the serious to the sardonic stage.
It starts with the words: "Wish you happy luxury !" Read in accord with the tenor of the letter, it conveys a biting ironical taunt.
These words were capable of being construed as conveying an innuendo that she was merry making de hors the matrimonial home in an extra marital way.
May be, the appellant was doubting her fidelity.
He informs her that he had visited Jherwin in the hope that he would join her there, but this hope did not materialise.
He complains against this attitude of neglect on the part of his wife when he says: "Today you have not seen to my condition, and have defamed me.
To whom should I blame ? It is the wind and to which side it blows it must do something.
I was thinking to save (you) from this wind.
" He further reproaches and upbraids her: "You did not think over it seriously and you did not care for it nor others.
You have taken it as a prestige issue.
I cannot do anything so long I am not heartily happy and I weep to my fate.
" He then warns her in a contemptuous and peremptory tone: "It would be better that you should resign your job now and come down here .
If you intend to reside with me, then you should agree to my words. otherwise it will be a dog 's life.
You should either come to this place or to village Jherwin after resigning the job and from there you may come to Simla on any day.
As you know, a friend in need is a friend in deed.
When this is lost, one cannot take the shelter of others.
" He reminds her that her marriage had been solemnised with him. "To do service entirely depends upon you and me and not upon (your) father.
It is time to resign the Service. " He repeats: "It is against the respect of my family, yourself and myself that I should allow you to serve at a monthly pay of Rs. 120/ and only for a tenure of six months and myself to stay at Simla in the Hotel." He then in stronger language demanded her to resign her job within 24 hours and come to his house direct without waiting for her resignation to be accepted.
He closes the letter with an ominous threat veiled as a warning: "If you do not resign the job, our relations will become strained." In the next letter (exhibit PC), dated December 16, 1971, Rama Nand wrote to Sumitra that he did not understand why she did not "improve his (?) life ' and why she was acting at the beck and call of others.
He urged her that it would be better to 'live for a more '.
He added: "You obey me or not, you yourself will understand the significance of this when you give place to it in your mind".
He sternly repeated the warning: "I once again request you to keep in mind your as also my honour, what you have to do, as the time has come.
There is no example in the history of world that a girl after marriage 455 should act on the advice of her father, which may be harmful." He again urged her: "Do not think this letter as a mere piece of paper, but each and every line in it will decide our future career. you should resign your post.
" He again administered a warning, coupled with a threat of resorting to violence in case she did not resign her job to live with the accused permanently: "The present is the condition of China 's wall as Lt. General Mr. Kaul was saying that on China Border there is no firing, no firing, no firing.
But what was the result in the end, you know better. .
If you honour me, your husband, then you should tender your resignation from the job forthwith".
He further sternly warned her: "If you still do not come round, what would happen in future, will entirely be your responsibility and I may not be blamed for that".
He ended the letter with a hostile note, repeating the threat: "I may write, what will happen in future.
Entire responsibility of future solely depends upon you.
It is the question of life and not of service. .
This is time of your test.
Reply this letter.
" The sentence, 'It is the question of life and not of service ' read in the context, clearly conveys to the wife a threat that the choice open to her was between 'life ' and 'service ', that is to say, she would not be left alive if she did not give up the 'service '.
This letter unmistakably reveals that Rama Nand had worked his feelings at his wife 's persistent refusal to give up service and live with him, into such a frenzied resolve that if his wife did not, as he desired, 'mend ' her ways, he would 'end ' her life.
Even after this letter, there appears to have been no alleviation or change in this revengeful attitude of the husband towards his wife.
This is discernible from Rama Nand 's last letter dated May 9, 1972 (exhibit PAB) addressed to Sumitra.
In this letter also, he cannot conceal his feeling of being "sick of you".
He writes, ". the difference in views can make life troubleful or as well can lead towards downfall as I already told you", that "to deceive any true person can only be a sin and nothing else".
He appears to be giving her a last warning, a last chance to come round and come home when he writes that "time is short I will again request you that if you try to come home on Saturday, it will be good .
I do not feel good. you definitely try to come, if you cannot come on Saturday then come on Sunday, otherwise. " These letters vividly reveal that despite the repeated persuasions, warnings and threats proceeding from Rama Nand accused, Sumitra intransigently and persistently refused to give up her service at Chanyana, and residence with her parents, and declined to come and live permanently in the matrimonial home at Jherwin, and as a result, how the husband 's feelings of tenderness towards his wife progressively 456 changing into regret, persecution complex, resentment, exasperation and smouldering hostility, ultimately hardened into a revengeful resolve in the mind of Rama Nand to end what he calls "a dog 's life" by putting an end to the life of his spouse.
We agree with the High Court that these letters reveal that Rama Nand appellant had a strong motive to murder the deceased.
The second circumstance was also well established.
It had been admitted even by the appellant and his co accused.
The courts below have found, and rightly so, that both the limbs of circumstance No. (3) had also been established by evidence produced by the prosecution.
Som Krishan (P.W. 33), father of Sumitra, had testified that when he went to Jherwin on receiving a message from the accused about the disappearance of his daughter, he was shown the Salwar (exhibit P 14) and shoes (exhibit P 15/1 2) and told that these clothes were left behind on the bank of the Sutlej river when she disappeared.
P.W. 33 further stated that this shabby Salwar (exhibit P 14) which had patches on it, did not belong to Sumitra and she never wore such a Salwar; nor did the pair of shoes (exhibit P 15) belong to her.
P.W. 33 further testified: "Then Rama Nand, Shish Ram and Kesar Chand accused implored me that they may be saved from police remand.
To this I said that I was not conversant with law but you may tell the truth".
This testimony of P.W. 33 has been accepted by the courts below.
We have no reason to take a different view.
As rightly held by the courts below Sumitra was a sophisticated and educated girl.
It was difficult to believe that she would do chilly plantation and wear such a patched and dirty Salwar as exhibit P 14.
The very story given out by the accused persons and narrated by Shish Ram in the report (exhibit PAQ) made by him to the Police, and repeated by him and Rama Nand in their examination under Section 342, Cr.
P.C., to effect that Sumitra had after undressing and leaving behind her shoes (exhibit P 15) and Salwar (exhibit P 14) on the bank of the Sutlej, committed suicide by jumping into the river was improbable, incredible and false.
Thus, circumstance 3(a) and (b) had also been clearly and cogently established.
This piece of evidence was relevant under Section 8, Evidence Act and was a definite pointer towards the guilt of the accused.
Circumstance (4) appearing in the prosecution evidence, was admitted by the accused persons.
Circumstance (5) also stood established.
Though a feeble pointer towards the guilt of the accused, by itself it was not of a conclusive character.
Circumstance (6) has been seriously controverted.
The burden of the arguments of the learned counsel for the appellants is that the prosecution had miserably failed to establish that the legless decomposed 457 body found in the river was that of Smt.
Sumitra, and in such a situation, the possibility of her being alive cannot be reasonably ruled out.
Although the High Court has held that the body recovered was that of Sumitra deceased and that the bones sent to the medical experts were not parts of the decomposed body found, but appeared to have been fraudulently replaced with the bones of a child during transmission to the medical experts, we would assume that the identity of the body found in the river was not established beyond reasonable doubt.
In other words, we would take it that the corpus delicti, i.e., the dead body of the victim was not found in this case.
But even on that assumption, the question remains whether the other circumstances established on record were sufficient to lead to the conclusion that within all human probability, she had been murdered by Rama Nand appellant ? It is true that one of the essential ingredients of the offence of culpable homicide required to be proved by the prosecution is that the accused "caused the death" of the person alleged to have been killed.
This means that before seeking to prove that the accused is the perpetrator of the murder, it must be established that homicidal death has been caused.
Ordinarily, the recovery of the dead body of the victim or a vital part of it, bearing marks of violence, is sufficient proof of homicidal death of the victim.
There was a time when under the old English Law, the finding of the body of the deceased was held to be essential before a person was convicted of committing his culpable homicide.
"I would never convict", said Sir Mathew Hale, "a person of murder or manslaughter unless the fact were proved to be done, or at least the body was found dead".
This was merely a rule of caution, and not of law.
But in those times when execution was the only punishment for murder, the need for adhering to this cautionary rule was greater.
Discovery of the dead body of the victim bearing physical evidence of violence, has never been considered as the only mode of proving the corpus delicti in murder.
Indeed, very many cases are of such a nature where the discovery of the dead body is impossible.
A blind adherence to this old "body" doctrine would open the door wide open for many a heinous murderer to escape with impunity simply because they were cunning and clever enough to destroy the body of their victim.
In the context of our law, Hale 's enunciation has to be interpreted no more than emphasising that where the dead body of the victim in a murder case is not found, other cogent and satisfactory proof of homicidal death of the victim must be adduced by the prosecution.
Such proof may be by the direct ocular 458 account of an eye witness, or by circumstantial evidence, or by both.
But where the fact of corpus delicti, i.e. 'homicidal death ' is sought to be established by circumstantial evidence alone, the circumstances must be of a clinching and definitive character unerringly leading to the inference that the victim concerned has met a homicidal death.
Even so, this principle of caution cannot be pushed too far as requiring absolute proof.
Perfect proof is seldom to be had in this imperfect world, and absolute certainty is a myth.
That is why under Section 3, Evidence Act, a fact is said to be "proved", if the Court considering the matters before it, considers its existence so probable that a prudent man ought, under the circumstances of the particular case to act upon the supposition that it exists.
The corpus delicti or the fact of homicidal death, therefore, can be proved by telling and inculpating circumstances which definitely lead to the conclusion that within all human probability, the victim has been murdered by the accused concerned.
In the instant case, Circumstances (1) to (5), in their cumulative effect, are not only inconsistent with the innocence of Rama Nand appellant, but ineluctably and rationally compel the conclusion that Sumitra has died and it is Rama Nand appellant who has intentionally caused her death.
Circumstance (3) involves an admission by Rama Nand and Shish Ram accused that Sumitra has met an unnatural death.
The only difference between the prosecution version and the defence version is as to whether Sumitra committed suicide or had been killed by Rama Nand appellant.
It has been found that the story of the suicide set up by the accused is false.
The articles Salwar (exhibit P.14) and the shoes (exhibit P 15) do not belong to her.
They were planted by the accused to lay a false trail and to mis direct the investigation.
This circumstance taken in conjunction with the others, irresistibly and rationally leads to the conclusion that she has been murdered by Rama Nand appellant and her dead body has been disposed of by the appellants Shish Ram and Kali Datt.
For the foregoing reasons, we dismiss this appeal and maintain the convictions and sentences of the appellants.
S.R. Appeal dismissed.
[/INST]Dismissing the appeal and maintaining the conviction and sentences of the appellants, the Court ^ HELD:(1) It is well settled that where the inference of guilt of an accused person is to be drawn from circumstantial evidence only, those circumstances must, in the first place, be cogently established.
Further, those circumstances should be of a definite tendency pointing towards the guilt of the accused, and in their totality, must unerringly lead to the conclusion that within all human probability, the offence was committed by the accused and none else.
In the instant case, the following circumstances had been correctly found to have been established by the prosecution: (i) Rama Nand accused had a strong motive to murder his wife, Sumitra.
(ii) Sumitra was last seen alive with Rama Nand, appellant in the family house at Jherwin on the night between 13th and 14th May, 1972.
(iii) (a) Rama Nand and the other co accused falsely gave out that she had committed suicide by jumping into the river.
They 'planted ' a Salwar and a pair of shoes on the bank of the Sutlaj and gave out that they belonged to the deceased, and Shish Ram lodged a false report with the police to the effect that she had committed suicide by jumping into the river.
The Salwar and the shoes, which had been 'planted ' there to manufacture false clues by the accused, did not belong to Sumitra, and the accused falsely asserted that whose articles belong to the deceased.
(b) The story given out by the accused persons that upto 11 a.m. on May 14, 1972, Sumitra was planting chillies along with Sheela and other members of the family of the accused, was false.
(iv) The gold chain (exhibit P 1) and the watch (exhibit P 2) which Sumitra used to wear on her person all the 24 hours, and the clothes (exhibit P 5 to P 10) which she had on her person and the basket (exhibit P 11) and umbrella (exhibit P 12) which she was carrying when on the evening of May 13, 1972 she came to house of the accused at Jherwin, were recovered from the house of the accused.
(v) Some days after the occurrence, one Paranda was found from the jungle near this village.
There was a bunch of hair in the plated tail of this Paranda.
The tail appeared to have been cut.
These hair sticking in the paranda and those found entangled in the Dupatta of the deceased were according to the Forensic Expert of one and the same person.
(vi) A legless decomposed corpse was recovered from the Sutlej near village Randol in a mutilated condition.
But its identity [451G H, 452A E, 453A B] (2) Even on the assumption that the dead body of the victim was not found, circumstances (i) to (v) mentioned above in their cumulative effect includably and rationally compel the conclusion that Sumitra had died and it was Rama 445 Nand accused who had intentionally caused her death.
Ordinarily, the recovery of the dead body of the victim or a vital part of it, bearing marks of violence is sufficient proof of homicidal death of the victim.
Even so, discovery of the dead body of the victim bearing physical evidence of violence, has never been considered as the only mode of proving the corpus delicti in murder.
Indeed very many cases are of such a nature where the discovery of the dead body is impossible.
A blind adherence to this old doctrine of Sir Mathew Hale that "for a conviction of murder atleast the body was found dead" would open the door wide open for many a heinous murderer to escape with impunity simply because they were a cunning and clever enough to destroy the body of their victim.
In the context of our law, Hale 's enunciation has to be interpreted no more than emphasising that where the dead body of the victim in a murder case is not found, other cogent and satisfactory proof of homicidal death of the victim must be adduced by the prosecution.
Such proof may be the direct ocular account of an eye witness, or by circumstantial evidence, or by both.
But where the fact of corpus delicti, i.e. 'homicidal death ' is sought to be established by circumstantial evidence alone, the circumstances must be of a clinching and definitive character unerringly leading to the inference that the victim concerned has met a homicidal death.
Even so, this principle of caution cannot be pushed too far as requiring absolute proof.
Perfect proof is seldom to be had in this imperfect world, and absolute certainty is a myth.
That is why under Section 3, Evidence Act, a fact is said to be "proved", if the Court considering the matters before it, considers its existence so probable that a prudent man ought.
under the circumstances of the particular case, to act upon the supposition that it exists.
The corpus delicti or the fact of homicidal death, therefore, can be proved by telling and inculpating circumstances which definitely lead to the conclusion that within all human probability, the victim has been murdered by the accused concerned.
[457 D H, 458A D]
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<s>[INST] Summarize the judgementAppeal No. 658 of 1967.
Appeal from the judgment and order dated June 27, 1966 of the Assam and Nagaland High Court in Civil Rule No. 296 of 1964.
Naunit Lal, for the appellants.
Sarjoo Prasad and section N. Prasad.
for the respondent.
307 The Judgment of the Court was delivered by shah, C. J.
On October 24, 1957 Rameshwar Agarwala hereinafter called the respondent applied to the Deputy Com missioner, Lakhimpur, for settlement of a tea garden for "special cultivation of tea".
By order dated March 11, 1964 the Government of Assam permitted settlement of the tea garden for special tea cultivation on payment of Rs . 3,86,008/ as premium.
The respondent failed to pay the amount demanded.
The State of Assam then put up the tea garden for auction.
The respondent moved a petition in the High Court of Assam for an order declaring that in fixing the amount of the premium at Rs. 3,86,008/the State acted illegally, and that the order was void and unenforceable at law because in fixing the amount of the premium the State acted without jurisdiction and the order directing auction of the tea garden for not depositing the amount demanded was also illegal.
The High Court, upheld the contention and ordered the State of Assam not to, give effect to the order dated March 31, 1964 calling upon the respondent to pay the amount due within two months of the order and the order dated November 26, 1964 directing that the tea garden be put up for auction.
With certificate granted by the High Court, the State of Assam has appealed .to this Court.
The tea garden belonged to the State of Assam.
The Govern ment of Assam in the absence of any binding statutory provision, could settle the tea garden on such commercial terms it could reasonably obtain.
The respondent applied to the Deputy Commissioner for settlement of the tea garden and requesting the State Government for early fixation of the amount of premium.
When the premium was fixed by the Government the respondent protested, contending that the action of the State was illegal Before the High Court it was contended by the Respondent that the power of the State Government to fix the premium for which it could lease the tea garden was restricted by Rule 40 framed under the Assam, Land Revenue Regulations.
The Rule reads "In addition to the land revenue payable under rule 17 and value of the timber assessed under rule 37, an applicant to whom a lease for special cultivation is granted shall be liable to pay premium.
The rate of premium shall be fixed by the State Government from time to time for each locality.
The reasons which persuaded the High to upheld the plea, raised by the respondent may be set out in their own words : "The only power which the Government has got, is to fix the rate of premium under Rule 40 of the Rules 308 under the Land Revenue Regulation and the question for us to consider is whether the order of the Government fixing the premium for settlement of this land for special cultivation is an order in conformity with Rule 40.
In our opinion, what Rule 40 provides is to confer upon the Government power to fix the rate of premium in every case which shall be payable for the settlement and it is only the Deputy Commissioner that is authorised to settle the land.
The whole purpose, of Rule 40 is to confer power on the Government to fix the rate of premium which will be valid for a particular locality and that the Deputy Commissioner has to make the settlement.
He is given the power to realise the premium fixed by the Government from time to time and to see that no document of lease is issued before the premium has been paid by the intending holder.
But Rule 40 does empower, in our opinion, the State Government to fix the amount of premium in the case of a particular settlement in a particular locality. . . the rate of premium for a particular locality and the Legislature when framing the rules never intended that the Government should be empowered to fixing the total amount of premium payable by the intending holder.
In our opinion, therefore, the order passed by the Government directing the authorities to offer the land for settlement in case the petitioners pay Rs. 3,86,000/ is not in conformity with Rule 40 and this order cannot be given effect to.
" The expression "locality" is not defined in the Act or in the Rules.
We see no warrant for the assumption made by the High Court that in settling the premium to be fixed in respect of its own property, the Government is bound to fix the premium generally in respect of a region.
The Government is by the Act or the Rules not disqualified from fixing the premium to be paid in respect of an individual tea garden.
In the absence of any indication to the contrary a tea garden may in our judgment be appropriately regarded as a locality within the meaning of Rule 40.
The power to settle a tea garden on payment of land revenue, value of the timber and premium is to be exercised according to the Rules.
The rate of premium may be fixed by the State Government according to its commercial value.
In the absence of any restriction imposed upon the State Government requiring that a general rate shall be fixed covering a specified area larger 309 than a tea garden there is nothing which prohibits the State Government from fixing the rate of premium having regard to the commercial value of the tea garden.
In the present case the Sub Divisional Officer reported that the price of the land of the Dirpai tea garden be valued at Rs.1 500/ per bigha and on that basis the State Government computed the premium to be paid in respect of the entire Jokai Tea Garden.
Fixation of a rate of Rs. 5001 per bigha in respect of the entire area of the tea garden may be regarded as a premium fixed for the locality of the tea garden.
The matter rested entirely in contract between the Respondent and the State Government.
There was an offer by the respondent for settlement of the tea garden.
He agreed to pay the land revenue payable under r. 17.
He also agreed to pay the value of the timber assessed under r. 37.
For settlement of the tea garden for special cultivation the respondent was also liable to pay premium.
The quantum of liability to pay land revenue was governed by r. 17 and value of the timber was governed by r. 37.
The liability to pay premium had to be fixed by the State Government.
In the absence of any restriction placed by the Rules upon the power of the St ate Government, we do not think that the High Court had any jurisdiction to compel the State to enter into a contract to settle the tea garden upon the respondent on payment of premium after determining a general rate for a region larger than the tea garden.
The High Court was in error in setting aside the order passed by the Government of Assam and in declaring that the offer to settle the land of the Dirpai Tea Garden on payment of Rs. 3,86,008/ was not in conformity with r. 40.
The High Court also erred in directing that auction of the land for nonpayment of the premium shall be set aside.
The appeal is allowed and the petition filed by the respondent will be dismissed.
The respondent will pay the costs in this Court and in the High Court.
R.K.P.S. Appeal allowed.
[/INST]In a suit for partition of bakash land a preliminary decree was passed.
The defendants appellants, claiming to be in actual possession of the bakasht land, filed a petition contending that the consequence of section 6.
of the Bihar Land Reforms Act, 1950 (which came into force in the meanwhile) was to put an end to the proprietor 's possession of the bakasht land by causing them to vest in the State and simultaneously creating a tenancy in favour of the person in khas possession thereof, and therefore, no final decree could be passed.
The trial court accepted the contention and dismissed the plaintiff 's application for passing final decree.
In appeal, the High Court set aside the order.
In appeal to this Court, HELD : Even if the appellants were in actual khas possession within the meaning of section 2(k) of the Act, it must be held that the plaintiff respondent, who was a co sharer, was in constructive possession through the appellants, as, under the law, possession of one co sharer is possession of all co shares.
The appellants did not claim to be trespassers on the property neither did they claim any title to the lands adversely to the respondent.
The deeming provision of section 6 must, therefore, enure for the benefit of all, who in the eye of land) would be regarded as in actual possession.
Therefore, the respondent had not lost his share in the bakasht lands and had a right to his share in them, though not as tenure holder or proprietor, but as a raiyat under the provisions of the Act.
[645 E G] P. L. Reddy vs L. L. Reddy, ; , 202, followed.
Surajnath Ahir vs Prithitnath Singh, , Ram Ran Baijal Singh vs Behari Singh alias Bagandha Singh, , section P. Shah vs, B. N. Singh; , and Mahant Sukhdeo Das vs Kashi Prasad, Tewari referred to.
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<s>[INST] Summarize the judgementCivil Appeal No. 748 of 1968.
637 (Fazal Ali, J.) Appeal by Special Leave from the Judgment and Decree dated the 14th February, 1967 of he Bombay High Court in Civil First Appeal No. 888 of 1959.
F. section Nariman and I. N. Shroff for the appellant.
K. section Ramamurthi and K. Rajendra Choudhury, for the Respondent.
The Judgment of the Court was delivered by FAZAL ALI, J.
This appeal by special leave against the judgment dated February 14, 1967, of the High Court of Bombay turns upon the interpretation of clause 3 of the agreement Ext.
39 executed between the parties containing the terms and conditions for which the plaintiff appellant was to supply electricity to the defendant the Jalgaon Borough Municipality.
What appears to us to have been a short and simple case has been rendered cumbersome and complicated by somewhat complex and involved process of reasoning adopted by the High Court in interpreting the various clauses of the agreement Ext.
The plaintiff/appellant 's case was based mainly on clause 3 of the agreement but the High Court instead of concentrating its attention on the interpretation of the scope and ambit of this particular clause appears to have entered upon a covering inquiry and a detailed determination of the history of the case, the various clauses of the agreement executed, the licence taken by the appellant, and so on, which, in our opinion, were not at all germane for the decision of the simple issue which arose in this appeal.
The facts of the case lie within a very narrow compass.
The plaintiff/appellant entered into an agreement to supply electrical energy to the Jalgaon Borough Municipality as far back as 1944.
The energy was to be supplied on the basis of the agreement executed between the parties in the year 1944.
This agreement expired to wards the end of January 1951 and a fresh agreement which is dated May 29, 1951, Ext.
39, which was to commence from February 1, 1951, was executed between the parties.
This agreement was to ensure for a period of five years.
In the present appeal we are concerned with the terms and recitals of this agreement, particularly clause 3 thereof.
The plaintiff averred inter alia that under the agreement the defendant was bound to consume electrical energy for 16 hours a day and pay the minimum charges even if no actual consumption was made.
This claim was put forward by the plaintiff in December 1953 on the basis of clause 3 of the agreement.
Consequent upon its claim the plaintiff sent a number of bills to the defendant which it refused to pay and hence the present suit was instituted on February 27, 1956.
Before the Trial Court the defendant Municipality denied the allegations of the plaintiff and averred that under the terms of is the agreement the Municipality was not bound to pay to the plaintiff Company any minimum charges even if the electrical energy was not consumed.
It was also alleged that even if there was any such clause 638 in the agreement it was void under section 23 of the 197.
A number of other defences were also taken with which we are not concerned.
The Trial Court of the Civil Judge, Senior Division, Jalgaon accepted the defendant 's plea and dismissed the suit of the plaintiff/appellant.
The plaintiff thereupon preferred an appeal to the High Court of Bombay which upheld the decree of the Trial Court and dismissed the appeal negativing the plea put forward by the plaintiff.
Counsel for both the parties agreed before us that the fate of the entire case depended upon the interpretation of clause 3 of the agreement Ext.
39 which appears on pp.
275 277 of the printed Paper Book.
Mr. F. section Nariman for the appellant submitted that the interpretation put by the High Court was absolutely wrong, whereas Mr. K. section Ramamurthi strenuously supported the judgment of the High Court.
The High Court on consideration of clauses 2 and 3 of the agreement appears to have lost sight of the essential stipulation contained in clause 3 and found that minimum charges were given only in clause 2 or the agreement and clause 3 could be of no assistance to the appellant.
The High Court also considered lot of other circumstances which were not at all relevant for the purpose of construing clause 3 of the agreement.
In order to interpret the document, it may be necessary to extract clauses 2 and 3 of the said agreement: "2.
The Company shall supply to the Municipality and the Municipality shall take from the company for a period of five years, the period commencing from 1st February 1951, electrical energy for running the electric motors to work water pumps at the Girna Pumping Station at the following rates.
1.5 annas per unit for the first 50 units per month per B.H.P. installed and the lest at 0.5 anna per unit plus an additional charge at 0.01 anna per unit per rupee rise in the fuel oil rate over Rs. 68/ per ton viz. the rate ex Power house ruling prior to war, with a minimum of 50 units per month per B.H.P. installed, first 50 units per B.H.P. shall mean and include units given by both the electric Motors and Pumps at the Girna Pumping Station.
The additional charge is to apply to all units.
The hours of supply of electrical energy for running the said electric motors shall be according to the quota of diesel oil sanctioned by the Government.
In normal times, i.e. when diesel oil becomes available in any required quantity and without any restriction, the Municipality shall take supply of electrical energy for a minimum period of 16 hours a day and the Company shall supply electricity for a maximum period of 20 hours a day i.e. excluding the four hours from 6 P.M. to 10 P.M.
An analysis of clauses 2 and 3 of the agreement clearly shows that these two clauses are independent and separate provisions dealing with 639 (Fazal Ali, J.) different contingencies.
If there is any link between the two it is only that the reason for making concession in clause a for charging rate of 0.5 annas per unit over first 50 units is the fact that the plain tiff company was guaranteed payment for electrical energy to be sup plied during fixed period whether or not it is consumed by the Municipality.
Clause 3 first of all stipulated that in normal times the Municipality was bound to take supply of electrical energy for a" minimum period of 16 hours a day and in view of this minimum guarantee the Company would supply electricity for a maximum period of 20 hours a day.
In doing this, however, four hours, namely from 6 P.M. to 10 P.M. , would be excluded, because these being the peak hours the Company would be at liberty to supply electricity to other consumers.
The terms of clause 3 appear to us to be absolutely clear and unambiguous and it was not at all necessary for the High Court to have gone into a plethora of extraneous circumstances when the terms of that document do not admit of any ambiguity.
The High Court seems to have completely overlooked the fact that clause 3 of the agreement embodied what is known in common parlance as the doctrine of minimum guarantee i.e. the Company was assured of a minimum consumption of electrical energy by the Municipality and or the payment of the same whether it was consumed or not.
That was the reason why the Company was prepared to charge a minimum rate of 0.5 anna per unit over and above the first 50 units.
The minimum charge of 0.5 anna per unit, therefore, was actually the consideration for the minimum guarantee allowed to the plaintiff under clause 3 of the agreement.
Moreover clauses 2 and 3 of the agreement seem to us to be in consonance with the spirit and letter of the proviso to section 22 of the which runs thus: "Provided that no person shall be entitled to demand or to continue to receive from a licensee a supply of energy for any premises having a separate supply unless he has agreed with the licensee to pay to him such minimum annual sum as will give him a reasonable return on the capital expenditure, and will cover other standing charges incurred by him in order to meet the possible maximum demand for those premises, the sum payable to be determined in case of difference or dispute by arbitration.
" A bale reading of clause 3 is sufficient to indicate that this particular term of the contract was in direct compliance with the provisions of the proviso to section 22 of the Act which ensures a provision for minimum guarantee for the supply of electricity.
Moreover it is obvious that if the plaintiff company was to give bulk supply of electricity at a concessional rate of 0.5 anna per unit it had to lay down lines and to keep the power ready for being supplied as and when required.
The consumers could put their switches on whenever they liked and therefore the plaintiff had to keep every thing ready so that power is supplied the moment the switch was put on.
in these circumstances, it was absolutely essential that the plain 640 tiff should have been ensured the payment of the minimum charges for the supply of electrical energy whether consumed or not so that it may be able to meet the bare maintenance expenses.
For these reasons, therefore, we are satisfied that the interpretation put by the Courts below on the agreement Ext.
39. was legally erroneous and cannot be accepted.
The next question that falls to be considered is about the question of quantum of interest to be allowed to the appellant Company.
Mr. F. section Nariman, learned counsel for the appellant, fairly conceded that he would not be in a position to press his claim for interest prior to the date of the suit and would be satisfied if he is awarded interest at the rate of 4 per cent.
per annum from the date of the suit.
The result is that the appeal is allowed, the judgments of the Trial Court and the High Court are set aside, the plaintiff 's suit is decreed with interest at the rate of 4% per annum from the date of the suit till payment.
In the peculiar circumstances of the case, we leave the parties to bear their own costs throughout.
V.M.K. Appeal allowed.
[/INST]The plaintiff appellant entered into an agreement with the respondent to supply electrical energy to the respondent in 1944.
This agreement expired towards the end of January 1951, and which was to commence from February 1951, was executed between the parties.
This agreements was to ensure for a period of five years.
Clause 3 of the agreement first of ' all stipulated that in normal times, the Municipality was bound to take supply.
Of electrical energy for a minimum period of 16 hours a day and in view of this minimum guarantee Company would supply electricity for a maximum period of 20 hours a day.
In doing, this, however four hours, namely, from 6 p.m. to 10 p.m would be excluded.
The plaintiff averred that under the agreement the agreement was bound to consume electrical energy for 16 hours a day and pay the minimum charges even if no actual consumption was made. 'This claim was put forward by the plaintiff in December.
1953 on the basis of` clause 3 of the agreement Consequent upon its claim the plaintiff.
sent a number of bills to the defendant which it refused to pay and hence the present in was instituted on February ' ',.
Before the Trial Court the defendant Municipality denied the allegations of ' the plaintiff and averred that under.
the terms of the agreement the.
Municipality was not bound to pay to the plaintiff Company any minimum charges even if the electrical energy was not consumed.
It was also alleged the even if there was any such clause in the agreement it was void under section 23 of the .
The Trial Court accepted the defendant 's plea and dismissed the suit.
The plaintiff thereupon preferred an appeal to the High Court of Bombay. 'the high Court dismissed the appeal holding that the minimum charges were given only in clause 2 of the agreement and that clause 3 could be of ' no assistance to the appellant.
Allowing the appeal by special leave.
^ HELD: (i) An analysis of clauses 2 and 3 of the agreement clearly shows that these clauses are independent and separate provisions dealing with different contingencies.
The terms of clause 3 are absolutely clear and unambiguous and it was not at all necessary for the High Court to halve gone into 1 a plethora of extraneous circumstances when the terms of that document do not admit of any ambiguity.
The High Court seems to have completely overlooked the fact that clause 3 of the agreement embodied what is known in common parlance as the doctrine of minimum guarantee i.e. the Company was assured of a minimum consumption of electrical energy by the Municipality and for the payment of the same whether it was consumed or not.
That was the reason why the Company was prepared to charge a minimum rate of 0.5 anna per unit over and above the first 50 units.
The minimum charge of 0.5 anna per unit, therefore.
was actually the consideration for the minimum guarantee allowed to the plaintiff under clause 3 of the agreement.
[638 H. 639 C D] (ii) Clauses 2 and 3 of the agreement are in consonance with the spirit and letter of the proviso to s.22 of the .
A bare reading of clause 3 is sufficient to which ensures a provision for minimum guarantee for the supply of electricity.
[639 & G]
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<s>[INST] Summarize the judgementl Leave Petition (Civil) No. 10784 of 1992 etc.
From the judgment and Order dated 13.3.1992 of the Central Administrative Tribunal, New Delhi in O.A. No. 262 of 1991.
M. K. Ramamoorthy, H.S. Gururaja Rao, R. Venkataramani, S.M. Garg, T.L. Roy, T.V. Ratnam, E.X. Joseph, D.N. Paul and M.M. Kashyap for the Petitioners.
D.N. Dwivedi, Addl.
Solicitor General, V.K. Verma and Ms. Ameeka Singh for the Respondents.
The Judgment of the Court was delivered by VENKATACHALA,J.
In these Special Leave Petitions, we are concerned with the Grievance of the employees belonging to the office of the Comptroller and Auditor General of India, working in the Railway Audit Department.
These employees who were Section Officers prior to 1st March, 1984, got promotion from that day as Assistant Audit Officers on a pay scale of Rs. 650 30 740 35800 EB 40 1040 and were designated as Officers 'Group B Gazetted '.
On the recommendations of the Fourth Pay Commission; the said pay scale of Assistant Audit Officers was revised to Rs. 2,000 3,200 from 1st January, 1986.
The grievance of the Assistant Audit Officers Group B Gazetted, is that the Indian Railways should not have denied to them the benefits, such as, issue of Railway Travel Passes/P.T.0s., allotment of Railway Quarters, giving of accommodation in Rest Houses/Retiring Rooms, taking of family members while on tour, etc.
admissible to Group B Gazetted Officers of the Railways.
The Principal Bench of the Central Administrative Tribunal, to be referred to herein after as "the Tribunal", which examined the said grievance, rejected it by order dated 13th March, 1992.
The grievance, so rejected by the Tribunal, is again ventilated in these Special Leave Petitions, seeking redressal therefor.
Since the facts which have given rise to the grievance, furnish the background, for examining its merit, it would be advantageous to advert to them at the 299 out set.
The Railway Board in its letter No. E(G) 58PS5 20/1 dated 14th April, 1960, addressed to the General Managers of the Indian Railways, spelled out its policy in the matter of issuance of Railway Passes/P.T.0s.
to the staff of the Railway Audit Department including the Indian Audit & Accounts Service Officers (IA&AS Officers) of that Department, thus: i.
The scale of Passes/P.T.0s.
and the rules governing their issue will be the same as applicable to Railway servants from time to time.
Passes/P.T.0s.
to IA & AS Officers, if are to be issued when they are proceeding on leave exceeding four months, they should have completed one year 's service in the Railway Audit Department and the Comptroller and Auditor General of India ought to assure by declaring that the Officers concerned will return to Railway Audit Department on the expiry of such Officers ' leave.
IA & AS Officers working in the Railway Audit Department will pot be entitled to grant of certificates which would entitle them to obtain travel concessions on Railways outside India.
Passes/P.T.0s.
will be issued by the Chief Auditors irrespective of home or foreign line.
It was mentioned in the above letter that the same was issued with the sanction of the President of India.
The policy contained in the above letter was followed by the Indian Railways for several years.
In the meantime, the Director of Audit, Central Railway, by his notice dated 19th December, 1983, made it known that the Central Government had, on the recommendations of the Comptroller and Auditor General of India, sanctioned higher scale of pay of Rs. 650 30 740 35 800 EB 40 1040 to 80 per cent of Section Officers on the staff of the Railway Audit Department and that scale of pay would become effective from 1st March, 1984.
It was indicated in that notice that the Section Officers on the staff of the Railway Audit Department getting such higher scale of pay, will have their designation as Assistant Audit Officers (Group B Gazetted).
Similar notice, it is said, was issued by the concerned Director of Audit of every other Zone of the lndian Railways.
The said scale of the pay of the Assistant Audit Officers (Group B Gazetted) came to be revised as Rs. 2,000 300 3,200 from 1st January, 1986 as per the recommendations of the Fourth Pay Commission.
Even then, the Assistant Audit Officers who Were designated as 'Group B Gazetted ' continued to have the privileges and facilities of 'Group B Officers of the Indian Railways.
However, by its letter No. E(W) 87PS51/3 dated 27th July, 1989 addressed to all General Managers, Indian Railways, the Railway Board referring to the creation of posts of Assistant Audit Officers in the Railway Audit Department and the incumbents in those posts having been given Group B Gazetted status, stated thus: "As a result of restructuring of the cadre of Indian Audit and Accounts Department, a number of posts of Assistant Audit Officers have been created in the scale of Rs. 2000 3200 and classified as Group 'B 'posts carrying a gazetted status.
The eligibility of these officers to various facilities as admissible to the Gazetted Officers on Railways in scale of Rs. 2000 3500 has been considered but the same has not been agreed to.
It has been decided that the Audit Officers in scale of Rs. 2000 3200 may be given the privileges and facilities viz. Passes/PTOs.
allotment of Railway Quarters and Rest Houses/retiring Rooms and taking family with them while on tour etc.
as admissible to the Railway Employees in identical scale of pay viz. Rs. 2000 3200.
" The said letter shows that it had been issued with the concurrence of the Finance Directorate of the Ministry of Railways.
But, the contents of the said letter were modified by a telegram, which read thus: "No. E(W)87PS51/3.
In partial notification of Ministry of Railway 's letter of even number dated 27.7.89 Ministry of Railway have decided that the Assistant Audit Officers given the Gazetted status between 1st March, 1984 and 31.12.1985 shall continue to enjoy the facility of passes, PTOS.
Quarters etc.
enjoyed by them as a result of conferring of the gazetted status on them during the period mentioned above (As personal to them.)" The said telegram makes it obvious that those Assistant Audit Officers in the Railway Audit Department who got Gazetted status between 1st March, 1984 and 31st December, 1985, shall alone be entitled to the facilities of Passes/P.T.0s.
, Quarters etc,and not those who got such Gazetted status after 31st December, 301 Then, there is the letter No. PCIV/86/ Imp./46 dated 30th October, 1987 issued by the Railway Board to the General Managers of the Indian Railways, which shows that the president of India had, consequent upon the revision of pay scales of the Central Government employees recommended by the Fourth Pay Commission, reclassified all the posts under the Indian Railways, thus: "Classification Description of Posts of posts Group A All posts in scale Rs. 2200 4000 and above.
Group B Posts in scale Rs. 2375 3500 applicable to accounts Officers only and other posts of Officers in scale Rs. 2000 3500(all Deptts.) Group C.
All posts in scales Rs. 825 1200 and above including posts of Post graduate Teachers (Selection Grade)/Head masters Middle School (Selection Grade)in scale Rs. 2000 3500, Supervisors in scale Rs. 2375 3500 and excluding those mentioned for Groups 'A ' and `B '.
Group D All posts in scales Rs. 750 940, Rs. 7751025 and Rs. 800 1150.
" The said classification of posts in the Indian Railways is done, as becomes clear from the said letter, consequent upon the introduction of Railway Services (Revised Pay) Rules, 1986.
In this context, it would be necessary to advert to the Railway Servants (Pass) Rules, 1986 made by the President of India under the proviso to Article 309 of the Constitution regulating the issuance of passes and Privileged Ticket Orders to Railway servants.
Meaning of 'railway servant for the purposes of the said Rules is given in clause (h) of Rule 2 thereof,.
thus: "railway servant ' means a person who is a member of a service or who holds a post under the administrative control of Railway Board and includes a person who holds a post in the Railway Board.
Persons lent from a service or post which is not under the administrative control of the Railway Board to a service or post which is under such administrative control do not come within the scope of this definition.
This term excludes casual labour for whom special 302 orders have been framed.
" Schedule II of the said Rules contains the classification (categorisation) of Railway servants into Group A, Group B, Group C and Group D and refers to certain privileges admissible to them.
That Schedule, which provides for issue of passes on privilege account to Railway servants puts Group A Group B Railway servants in one category.
Group C Railway servants are put in altogether a different category for the purpose of issue of passes to them.
From the said facts, it becomes clear that the Assistant Audit Officers in the Railway Audit Department, who hold the posts on the pay scale of Rs. 2,0003,200, although designated as Group B Officers, are not treated on par with Railway servants of the Indian Railways in the category of Group B Officers, to wit, the Railway servants holding the posts of Assistant Accounts Officers and other Officers on the higher pay Scale of Rs 2,000 3,500.
Therefore, the obvious reason for denial of the privileges conferred upon Group B Railway Officers under the Railway Servants (Pass) Rules, 1986, to Assistant Audit Officers of the Railway Audit Department, was the latter holding posts of lower pay scale of Rs. 2,000 3,200.
It was contended by the learned counsel for the petitioners that the Assistant Audit Officers working in the Railway Audit Department could not have been treated differently from Group B Officers of the Indian Railways in the matter of issue of privilege Passes/P.T.0s.
to them when the latter No. E. (G) 58PS5 20/1 dated 14th April, 1960 issued by the Railway Board with the sanction of the President, clearly laid down the policy that scale of Passes/P.T.0s.
and the Rules governing their issue will be the same as applicable to Railway servants from time to time.
It was also contended by them that the Railway Servants (Pass) Rules, 1986 issued by the President of India, since exclude the Assistant Audit Officers from 'B ' category Officers, they would be violative of Article 14 of the Constitution.
Lastly, it was contended by them that the decision of the Indian Railways that the Assistant Audit Officers of the Railway Audit Department, who were given the Gazetted status between 1st March, 1984 and 31 st December, 1985, alone shall continue to enjoy the facilities of Passes/P.T.0s., Quarters etc. has since resulted in denial of such facilities to the Assistant Audit Officers who were given the Gazetted status after 31st December, 1985, the same (decision) is violative of Article 14 of the Constitution.
We are unable to find merit in any of the said contentions urged on behalf of the Assistant Audit Officers in support of their grievance, for the reasons which we shall presently state.
303 The Assistant Audit Officers although working in the Railway Audit Department, are the Officers who are appointed by the Comptroller and Auditor General of India and work under his.
control and supervision.
No doubt, the Railway Board, as seen from its letter dated 14th April, 1960 adverted to earlier, had decided to give to the staff and Officers working in the Railway Audit Department the facilities admissible to Railway servants of comparable status.
It is not for us to go into the question whether it was obligatory for the Railways to confer such facilities on the staff and Officers of the Railway Audit Department, who in reality belong to the Department of Comptroller and Auditor General of India, inasmuch as that question is not required to be decided by us.
When the said letter dated 14th April, 1960, containing the Railway Board 's policy of issuance of Passes/P.T.0s.
is seen, it shows that the staff of the Railway Audit Department is treated more generously than the Officers of the same Audit Department in the matter of issuance of Passes/P.T.0s.
to them (Officers), in that, the issuance of passes to the latter category is made subject to certain restrictions.
No doubt, when certain Section Officers were promoted as Assistant Audit Officers and conferred the status of 'Group B Gazetted ' by the Comptroller and Auditor General of India, such Officers were treated notwithstanding their lower pay scale, on par with 'B ' Group Officers in the Indian Railways as regards privileges/facilities obtainable by them from the Railways.
But, when the scale of pay of the Assistant Audit Officers of the Railway Audit Department was revised on the recommendations of the Fourth pay Commission, the scale of pay of the Assistant Audit Officers, who had been designated as Group 'B ' Officers, by the Comptroller and Auditor General of India, fell short of the scale of pay of the Railway servants of the Railway Department classified as Group 'B ' Officers by the President of India.
It cannot be overlooked that it is the President of India, who made the Railway Services (Revised Pay) Rules, 1986, on the basis of the pay revision of the Central Government Servants, as recommended by the Fourth Pay Commission and it is again the order of the President of India, which classified the Railway servants into Group A, Group B, Group C, and Group D according to the minimum and maximum scale of pay of the posts held by them.
Indeed, it was not disputed on behalf of the petitioners that the Assistant Audit Officers of the Railway Audit Department who are on the pay scale of Rs. 2,000 3,200 are treated on par with the Railway servants (Officers) who are on the pay scale of Rs. 2,000 3,200 in matters of giving the facilities or conferring of privileges.
What has happened is that the Railway Servants (Pass) Rules, 1986, when are made, certain extra privileges relating to issuance of Passes/P.T.0s.
are conferred on Railway servants, that is, Officers in Group 'A ' and Group 'B ' However, Group 'B ' Railway servants, according to classification made by the president of India, on revision of their pay scales are those whose pay scales are Rs.2,000 3,500.
What is contended for on behalf of the Assistant Audit Officers, is that the fact that their 304 scale of pay is lower then Rs. 2,000 3,500 as applicable to `B ' Group Gazetted Officers of the Railways should be ignored and the status that is conferred upon them by the Comptroller and Auditor General of India as Group B Gazetted ' alone should form the basis to give them facilities or confer privileges on par with 'B ' Group Gazetted Railway servants.
The submission made on behalf of the Railways, was to the contrary.
According to the submission, the fact that the Assistant Audit Officers in the Railway Audit Department, on the pay scale of Rs. 2,000 3,200, are designated by the Comptroller and Auditor General of India as 'Group B Gazetted ' is not sufficient to equate them with Group B Officers of the Indian Railways who hold higher posts with scale of pay of Rs. 2,000 3,500.
If the Railways give the facilities and privileges to the Assistant Audit officers, who are not Railway servants, treating them on par with Railway servants of Group 'B ' they could find no valid reason to deny such facilities and privileges to the Railway servants holding posts on the pay scale of Rs. 2,000 3,200.
If that has to be done, the Indian Railways would be required to extend similar facilities and privileges to all Railway servants who hold posts in the Indian Railways on the scale of pay of Rs. 2,000 3,200.
It means extending the benefits to thousands of Railway servants involving heavy financial burden on the Indian Railways.
We find that the contentions raised on behalf of the Assistant Audit Officers, are unacceptable in that, if accepted, they would lead to unjust results of the Indian Railways conferring special privileges and facilities upon persons belonging to foreign Department of Comptroller and Auditor General of India, while their own servants who hold equivalent posts on the same scale of pay will be denied such privileges and facilities.
Therefore, there is substance in the submissions made on behalf of the Indian Railways that the grievance sought to be made out on behalf of the Assistant Audit Officers lacks merit and calls to be rejected.
We, accordingly, reject the contention advanced on behalf of the Assistant Audit Officers that they should be treated by the Indian Railways on par with Railway servants classified in Group 'B "in matters relating to the conferring of privileges and giving of facilities.
Again, when the Railway Servants (Pass) Rules, 1986, made in consonance with the classification of Railway servants, rightly made by the President of Indian consequent upon the Railway services (Revised Pay) Rules, 1986 issued under the proviso to Article 309 of the Constitution, confer facilities or privileges according to the class to which Railway servants belong, they cannot be treated as Rules which are violative of Article 14 of the Constitution.
Nor can they be regarded as arbitrary.
Hence, the contentions raised on behalf of the Assistant Audit Officers on the unsustainability of the Railway Servants (Pass) Rules, 1986 based on Article 14 of the Constitution, wan ant rejection as those lack in merit.
305 Coming to the last contention, viz, that the privileges given to and facilities conferred on the Assistant Audit Officers, who had been given the status of `Group B Gazetted by the comptroller and Auditor General of India, between 1st March, 1984 and 31st December, 1985, are discriminatory, all that we would wish to say is that even if such discrimination is brought about by the Railways in regard to the officers of the same category, that is, Assistant Audit Officers, such discriminatory treatment accorded to a small number cannot be availed of by the petitioners to obtain the benefit of such wrongly conferred privileges and facilities.
However, we do not consider it appropriate to pronounce upon the correctness of the conferment of such privileges and facilities on a small number of Assistant Audit Officers in these petitions, when they are not impleaded by the petitioners as party respondents, in these petitions.
Hence, we reject the last contention, as well.
We, therefore, find no good reason to disagree with the order of the Tribunal impugned in these Special Leave Petitions.
In the result, we dismiss these Special Leave Petitions.
However,.in the facts and circumstances of the cases we make no order as to costs.
SLPs dismissed.
[/INST]Petitioners were in service, under Comptroller and Auditor General of India (C & AG for short), as Assistant Audit Officers (A.A.O. for short) Group B Gazetted, in pay scale Rs. 2000 3200, and were working in Railway Audit Department, after December 31,1985.
In 1960, Railway Board spelled out its policy, stating that scale of passes/P.T.0s.
and the rules governing their issue to staff of the Railway Audit Department will be the same as applicable to Railway servants.
However some distinctions were made as regards Indian Audit and Accounts Service Officers (IA & AS Officers) of Railway Audit Department, on recommendations of the C & AG., Central Government sanctioned higher scale of pay effective from March 1, 1984, for 80 per cent of Section officers in the Railway Audit Department to be designated as A.A.Os (Group B Gazetted).
Their pay scale was revised to Rs. 2000 3200 from January 1, 1986, on recommendation of Fourth Pay Commission.
They continued to have the privileges and facilities of Group B Officers of Indian Railway.
In 1987, consequent to the revision of pay scales of Railway posts, on recommendation by the Fourth pay Commission, the posts under Indian Railways were re classified.
Posts in scale of Rs. 2000 3200 were classified as Group 'C ' instead of Group B.
In 1989, the Railway Board, in view of restructuring of cadre of Indian Audit and Accounts Department, creation of posts of A.A.Os in scale of Rs. 2000 3200, classified as Group B Gazetted status, issued instructions that Audit Officers in Scale of Rs. 2000 3200 may 297 be given privileges and facilities viz Passes/P.T.0s.
Quarters etc, as admissible to Railway employees in identical scale.
Consequently they were not entitled to the privileges and facilities admissible to gazetted Railway Officers.
classified in Group B in scale of Rs. 2000 3500.
However, Assistant Audit Officers given Gazetted status between March 1, 1984, and December 31, 1985 were allowed to continue to enjoy the facilities of Passes/p.
T.Os quarters etc.
Petitioners filed application before the Central Administrative Tribunal, Principal Bench, claiming that Assistant Audit Officers, given Gazetted status Group B after December 31, 1985, were also entitled to the privileges and facilities admissible to Railway Officers, classified 'Group B '.
The application was rejected by the Tribunal and the Petitions filed Special Leave petition seeking redressal.
This Court dismissed the special leave petition and, HELD: That conferring special privileges and facilities, to Assistant Audit Officers, which are not provided to Railway servants in identical pay scale would lead to unjust results.
It would result in conferring special privileges and facilities, by the Indian Railways to persons belonging to foreign department of Controller and Auditor General of India, while their own servants, who hold equivalent posts on the same scale of pay will be denied such privileges and facilities.
The Railway Board 's letter dated April 14, 1960 also shows that the staff of the Railway Audit Department is treated more generously than the officers (if the same Audit Department in matters of issuance of Passes/P.T.0s.
The Assistant Audit Officers, who had been given status of gazetted Group B, by the comptroller and Audit General, cannot be treated, by the Indian Railways on par, with Railway servants, classified group B. In matters relating to conferring privileges and giving of facilities.
The Railway Servant (Pass) Rules, 1986, made in Consonance with classification of Railway servants, rightly made by the President of India, consequent upon the Railway services (Revised Pay) Rules, 1986, issued under the proviso to Article 309 of the Constitution, confer facilities and privileges according to class to which Railway servants belong, they can not be treated as Rules violative of Article 14 of the Constitution.
Nor can they be regarded as arbitrary.
(303 C, 304 G) That even if discrimination was brought about by the Railways in regard to officers of the same category, that is, Assist Ant Audit Officers, such discriminatory treatment accorded to a small number cannot be availed of by the Petitioners, to obtain she benefit of such wrongly conferred privileges and facilities.
However, this Court did not consider it appropriate to pronounce 298 upon the correctness of the conferment of such privileges and facilities to the Assistant Audit Officers, given status of Gazetted Group B between March 1, 1984 and December 31, 1985, when they had not been impleaded as party respondents.
(305 A C)
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<s>[INST] Summarize the judgementCivil Appeal No. 3066 of 1987.
From the Judgment and Order dated 9.7.1986 of the Punjab and Haryana High Court in R.S.A. No. 163 of 1978.
Mala Ram Ghana and Dalveer Bhandari for the Appellant.
M.S. Gujral and Dr. Meera Aggarwal for the Respondents.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J.
Special leave granted.
The High Court in its judgment and order dated 9th July, 1986, has observed that the question of limitation has been canvassed before the High Court.
The High Court expressed the view that there was a lot of conflict between the various High Courts on the interpretation of Article 54 of the Limitation Act which governed the point of limitation.
The High Court, however, did not decide this question and expressed the view that due to passage of time prices of lands had gone up sky high and it would be unjust to enforce the agreement of sale entered into.
In other words, it appears that without deciding the question whether the claim of the plaintiff was barred by limitation or not, the High Court exercised its discretion in refusing to grant the relief on the ground that there has been good deal of delay and the parties would suffer if specific performance of the agreement was granted.
It appears from the facts that in this case the major portion of the agreed price had been paid long time ago and the balance thereof was to be paid at the time of execution of the documents was a sum of Rs. 75 only.
It further appears that possession of the premises was with the appellant for all these years in part performance of the agreement.
In those circumstances, the principle upon which the High Court refused to exercise its discretion, in our opinion, was not applicable and such discretion was not proper.
The High Court exercised discretion on wrong principles.
See in this connection Madamsetty Satyanarayana vs G. Yellogi Rao & Two others; , ; Dr. Jiwan Lal & Ors.
vs Brij Mohan Mehra & Another, ; and see also the observation in Debendra Nath Mandal vs Sakhilal Kar & Ors., AIR 1950 Calcutta 526 In that view of the matter, we cannot sustain the exercise of discretion in the manner done by the High Court.
This, however, does 1101 not decide the matter because the High Court declined to go into the facts and decide the question of limitation on merits, the High Court took the view in exercise of its discretion.
Since we are not sustaining the High Court 's exercise of discretion hence the order and the Judgment of the High Court are set aside but the matter is remanded to the High Court for its decision on the merits.
The matter should be disposed of by the High Court as early as possible.
The appeal is accordingly allowed with no order as to costs.
P.S.S. Appeal allowed.
[/INST]Under section 171 read with section 40 of the United Provinces Tenancy Act, 1939, if a tenant sub lets the land to a 'sub tenant ' and the sub lease continues for more than five years, the 'land holder ' is entitled to eject both the tenant and the sub tanant from the land held by them.
How ever, tenants are entitled to retain possession of land for certain periods in terms of provisions of section 295 A of the Act and certain notifications issued by the State Government under section 10 of the Uttar Pradesh Agricultural Tenants (Acquisition of Privileges) (Amendment) and Miscellaneous Provisions Act, 1950, notwithstanding anything contained in any law for the time being in force.
The appellant, Hari Shanker, the 'land holder ' of the land in question, filed a suit under section 171 of the United Provinces Tenants Act, 1939 against his 'exproprietory tanant '.
Habib, on the ground that he had sub let the land for more than five years to a 'sub tenant ', Ida, in contravention of section 40 of the said Act.
The suit was decreed in favour of Hari Shanker and Habib was given the option to apply for ejectment of Ida and resume occupation of the land in terms of the proviso to section 171.
on an appeal filed by Ida, the Additional Commissioner set aside the decree and dismissed the suit.
Allowing the second appeal filed by Hari Shanker, the Board of Revenue restored the decree of the Trial Court.
Ida 's writ petition against that order was dismissed by a Single Judge of the High Court.
Meanwhile, Hari Shanker had applied for execution of the decree and the objection filed thereto by Ida was dismissed, though the application for execution itself was still pending.
Habib also filed an application against Ida as contemplated by the proviso to section 171 of the Act.
Ida 's appeal against the order aforesaid of the Single Judge and the writ petitions filed by Habib and Ida against orders passed in execution proceedings were heard together by the Division Bench of the High Court which allowed them and dismissed the suit of Hari Shanker.
329 Allowing the appeals, ^ HELD: The Division Bench of the High Court mixed up the question of termination of the sub tenancy with the question of recovery of possession.
It is common ground that Habib was a "sub tenant" of Hari Shanker in respect of the suit land.
He granted a "sub tenancy" to Ida which was from year to year.
The "sub tenancy" was created in 1943 and it admittedly continued for a period of more than 5 years.
It is not disputed that the said "sub tenancy" was not terminated by Habib in spite of the provisions of section 40 of the United Provinces Tenancy Act, 1939.
It may be true that even if the sub tenancy had been terminated Habib might not have been able to recover possession of the suit land from Ida but that does not affect the question of the continuance of the "sub tenancy".
As the said "sub tenancy" contravened the provisions of section 40, Hari Shanker was clearly entitled to file a suit as contemplated by section 171 of the said act against Habib as well as Ida on the ground that the tenant Habib has sub let the suit land otherwise than in accordance with the provisions of the said Act, namely, in excess of 5 years.
There is, on the record, no defence to that suit which was rightly decreed by the Board of Revenue.
[333D H I The question whether Habib is in a position to evict Ida and obtain possession of the suit land is a question which will have to be decided in the application filed by Habib against Ida for the eviction of Ida from the suit land and recovery of possession thereof.
Similarly, the question as to whether the appellant, Hari Shanker, has become entitled to execute the decree in the suit to which he is entitled will have to be disposed of in the application filed by Hari Shanker against Habib as well as Ida.
All these applications, we understand, are pending before the relevant authorities and they will have to be decided according to law.
However, in our opinion, there is no doubt that in the circumstances set out above.
Hari Shanker is entitled to the decree which the Board of Revenue passed in his favour and which was upheld by the learned Single Judge.
[333H; 334A C]
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<s>[INST] Summarize the judgementCivil Appeal No. 10234 of 1983.
From the Judgment and Order dated 3.1.19/9 of the Alla habad High Court in Civil Revision No. 3714 of 1978.
K.B. Rohtagi for the Appellant.
R.K. Garg and D.K. Garg for the Respondent.
The Judgment of the Court was delivered by AHMADI, J.
The short question which arises for our consideration in this appeal by special leave is whether a tenant of a premises constructed in 1967 is entitled to the protection of Section 39 of the U.P. Urban Buildings (Regu lation of Letting, Rent and Eviction) Act, 1972 (Act No. 13 of 1972 as amended by Act No. 17 of 1985), hereinafter called 'the Act ', in an eviction suit instituted before the commencement of the Act.
The Act came into force w.e.f.
15th July, 1972 by virtue of the notification issued by the State Government in exercise of power conferred by Sub Section 4 of Section 1 of the Act, vide Notification No. 3409/XXIX 59 72 dated 27th June, 1972 published in the U.P. Government Gazette, Extra, dated 1st July, 1972.
The Act was enacted for inter alia regulation of letting and eviction of tenants from certain classes of buildings situate in urban areas specified in Sub Section (3) of Section 1.
Section 2 indicates the buildings to which the Act shall not apply.
We are concerned with Sub Section (2) of Section 2, the rele vant part whereof reads as under: "Except as provided in sub section (5) of section 12, sub section (1 A) of Section 21, sub section (2) of Section 24, Sections 24 A, 24 B, 24 C or sub section (3) of section 29, nothing in this Act shall apply to building during a period of ten years from the date on which its construction is completed".
Since it is not disputed before us that the construction of the suit property was completed in 1967, we need not set out the provisos and the explanations to the sub section.
Section 3 defines the various expressions used in the Act.
Under 189 clause (a) 'tenant ', in relation to a building means a person by whom its rent is payable and 'building ' according to clause (i) means a residential or non residential roofed structure including any land, garages and out houses appur tenant thereto.
Any person to whom rent is or if the build ing were let, would be, payable, including his agent or attorney or such person, is a 'landlord ' within the meaning of clause (j) of that section.
It would thus seem that but for the exemption granted by Section 2(2), the provisions of the Act would have applied to the letting of the suit prem ises.
The scheme of Section 2 is that buildings referred to in clauses (a) to (f) are exempt from the operation of the Act for all times (subject of course to legislative changes) whereas the exemption granted by Section 2(2) is for a period of ten years from the date of completion of construc tion.
Chapter III regulates to letting.
Section 11 provides that no person shall let any building except in pursuance of an allotment order issued by the District Magistrate under Section 16.
Chapter IV regulates eviction.
Section 20 inter alia prohibits the institution of a suit for eviction of a tenant from any building except on the grounds catalogued in clauses (a) to (g) of sub section (2) thereof.
Section 21 provides for the eviction of a tenant if the building is bonafide required by the landlord for his own use or the use of any of his family member.
The scheme of Chapters III & IV clearly shows that both the letting of and eviction from the buildings to which the Act applies are regulated by the provisions of the Act.
Section 39 of the Act with which we are mainly concerned finds its place in Chapter VII entitled Miscellaneous and Transitional Provisions.
That section reads as under: "Pending suits for eviction relating to building brought under regulation for the first time In any suit for evic tion of a tenant from any building to which the old Act did not apply, pending on the date of commencement of this Act, where the tenant within one month from such date of com mencement or from the date of his knowledge of the pendency of the suit, whichever be later, deposits in the court before which the suit is pending, the entire amount of rent and damages for use and occupation (such damages for use and occupation being calculated at the same rate as rent) to gether with interest thereon at the rate of nine per cent per annum and the landlord 's full cost of the suit, no decree for eviction shall be passed except on any of the 190 grounds mentioned in the proviso to sub section (1) or in clauses (b) to (g) of sub section (2) of Section 20, and parties shall be entitled to make necessary amendment in their pleadings and to adduce additional evidence where necessary.
" This Section carried an explanation which came to be omitted by Section 8(iv) (and be deemed always to have been omitted) of the Civil Laws Amendment Act, 1972.
Section 40 lays down that where an appeal or revision arising out of a suit for eviction of a tenant from any building to which the old Act did not apply is pending on the date of commencement of this Act, it shall be disposed of in accordance with the provi sions of Section 39, which shall mutatis mutandis apply.
The plain reading of Section 39 makes it clear that the said section obliges the court to refuse to pass a decree for eviction, except on any of the grounds mentioned in the proviso to sub section (1) or in clauses (b) to (g) of sub section (2) of Section 20, if the following four require ments are satisfied: (i) the building is one to which the old Act (the U.P. (Temporary) Control of Rent and Eviction Act, 1947 U.P. Act No. III of 1947) did not apply; (ii) the eviction suit must be pending on the date of commencement of the Act i.e., 15th July, 1972: (iii) the tenant deposits in court the entire amount of rent/damages for the use and occupation of the building together with interest at 9% per annum and the landlord 's full cost of the suit; and (iv) such deposit is made within one month from the date of commencement of the Act or from the date of knowledge of the pendency of the eviction suit, whichever is later.
The benefit of Section 39 is extended mutatis mutandis to an appeal or revision arising out of an eviction suit to which the old Act did not apply provided the said appeal or revi sion was pending on the date of commencement of the Act.
On a plain reading of Section 39 it becomes clear that in a suit for eviction to which the said provision applies, the Court trying the suit is 191 precluded from passing a decree for eviction if the tenant deposits in court the entire amount of rent and damages together with interest at 9% per annum and the landlord 's full cost of the suit within the time allowed but this embargo does not apply if eviction is sought on the ground or grounds mentioned in the proviso to Sub section (1) or in clauses (b) to (g) of Sub section (2) of Section 20.
The ground mentioned in the proviso to sub section (1) of Sec tion 20 is determination of tenancy by efflux of time where the duration of tenancy is fixed under a compromise or adjustment arrived at with reference to a suit, appeal, revision or execution proceeding which is recorded in Court or is otherwise reduced to writing and signed by the tenant.
Sub section (2) of Section 20 enumerates the grounds in clauses (a) to (g) on which an eviction suit can be rounded against a tenant.
Clause (a) permits the institution of a suit for eviction if the tenant is in arrears of rent for not less than four months and has failed to pay the same within one month from the date of service of a notice of demand upon him.
The grounds in clauses (b) to (g) are other than arrears of rent.
From the fact that a suit rounded on anyone or more of the grounds set out in the proviso to sub section (1) and clauses (b) to (g) of sub section (2) of Section 20 is exempt from the operation of Section 39, it would seem that the legislature desired to grant protection from eviction where the same is sought on the sole ground of arrears of rent.
That is why in the exemption clause con tained in Section 39, clause (a) to sub section (2) of Section 20 which permits eviction on the ground of arrears of rent is deliberately and intentionally excluded and an embargo is created against the passing of an eviction decree if the tenant deposits in court within the time allowed the entire arrears of rent together with interest and costs.
If the suit is on anyone or more of the exempted grounds, the landlord is permitted to proceed with the same, if necessary by effecting an amendment in the pleading and by adducing additional evidence.
Such a suit may be continued and if the ground or grounds pleaded is/are proved, the court is enti tled to grant eviction.
It, therefore, seems clear to us that the legislature intended to protect eviction of a tenant on the ground of arrears of rent if the tenant com plied with the conditions of Section 39.
In the present proceedings it is not disputed that the construction of the demised premises was completed in 1967 and the letting had taken place in the same year.
It is also not disputed that immediately on the completion of ten years the tenant deposited on 2nd September, 1977 an amount of Rs.4,005 being the arrears of rent inclusive of interest and cost.
It is not disputed that this payment was made within one month after the expiry of the period of ten years stipu lated in 192 Section 2(2) of the Act to take advantage of Section 39 of the Act.
The eviction suit was admittedly filed on 27th May, 1972 i.e. before the commencement of the Act i.e. 15th July, 1972.
There is also no dispute that the provisions of the old Act did not apply to the suit.
On these undisputed facts the trial court gave the benefit of Section 39 and refused to order ejectment of the tenant.
The landlord filed a revision application which was rejected by the Second Addi tional District Judge, Bulandshahr, on 15th July, 1978.
The High Court rejected the landlord 's further revision applica tion on the ground that the question was concluded by the decision in R.D. Ram Nath & Co. & Anr.
vs Girdhari Lal & Anr.
, It is against the said decision that the present appeal is preferred.
The question then is wheth er or not the provision of Section 39 of the Act is attract ed in the backdrop of the above facts.
We may now consider the case law on the point to which our attention was called.
In Ram Swaroop Rai vs Lilavathi, ; 3 SCC 452, this Court while con struing section 2(2) of the Act observed that the burden is on the landlord to show that his case falls within the exemption engrafted in the said sub Section.
In the present case, since the facts are not in dispute the question of onus recedes in the background.
In Om Prakash Gupta etc.
vs Dig Vijen: drapal Gupta etc.
; , , a three Judge Bench had to consider the effect of section 2(2) read with section 39 of the Act.
In that case, an eviction suit was filed against the appellant tenant on the ground that the provisions of the Act did not apply to the demised shop and the tenant was therefore liable to be evicted.
The Trial Court decreed the suit on the finding that the construction of the suit shop was completed in 1967 and since 10 years had not elapsed from the date of completion of the construc tion the provisions of the Act had no application.
The tenant carried the matter in revision but the judgment and decree of the Trial Court was substantially maintained.
The tenant thereupon moved the High Court under section 115, C.P.C. The learned Single Judge who heard the revision remitted the matter to the Trial Court for recording a finding as to on what date the construction of the building could be said to have been completed within the meaning of section 2(2) read with Explanation I(a) thereto.
The Trial Court returned a finding to the effect that the construction of the disputed shop must be taken to have been completed on the date of the first assessment, i.e. 1st April, 1968, within the meaning of the said provision.
The tenant chal lenged the finding on the ground that the date of occupation should have been taken to be the date of completion of the construction and not the date of the first assessment.
The Division 193 Bench to which the case was referred concluded that the construction of the shop must be deemed to have been com pleted on 1st April, 1968 i.e. at the date of the first assessment and not at the date of actual occupation and hence the provisions of the Act had no application to the building till the date of the decision of the revision application on 23rd March, 1978 as the period of 10 years expired later on 31st March, 1978.
This Court upheld the finding that the date of construction must be taken, as the date of first assessment i.e. 1st April, 1968 and not the date of actual occupation.
To overcome this difficulty it was contended on behalf of the tenant that on a correct reading of section 2(2) the exemption engrafted therein would not embrace buildings constructed prior to the en forcement of the Act.
This Court construing the language of section 2(2) of the Act held that the sub section nowhere provided that the building should have been constructed after the commencement of the Act; to so interpret it would tantamount to adding words in it which was not permissible.
This Court, therefore, negatived the contention that the exemption under the sub section did not embrace buildings constructed before the Act came into force.
As pointed out earlier the revision application was decided on 23rd March, 1978 whereas the period of 10 years from the date of comple tion of the construction i.e. 1st April, 1968 was to end on 31st March, 1978 i.e. a week later.
Section 39 of the Act, therefore, clearly did not apply in the facts of that case.
Secondly, it was found that the suit was instituted on 23rd March, 1974 long after the commencement of the Act and was therefore not pending on 15th July, 1972 to attract the application of Section 39 of the Act.
For these reasons, this Court came to the conclusion that the appellant Om Prakash was not entitled to tile protection of section 39 of tile Act.
Two features which distinguish this case from the case on hand are: (i) that the revision application was disposed of by the High Court before the expiry of the moratorium period of 10 years granted by section 2(2) of the Act; and (ii) the suit having been filed long after the commencement of the Act on 15th July, 1972 could not be said to be pending at the date of the commencement of the Act to enable the tenant to seek redress under section 39 of the Act.
In Vineet Kumar vs Mangal Sain Wadhera, ; , an , eviction suit was filed on the ground of arrears of rent and damages for use and occupation of the demised premises pendente lite.
The tenant was inducted in the building stated to have been constructed in 1971 on 7th February, 1972, on a monthly rent of Rs.250.
The building in suit was assessed to house and water tax on 1st October, 197 1.
The tenant defaulted in the payment of rent 'despite service of notice dated 24th 194 March, 1977.
Admittedly, the suit was filed after the com mencement of the Act.
The point for consideration was wheth er the building which was not 10 years ' old on the date of the suit and was therefore exempted from the operation of the Act, would be governed by it on the expiry of the period of 10 years pendente lite.
Dealing with this contention this Court observed in paragraph 13 of the judgment as under: "The moment a building becomes ten years old to be reckoned from the date of completion, the new Rent Act would become applicable.
" The decision in Om Prakash Gupta 's case (supra) was rightly distinguished on the ground that it was not neces sary in that case to deal with the question whether the tenant would be entitled to the benefit of Section 39 as the building had not become ten years old when the revision was disposed of by the High Court on 23rd March, 1978.
Dealing next with the contention that the Court had to decide the case on the basis of the cause of action that had accrued before the institution of the suit and not on a new cause of action, this Court, relying on the observations to the effect that subsequent developments can be looked into made in paragraph 14 of the decision in Pasupuleti Venkates warlu vs
Motor and General Traders; , , ob served as under: "Normally amendment is not allowed if it changes the cause of action.
But it is well recognised that where the amend ment does not constitute an addition of a new cause of action, or raise a new case, but amounts to no more than adding to the facts already on the record, the amendment would be allowed even after the statutory period of limita tion.
The question in the present case is whether by seeking the benefit of Section 39 of the new Act there is a change in the cause of action." After referring to the case of A.K. Gupta & Sons vs Damodar Valley Corporation, ; , this Court further observed: "The appellant in the present case only seeks the protection of the new Rent Act which became applicable to the premises in question during the pendency of the litigation.
We see no reason why the benefit of the new Rent Act be 195 not given to the appellant.
Section 20 of the new Rent Act 'provides a bar to a suit for eviction of a tenant except on the specified grounds as provided in the section.
Subsection (4) of Section 20 stipulates that in any suit for eviction on the grounds mentioned in clauses (a) to sub section (2), viz. the arrears of rent, if at the first hearing of the suit the tenant in default pays all arrears of rent to the landlord or deposits in court the entire amount of rent and damages for use and occupation of the building due from him, such damages for use and occupation being calculated at the same rate as rent together with interest thereon at the rate of nine per cent per annum and the landlord 's cost of the suit in respect thereof after deducting therefrom any amount already deposited by the tenant under sub section (1) of Section 30, the court may, in lieu of passing a decree for eviction on that ground, pass an order relieving the tenant against his liability for eviction on that ground.
Sections 39 and 40 of the new Rent Act also indicate that the benefit of the new Act will be given to the tenant if the conditions contemplated in those sections are satisfied.
Section 39 also indicates that the parties are entitled to make neces sary amendment in their pleadings and to adduce additional evidence where necessary.
" On this line of reason this Court set aside the judgment and decree of the High Court insofar as it related to evic tion.
We find, with respect, that Their Lordships committed an error in overlooking the text of Section 39 of the Act.
That section in terms says that the suit must be pending at the commencement of the Act to seek the benefit of that provi sion.
Admittedly, the suit in question was filed after the commencement of the Act and hence the tenant was not enti tled to the benefit of Section 39 of the Act.
But that apart, in a subsequent decision of this Court in Nand Ki shore Marwah vs Samundri Devi, ; , this Court dissented from the view in Vineet Kumar 's case on the ground that the attention of the Court was not drawn to Om Prakash Gupta 's case (supra) which specifically considered the provisions of the Act and in particular the language of Section 39 of the Act to point out that in order to attract that provision it must be shown that the suit was pending at the commencement of the Act i.e. on 15th July, 1975.
Refer ring to Section 20 of the Act, which bars institution of a suit for eviction of a tenant except on grounds specified in clauses (a) to (g) this Court observed as under: 196 "This clearly indicates that the restriction put under Section 20 is to the institution of the suit itself and therefore it is clear that if the provisions of this Act applied then no suit for eviction can be instituted except on the ground 'specified in the sub sections of this sec tion.
Keeping in view the language of this section if we examine the provisions contained in sub section (2) of Section (2) it will be clear that for a newly constructed building the provisions of this Act will not apply for 10 years and therefore so far as the restriction under Section 20 is concerned they will not apply and therefore it is clear that within 10 years as provided for in sub section (2) of Section 2 restriction on the institution of suit as provided for in Section 20 subsection (1) quoted above will not be applicable and it is thus clear that during the pendency of the litigation even if 10 years expired the restriction will not be attracted as the suit has been instituted within 10 years and therefore restriction as provided for in Section 20 cannot be attracted.
" It may with respect, be pointed out that the comment that the Court 's attention was drawn to Om Prakash Gupta 's case is not correct as this case is specifically mentioned in paragraph 14 of the judgment in that case.
Lastly, in Atma Ram Mittal vs Ishwar Singh Punia, ; , the appellant landlord had filed an eviction suit in respect of a shop which had been rented to the respondent in 1978.
The suit was filed on the ground that the tenant was in arrears of rent from ist December, 1981 to 31st May, 1982 and the tenancy had been duly terminated by a notice.
The suit was filed under sub section (3) of Section 1 of the Haryana Urban (Control of Rent and Eviction) Act, 1973.
That sub section provided that "nothing in the Act shall apply to any building the construction of which is completed on or after the commencement of this Act for a period of ten years from the date of its completion".
Section 13(1) enumerated the usual grounds on which possession of a building or land could be obtained from a tenant.
In November 1984, the tenant applied for dismissal of the suit on the ground that the moratorium period of 10 years expired in June/984 since admittedly the demised shop was constructed sometime in June 1974.
Quoting the following passage from Ram Swaroop Rai 's, case (supra): 197 "The legislature found that rent control law had a chilling effect on new building construction, and so, to encourage more building operations, amended the statute to release, from the shackles of legislative restriction, 'new construc tions ' for a period of ten years.
So much so, a landlord who had let out his new building could recover possession with out impediment if he instituted such proceeding within ten years of completion.
" this Court held as under: "It is well settled that no man should suffer because of the fault of the court or delay in the procedure.
Broom has stated the maxim "actus curiae neminem gravabit" an act of court shall prejudice no man.
Therefore, having regard to the time normally consumed for adjudication, the ten years ' exemption or holiday from the application of the Rent Act would become illusory, if the suit has to be filed within that time and be disposed of finally.
It is common knowledge that unless a suit is instituted soon after the date of letting it would never be disposed of within ten years and even then within that time it may not be disposed of.
That will make the ten years holiday from the Rent Act illusory and provide no incentive to the landlords to build new houses to solve problem of shortages of houses.
The purpose of legislation would thus be defeated.
Purposive interpreta tion in a social amelioration legislation is an imperative irrespective of anything else.
" Proceeding further, this Court said: "We are clearly of the opinion that having regard to the language we must find the reason and the spirit of the law.
If the immunity from the operation of the Rent Act is made and depended upon the ultimate disposal of the case within the period of exemption of ten years which is in reality an impossibility, then there would be empty reasons.
In our opinion, bearing in mind the well settled principles that the rights of the parties crystallise to the date of the institution of the suit as enunciated by this Court in Om Prakash Gupta vs Digviiendrapal Gupta, the meaningful con struc 198 tion must be that the exemption would apply for a period of ten years and will continue to be available until suit is disposed of or adjudicated.
Such suit or proceeding must be instituted within the stipulated period of ten years.
Once rights crystallise the adjudication must be in accordance with law.
" In order to appreciate the controversy in the correct perspective it would not be out of place to notice the legislative changes.
During the second world war certain orders were issued under the Defence of India Rules, 1939, relating to the control and letting of accommodations to cope with the paucity of accommodation.
This was followed by an ordinance promulgated in 1946 which was repealed by the U.P. (Temporary) Control of Rent and Eviction Act, 1947 described as the Old Act by Section 3(h) of the Act.
The measure which was intended to be of a temporary character only continued till the passing of the Act in 1972.
When the old Act replaced the 1946 ordinance, the expectation was that the acute shortage of accommodation was only a tempo rary feature and would disappear with the passage of time.
The hope was belied and the stringent restrictions placed on the landlord 's rights in the matter of fixation and recovery of rent and eviction from the rented premises had to be continued indefinitely.
These restrictions discouraged building activity which added to the already serious housing problem.
There was an urgent need to provide incentives and thereby encourage new constructions.
With that in view Section 2(2) provided that nothing in the Act shall apply to a building during a period of ten years from the date on which its construction is completed.
In other words the legislature has relieved the owner of a new building from the restrictive provisions relating to rent, etc., contained in Sections 4 to 9 of the Act.
So also such owners are granted a holiday or recess of ten years from the restric tive provisions regulating letting (Chapter III) and Evic tion (Chapter IV) contained in the Act.
This freedom from the operation of the Act for ten years is given for the obvious purpose of encouraging building activity to ease the problem of scarcity of accommodation.
The provisions of the Act in this behalf must, therefore, be understood in this background.
Section 2(2) in terms says that the provisions of the Act will not apply to new constructions for a period of ten years from the date of completion of the construction.
Read positively it means that the Act will apply to such build ings on the expiry of the recess period.
But how are suits already filed during the recess period to be dealt with? Does 199 the Act offer any clue in this behalf? In this connection the only provisions which come to mind are sections 39 and 40 of the Act.
Section 39 deals with suits pending on the date of commencement of the Act.
Section 40 extends protec tion to an appeal or revision pending on the date of com mencement of the Act provided it has arisen out of an evic tion suit filed against a tenant to which the old Act did not apply.
Such an appeal or revision has to be disposed of in the same manner as the suit is required to be dealt with under Section 39 of the Act.
In order to secure the benefit of Section 39 or 40 it must be shown that the suit, appeal or revision was pending on the date of commencement of the Act.
Secondly, if the suit is rounded on the allegation of nonpayment of rent, the tenant must, within one month from the date of commencement of the Act or from the date of knowledge of the pendency of the suit, deposit in court the entire amount of rent and damages for use and occupation of the building with interest as prescribed and landlord 's entire cost of the suit, to take the benefit of the said provision.
If both these conditions are satisfied, the law, Section 39.
mandates that no decree for eviction shall be passed except on any of the grounds specified in the proviso to sub section (1) or clauses (b) to (g) of sub section (2) of Section 20 of the Act.
Similarly Section 40 lays down that if an appeal or revision (arising out of a suit for eviction of a tenant from any building to which the old Act does not apply) is pending on the date of commencement of the Act, the benefit of Section 39 will be available to the tenant.
What these two provisions emphasise is that in order to avail of the benefit engrafted therein, the proceedings i.e., the suit, appeal or revision application must be pending at the date of commencement of.
the Act, i.e., 15th July, 1972, and the tenant must have deposited the arrears of rent and damages together with interest and full cost of the landlord in the court within one month from the date of such commencement.
Once the four conditions of Section 39 set out in the earlier part of this judgment are satisfied, the court is debarred from passing a decree in ejectment except on any of the grounds mentioned in the proviso to sub section (1) or in clauses (b) to (g) of sub section (2) of Section 20 of the Act.
Therefore, even in a suit, appeal or revision application pending at the date of commencement of the Act, a decree for eviction can be passed if the case is brought within the exemption clause of Section 39 not withstanding the fact that the tenant has deposited the full amount of arrears of rent and damages together with interest and cost as required by that section.
It, therefore, seems clear to us on the plain language of Section 39 of the Act that the legislature desired to grant protection from evic tion where the same was sought on the sole ground of arrears of rent.
In cases falling within the exemption clauses of that section, the legislature has 200 itself permitted the landlord to proceed with the suit and claim eviction on any of the grounds enumerated in the proviso to sub section (1) or in clauses (b) to (g) of sub section (2) of Section 20 of the Act, if necessary by making the required amendment in the pleadings and by adducing additional evidence where necessary.
It therefore seems to us that the legislature desired to limit the scope of the application of Sections 39 and 40 to suits, appeals and revisions pending on the date of com mencement of the Act, i.e. 15th July 1972, relating to buildings to which the old Act did not apply and to which the new Act was to apply forthwith and not at a later date.
This is clear from the fact that the section contemplates deposit of arrears of rent and damages together with inter est and cost within one month from "such date of commence ment" meaning the date of commencement of the Act.
To put it differently the section expects the tenant to make the deposit within one month from 15th July, 1972.
This may not be possible unless the Act is to apply to the building forthwith.
Of course the benefit of an extended date is given to those cases where the knowledge about the pendency of the proceedings is gained after 15th July, 1972.
For example where a suit is actually filed before the commence ment of the Act but the summons of the suit is served in October 1972, the tenant would be entitled to make the deposit within one month from the service of the summons to avail of the benefit of this provision.
So also it can apply to cases where the tenant had died before the Act came into force or before the expiry of one month from the date of commencement of the Act and the landlord took time to bring the legal representative on record; in which case the legal representative would be entitled to seek the benefit from the date of knowledge.
Of course this benefit would not be available where the tenant dies after the expiry of the period within which the right is to be exercised.
The same would be the case in the case of an appeal or revision application.
It seems to us that the legislature intended to give the benefit of Sections 39 and 40 to suits, appeals or revisions which were pending on 15th July, 1972 and in which the deposit came to be made within one month from that date.
The expression such preceding the word 'commencement ' is clearly suggestive of the fact that it has reference to the date of commencement of the Act and the payment must be made within one month from such commencement.
Unless we give such a restricted meaning to the section we would not be able to advance the legislative intent to relieve the landlords of new buildings from the rigours of the Act.
This interpreta tion is also in tune with the ratio in Ram Swaroop Rai 's case (supra).
201 was argued that the words 'commencement of this Act ' should be construed to mean the date on which the moratorium period expired and the Act became applicable to the demised buildings.
Such a view would require this Court to give different meanings to the same expression appearing at two places in the same section.
The words 'on the date of com mencement of this Act ' in relation to the pendency of the suit would mean 15th July, 1972 as held in Om Prakash Gupta (supra) but the words 'from such date of commencement ' appearing immediately thereafter in relation to the deposit to be made would have to be construed as the date of actual application of the act at a date subsequent to 15th July, 1972.
Ordinarily the rule of construction is that the same expression where it appears more than once in the same statute, more so in the same provision, must receive the same meaning unless the context suggests otherwise Besides, such an interpretation would render the use of prefix 'such ' before the word 'commencement ' redundant.
Thirdly such an interpretation would run counter to the view taken by this Court in Atma Ram Mittal 's case (supra) wherein it was head that no man can be made to suffer because of the court 's fault or court 's delay in the disposal of the suit.
To put it differently if the suit could be disposed of within the period of ten years, the tenant would not be entitled to the protection of Section 39 but if the suit is prolonged beyond ten years the tenant would be entitled to such protection.
Such an interpretation would encourage the tenant to pro tract the litigation and if he succeeds in delaying the disposal of the suit till the expiry of ten years he would secure the benefit of Section 39, otherwise not.
We are, therefore, of the opinion that it is not possible to uphold the argument.
In the above view of the matter we are of the opinion that the courts below committed an error in giving the benefit of Section 39 of the Act to the tenant since admit tedly the tenant could not and had not made the deposit within one month from the date of commencement of the Act on 15th July, 1972 but had made the deposit within a month after the moratorium period expired in 1977.
As stated above the legislature intended to limit the application of Sec tions 39 and 40 of the Act to cases where the Act became applicable immediately and the deposit could be made within one month from its applicability and not to cases where the moratorium period was to expire long thereafter.
For the reasons stated above we think the courts below were wrong in the view they took.
We, therefore, set aside the judgment and decree of the courts below by allowing this appeal.
Having regard 202 to the fact that the respondent will have to look for alter native accommodation we give him a year 's time to vacate on condition that he pays all the arrears of rent and damages, if due, within one month and files an undertaking in the usual form within even time.
In the circumstances of the case we think the parties may be left to bear their own costs.
R.S.S. appeal allowed.
[/INST]The respondent contractor had entered into an agreement with the petitioner for formation of an earth dam.
Disputes and difference arose between the parties.
A reference was made to the arbitrator wherein the respondent made eleven claims out of which one claim was later withdrawn.
The arbitrator gave a non speaking award in favour of the re spondent amounting to a consolidated sum of Rs.19.39 lakhs.
The respondent flied a proceeding before the Court to make the award rule of the Court.
The petitioner preferred an application for setting aside the award which was dis missed.
The High Court dismissed the appeal and the revision of the petitioner.
Before this Court it was contended inter alia that the award purported to grant damages on the basis of escalation of cost and prices, and such escalation was not a matter within the domain of the bargain between the parties.
It was also contended that the fact that the arbitrator had taken into consideration the question of escalation would make the award bad because it was not discernible whether he had awarded any amount on account of excalation.
Dismissing the special leave petition, this Court, HELD: (1) In matters of challenging an award, there are often two distinct and different grounds.
One is an error apparent on the face of the record and the other is that the arbitrator has exceeded his jurisdiction.
In the latter case the Court can look into the arbitration agreement but under the former It cannot, unless the agreement was incorporated or recited In the award.
[58A B] M/s Sudarshan Trading Co. vs Government of Kerala & Anr., ; , referred to.
11 55 (2) Only in a speaking award the court can look into the reasoning of the award.
It is not open to the court to probe the mental process of the arbitrator and speculate, where no reasons are given by the arbitrator, as to what impelled the arbitrator to arrive at his conclusion.
[58D] (3) It is not discernible on the face of the record that the arbitrator has exceeded his jurisdiction in awarding damages on account of escalation.
All that the award states is that he has considered the claim on the basis of escala tion.
Such a consideration does not make the award, on the race of it, bad on the ground of error apparent on the face of the record. ' [58G H; 59A B] (4) The Arbitrator does not state that he has awarded any amount on that account.
There is neither any error apparent on the face of the record, nor any material to satisfy that the arbitrator has exceeded his jurisdiction in awarding the amount as he did.
[59B C]
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<s>[INST] Summarize the judgement109 of 1961.
Writ Petition under article 32 of the Constitution of India for enforcement of the Fundamental Rights.
M. O. Setalvad, Attorney General of India, B. R. L. Iyengar and K. P. Bhat, for the petitioner.
A. V. Viswanatha Sastri, R. Gopalakrishnan and T. M. Sen, for the respondents.
April 12.
The Judgment of the Court was delivered by DAS GUPTA, J.
The petitioner, who is the proprietor of the Shaheen Motor Service, used to ply a motor bus for hire on the route Archalli to Saravanabelgola in Hassan District in the State of Mysore.
A scheme under section 68 C of the of 1939 having been published by the Mysore Transport Undertaking, the petitioner as one of the persons affected thereby filed objections to the scheme before the State Government under section 68 D(1) of the Act.
The State Government however after considering the objections a, id hearing the petitioner approved the scheme, subject to a slight modification with which we arc not concerned.
This approval was given on December 22, 1959.
In pursuance of this approved scheme the State Transport Undertaking the 2nd respondent before us made applications for permits but before the Regional Transport Authority could issue such permits the present petition was filed praying, in the first place, for a writ of certiorari to quash the scheme and some consequential directions, and secondly for a wait of 911 "prohibition" to the Regional Transport Authority, Hassan District, who is the third respondent before us "to refrain from dealing with the applications for permit made by the 2nd respondent unless and until they are duly published and notice thereof is given to the petitioner and he is allowed to make his representation thereon regarding their compliance or otherwise with the conditions of section 68 F(1) of Chapter IV A.
After learned counsel for the petitioner had been heard, this Court by its order dated March 21, 1961, granted leave to the petitioner to amend the writ petition so as to confine it to the second prayer only and directed a rule to issue only in respect of this second prayer.
The only question with which we are therefore now concerned is whether a writ should issue prohibiting, the Regional Transport Authority, Hassan District, from dealing with the applications for permits made by the State Transport Undertaking "unless and until they are duly published and notice thereof is given to the petitioner and he is allowed to make his representations thereon".
The petitioners case as regards this prayer is that under the law no permit can be granted to the State Transport Undertaking until the applications for permit have been duly published and notice has been given to the petitioner of those applications.
In support of this proposition learned counsel advanced two arguments firstly, that section 57(3) in Chapter IV of the Act, requires such prior publication with notice of the date before which representations in connection with the application may be submitted and that in consequence of section 68 B of Chapter IV A the above provisions of section 57(3) of Chapter IV have to be followed.
The second argument is that the Regional Transport Authority acts in a quasi judicial capacity when dealing with applications for permits made under section 68 F and so the petitioner who will be affected by the issue of the permits is entitled to notice.
Section 68 B on which reliance has been placed provides inter alia that the provisions of Chapter IV A 912 shall have effect "notwithstanding anything inconsistent therewith contained in Chapter IV".
It says nothing positive as regards any of the provisions of Chapter IV being applicable to matters under Chapter IV A but provides negatively that if any question arises as regards any provisions of the Act in Chapter IV A and there is difficulty in applying it on the ground that there is conflict between it and some provisions of Chapter IV, the provisions of Chapter IV A will prevail.
Mr. Iyengar has argued that it is implicit in this provision that if there is no such difficulty all the provisions of Chapter IV will apply to matters dealt with under Chapter IV A.
This argument, in our opinion, is fallacious.
All that section 68 B pre supposes is that there are some provisions in Chapter IV which may apply to matters under Chapter IV A; on that assumption it proceeds to say that if on a matter to which provisions of Chapter IV would prima facie apply there is a provision in Chapter IV A also which appears applicable the provision in Chapter IV A will prevail to the extent of its inconsistency with the corresponding provision in Chapter IV.
As to what provisions in Chapter IV will apply or not section 68 B says nothing and provides no guidance either expres sly or by implication.
To find out whether a particular provision in Chapter IV (not being inconsistent with any provisions in Chap.
IV A) will apply or not to a matter under Chapter IV A, we have to examine the matter in question and then decide whether it is of such a nature that it attracts that particular provision of Chapter IV.
What then is the matter dealt with under section 68 F(1) with which we are concerned in the present case? Section 68 F(1) comes into operation when a scheme has already been approved by the State Government under section 68 D(2).
In order that the approved scheme may be implemented the State Transport Undertaking which is to run and operate.
the Transport Service under the scheme must have a permit from the Regio nal Transport Authority.
Section 68 F(1) provides that the State Transport Undertaking will have to apply for a permit (i) in pursuance of the approved 913 scheme and (ii) in the manner specified in Chapter IV.
Once that is done, the sub section proceeds to say " 'A Regional Transport Authority shall issue such permit to the State Transport Undertaking", and this "notwithstanding anything to the contrary contained in Chapter IV.
" It appears clear to us that the provisions of section 57(3) have nothing to do with these matters dealt with by section 68 F(1).
Section 57(3) lays on the Regional Transport Authority certain duties when it considers an application for a permit.
These conditions are (1) to make the application available for inspection at the office of the Authority, (2) to publish the application or the substance thereof in the prescribed manner together with a notice of the date before which representations in connection therewith may be submitted and the date and the time and place at which the application and any representa tions, received will be considered.
Under section 68 F(1) as already mentioned the Regional Transport Authority has no option to refuse the grant of the permit provided it has been made in pursuance of the approved scheme and in the manner mentioned in Chap.
The duty of the Regional Transport Authority on receipt of the application from the State Transport Undertaking for a permit is therefore to examine the application for itself to see whether it is in pursuance of an approved scheme and secondly whether it has been made in the manner laid down in Chapter IV.
This is a duty which the Regional Transport Authority has to perform for itself and there is no question of its asking for assistance from the public or existing permit holders for Transport Services on the route.
Neither the public in general nor the permit holder has any part to play in this matter.
The provisions of section 57(3) for making the application made under Chapter IV, available for inspection, for publishing the application or a substance thereof with a notice of the date by which the representations may be submitted and the date, time and place when the representations will be considered are required to enable the Regional Transport Authority to come to a 115 914 correct conclusion as to whether the application should be granted or not.
An application not made in the manner laid down in Chapter IV will not be con sidered by the Regional Transport Authority at all.
But the mere fact that it has been made in the proper manner will not entitle the applicant to a permit.
it is the duty of the Regional Transport Authority to decide on a consideration of all relevant matters whether the application should be allowed.
Other operators and even the public have a legal right to make representations to persuade the Authority not to grant the permit on the merits of the case.
It is for this reason that there was necessity to make the provisions in sub section 3 of section 57 so that the Regional Transport Authority may receive every assistance in coming to a proper conclusion.
When however a scheme prepared and published under section 68 C has been approved and an application has been made in pursuance of the scheme and in the proper manner as specified in Chapter IV nothing more remains to be decided by the Regional Transport Authority.
The nature of the matter dealt with under section 68 F(1) is thus such as does not and cannot attract any of the provisions of section 57(3).
It may be mentioned here that in Srinivasa Reddy.
& Or.3.
vs The State of Mysore & Ors.
(1) a question was raised whether section 57(3) applied or not to an application made under section 68 F(1).
The Court considered it unnecessary then to go into the matter as on the facts of that case it was found that the application had not been made in the manner provided in Chapter IV and was actually in breach of section 57(2) of the Act and so no permit could be issued on such an application.
The provision in section 57(2) which was applicable to applica tions under section 68 F is that an application for a permit shall be made not less than six weeks before the date on which it is desired that the permit shall take effect or if the Regional Transport Authority appoints dates for the receipt of such application on such dates.
In that case the Court held that this provision in section 57(2) is in reality a manner of making the (1) ; 915 application and consequently it applied to applications made under section 68 F(1).
The provisions of section 57(3) cannot however be said to have anything to do with the manner of making the application and the nature of the matter dealt with under section 68 F(1) is such that provisions of section 57(3) are not attracted, The next argument is that the Regional Transport Authority functions as a quasi judicial authority when dealing with an application made by the State Transport Undertaking under section 68 F(1).
It is said that as under section 68 F(2) the Regional Transport Authority may refuse to entertain an application for renewal of any other permit or cancel an existing permit or modify in certain matters the terms of an existing permit, for the purpose of giving effect to the approved scheme there is a lis between the existing permit holders and the State Transport Undertaking when an application under section 68 F(1) is dealt with.
It appears to us that when deciding what action to take under section 68 F(2) the authority is tied down by the terms and conditions of the approved scheme and his duty is merely to do what is necessary to give effect to the provisions of the scheme.
, The refusal to entertain applications for renewal of permits or cancellation of permits or modification of terms of existing permits really flow from the scheme.
The duty is therefore merely mechanical; and it will be incorrect to say that there is in these matters any lis between the existing operators and the State Transport Undertaking which is to be decided by the Regional Transport Authority.
There is no justification therefore for saving that when taking action under section 68 F(2) the regional Transport Authority is exercising a quasi judicial function.
Apart from this it has to be pointed out that action under section 68 F(2) is really independent of the issue of the permits under section 68 F(1).
Once the scheme has been approved, action under section 68 F(1) flows from it and at the same time action under section 68 F(2) flows from the same scheme.
The argument that the Regional Transport Authority should be held to be exercising quasi judicial function in dealing with applications for permits under section 68 F(1) 916 because of the action it may take under section 68 F(2) therefore fails.
It was next said that when the Regional Transport Authority issues the permit it can attach to the permit conditions under section 48(3) of the Act.
Section 48(3) authorises the Regional, Transport Authority if it decides to grant a stage carriage permit, to attach to the permit any of the conditions specified in the subsection.
It has to be noticed that section 68 F(1) does not speak of the "grant" of a permit but provides that the Regional Transport Authority shall "issue" a permit.
In any case, if the Regional Transport Authority has to decide what conditions to attach to such a permit, it is not possible to say that it is then exercising a quasi judicial function.
For, in deciding that matter the Regional Transport Authority is to have regard to the interests of the public but there is no question because of that, of any lis between the State Transport Undertaking on the one hand and the public on the other.
In our opinion, the Regional Transport Authority acts wholly in a ministerial capacity while dealing with an application of the State Transport Undertaking under section 68 F(1).
The fact that on other occasions and in other matters the Regional Transport Authority has quasi judicial functions to perform cannot make its function under, section 68 F(1) a quasi judicial function.
Our conclusion therefore is that the petitioner 's contention that no permit can be granted to the State Transport Undertaking until the applications for permit have been duly published and notices have been given to the petitioner of these applications is unsound Consequently, the petitioner is not entitled to any relief.
The petition is dismissed with costs.
Petition dismissed.
[/INST]Section 30(3)(a) of the Mysore House Rent and Accommodation Control Act, 1951, authorised the Controller to select any Government, local authority, public institution, officer of a government, local authority or public institution or any other person as a tenant of a vacant house.
Under the Act the owner was bound to let the house to the tenant so selected.
The petitioner was the owner of a house for whom the controller selected a tenant under these provisions.
He challenged the constitutionality of section 3(3)(a) in so far as the selection of "other persons" was authorised on the grounds that: (i) it put an unreasonable restriction on his fundamental right to property and (ii) it offended article 14 of the Constitution as it provided no guidance for choosing the tenant and enabled the controller to make an arbitrary choice.
Held, that section 3(3)(a) of the Act was valid and did not violate article 14 or 19(1)(f) of the Constitution.
An individual was a member of the public and the restriction caused by his selection was in the interest of the general public.
The restriction was not unreasonable.
It was enforced only when the owner did not want the house for his own use.
It could make no reasonable difference to him whether an individual was selected or government, local authority, public institution or any officer of any of these was selected.
The Act made provision for selection of a suitable tenant.
This was further secured by providing for an appeal to the District judge and thereafter a revision petition to the High Court.
There was ample guidance given in the Act to the Controller to choose a suitable tenant.
Every one had been given a right to apply for being selected as a tenant; and the owner bad been given the right to have his views also considered.
The ultimate decision was a judicial decision, and if required, of the highest tribunal in the State.
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<s>[INST] Summarize the judgementAppeal Nos. 858 to 861 of 1964.
Appeals by special leave from the judgment and order of the Andhra Pradesh High Court in Second Appeals Nos. 720 and 724 to 726 of 1957.
C.B. Agarwala and T. V. R. Tatachari, for the appellants (in all the appeals).
P. Ram Reddy and K. R. Sharma for the respondent (in all the appeals. ) The Judgment of the Court was delivered by Shelat, J.
All these four appeals by special leave raise a common question regarding interpretation of section 11(1) of the Madras Commercial Crops Market Act, XX of 1933 and Rule 28 of the Rules made thereunder and therefore can be disposed of by a common judgment.
The Act was originally enacted by the Madras Legislature.
It was a law in force immediately before the constitution of the State of Andhra Pradesh and governed the territories now forming part of that State.
By virtue of Andhra Pradesh Act of 1953 and the Adaptation of Laws Order passed on November 1, 1953 by the State Government of Andhra Pradesh it became applicable to the newly formed State of Andhra Pradesh.
By a Notification dated June 27, 1949 the then Government of Madras, in exercise of the power conferred on it by section 2(1)(a), declared coconuts and copra to be commercial crops.
Under section 4 of the Act, the State Government also declared the District of East Godavari as the "notified area" for purposes of the Act in respect of coconuts and copra.
By a further notification dated December 5, 1950 issued under section 4(a) of the Act it established a Market Com 976 mittee at Rajahmundry for the said notified area.
The said Market Committee levied the following fees, viz., (1) a licence fee under section 5(1) of the Act read with Rule 28(3); (2) a licence fee for storage, wharfage etc., under section 5(3) read with Rule 28(3); (3), a registration fee under section 18 read with Rule 37; (4) a fee on the said goods bought and sold within the notified area and under section II (1) read with Rule 28(1); and (5) a fee under the same section on consign ments of coconut oil.
Contesting the levy of fees under items 2 to 5 as being illegal on the ground that they sold coconuts and copra to customers outside the notified area and in some cases outside the State, the appellants filed various suits in the court of the District Munsif, Amalapuram for refund of the said fees collected by the said Committee at different times.
The Market Committee resisted the said suits claiming that the aforesaid provisions conferred power upon it to levy the said fees and that the said levy was valid and legal.
The said suits were tried together and the District Munsif by his judgment dated October 17, 1955, inter alia, held that the levy under section 11(1) read with Rule 28(1) though called a "fee" was really a "tax", that the said provisions empowered the Committee to impose the said tax only when the said goods were bought and sold within the notified area, that the sales effected by the appellants were to customers outside the said area and in some cases outside the State, that the Committee had no power to levy and collect the said fees ' and therefore the appellants were entitled to refund of the said fees and accordingly passed decrees in all the suits.
In appeals by the Committee, the Subordinate Judge, Amalapuram, held that though the appellants purchased the said goods within the notified area they exported them to their customers outside the notified area and outside the State and relying upon the decision in Kutti Koya vs State of Madras() he held that though section II (1) called the said levy as fee it was in substance a tax and that such a tax being oil sales completed at the places of their customers outside the State offended article 286 of the Constitution and was therefore illegal.
The Subordinate Judge, except for deleting the relief granted in respect of licence fee under section 5(3) of the Act, dismissed the appeals and confirmed the judgment and decree of the Trial Court.
The Market Committee thereupon filed Second Appeals in the High Court of Andhra Pradesh.
Before the High Court the controversy centered round the question of fee under section 11 (1) only.
By its common judgment dated November 8, 1961 the High Court relying upon the judgment of a Division Bench of that Court in Satyanarayana and Venkataraju Firm vs Godavari Market Committee(2) held that the word "fee" in section II (1) was in fact a fee and not a tax, The Division Bench also held that the said goods were pur (1) A.I.R., 1954 Mad. 621.
(2) A.I.R. 1959 Andh.
Pradesh 398.
977 chased by the appellants from producers or petty dealers within the notified area and then sold by them to customers outside the said area or the State, that the transactions which were the subjected matter of the levy under section 11(1) were transactions consisting of purchase of the said goods by the appellants and the corresponding sales to them by the producers and petty dealers and not the subsequent sales effected by them to their customers outside the notified area or the State, that therefore the transactions on which the said fee was levied were effected and completed inside the notified area and fell within the expression "bought and sold" in section 11 (1) and therefore the Market Committee rightly levied the said fee on those.
transactions.
In the result, the Division Bench allowed the appeals and dismissed the appellants ' suits.
It is this judgment and decree against which these appeals are directed.
The preamble of the Act states that the Act was passed for making provisions for better regulation of buying and selling of and the establishment of markets for commercial crops.
As stated in M.C.V.S. Arunachala Nadar vs The State of Madras(1), the Act was the result of long exploratory investigation by experts in the field, conceived and enacted to regulate the buying and selling of Commmercial crops to provide suitable and regulated markets, to eliminate middlemen and bring face to face the producer and the buyer so that they meet on equal terms thereby eradicating or at any rate reducing the scope for exploitation of the producers.
It therefore provided a machinery for regulating trade by providing a common place where facilities would be furnished by way of space, buildings and storage accommodation, and where market practices would be regularised and market charges clearly defined and unwarranted ones prohibited, where correct weighment would be ensured by licensed weighmen and all weights would be checked and stamped, where payment on hand would be ensured, where provision would be made for settlement of disputes, where daily prevailing prices would be made available to the grower and reliable market information provided regarding arrivals, stocks, prices etc., and where quality standards would be fixed when necessary and contract forms standardized for purchase and sale.
The result of the implementation of the Act would be thus to give reasonable facilities to the growers of commercial crops ensuring proper price for their commodities.
Section 4(a) (1) provides for the formation of a market com mittee for enforcing the provisions of the Act and the Rules and bylaws framed thereunder.
Sub section (2) lays down that the Committee shall establish in the notified area such number of markets providing such facilities, as the State Government may from time to time direct, for purchase and sale of commercial crops.
Section 5 (1) [1959] Suppl.
1 S.C.R. 92.
978 prohibits any person to set up, establish or use, continue or .allow to be continued any place within the notified area for the purchase or sale of commercial crops except under a licence and in accordance with the conditions thereof.
The Market Committee, however, can exempt from the provisions of this sub section any person who carries on the business of purchasing or selling any .,commercial crop in quantities not exceeding those prescribed by the Rules.
It also exempts from the provisions of this section a person selling a commercial crop which has been grown by him or a co operative society selling a commercial crop which has been grown by any of its members and also a person purchasing for his private use a commercial crop in quantities not exceeding those prescribed by the rules.
Section 6 provides that every market committee shall consist of such number of members not exceeding twelve as may be fixed by the State Government and provides for representatives of licencees under section 5 and buyers, sellers and buyers and sellers registered under the Rules prescribed in that behalf.
Section II (1) with which we are concerned in these appeals reads: "The Market Committee shall, subject to such rules as may be made in this behalf, levy fees on the notified commercial crop or crops bought and sold in the notified area at such rates as it may determine.
" The Explanation to sub section (1) provides that all notified commercial crops leaving a notified area shall, unless the contrary is proved, be presumed to be bought and sold within such area.
Sub section 2 provides that the fee chargeable under sub section(1) shall be paid by the purchaser of the commercial crop concerned provided that where such a purchaser cannot be identified the fee shall be paid by the seller.
Section 12 provides that all monies received by a market committee shall be paid into a fund and all expenditure incurred by the market committee shall be defrayed out of the said fund.
The expenditure which the committee can incur is for purposes set out in section 13 which incidentally reflect the object and purpose of the Act.
Section 18 empowers the State Government to make rules including rules for licence fee under section, 5, the registration fee and the prohibition of buying and selling ,of commercial crops in the notified area by persons not so registered and the fee to be levied on commercial crops bought and sold in the notified area.
Rule 28 lays down the maximum fee leviable on commercial crops under section 11 (I) as also the maximum fee payable for licences and registration.
Rule 28 A provides that the fees referred to in sub rule (1), that is, "fees" under section 11 (1), shall not be levied more than once on a commercial crop in a notified area.
These provisions clearly show the policy of safe_guarding the interests of the producers and of guaranteeing to them 979 reasonable return for the crops they would bring to sell without being exploited.
Mr. Agarwala raised the following contentions: (1) that the fee charged by the Market Committee under s.11(1) was on sales effected by the appellants with their customers, some of whom were admittedly outside the notified area and the rest outside the State; (2) that that was the footing on which the parties proceeded with the suits but that case was given up in the High Court and the High Court was in error in permitting the Committee to shift its case and argue that the fee was levied not on those sales but on transactions of purchase entered into by the appellants with the producers and other petty dealers.
It is true that in para 3 of their plaint the appellants averred that their business activities consisted of buying coconuts and copra in East Godavari District and selling them to customers outside the notified area and even the State and that those sales were completed at the respective places of those customers.
The appellants ' case therefore was that in respect of these sales with customers some of whom were outside the notified area and the rest outside the State, the levy of fee was in the former case beyond the ken of section II (1) and in the latter case repugnant to article 286 of the Constitution.
The written statement of the respondent committee denied these allegations.
The Committee asserted that both the purchases and sales took place in the notified area and that though the fee levied by it was on sales by the appellants and though delivery of the said goods thereunder took place outside the notified area the sales in respect thereof were made within the notified area and therefore the question of the levy under section 11 (1) being repugnant to article 286 of the Constitution did not arise.
Besides these pleadings Mr. Agarwala drew our attention to certain notices of demand and circulars issued by the Committee in which it was stated that the said fee was being levied on goods exported outside East Godavari District and that the traders were liable to pay it both on coconuts exported to outsiders and also consumed internally.
That presumably was stated because if the goods were "bought and sold" within the notified area, even if they were subsequently exported outside, section 11(1) would apply.
The practice followed by the appellants and not denied by the Committee was that they used to despatch these goods by rail to their customers.
Railway receipts and hundies were then sent to their bankers at the destination and railway receipts were delivered to the customers on their honouring the hundies Thus the goods were delivered outside the notified area and the sales effected by the appellants to their customers were also completed at places outside the notified area and in some cases outside the State.
On these facts the District Munsif held that property in the goods having passed at destination, sales took place outside the 980 notified area and therefore the fee charged by the Committee was illegal as section 11(1) permitted such a levy only on goods bought and sold within the notified area.
On appeal by the Committee, the Subordinate Judge held that the said fee was a tax, that it was a tax on sales outside the notified area and the State and was not therefore warranted under section 11 (1) and was repugnant to article 286.
It seems that in both the courts, the real issue was lost sight of, viz., whether the goods in respect of which the fee under section 1 1 (I) was levied were goods "bought and sold" within the notified area as envisaged by the section.
In the High Court however the questions convassed were (1) whethe r the fee provided in section 11 (1) was a fee or a tax and (2) even if it was a fee whether the Committee had the power to levy it in respect of goods sold by the appellants outside the notified area.
As already stated the Trial Judge and the Subordinate Judge had proceeded on the footing that the said fee was levied on sales entered into by the appellants with their customers who undoubtedly were outside the notified area.
But the real question that ought to have been dealt with by the Trial, Judge and on appeal by the Subordinate Judge was not whether the appellant 's sales were to customers outside the notified area or the State but whether the fee which was levied was valid.
The question of the validity of the levy entailed another question, viz., whether the levy was on transactions effected by the appellants before they sold those goods to their customers.
Were the appellants entitled to a refund of the fees levied on them under section II (1) ?, was the principal question in the suits.
To decide that question it was necessary for the court to go into the question whether the fee was charged on the sales by the appellants or on the transactions made between them and those from whom they purchased the goods in question.
Since neither the Trial Court nor the Subordinate Judge had gone into that question, it was necessary for the High Court to go into it not only to do justice to the parties but also because that was the real issue arising in the suits and was the crux of the litigation.
There was therefore no question of the High Court allowing the respondent Committee to make out a new case.
The question from the very inception was whether the Committee was competent to levy the fee in question under section 11(1).
To answer that question the court necessarily had to enquire on which transactions could the said fee be levied under section 11(1) and whether it was rightly levied by the Com mittee.
The High Court answered these questions by holding that it was levied, on the transactions effected by the appellants with those from whom they bought the said goods, that section 11(1) dealt with those transactions and was not therefore concerned with the subsequent sales entered into by the appellants with their customers outside the notified area.
Since, according to the High Court, those transactions were admittedly effected within the noti 981 fied area the levy was valid and warranted under section 1 1 (1).
In our view the High Court approached the question from a correct angle and therefore there was no question of its having allowed the Committee to change its case or make out a new case.
That being the position, the next question is whether the Committee could levy fee under section II (1) on the transactions effected by the appellants before they sold those goods to their customers.
Mr. Agarwala 's contention was that the fee levied under section 11(1) could only be in respect of goods "bought and sold" and not in respect of transactions where goods were only "bought" or only "sold".
According to him it is only when a person bought goods and sold those identical goods within the notified area that the fee under section 11(1) could be levied.
According to him, the transactions effected by the appellants consisted in their purchasing the said goods; they stopped at the stage of goods "bought".
Therefore, the other ingredient for a valid levy of the fee not being present the fee levied in the present case was not in accordance with the requirements of section 11 (1) and was unwarranted.
This contention raises the question as to the meaning of the words "bought and sold" in section 11(1).
At first sight they would appear to be susceptible of three meanings; viz., (1) that they mean duality of transactions where the same person buys goods and sells those identical goods in the notified area; (2) that they mean "bought" or "sold" the conjunctive "and" meaning in the context of the sub section the disjunctive "or" and (3) that they apply to a transaction of purchase as the concept of purchase includes a corresponding sale.
When a person buys an article from another person, that, other person at the same time sells him that article and it is in that sense that section 11(1) uses the words "bought and sold.
" The incidence of the fee under section 11(1) is on the goods thus "bought and sold".
This last interpretation was favoured by the High Court of Madras in Louis Dreyfus & Co. vs South Arcot Groundnut Market Committee(1) which has been accepted by the High Court in the present case.
If the construction commended to us for acceptance by Mr. Agarwala were to be correct, viz., that the appellant 's transactions stopped at the stage of goods "bought", they would not be transactions in respect of goods "bought and sold".
If the fee was levied on sales effected by the appellants with their customers its levy would not be valid under section 1 1 (1) and would also be repugnant to article ' 286 where goods were delivered outside the State.
But it is a well settled rule of construction that the court should endeavour as far as possible to construe a statute in such a manner that the construction results in validity rather than its invalidity and gives effect to the (1) 982 manifest intention of the legislature enacting that statute.
The object in passing the Act was to prevent the mischief of exploitation of producers of commercial crops such as coconuts and copra and to see that such producers got a fair price for their goods.
The mischief to prevent which the Act was enacted was the exploitation of these producers by middlemen and those buying goods from them and therefore the Act provided facilities such as market place, place for storage, correct weighment etc., so that the producers and his purchasers come face to face in a regulated and controlled market and a fair price was obtained by them.
If the construction suggested by Mr. Agarwala were to be accepted and the section were to be construed as being applicable to those transactions only which have a dual aspect, that is, buying by a dealer from a producer and the dealer selling those identical goods within the notified area, the object of the Act would be defeated, for in a large number of cases the transactions would halt at the stage of buying and the Committee in those cases would have no power to levy the fee on them.
Why is a buyer or a seller or a buyer and seller required to be registered and why does the Act prevent those who have not registered themselves from effecting transactions in commercial crops unless the object was to regulate and control transactions in those commodities at all stages and in a manner preventing the exploitation of the producer ? The legislature had thus principally the producer in mind who should have a proper market where he can bring his goods for sale and where he can secure a fair deal and a fair price.
The Act thus aims at transactions which such a producer would enter into with those who buy from him.
The words "bought and sold" used in section 11(1) aim at those transactions where under a dealer buys from a producer who brings to the market his goods for sale.
The transactions aimed at must be viewed in the sense in which the legislature intended it to be viewed, that is, as one transaction resulting in buying on the one hand and selling on the other.
Such a construction is commendable because it is not only in consonance with the words used in section 11(1) but is consistent with the object of the Act as expressed through its various provisions.
The construction on the other hand canvassed by the appellants is defeative of the purpose of the Act and should, unless we are compelled to accept it, be avoided.
The construction which we are inclined to accept acquired some support from the fact that section II makes the purchaser and not the seller primarily responsible for payment of the fee and it is only when the purchaser cannot be identified that the seller is made liable.
Mr. Agarwala at first also urged that the fee under section 11 (1) amounted to a tax and that it was in fact a sales tax.
But at the last moment he stated that he did not wish to press that contention and requested us not to express any opinion thereon.
Since the contention is not pressed we need not express any opinion on that ques 983 tion and confine ourselves to the question as to the interpretation of the words "bought and sold" in that section.
In our view the construction placed by, the High Court on section 11(1) was a correct construction and therefore the respondent committee had rightly charged the appellants with said fee.
The appeals therefore fail and are dismissed with costs.
One hearing fee.
[/INST]In a prosecution for murder the only eye witness having named the appellant as the assailant in her deposition in the committal court, left out his name in her evidence in the Sessions Court.
She was declared hostile and was allowed to be cross examined.
The Sessions Judge questioned the appellant with reference to the statement of the witness in the committal proceedings and informed him, that it was marked under section 288, Cr.
P.C. He however did not pass an order transferring the earlier deposition to the record of the Sessions Court.
Treating the previous statement as substantive evidence and relying upon the other circumstances in the case, the Sessions Court and the High Court on appeal convicted the appellant.
On appeal to this Court, HELD : The High Court and the Sessions Court were right in convicting the appellant.
Although the technical requirement of section 288, namely, that an order should be passed to indicate that the statement is transferred so as to be read as substantive evidence, was not complied with there was no substantial departure from the requirements of the law and no prejudice was caused to the appellant since he was informed that the statement was being used under section 288.
[124 E G] [Desirability of an order indicating why the earlier deposition was being transferred to the record of the trial court, pointed out.
[124 C D]
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<s>[INST] Summarize the judgementivil Appeal Nos.
1350 51 (NT) of 1974 From the Judgment and order dated 19th October.
1973 of the Delhi High Court in Income Tax Reference Nos 46 and 52 of 1970 Dr. V. Gauri Shankar and Miss A. Subhashini for the Appellant.
Bishambar Lal, R.P. Gupta, S.K. Gupta and V.K. Jain for the Respondent.
153 The Judgment of the Court was delivered by PATHAK, J.
These appeals by certificate granted by the Delhi High Court are directed against a common judgment of that High Court disposing of two income tax references relating to the assessment years 1956 57 and 1957 58 on the question whether the assessee 's dividend income from a Pakistan company was deductible against its business loss in India.
The assessee is a public limited company carrying on the business of manufacturing and selling sugar.
During the relevant period it also held some shares in the Premier Sugar Mills & Distillery Co. Ltd Mardan, West Pakistan.
The Pakistan company also carried on the business of manufacturing and selling sugar.
In the previous year relevant to the assessment year 1956 57 the assessee earned a dividend income of Rs.2,30,832 from its holdings in the Pakistan company.
It sustained a loss of Rs.20,30,006 from the business in India.
Likewise, in the previous year relevant to the assessment year 1957 58 the asses see received a dividend income of Rs.3,30,868 from the holdings in the Pakistan company, but sustained a loss of Rs.9,11,728 from the business in India.
The assessee claimed that the entire loss sustained by it in India in each year should be carried forward and set off against its business profits in India in future years.
It contended that the dividend income derived by it from the Pakistan company was not liable to tax in India as it was wholly taxed in Pakistan, and therefore, it could not be set off against the business loss in India.
The Income tax officer rejected the contention and deducted the dividend income received from the Pakistan company from the business loss in India disclosed by the assessee and after making certain other adjustments he determined the total loss of the assessee for the assessment year 1956 57 at p Rs.16,51,129 and for the assessment year 1957 58 at Rs.3,78,661.
The assessee appealed to the Appellate Assistant Commissioner of Income tax in respect of each assessment year, but the appeals failed, except that in the case for the assessment year 1957 58 the Appellate Assistant Commissioner determined the dividend income from the Pakistan company at Rs.2,27,472 and reduced the net loss accordingly.
In second appeal the Income tax Appellate Tribunal confirmed the orders of the Appellate Assistant Commissioner.
Thereafter, at the instance of the assessee the Appellate Tribunal referred the following questions in the two cases to the Delhi High Court for its opinion: 154 "1.
Whether on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the net dividend income of Rs.2,30,832 received from a Pakistan Company and the capital gains of Rs.5,120 were not deductible in arriving at the total world loss under section 24(1)?" 2.
Whether on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the net dividend income of Rs.2,27,472 received from a Pakistan company and the capital gains of Rs.50,829 were not deductible in arriving at the total world loss under section 24(1)?" The High Court answered the questions relating to the Pakistan dividend in favour of the assessee and against the revenue.
So far as the question in each case refers to the deduction of capital gains against the total world loss for the year, learned counsel for the parties jointly state that it is not subject matter of these appeals.
It is necessary to mention at the outset that the Dominion of India and the Dominion of Pakistan concluded an Agreement for the Avoidance of Double Taxation of Income chargeable in the two Dominions in accordance with their respective laws, and in exercise of the powers conferred by section 49AA of the Indian Income tax Act 1922 and the corresponding provisions of the Excess Profits Tax Act, 1940 and the the Government of India directed by Notification No. 28 dated December 10, 1947 that the provisions of the Agreement would be given effect to in the Dominion of India.
As the scope and effect of the Agreement is intimately involved in the resolution of the controversy between the parties, the material provisions may be set forth immediately: "Article IV Each Dominion shall make assessment in the ordinary way under its own laws; and, where either Dominion under the operation of its laws charges any income from the sources or categories of transaction specified in column I of the Schedule of this Agreement (hereinafter referred to as the Schedule) in excess of the amount calculated according to the percentage specified in columns 2 155 and 3 thereof, that Dominion shall allow an abatement equal to the lower amount of tax payable on such excess in their Dominion as provided for in Article VI.
Article V Where any income accruing or arising without the territories of the Dominions is chargeable to tax in both the Dominions, each Dominion shall allow an abatement equal to one half of the lower amount of tax payable in either Dominion on such doubly taxed income.
Article VI(a) For the purposes of the abatement to be allowed under Article IV or V, the tax payable in each Dominion on the excess or the doubly taxed income, as the case may be, shall be such proportion of the tax payable in each Dominion as the excess or the doubly taxed income bears to the total income of the assessee in each Dominion.
(b) Where at the time of assessment in one Dominion, the n tax payable on the total income in the other Dominion is not known, the first Dominion shall make a demand without allowing the abatement, but shall hold in abeyance for a period of one year (or such longer period as may be allowed by the Income tax officer in his descretion) the collection of a portion of the demand equal to the estimated abatement.
If the assessee produces a certificate of assessment in the other Dominion within the period of one year or any longer period allowed by the Income tax officer, the uncollected portion of the demand will be adjusted against the abatement allowable under this Agreement; if no such certificate is produced the abatement shall cease to be operative and the outstanding demand shall be collected forthwith.
Article VII(a) Nothing in this Agreement shall be construed as modifying or interpreting in any manner the provisions of relevant taxation laws in force in either Dominion (b) If any question arises as to whether any income falls within any one of the items specified in the Schedule and if so under which item, the question shall be decided without 156 any reference to the treatment of such income in assessment made by the other Dominion.
xxx xxx xxx The Schedule (See Article IV) ____________________________________________________________ Source of Income Percentage of Remarks or nature of Income which each transaction from Dominion is en which income is titled to charge derived.
under the Agreement.
(1) (2) (3) (4) ____________________________________________________________ xxxx xxxx xxxx xxxx section Dividends By each (As in Relief in respect of Dominion preceding any excess income tax in pro column) deemed to be paid by portion to the shareholder shall the profits be allowed by each of the Dominion in proportion company to the profits of the chargeable company chargeable by by each each under this Dominion Agreement.
under this Agreement.
xxx xxxx xxx xxx" ___________________________________________________________ It is apparent that in the case of dividend income the percentage of income which each Dominion is entitled to charge under Agreement is in proportion to the profits of the company chargeable by each Dominion under that Agreement.
The relevant entry in the Schedule indicates that as the factory is situated in Pakistan the Dominion of Pakistan is entitled to charge 100 per cent of the income and that the Dominion of India is not entitled to charge any percentage of the Income.
Therefore, the dividend income derived from the Pakistan Company by the assessee is, by virtue of the Agreement, liable to charge wholly by the Dominion of Pakistan, and the Dominion of India is not entitled to charge the dividend income at all.
But this, it must be noted, is the position obtaining pursuant to the Agreement.
If regard be had to the provisions of the Indian Income tax Act, without reference to the Agreement, the dividend income, even though accruing or arising abroad, is liable to tax under the Indian law.
157 The High Court held that because of the operation of the aforesaid Agreement dividend income derived by the assessee in Pakistan was not assessable under the Income tax Act in India and, therefore, could not be set off under sub section (1) of section 24 of the Indian Income tax Act 1922 against the business loss suffered by the assessee.
Now there can be no doubt that under sub section
(1) of section 24 an assessee who has sustained a loss of profits or gains in any year under any of the heads mentioned in section 6 is entitled to have the amount of the loss set off against his income, profits or gains under any other head in that year, and that the income, profits or gains against which the loss is set off must be such income, profits or gains as is assessable under the Indian Income tax Act.
The statute does not contemplate a setting off of loss against income which is not assessable at all under the Act.
But in order to determine whether the income in question is assessable under the Act regard must be had to the provisions of the Act itself.
The High Court erred in taking into consideration the circumstance that the Agreement between the two Dominions prohibited the Dominion of India from charging income tax on dividend income earned in Pakistan and treating it as exempt from the process of assessment to tax under the Act.
It will be apparent from Article IV of the Agreement that each Dominion is entitled to make assessments in the ordinary way under its own laws.
The process of determining the assessable income of the assessee is not effected by the Agreement.
What the Agreement does is to give relief against double taxation, and as is clear, from Article lV, V and VI it is the charge levied by a Dominion on the income of an assessee that is involved in the relief.
For Article IV goes on to say that where either Dominion under the operation of its laws charges any income from the sources or categories of transactions specified in column 1 of the Schedule to the Agreement in excess of the amount calculated according to the percentage specified in columns 2 and 3 thereof, that Dominion shall allow an abatement equal to the lower amount of tax payable on such excess in the Dominion as provided for in Article VI.
The Agreement was considered by this Court in Ramesh R. Saraiya vs Commissioner of Income tax Bombay City I, [1965] 55 lTR 699 and the position was summed up clearly as follows.
"It seems to us that the opening sentence of Article IV of the Agreement that each Dominion is entitled to make assessment in the ordinary way under its own laws clearly shows that each Dominion can make an assessment regardless of the Agreement.
But a restriction is imposed on 158 each Dominion and the restriction is not on the power of assessment but on the liberty to retain the tax assessed Article IV directs each Dominion to allow abatement on the amount in excess of the amount mentioned in the Schedule.
The scheme of the Schedule is to apportion income from various sources among the two Dominions In the case of dividends each Dominion is entitled to charge "in proportion to the profits of the company charge able by each Dominion under this agreement.
" This refers us back to the other items For instance, in respect of goods manufactured by the assessee partly in one Dominion and partly in the other, each Dominion is entitled to charge on 50% of the profits But the Schedule does not limit the power of each Dominion to assesss in the normal way all the income that is liable to taxation under its laws.
The Schedule has been inserted only for the purpose of calculating the abatement to be allowed Article VI also leads to the same conclusion For if no assessment could be made on the amount on which abatement is to be allowed, there could be no question of making a demand without allowing the abatement and holding in abeyance for a period the collection of a portion of the demand equal to the estimated abatement.
" On the basis of Agreement the High Court came to the conclusion that the dividend income was not liable to charge by the Dominion of India The High Court omitted to note that the Agreement functions on a different plane altogether.
It enjoys no role in the application of the Indian law for the purpose of determining the total income of an assessee and the tax liability consequent upon such assessment.
On the contrary, the provisions of the Agreement clearly envisage that full effect must be given to the operation of the tax law of each Dominion All that the Agreement does is to permit a Dominion to retain the tax recovered by it pursuant to an assessment under its law to the extent that an abatement is not allowed under the provisions of the Agreement Article IV, it may be reiterated, specifically provides that each Dominion shall make assessment in the ordinary way under its own laws.
Such assessment includes the determination of the consequential tax liability.
Thereafter, the Agreement takes over the Dominion must allow an abatement in the degree mentioned in Article IV.
It will also be noticed that clause (b) of Article VI permits the 159 Dominion to make a demand without allowing the abatement if the tax payable on the total income in the other Dominion is not known, but the collection of the tax has to be held in abeyance for a period of one year at least to the extent of the estimated abatement.
If the assessee produces the certificate of assessment in the other Dominion within the period of one year or any longer period allowed by the Income tax officer, the uncollected portion of the demand has to be adjusted against the abatement allowable under the Agreement.
But if no such certificate is produced, the abatement ceases to be operative and the outstanding demand can be collected forthwith.
Clause (a) of Article VII makes absolutely clear that nothing in the Agreement can be considered as modifying or incorporating in any manner the provisions of the relevant tax laws in force in either Dominion.
Therefore, having regard to what is expressly stated in Article IV of the Agreement, and re emphasised in cl.
(a) of Article VII, there can be no escape from the conclusion that for the purposes of the assessment under the Indian Income tax Act, the income of the assessee must be determined in the ordinary way under the Indian law, and in no way can the Agreement be construed as modifying or superseding in any manner the provisions of the Indian law in that regard.
The High Court has proceeded on the basis that for the purpose of giving abatement of tax in India the dividend income from the Pakistan Company can be excluded from the taxable income of the assessee.
It has reasoned that by requiring the dividend profits accruing or arising in Pakistan to be set off against the business loss of the assessee in India there is, in the result, a taxing of the dividend income from the Pakistan company.
The High Court has fallen into the fallacy of treating the setting off of the dividend income against the business loss as an infringement of the Agreement.
It has lost sight of the provisions of the Agreement itself which provide that the Indian Income tax Act must be applied without regard to the Agreement for the purpose of determining the total income and the consequential tax liability of the assessee.
Once it is accepted that the Agreement preserves the right of each Dominion to determine the assessable income in accordance with the operation of its own laws and it is concerned only with the question of the degree of retention of the tax charged by it consequent upon such assessment, it becomes abundantly clear that the dividend income, inasmuch as it is taxable under the Indian Income tax Act, by virtue of sub cl.
(ii) of d. (b) of sub.
section (1) of section 4, must be brought into the net 160 of income for assessment under the Indian law.
It has not been shown to us by learned counsel for the assessee that it constitutes the subject of exemption under any provision of the Indian Income tax Act Subs.
(3) of section 4 sets forth the cases in which income is not includible in the total income of the person receiving it.
And sections 14 to 16 detail the cases where the statute grants exemption from tax.
No provision in the Act has been pointed out from which we may infer that the dividend income in question is not liable to inclusion in determining the total income of the assessee.
Learned counsel for the assessee has placed a number of cases before us which deal with the application of the Indian Income tax Act, and where it has been held that for the purpose of sub section
(t) of section 24 of that Act income which does not fall within the purview of the Act at all cannot be set off against a loss arising under the Act.
These are cases which are wholly inapposite, and have no bearing, at all upon the role played by the Agreement.
It is also urged that it is open to the assessee to claim or not to claim the benefit of section 24 of the Act, and that if he does not do so no question arises of applying section 24.
In the first place, a perusal of the assessment orders for the two years shows clearly that the assessee did claim a set off of the Pakistan dividend against the losses of the Indian business.
In the second place there is a duty cast on the Income tax officer to apply the relevant provisions of the Indian Income tax Act for the purpose of determining the true figure of the assessee 's taxable income and the consequential tax liability.
Merely because the assessee fails to claim the benefit of a set off cannot relieve the Income tax officer of his duty to apply section 24 in an appropriate case.
In the result the appeals are allowed, the judgment of the High Court is set aside and the questions referred by the Income tax Appellate Tribunal to the High Court are answered in favour of the Revenue and against the assessee in so far that we hold that the dividend income received from the Pakistan company is deductible in arriving at the total world loss of the assessee under sub s (1) of section 24 of the Indian Income tax Act, 1922.
The Revenue is entitled to its costs.
S.R. Appeals allowed.
[/INST]Section 11( 1) of the U. P. Agricultural Income tax Act, 1948, provided: "Where any person holds land, from which agricultural income is derived, as a common manager appointed under any law for the time being in force or under any agreement or as receiver, administrator or the like on behalf of persons jointly interested in such land or in the agricultural income derived therefrom, the aggregate of the sums payable as agricultural income tax by each person on the agricultural income derived from such land and received by him, shall be assessed on such common manager, receiver, administrator or the like, and he shall be deemed to be the assessee in respect of the agricultural income tax so payable by each such person and shall be liable to pay the same.
" The appellants were the trustees of an estate settled on trust under a will which inter alia provided that the trustees were to take possession of the trust properties and to manage the same with all the powers of absolute owners and to pay the annuities to certain persons.
The assessing authority assessed the appellants to agricultural income tax upon the total agricultural income received by them, overruling their contention that the tax should be computed in accordance with the method of computation laid down in section 11(1) of the Act and that they should be called upon to pay the aggregate of the sums payable as agricultural income tax by each of the annuitants.
Held: (1) that the trustees who were the legal owners of the trust property did not hold the land from which agricultural income was derived, on behalf of the annuitants and that each of the annuitants was separately or individually interested in the agricultural income derived from the land comprised in the trust estate to the extent of the annuity payable to him.
(2) that section 11(1) of the Act was not applicable to the case and that the appellants were liable to pay agricultural income tax upon the total agricultural income received by them
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<s>[INST] Summarize the judgement307 and 308 of 1960.
Petitions under article 32 of the Constitution of India; for enforcement of Fundamental Rights.
Porus A. Mehta, J. B. Gagrat and G. Gopalakrishnan, for the petitioner.
H. J. Umrigar, R. H. Dhebar and T. M, Sen, for the respondents.
March 23.
The Judgment of the Court was delivered by section K. DAS, J.
These are two writ petitions in respect of two orders 'dated August 3, 1960, b which the Joint Chief Controller of Imports, Madras, cancelled two import licences, Nos.
A 863296 and 836640 dated January 18, 1960, and February 2, 1960, respectively, granted in favour of the petitioner, Messrs. Sinha Govindji of Bangalore Road, Bellary, for the purpose of importing cellulose nitrate sheets of the value of Rs. 75,000 each for two licensing periods, April/September, '1959, and October/ March, 1960.
The complaint of the petitioner firm is that respondents 1 and 2 have cancelled the licences in circumstances which amounted to a denial of its right to be given a reasonable opportunity of being heard, as provided by cl. 10 of the Imports (Control) Order, 1955, before the impugned 'orders were passed 542 and thus arbitrarily and without authority of law deprived the petitioner of its fundamental right to carry on its business under article 19 of the constitution.
The point for decision is a short one and we need only state such facts as bear upon that point.
The petitioner 's case is that the proprietor of the firm is a citizen of India carrying on a business of the manufacture of celluloid and plastic bangles, etc, at Bellary in the Mysore State.
The petitioner was granted the two licences referred to above and thereafter entered into firm commitments for the import of cellulose sheets to the clause of Rs. 99,000.
On March 4, 1960, the petitioner was surprised to receive two letters from the Assistant Controller of Imports, Madras, calling upon the petitioner to let him know the extent to which the licenses had been utilised and asking the petitioner not to enter into fresh commitments against the said licenses without specific and prior approval of the Controllers ' office.
This led to some correspondence between the petitioner and the Control authorities, details whereof are not necessary for our purpose.
On May 27, 1960, the petitioner received two notices, only one of which we need set out in full.
It stated: "It is hereby notified that in exercise of the powers conferred by cl. 9 of the Imports (Control) Order, 1955, the Government of India, in the Minis.
try of Commerce and Industry propose to cancel licence No. A 836640/60/AU/M dated the Second February, 1960, valued at Rs. 75,000 (Rupees Seventy five thousand only) for import of Cellulose Nitrate Sheets from the Soft Currency area except South Africa, granted by the Joint Chief Controller of Imports and Exports, Madras to Messrs. Sinha Govindji, No. 18, Bangalore Road, Bellary 2, unless sufficient cause against this is furnished to the Joint Chief Controller of Imports and Exports, Madras, within ten days of the date of issue of this notice, by the said Messrs. Sinha Govindji, No. 18, Bangalore Road, Bellary 2 or any Bank, or any other party who may be interested in it.
In view of what is stated above, Messrs. Sinha 543 Govindji, Bellary or any Bank, or any other party who may be interested in the said licence No.836640/60/AU/M dated Second February, 1960, are hereby directed not to enter into any commit Departments against the said license and return it immediately to the Joint Chief Controller of Imports and Exports, Madras.
(Sd.) J. K. Sarkar, Deputy Chief Controller of Imports and Exports.
" The notices, be it noted, did not state on what grounds falling within cl. 9 of the Imports (Control) Order, 1955, it was proposed to cancel the licences of the petitioner.
Clause 9 of the Control Order states four grounds for cancellation of a licence, and we may read the clause here omitting those grounds which are not relevant for our case: "9. Cancellation of Licences: The Central Government or any other officer authorised in this behalf may cancel any licence granted under this Order or otherwise render it ineffective: (a) if the licence has been granted through inadvertence or mistake or has been obtained by fraud or misrepresentation; (b) (c) (d) By a letter dated May 30, 1960, the petitioner referred to the earlier correspondence on the subject and said inter alia: "Now clause (9) of the Import Control Order, 1955, under which action is proposed to be taken envisages the cancellation of a licence on various grounds.
Your notice does not disclose on which of these grounds the proposed action is sought to be taken.
Without knowing on what ground the proposed cancellation is to be effected it is impos sible for me to show cause against it.
I may, however, state that I have not done anything justifying the cancellation of the licence under the said Rule and that as far as I can see, there is no ground whatsoever for such cancellation.
" 544 Then, on August 4, 1960, the petitioner received two orders dated the previous day by which the two licences in favour of the petitioner were cancelled.
The orders stated (we are quoting only one of the orders which are similar in terms): "Whereas M/s. Sinha Govindji, Bangalore Road, Bellary or any bank or any other person have not come forward furnishing sufficient cause, against Notice No. 1/LCL/60/CDN(1) dt.
27 5 1960, proposing to cancel licence No. A 863296/60/AU/Mdt. 18 1 60, valued at Rs. 75,000 for the import of Cellulose Nitrate Sheets from the Soft Currency Area except South Africa granted to the said M/s. Sinha Govindji, Bangalore Road, Bellary, by the Joint Chief Controller of Imports and Exports, Madras, Government of India, in the Ministry of Commerce and Industry in exercise of the powers conferred by clause 9 of the Imports (Control) Order, 1955, hereby cancel the said licence No. A 863296/60/AU/M dt.
18 1 60 issued to the said M/s. Sinha Govindji, Bellary.
" It will be noticed that the orders also did not state on what ground the licences were cancelled.
The petitioner complained that the cancellation of the two licences led the Customs authorities to hold back the goods of the petitioner which had already arrived at port and were awaiting clearance, resulting in heavy demurrage, etc.
; but the real ground on which the petitioner challenges the two cancellation orders is that (to quote the words of the petition) "no real opportunity at all to show cause against the proposed cancellation was given to the petitioner in total disregard of the provisions of cl. 10 of the Imports (Control) Order, 1955".
We may read here that clause.
Applicant or licensee to be heard.
No action shall be taken under Clauses 7, 8 or 9 unless the licensee/importer has been given a reasonable opportunity of being heard.
" On behalf of the respondents it has been stated that after the issue of the two licences a letter dated February 16, 1960, was received from the Director, Small Industries Service Institute, Bangalore, to the 545 effect that the petitioner had no machinery and equipment to manufacture the relevant articles from the imported raw material.
On receipt of this letter a joint investigation was held by the Assistant Director of Industries, Bell, try, and the Deputy Director, Small, Industries Service Institute, Hubli, and it was found at the time of inspection that the petitioner firm had no machinery and equipment at the premises, nor did they possess any municipal licence or factory licence.
On July 2, 1960, the Chief Controller of Imports & Exports wrote to the petitioner giving the above information and asking the petitioner to show cause why further issue of licences should not be suspended under cl. 8 of the Imports (Control) Order, 1955.
We quote below the relevant extracts from this letter: "Gentleman, I write to refer to your letter dated the 21st May, 1960, and 30th May, 1960, on the above subject, and to say that a joint investigation conducted by the Deputy Director, Small Industries Service Institute, Hubli, and Assistant Director of Industries, Government of Mysore, Bellary, revealed that at the time of inspection of your firm by them, no machinery and equipment existed in your premises and that you had no Municipal licences or Factory licence or Factory.
In view of this, it is clear that you had obtained the Essentiality Certificate from the Director of Industries fraudulently and by misrepresentation of facts and thereafter obtained the licences in question by producing the said Certificate to the Joint Controller of Imports & Exports, Madras.
The above action on your part directly contravenes the Import Trade Control Regulations, within the meaning of para.
6(vii) of Chapter V of the Import Trade Control Hand Book of Rules and Procedure, 1956, read with clause 8(b) of the Imports (Control) Order No. 17/55 dated the 7th December, 1955.
In view of this, the request made by you in the letters under reference cannot be acceded to.
69 546 On the other hand, you are called upon, under clause 10 of the said Imports (Control) Order, 1955, to show cause, within 15 (fifteen) days from the date of receipt of this letter, as to why further issue of licences to you should not be suspended, under clause 8 of the said Imports (Control) Order No. 17/55 dated the 7th December, 1955, for contravening the Import Trade Control Regulations.
If your reply does not reach the undersigned within the stipulated period it will be assumed that you have no defence to urge in your favour and this office will proceed to adjudicate action against you, without making any further reference to you.
" The contention urged on behalf of the respondents is that the letter dated July 2, 1960, stated the necessary ground for the cancellation of the licences to the petitioner, and as the petitioner furnished no sufficient cause against cancellation, the orders of cancellation were made on August 3, 1960.
The argument on behalf of the respondents is that the provisions of cl. 10 of the Imports (Control) Order, 1955, have been sufficiently complied with by reason of what was stated in the letter of July 2, 1960.
On a careful consideration of the facts and circumstances as stated in the affidavits of the parties we have come to the conclusion that the petitioner has had no reasonable opportunity of being heard before the cancellation orders were made on August 3, 1960.
The cancellation orders are, therefore, bad and must be quashed.
Our reasons are the following.
It is not disputed that the notice dated May 27, 1960, did not state any ground for the proposed cancellation; it merely referred to cl. 9 without stating on which of the four grounds mentioned therein it was proposed to take action.
Naturally, the petitioner stated in its letter dated May 30, 1960, that without knowing on what ground the proposed cancellation was to be made, the petitioner firm was not in a position to show cause.
So far there is no dispute between the parties, and it is not seriously urged by the respondents that if the notice stood by itself, it could be held to have given the petitioner a reasonable 547 opportunity of being heard within the meaning of cl. 10.
The respondents, however, rely on the letter dated July 2, 1960, in support of their contention that the petitioner has had a reasonable opportunity of showing cause against the cancellation of the two licences.
On behalf of the petitioner it has been submitted, not without justification, that the letter dated July 2, 1960, related to a different matter, viz., the suspension of the grant of further licences under cl. 8 for which also a reasonable opportunity to be heard had to be given to the petitioner under cl. 10.
In its operative part the letter stated: "you are called upon to show cause, within 15 days from the date of this letter, as to why further issue of licences to you should not be suspended under cl. 8".
It, therefore, related to proposed action under cl. 8.
The respondents, have, however, pointed out that the subject matter of the letter as indicated therein referred to the notices dated May 27, 1960, for cancellation of the licences and it also referred to the earlier, correspondence on the same subject, viz., the petitioner 's letters dated May 21, 1960, and May 30, 1960; therefore, the, contention is that the petitioner must Know as a result of the reference to the subject matter and earlier correspondence that the grounds given in the letter related to proposed action both under cl. 8 and cl. 9, even though the operative portion related to cl. 8 only.
It is true that the contents of the letter dated July 2, 1960, should be considered from the point of view of substance rather than that of technical rules of construction of statutory instruments.
So considered, it is difficult to hold that the letter asked the petitioner to show cause against cancellation of its licences, parti cularly in the light of the contents of the subsequent letters of the Department which would be referred to presently.
Even if we assume that it did so, what is the position? Within 10 days of the receipt of the letter (which was received by the petitioner on July 5, 1960) the petitioner 's solicitor asked for a copy of the joint investigation proceeding and the report submitted as a result thereof The letter also asked for 548 other relevant documents in order to enable the petitioner to show cause.
It said that the petitioner would show cause as soon as the relevant documents were received and it also said that 6.
personal hearing would be asked for and prayed that in the meantime no further action should be taken.
No reply was given by the respondents to the aforesaid letter of the petitioner 's solicitor till August 6, 1960, that is, three days after the cancellation orders had been made.
The petitioner was not given a copy of the report of the investigation till as much later date, nor was any in formation given to the petitioner that the copy would not be available and the petitioner must show cause at once.
As a matter of fact the petitioner was told nothing in reply to the letter dated July 15, 1960, till three days after the cancellation orders had been made. 'the cancellation orders blandly stated that no cause had been shown, when in fact the petitioner had specifically asked for an opportunity to show cause.
By their letter dated August 6, 1960, the respondents said that the matter would be considered on receipt of a letter of authority from the solicitor in proper form and on stamped paper, without stating that in the meantime cancellation order, had been made.
without waiting for any explanation.
on August 10, 1960, the solicitor submitted a written authority, saying that it was unnecessary to (,all for it arid that the two licences had been cancelled arbitrarily and without giving the petitioner an opportunity of being heard.
The correspondence, then continued with regard to the proposed action under cl. 8 and the petitioner challenged the correctness of the report of the joint investigation proceeding on many essential particulars including the alleged absence of machinery arid equipment.
It, is not necessary to enter into details of that correspondence, because the proposed action under cl. 8 is not the subject matter of the present proceeding.
It is enough to state that from what happened after the receipt of the letter dated July 2, 1960, it is abundantly clear that the petitioner has bad no real opportunity of being heard with regard to the ground alleged in the letter, before the cancellation orders were made 549 on August 3, 1960.
There was, in our opinion, a clear violation of the requirement of cl. 10, which embodies the principles of natural justice.
The cancellation orders are, therefore, bad and must be quashed.
We allow the writ petitions and order accordingly.
The petitioner is entitled to its costs; there will be one rearing fee.
Petitions allowed.
[/INST]The petitioners who were partners of a registered firm hold ing public carrier and stage carriage permits challenged the constutionality of certain provisions of the Rajasthan Passengers and Goods Taxation Act, 1959, the Rajasthan Passengers and Goods Taxation Rules, 959, and a notification issued under r. 8.
The Act was passed for levying a tax on passengers and goods 518 carried by road in motor vehicles the power to enact being derived from Entry 56 of the State List in Sch.
VII of the Constitution.
Section 3(4) of the Act prescribed the method of collection of the tax and provided that the State Government may accept a lump sum in lieu of the tax chargeable".
Rule 8(i) prescribed the method of payment and provided that the tax "shall be paid in lump sum" and the notification in question prescribed the rates of the tax.
Held, that the incidence of the tax was upon "passengers and goods" and not upon income of the petitioners though the amount of the tax was measured by the fares and freights.
The charging section, namely, section 3 did not go outside Entry 56.
Mathurai vs State of Madras, I.L.R. , Alma Ram Budhia vs State of Bihar, Pat. 493, referred to.
The tax did not offend articles 301 and 304 of the Constitution and no inter State trade, commerce or intercourse was affected by it.
Although the tax fell upon passengers and goods proceeding to or from an extra State point, it was limited only to the fare and freight proportionate to the route within the State.
The word "shall" is ordinarily mandatory but it is sometimes interpreted as directory, and in the present case the word "shall" used in rr. 8 and 8A and the notification should be interpreted as directory as section 4 of the Act from which the Rules and the notification derive their authority, creates an option by using the words "may accept".
The Act, the Rules and the notification must be read harmoniously.
The mandatory language was used to fix peremptorily the amount of the lump sum if paid in lieu of the tax.
In Re Lord Thurlow Ex Parte Official Receiver, (1895) 1 Q.B. 724, Mannikam Patter vs Nanchappa Chettiar, (1928) M.W.N. 441, In re Rustom, 369, jethaji Peraji Firm v: Krishnayya, Mad.
648 and Burjore and Bhavant Pershad vs Mussumat Bhagana, (1883) L.R. II I.A. 7, followed.
The lump sum figure was based on averages and could not be impeached by reference to a possibility that on some days no business might be done.
Comparison with Railways which is a union subject was not admissible.
There was no discrimination between operators of public motor vehicles using roads all of whom were affected by the Act, There could be no comparison between persons using better kind of roads and those using roads which were not so good.
All operators using better kind of roads had to pay heavier tax, and there was no discrimination between them as a class.
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<s>[INST] Summarize the judgementSpecial Leave Petition No. 416 of 1981.
From the judgment and order dated the 5th September, 1980 of the Punjab and Haryana High Court in Civil Writ Petition No. 1515 of 1980.
L.N. Sinha, Attorney General, K.S. Gurumoorthy & R.N. Poddar for the Petitioner.
The Order of the Court was delivered by PATHAK, J.
This petition for special leave to appeal by the Union of India is directed against the judgment and order of the High Court of Punjab and Haryana holding the respondent, a retired Judge of the High Court, entitled to the payment of the cash equivalent of leave salary in respect of the period of earned leave at his credit on the date of his retirement.
The respondent, Shri Gurnam Singh, was a member of the Superior Judicial Service in the State of Haryana.
On February 24, 1972 he was appointed a Judge of the High Court of Punjab and Haryana and retired on March 18, 1980 on attaining the age of 62 years.
On the date of retirement the respondent had to his credit earned leave which had not been availed of by him.
He claimed that he was entitled to receive the cash equivalent of leave salary in respect of the period of unutilised earned leave.
He also claimed dearness allowance for the period before retirement.
The claim being denied, the respondent applied to the High Court of Punjab and Haryana for relief under Article 226 of the Constitution.
The 702 writ petition was allowed by the High Court by its judgment and order dated September 5, 1980 and a direction was issued to the Union of India to pay the amount claimed.
During the course of the hearing the Union of India conceded the claim to dearness allowance in view of the order dated July 3, 1980 of the Government that the Judges of the High Court were entitled to draw dearness allowance from December 1, 1979.
As to the remaining claim, the High Court held the respondent entitled to the cash equivalent of the leave salary for the period of unutilised earned leave by giving him the benefit of rule 20 B, All India Services (Leave) Rules, 1955 by virtue of rule 2 of the High Court Judges Rules, 1956.
The order of the High Court is assailed before us.
In our opinion, the High Court is plainly right.
Article 221 of the Constitution provides for the payment of salaries and allowances to a Judge of a High Court.
Clause (2) of Article 221 declares: "(2) Every Judge shall be entitled to such allowances and to such rights in respect of leave of absence and pension as may from time to time be determined by or under law made by Parliament and, until so determined, to such allowances and rights as are specified in the Second Schedule: . . " The rights in respect of leave of absence to which a Judge is entitled may be determined by or under law made by Parliament.
Parliament enacted the , and sections 3 to 13 of that Act classify the kinds of leave admissible to a Judge, and provide for the maintenance of a leave account, the aggregate amount of leave which may be granted, the commutation of leave on half allowance into leave on full allowance, the grant of leave not due, special disability leave, extraordinary leave, the rate of leave allowances, allowance for joining time, for combining leave with vacation and the consequences of overstaying leave or vacation, It also specifies the authority competent to grant leave.
The Union of India says that these several provisions constitute a complete code and exhaustively set forth all the benefits relating to leave to which a Judge of a High Court is entitled, and that it is not permissible to proceed beyond those provisions to discover any further right in favour of a Judge.
That submission is inadmissible.
Sub section
(1) of section 24 of the same Act empowers of 703 Central Government to make rules to carry out the purpose of the Act.
And clause (a) of Sub section
(2) of section 24 specifically contemplates rules providing for "leave of absence of a Judge".
In other words, it is open to the Central Government to add to the existing statutory provisions by making rules in relation to leave of absence.
Sub section
(2) of section 24 in fact enables the Central Government to make rules in respect of several other matters, such as the pension payable to a Judge, travelling allowances, use of official residence, facilities for medical treatment and other conditions of service and "any other matter which has to be, or may be prescribed".
Now the Government of India enacted the High Court Judges Rules, 1956 and rule 2 comprehensively declares: "2.
The conditions of services of a Judge of a High Court for which no express provision has been made in the , shall be, and shall from the commencement of the Constitution be deemed to have been, determined by the rules for the time being applicable to a member of the Indian Administrative Service holding the rank of Secretary to the Government of the State in which the principal seat of the High Court is situated.
Provided that, in the case of a Judge of the High Court of Delhi and a Judge of the High Court of Punjab and Haryana the conditions of service shall be determined by the rules for the time being applicable to a member of the Indian Administrative Service on deputation to the Government of India holding the rank of Joint Secretary to the Government of India stationed at New Delhi.
Provided further that in respect of facilities for medical treatment and accommodation in hospitals the provisions of the All India Service (Medical Attendance) Rules, 1954, in their application to a Judge, shall be deemed to have taken effect from the 26th January, 1950.
Provided also that where at the request of the President, any Judge undertakes to discharge any function outside his normal duties in any locality away from of his headquarters, the President may, having regard to the nature of such function and locality, determine the facilities that may be afforded to such judge including accommodation, transport and telephone so long as he continues to dis 704 charge such function, either without any payment or at a concessional rate." Rule 2A sets forth the rights of a Judge who avails of an official residence and Rule 2B provides the scale of its free furnishing.
It is clear from Rule 2 of the High Court Judges Rules, 1956, that the conditions of service of a Judge of the High Court of Punjab and Haryana, where not expressly provided in the must be determined by the rules governing a member of the Indian Administrative Service of the rank of Joint Secretary to the Government of India stationed at New Delhi.
The All India Services (Leave) Rules, 1955 contain provision for leave in relation to members of the All India Services, including the Indian Administrative Service.
On the date when the respondent retired those rules included rule 20 B which provides: "20 B. Payment of cash equivalent of leave salary: (1) The Government shall suo moto sanction to a member of the service who retires from the service under sub rule (1) of rule 16 of the All India Services (Death cum Retirement Benefits) Rules, 1958, having attained the age of 58 years on or after the 30th September, 1977 the cash equivalent of leave salary in respect of the period of earned leave at his credit on the date of his retirement, subject to a maximum of 180 days.
(2) The cash equivalent of leave salary payable to a member of the Service under sub rule (1) above shall also include dearness allowance admissible to him on the leave salary at the rates in force on the date of retirement, and it shall be paid in one lump sum, as a one time settlement.
(3) The city compensatory allowance and the house rent allowance shall not be included in calculating the cash equivalent of leave salary under this rule.
(4) From the cash equivalent so worked out no deduction shall be made on account of pension and pensionary equivalent of other retirement benefits.
705 It is not disputed that Rule 20 B applies to a member of the Indian Administrative Service of the rank of Joint Secretary to the Government of India stationed at New Delhi.
The rule entitles him on retirement from service to the cash equivalent of leave salary in respect of the period of unutilised earned leave subject to a maximum of 180 days, inclusive of dearness allowance.
It is apparent that by virtue of Rule 2 of the High Court Judges Rules, 1956 this benefit must be read as a condition of service enjoyed by a Judge of the High Court.
It may be observed that although rule 20 B of the All India Services (Leave) Rules, 1955 is a provision of a scheme applicable to members of the All India Services, there is nothing in its nature and content which makes it inapplicable mutatis mutandis to the statutory scheme pertaining to leave enacted in the .
There is also nothing in the constitutional position of a Judge of a High Court which precludes Rule 20 B from inclusion in that scheme.
It is true that Rule 20 B revolves around the concept of earned leave, and the expression "earned leave" has been specifically defined by clause (d) of rule 2 of the All India Services (Leave) Rules, 1955 as "leave earned under rule 10".
But rule 10 merely lays down the rate and amount of earned leave.
The principle in which "earned leave" is rooted must be discovered from rule 4, which provides that "except as otherwise provided in these rules leave shall be earned by duty only".
The performance of duty is the basis of earning leave.
That concept is also embedded in the .
Under that Act, the time spent by a Judge on duty constitutes the primary ingredient in the concept of "actual service",(1) which is the reason for crediting leave in the leave account of a Judge.(2) Although the expression "earned leave" is not employed in the Act, the fundamental premise for the grant of leave to a Judge is that he has earned it.
He has earned it by virtue of the time spent by him on actual service.
That a Judge earns the leave which is credited to his leave account is borne out by the proviso to section 6 of the Act, which declares that the grant under section 6 of leave not due will not be mad "if the Judge is not expected to return to duty at the end of such leave and earn the leave granted" (emphasis provided).
The concept then on which rule 20 B proceeds is familiar to and underlies the statutory scheme relating to leave formulated in the Act.
It bears a logical and reasonable relationship to the essential content of that scheme.
On 706 that, it must be regarded as a provision absorbed by rule 2 of the High Court Judges Rules, 1956 into the statutory structure defining the conditions of service of a Judge of a High Court.
We may observe that even as a right to receive pension, although accruing on retirement, is a condition of service, so also the right to the payment of the cash equivalent of leave salary for the period of unutilised leave accruing on the date of retirement must be considered as a condition of service.
In our judgment, the High Court is right in upholding the claim of the respondent to the payment of the cash equivalent of the leave salary in respect of the period of earned leave at his credit on the date of retirement in accordance with the provisions of rule 20 B of the All India Services (Leave) Rules, 1955 read with rule 2 of the High Court Judges Rules, 1956.
The Special Leave petition is dismissed.
P.B.R. Petition dismissed.
[/INST]An identical scale of pay was being enjoyed by both Naiks and Radio operators Grade III (Naik) in the antral Reserve Police Force before the revision of scales of pay of Central Government employees with effect from January 1,1973 consequent upon the recommendations of the Third Pay Commission.
However, Radio operators Grade III (Naik) were entitled to a special pay of Rs. 30.
The Pay Commission recommended the scale of pay of Rs. 225 308 for the post of Naik but did not make any separate recommendation in respect of Radio operator Grade III (Naik).
The petitioners who were Radio operators Grade III (Naik) were initially paid a salary of Rs. 250 with a special pay of Rs. 30 from January 1,1973.
They were subsequently placed in tho revised scale of pay of Rs. 225 308 given to Naiks with a special pay of Rs. 30 and the excess amount paid earlier was sought to be recovered from them.
The petitioners contended: (i) that they were entitled to the scale of pay of Rs. 260 430 as that was the scale of pay prescribed for posts in other departments for which matriculation was the minimum qualification, (ii) that their scale of pay could not be far below the scale of pay of Rs. 330 480 prescribed for the next immediate senior post of Radio operator Grade II and (iii) that they should be paid at par with comparable government employees on the civil side.
In the alternative, the petitioners contended that they were entitled to the pay of Rs. 250 and the special pay of Rs. 30 paid to them before refixation of their salary.
Dismissing the petition, ^ HELD: 1.
The minimum qualification prescribed for the post of Naik as on January 1,1973 was Middle School Examination and it had been raised to Matriculation Examination only from January 24, 1975.
As Naiks and Radio operators Grade III (Naik) had been uniformly treated at par in the matter of that basic qualification, it was not open to the petitioners to base their claim with reference to a qualification which had not existed on January 1, 1973.
[5 E G] 2 2.
It was not for the Court to examine how far below should be the revised scale of pay of Radio operators Grade Ill as compared to that of Radio operators Grade II.
If the Government had prescribed a particular pay scale in respect of them, all that the Court could do was to merely pronounce on the validity of that fixation.
If the prescription was found contrary to law, the Court would strike it down and direct the Government to take a fresh decision in the matter.
This case was very different from one where the Court had sought to prescribe scales of pay in appeals directly preferred from an award of the Labour Court dealing with such a matter.
In the latter case, the Court in its appellate jurisdiction could be regarded as enjoying all the jurisdiction which the Labour Court enjoyed.
[6 A C] 3.
Radio operators Grade Ill (Naik) had to be considered substantially on the same basis as Naiks and it was because of their special qualifications and of the specialised nature of their duties that they had been provided with a special pay in addition.
Ever since 1975 Radio operators Grade III (Naik) had been selected only from the rank of Constables on the General Duty Side.
The revised pay scale of Radio operators of the rank of Head Constable as well as Head Constables on General Duty was Rs. 260 350 with a special pay of Rs. 40 to the former.
As this post was the next immediate higher post above the rank of Naik.
it was apparent that there was no justification for giving to the petitioners, who were junior in rank, the scale of pay of Rs. 260 430.
[6 D F] 4.
The petitioners could not claim to be paid at par with comparable government employees on the civil side as they were entitled to certain benefits which were not available to the latter.
[6 G H; 7 A B] 5.
The revised pay initially paid to the petitioners had been computed in error inasmuch as when fixing the pay in the revised scale the special pay had been wrongly taken into account.
[7 D E]
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<s>[INST] Summarize the judgement69 of 1953.
Petition under article 32 of the, Constitution for enforcement of fundamental rights.
1185 section C. Isaacs (Jai Prasad Agarwal, with him) for, the appellant.
K. B. Asthana for respondent No. 1.
section P. Sinha (R. Patnaik, with him) for respondent No. 4. 1953.
May 22.
The Judgment of the Court was delivered by PATANJALI SASTRI C. J.
This is an application under article 32 of the Constitution seeking protection of the petitioners ' fundamental right under article 15 (1) against alleged violation thereof by the respondents.
The petitioners are three residents of Etah in Uttar Pradesh.
They complain that at the by election to the Municipal Board of Etah held on November 2, 1951, December 8, 1951, and March 17, 1952, at which respondents 4, 11 and 12 were respectively elected, the Petitioners were deprived of their rights to exercise their votes and to seek their election as candidates, as those by elections were held on communal lines on the basis of separate electorates contrary to the provisions of the Constitution.
They also allege that the nomination of respondent 3 as a member of the Board by the Government was an illegal exercise of its powers, as the interest which that respondent was nominated to represent in the Board was already sufficiently represented.
The petition ners accordingly pray for the issue of writs of quo warranto, mandamus and other appropriate writs or directions to respondents 3, 4, 11 and 12 to show under what authority they are acting as members of the Board and to prevent them from acting assuchmembers.
Tbe petitioners also ask for wkits on the District Magistrate and the Civil Judge of Etah, respondents 2 and 13 respectively, directing them not to hold or permit the holding of any meeting of the Board which is said to be illegally constituted.
Now, it cannot be seriously disputed that any law providing for elections on the basis of separate electo rates for members of different religious communities offends against article 15 (1) of the Constitution which runs thus 1186 "15 (1) The State shall not discriminate against any citizen on grounds only of religion, race, caste, sex, place of birth or any of them.
" This constitutional mandate to the State not to diis criminate against any citizen on the ground, inter alia, of religion clearly extends to political as.well as to other rights, and any election held after the Constitution in ,pursuance of such a law subject to clause (4) must be held void as being repugnant to the Constitution.
But the question is whether the petitioners are now entitled to the relief they seek in this application under article 32.
It is true, as pointed out in the Cross Roads case(1), that article 32 provides, in some respects, for a more effective remedy through this court than article 226 does through the High Courts.
But the scope of the remedy is clearly narrower in that it is restricted solely to enforcement of fundamental rights conferred by Part III of the Constitution.
Any right, for instance, which the petitioners may have as rate payers in the Municipality to insist that the Board should be legally constituted and that respondents 3, 4, 11 and 12, who are not properly elected or nominated members, should not be permitted to take part in the proceedings of the Board, is outside the purview of article 32, as such right, even if it exists, is not a fundamental right conferred by Part 111.
Petitioners ' learned counsel, however, contended that the fundamental right conferred by article 15 (1) on the petitioners as citizens of India was violated by the elections in question having been held on a basis which discriminated against the petitioners on the ground of their religion in that it precluded them from exercising their franchise in relation to all the candidates and from contesting the elections without regard to the reservation of seats on communal basis.
Learned counsel,also submitted that the delimitation of the constituencies on communal lines was a denial of equality to the petitioners in the matter of their political rights and in that respect also infringed their (1) ; 1187 fundamental right under article 14.
We are unable to accede to these contentions.
It is plain that the fundamental right conferred by article 15(1) is conferred on a citizen as an individual and is a guarantee against his being subjected to discrimination in the matter of the rights, privileges and immunities pertaining to him as a citizen generally.
It is not the petitioners ' case that any discrimination is now being practised or threatened against them.
Their grievance is that the mode of election by separate electorates formed on communal lines involved discrimination against them in relation to seats other than those reserved for their respective communities as to which they could not exercise their right to vote or their right to stand as candidates.
There is no suggestion that the petitioners actually sought to assert those rights by taking appropriate proceedings to have the bar removed and the election conducted in accordance with the Constitution.
In fact, the petitioners acquiesced in the elections being conducted under the old system of separate electorates and felt no discrimination having been practised against them until a no confidence motion was tabled recently against the former Chairman who has since lost his seat as a result of that motion having been carried.
Thus, the infringement of their fundamental rights under article 15(1) and art 61 14, that is, the discrimination practised against them, of which they now complain, related to rights which they in fact never sought to exercise and took no steps to assert, while there was still room for doing so, and for the exercise of which the opportunity is now lost.
But, argues Mr. Isaacs, the election of the respondents 4 11 and 12 being void, they are no better than usurpers, and the petitioners are entitled to prevent them from functioning as members of the Municipal Board.
It may be, as we have already remarked, that the petitioners could claim such relief as ratepayers of the Municipality in appropriately framed proceedings, but there is no question of enforcing petitioners ' funda mental right under article 15(1) or article 14 in such claim, There is still less ground for seeking relief on 1188 that basis aoainst respondent 3 who is only a nominated member.
The petitioners appear to have misconceived their remedy and their application under article 32 must fail.
The petition is dismissed with costs, one sot.
Petition dismissed.
Agent for the petitioners: K. L. Mehta.
Agent for respondent No. I : C. P. Lal.
Agent for respondent No. 4: section P. Varma.
[/INST]The petitioners, who were residents of a municipality, alleging that they had been deprived of their rights to exercise their votes and to seek their election as candidates in certain by elections to the Municipal Board, as those by elections were held on communal lines on the basis of separate electorates contrary to the provisions of the Constitution, applied for writs tinder article 32 of the Constitution for preventing the elected candidates from acting as members of the Board, and the District Magistrate and Civil Judge from holding any meetings of the Board: Held, that, though a law which provides for elections on the basis of separate electorates for members of different religious communities offends against article 15(1) of the Constitution and an election held after the Constitution in pursuance of such a law subject to el. 4 would be void, the right which the petitioners claimed as rate payers in the municipality to insist that the Board should be legally constituted and that persons who have not been properly elected should not be allowed to take part in the proceedings of the Board was outside the purview of article 32 of the Constitution inasmuch as such a right, even if it existed, was not a fundamental right conferred by Part III of the Constitution.
Held further, that the alleged infringement of the fundamental rights of the petitioners under article 15(1) and article 14, that is, the discrimination practised against them related to rights which they in fact never sought to exercise and took no steps to assert while there was occasion for doing so and the petitioners were therefore entitled to no relief under article 32 of the Constitution.
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<s>[INST] Summarize the judgementAppeal No. 481 of 1958.
Appeal by special leave from the Award dated June 29, 1957, of the State Industrial, Tribunal U.P. Allahabad, in Ref.
No. 98 of 1956.
M.C. Setalvad, Attorney General for India, section N. Andley, J. B. Dadachanji, Rameshuar Nath and P. L. Vohra, for the, appellants.
A. D. Mathur, for respondent No. 1.
G. C. Mathur and C. P. Lat, for respondent No. 2.
G. N. Dikshit and C. P. Lal, for the intervener.
March, 8.
The Judgment of the Court was delivered by WANCHOO, J.
This is an appeal by special leave against the order of the Industrial Tribunal, Allahabad.
The appellant is the U. P. Electric Supply Co. Ltd., Lucknow, (hereinafter called the company).
It appears that the company used to employ Messrs. s M. Choudhary (hereinafter referred to as the contractors) as its contractors for doing certain work for it.
The contractors in their turn used to employ a number of persons to carry out the work which they had taken on contract.
A dispute arose between the contractors and their workmen in 1956 and an application was made on June 6, 1956, by the workmen before the conciliation board.
To this application both the company as well as the contractors were parties and four matters were referred by the workmen to the conciliation board, namely, (i) non grant of bonus for the years 1953 54 and 1954 55; (ii) nongrant of festival holidays; (iii) non fixation of minimum wages of these workmen at par with the 191 workmen employed by the company; and (iv) nonabolition of the contract system.
Efforts at conciliation failed and thereupon the Government of Uttar Pradesh made a reference to the Industrial Tribunal under the U. P. Industrial Disputes Act, No. XXVIII of 1947, (hereinafter called the Act).
In this reference only three points were referred out of the four which were before the conciliation board, namely, those relating to bonus, festival holidays and payment of wages to these workmen at par with the workmen of the company.
The fourth point which was raised before the conciliation board (namely, non abolition of the contract system) was not referred.
The parties to this reference were two, namely (i) the contractors and (ii) their workmen.
The appellant was not a party to this reference.
On August 13, 1956, another notification was issued by the U. P. Government under sections 3, 5 and 8 of the Act by which the company was impleaded as a party to the dispute referred by the notification of July 31, 1956.
It is remarkable, however, that the matters of dispute which were specified in the reference dated July 31, 1956, were not amended as they could have been under the proviso to section 4 of the Act, by adding the fourth point 'of dispute before the conciliation board, namely, the non abolition of the contract system.
When the matter came up before the industrial court it framed a number of issues; and the first and most important issue ran thus: "Are the workmen concerned employees of the U. P. Electric Supply Co. Ltd., Lucknow or of Messrs. section M. Chaudhary, contractors ? " The main objection of the company was that the dispute, if any was between the contractors and their employees and that there was no dispute between the company and its workmen.
It was further objected that there was no valid or legal order of the Government referring any dispute between the company and its workmen to the tribunal and therefore the tribunal had no jurisdiction.
On the merits it was urged that the workmen concerned were not the workmen of the company and there was no relationship of employer and employee between the company and these workmen and therefore the company could not be regarded 192 as a party to the dispute between the contractors and their workmen.
It is therefore clear that the main question which was considered by the tribunal was whether the workmen concerned were the workmen of the company or of the contractors.
As the tribunal itself says, " the crux of the whole case was whether the workmen concerned were the employees of the company ".
The tribunal went into the evidence in this connection and came to the conclusion that these workmen were in fact and in reality the employees of the company.
The main contention on behalf of the company before us is that even assuming that the Government had power under section 5 read with cl. 12 of G. O. No. U 464 (LL)XXXVI B 257(LL)/1954, dated July 14, 1954, to implied the company as a party, the main issue decided by the tribunal was not referred to it and the tribunal could only decide the three matters of dispute included in the order of reference of July 31, 1956.
Therefore, in so far as the tribunal went beyond the, three matters of dispute specified in the reference and decided the question whether the workmen concerned were in the employ of the company or of the contractors it was acting without jurisdiction as this matter was never referred to it.
We are of opinion that this contention must prevail.
As we have already pointed out, there were four matters before the conciliation board including the question of non abolition of the contract system.
Further before the conciliation board not only the contractors but the company was also a party, for obviously the question of non abolition of the contract system would necessitate the presence of the company as a party to the proceedings.
When however the Government referred the dispute to the tribunal on July 31, it did not include the fourth item which was before the conciliation board relating to the non abolition of the contract system among the matters in dispute.
It also did not include the company as one of the parties to the dispute, for the reference order refers only to two parties to the dispute, namely, the contractors and their workmen.
On such a reference there could be no jurisdiction in 193 the tribunal to decide the question whether these workmen were the workmen of the company or of the contractors, for such a question was not referred to the tribunal.
It is true that on August 13, 1956, the company was impleaded as a party to the dispute referred by the notification of July 31 ; but the matters in dispute remained unmended, and the question of non abolition of the contract system or the question whether these workmen were the employees of the company in fact and in reality was not included in the matters of dispute by amendment under the proviso to section 4 of the Act.
In these circumstances it is immaterial to consider whether the impleading of the company as a party on August 13, 1956, was legal and valid or not.
Assuming that it was legal and valid, the fact remains that issue No. 1 set out above by us which is undoubtedly the crux of the question in this case was not referred to the tribunal at all and did not arise out of the three matters of dispute specified in the reference order of July 31, 1956.
In these circumstances the order of the tribunal by which it held that these workmen were the workmen of the company was beyond its jurisdiction.
The entire order of the tribunal is directed against the company and must therefore be set aside in whole as without jurisdiction and we need not express any opinion on the merits.
We therefore allow the appeal and set aside the order of the tribunal against the appellant.
In the circumstances we pass no order as to costs.
Appeal allowed.
[/INST]The unskilled seasonal workmen of the Bihar Sugar Industry, bulk of whom belonged to the landless labourer class, who ceased to have any contractual relation with the employers once the 990 season was over and on the commencement of the next season might or might not rejoin their employment) raised disputes over the question whether retaining allowances should be paid to them during the off season.
The Labour Appellate Tribunal inter alia awarded a retaining allowance to unskilled workmen, at a rate of 5% of the basic wage for the period of the off season to be paid every year at the beginning of the season, when they reported for duty.
The main contentions on behalf of the employer were that.
agriculture was the primary occupation of these persons and the employment in the Sugar Factory Was merely a subsidiary occupation, that claim for retaining allowance was really in the nature of unemployment relief which it was the duty of the State and not the industry to give, that the relationship of employer and employee did not exist in the off season and so no payment of anything in the character of wages could possibly be claimed by the labour.
Held, that the relief of unemployment by arranging suitable alternative employment or an alleviation of the distress of employment insurance benefits or by other modes though is primarily the function of the Government of the country, yet the industry where these workmen are seasonally employed cannot look unconcerned and play no part in alleviating the distress of the people who have contributed to the prosperity of the industry by their labour though only for a part of the year.
In deciding whether the principle of social justice which it is the aim of industrial adjudication to apply to justify the payment of retaining allowance to unskilled workmen in these sugar industries it is necessary to take into account.
(a) opportunities of alternative employment in the off season that will be available to such workmen; (b) the degree in which such workmen can be said to have become attached to the particular factory where they work; (c) the likely benefit to the industry if such workmen are induced to return to the factory by the incentive of retaining allowance to be paid when the season commences; (d) the capacity of the industry to bear the burden of retaining allowance.
Held, further, that for alleviating the distress of unskilled workmen in these Sugar Factories, a much better course will be to raise the wage structure with an eye to this fact that for a part of the off season at least when they remain unemployed than to pay retaining allowance for the entire off season.
In the instant case the interests of both the employers and labour will be best served if the question of raising their wages in view of the seasonal nature of their employment be raised before the wage board which has been entrusted with the task of fixing the wages of the workmen concerned in the present dispute, which will be considered sympathetically, specially as the employers have recognised the reasonableness of the claim, 991
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<s>[INST] Summarize the judgementNo. 1113 of 1974.
(From the Judgment and Order dated the 15/16/17 1 1974 of the Bombay High Court in S.C.A. No. 815 of 1972) AND CA No. 242 of 1974 (From the Judgment and order dated the 14 7 1973 of the Gujarat High Court in S.C.A. No. 1418 of 1971).
C. As.
Nos. 285 287 of 1974.
(From the Judgment and Order dated the 14 7 1973 of the Gujarat High Court in S.C.A. No. 1418/71, 422/70 & 1099/69 respectively).
K. K Singhvi in CA 1113/74, ,4.
K. Garg, S.C. Agarwal and V.J. Francis for the appellants in CAs 1113/and 242/74 & for respondents Nos. 2, 3, 5, 6 13 in CA No. 285, Rr. 2 18 in CA 286 and for Rr. 3, 7, 16 23, 28 and 33, 35 39, 41 43 and 45 in CA 287/74.
M.C. Bhandare and M.N. Shroff, for respondent 's 1 and 2 in CA 1113/74.
M.V. Paranjpe, M.K. Joshi, K. Rajendra Choudhary and Mrs. Veena Devi, for respondent No. 3 in CA No. 1113/74.
M.K. Ramamurthi, Vimal Dave and Miss Kailash Mehta, for the appellants in CAs 285 to 287774 and for the respondents No. 2 and 3 in CA 242/74.
D.V. Patel, in CA 285 to 287/74, P.H. Parekh and M.N. Shroff for the respondent No. 1 in CAs Nos.
242/74 and 285 to 287 of 1974.
The Judgment of the Court was delivered by CHANDRACHUD, J.
This is a group of five appeals, one from Maharashtra and four from Gujarat.
They involve substantially identical questions and since the appeal from the judgment of the Bombay High Court was argued as the main appeal, we will refer 'to the facts of that appeal and indicate at appropriate places if there is any material difference between those facts and the facts leading to the Gujarat appeals.
Civil Appeal No. 1113 of 1974 from Maha rashtra is by certificate granted by the High Court of Bombay under article 133(1) (a) & (b) of the Constitution.
Civil Appeals Nos. 242 and 285 287 of 1974 from Gujarat are also by certificate granted by the Gujarat High Court under article 133(1) of the Constitution.
Special Civil Application No. 815 of 1972 which has given rise to Civil Appeal No. 1113 of 1974 was disposed of by a Division Bench of the Bombay High Court by its judg ment dated 15th, 16th and 17th January, 1974.
The four Gujarat appeals arise out of 781 Special Civil Applications Nos. 1099 of 1969, 422 of 1970 and 1418 of 1971 which were disposed of by a Full Bench of the Gujarat High Court by its judgment dated July 14, 1973.
The complexity of the questions involved in these ap peals has been expressed by the Bombay High Court by saying that the writ petitions before it involved "ticklish and complicated questions" and by the Gujarat High Court by saying that though it had many occasions to consider complex problems pertaining to service laws, there was "no case comparable" to the writ petitions filed before it in the instant case.
The learned Chief Justice (Bhagwati, J.) who delivered the judgment of the Full Bench obserVes that these questions of "unrivailed complexity" had caused considerable anxiety to the Court in reaching a satisfactory conclusion.
We share this anxiety which is further heightened by the diametrically opposite and entirely inconsistent stands taken by the State governments from time to time.
Evidently, the State governments did not know their own mind and being unable to take up a firm and consistent stand, they defended the various Writ petitions filed against them by their employees according to the mood of the passing moment.
That must be deprecated.
The appeals raise the familiar question of seniority in service, the competing groups being promotees on the one hand and direct recruits on the other, to the posts of Deputy Engineers.
The writ petitions were filed and de fended by the rival groups in a representative capacity so that, our decision will bind not only the parties thereto but all others whom, under the relevant provisions of the Code of Civil Procedure, they were permitted to represent.
Taking the facts of the Maharashtra case, the two appel lants therein were.
initially recruited as Overseers in 1953 and were promoted temporarily as Deputy Engineers, in Janu ary 1959 and October 1957 respectively.
They were con firmed as Deputy Engineers after the coming into force of certain rules framed on February 19, 1970.
The 1st respondent to the appeal is the State of Maharashtra.
The 2nd and 3rd respondents were appointed directly on probation as Deputy Engineers.
They are Engineering Graduates but so are the appellants.
Respondents 2 and 3 qualified for direct appointment after passing a competitive examination in 1963 and 1959 respectively.
They were confirmed two years later, in 1965 and 1961 respectively.
The grievance of the appellants is that notwithstanding the length of their continuous service as Deputy Engineers since 1959 and 1957, respondents 2 and 3 were shown as senior to them in the Cadre of Deputy Engineers though they were appointed later in 1963 and 1959 respectively. 'The appellants claim that their seniority should have been fixed under the rules framed by the then Government of Bombay on November 21, 1941 as clarified by the Chief Secretary to that Government by his letter dated January 11, 1949.
According to them, the rules flamed by the Maharashtra Government on April 29, 1960 cannot take away the right which had accrued to them under the rules existing fat the time of their promotion in 1959 and 1957.
They challenge the validity of rule 8(iii) of the 1960 rules and of rule 33 of the 1970 rules aS being violative of articles 14 and 16 of the 782 Constitution.
They also challenge the 1970 rules on the ground that they lack approval of the Central Government, thereby violating the proviso to s.81 (6) of the Bombay State Reorganisation Act of 1960.
According to the appel lants, the 1960 rules were superseded by the rules dated July 29, 1963 and still the State Government continued to apply the defunct rules of 1960.
On these grounds, broad ly, the appellants filed a writ petition in the Bombay High Court on behalf of themselves and all those promoted as Deputy Engineers in Class II of the Maharashtra Engineering Service.
Putting it as briefly as one may, the, sum and substance of the stand taken by respondents 2 and 3 is that neither the 1941 rules nor the 1963 rules are applicable to employ ees in Maharashtra Engineering Service.
The posts of Deputy Engineers, according to them and according to the State of Maharashtra, were required to be filled in by direct recruits and promotees in the ratio of 75 : 25 under the 1960 rules which had super seded the earlier rules of 1939.
Therefore, ac cording to them, the question of seniority of the appellants could not possibly arise until they were con firmed, and seniority has to be fixed from the respective dates of confirmation in terms of rule 8(iii) of the 1960 rules.
The Government of Maharashtra contended that the confirmation of appellants depended necessarily on the availability of vacancies allotable to them within the quota of 25% of the total vacancies, and delay in passing orders of confirmation was inevitably caused by the fact that the number of officiating Deputy Engineers was much too large.
In order to rectify the somewhat unsatisfactory position, the State Government, according to its contention, framed the 1970 rules, altering the ratio of direct recruits and promotees from 75: 25 to 34: 66, as a result of which sever al promotees were confirmed.
Even prior to that, according to the State Government, whenever vacancies occurred in the substantive posts which were required to be filled is ac cording to the prescribed ratio, those vacancies were duly filled in from amongst the officiating Deputy Engineers and they were given anterior dates of, confirmation with effect from the dates when the vacancies had actually occurred.
The respondents disputed that rule 8(iii) of the 1960 rules and rule 33 of 1970 rules were unconstitutional or otherwise invalid.
Before examining the merits of these contentions it would be necessary, for a proper understanding of the issues involved in the case, to set out briefly the history of the Engineering Service and the background in which the various rules came to be framed.
The Engineering Service in the then province 'of Bombay consisted, prior to 1937, of (i) the Indian Engineering Service which was an All India Service, (ii) the Bombay Subordinate Service of Engineers, (iii)Supervisors, both permanent and temporary, and (iv) temporary Engineers, appointed annually.
The Bombay Subordinate Service of Engineers consisted of non gazetted Class III employees, in which 2 posts used to be filled in annually by direct re cruitment on the basis of the results of the examination held for Diploma in Civil Engineering.
The remaining posts used to be filled in by promotion from the 783 rank of temporary Overseers.
On March 22, 1937 the Govern ment of Bombay in the Public Works Department passed a resolution reorganizing the Engineering Service.
This resolution contemplated the creation of two new Provincial Engineering Services to be designated as Bombay Engineering Service Class I and Bombay Engineering Service Class 1I.
The cadre strength of Class I Service was fixed initially at 36 while that of Class II Service was fixed at 80.
Class I Service comprised the apex posts of Chief Engineer, Superin tending Engineer and Executive Engineer, and the junior posts of Assistant Engineers.
Class II Service consisted of Deputy Engineers only.
On September 21, 1939 the Government of Bombay passed a resolution adopting rules for regulating the methods of recruitment to the posts of Assistant Engineers and Execu tive Engineers in Class I Service and the posts of Deputy Engineers in Class II Service.
These rules were made by the Governor of Bombay in exercise of the powers conferred by section 241(2) (b) of the Government of India Act 1935 and were called: "Recruitment Rules of the Bombay Service of Engi neers (Class 1 and Class II).
" The rules appear at Item 53 is Section V of A endix C to the Bombay Civil Services Classification and Recruitment Rules under the heading "Bombay Service of Engineers." Rule 2 of the 1939 Rules laid down the method of re cruitment to the Bombay Service.
of Engineers, Class I, by providing that such recruitment was to be made either (a) by nomination under the guarantee given to the College of Engineering, Poona, or (b) by promotion from the existing Bombay Service of Engineers or from the Bombay Service of Engineers Class II.
Rule 3 provided that as regards the recruitment from source (a), such number of appointments as may be fixed by the Government from time to.
time would be made from amongst the students of the College of Engineer ing, Poona, who had passed the examination for the Degree of B.E. (Civil) in First Class.
The candidates.
so recruited by nomination were to be appointed in the first instance as Assistant Engineers on probation for two years and on completion of the probationary period, they Were to be confirmed as Assistant Engineers.
Rule 10 of the 1939 Rules prescribed the method of recruitment to the Bombay Service of Engineers Class II.
It provided that recruitment of Class II service shall be made either (a) by nomination under rule 11 under the guar antee given to the College of Engineering, Poona, or (b) by promotion from any of the three prescribed sources.
Those sources were (1 ) the Bombay Subordinate Engineering Serv ice, ( 2 ) Permanent or temporary Supervisors and ( 3 ) Temporary Engineers appointed on annual sanction.
Rule 11 provided that such number of appointments as may be fixed by the Government from time to time shall be made annually from amongst the students of the College of Engineering, Poona, who have passed the examination for the Degree of B.E. (Civil).
Every such candidate recruited by nomination was required by rule 14 to serve intially as a "candidate" for one year on the expiry of which period he would be appointed as a Deputy Engineer on probation for one year.
On the satisfactory completion of the probationary period, the candidate would be eligible for confirmation as a Deputy Engineer.
784 The guarantee envisaged by rules 2(a) and 10(a) of the 1939 rules was given by the Government to the students of the College of Engineering, Poona, under a resolution dated July 12, 1940.
The guarantee operated in different measures until it was finally withdrawn by a resolution dated May 27, 1947.
The last batch of students who obtained the benefit of the guarantee were those that passed the examination for the Degree of B.E. (Civil) in 1949.
By a resolution dated November 25, 1950 the Government of Bombay appointed a Committee under the Chairmanship of Shri Gurjar to examine the, question of future recruitment to Engineering Services, Classes I and II.
That Committee submitted its recommendations to the Government after prolonged deliberations but since the implementation of the recommendations had to be deferred, the Government started making appointments to both classes of services by direct recruitment through the Public Service Commission.
Such appointments were made from the year 1950.
As stated earli er, the cadre strength of Class I and Class II Services was fixed initially at 36 and 80 permanent posts respectively.
But with the launching of new development projects, the strength of both cadres had to be expanded from time to time by addition to the permanent posts.
In fact, for an early and effective achievement of the target it became necessary to make appointments of several temporary Execu tive Engineers and Deputy Engineers.
On November 1, 1956 there were 360 temporary posts of Deputy Engineers as against 200 permanent posts.
By April 29, 1960 these numbers had risen respectively to 600 and 400.
One of, the bones of contention between the parties is whether these temporary posts of Deputy Engineers were additions to Class II cadre, even if temporary, or whether the temporary posts were wholly outside the cadre of Class II Service.
It is neces sary to mention at this stage that appointments as officiat ing Deputy Engineers to such temporary posts were made by promotion from amongst the members of the Bombay Subordinate Service of Engineers as also from amongst permanent and temporary Supervisors.
But no direct appointments were made by the Government to these temporary posts of officiat ing Deputy Engineers.
The direct appointments were made only to permanent posts because such appointees were prom ised confirmation after two years from the date of appoint ment, during which period they were expected to complete their probation.
On April 29, 1960 the Government of Bombay in the Public Works Department passed a resolution embodying rules of recruitment to Bombay Service of Engineers Class I and Class II.
These rules continued the existing division of Engineering Services into Class I and Class II and they provided that appointments to both classes of service should be made by nomination as well as by promotion.
As regards appointments by nomination it was provided that they should be made through competitive examination held by the Public Service Commission and that for both the classes of service there should be a common examination.
Candidates recruited directly were to be confirmed after two years in their respective cadres, if otherwise found fit.
The resolution of 1960 was signed by Under Secretary to the Government, "By order and in the name of the 'Governor of Bombay.
" 785 The rules regarding recruitment to Class I and Class II Engineering Service were set out in the Appendix to the 1960 Resolution.
Rule 1 of those rules provided that appointments to both classes of services shall be made either by nomina tion after a competitive examination held by the Public Service Commission or by promotion from amongst the members of the lower cadres concerned, provided however that the ratio of appointments by nomination and promotion shall, as far as practicable, be 75: 25.
By rule 2, candidates ap pointed to either of the services by nomination were to be on probation for two years.
They were to serve, in the first instance, as Trainees for a period not exceeding one year and thereafter they were to be placed in a probationary capacity in charge of a sub division for a period of not less than one year.
On the expiry of the aforesaid period of two years they were to be confirmed as Assistant Engi neers in Class I or as Deputy Engineers in Class II, as the case may be, if favourably reported upon by their superiors.
Rule 2 further provided that Assistant Engineer would be confirmed as Executive Engineer after 9 years ' service unless the period was extended by the Government.
Under rule 3, candidates securing higher places in the competi tive examinations were to be appointed in Class I service according to the number of vacancies declared for such recruitment in that cadre while candidates securing the next higher places were to be offered appointments to Class II service.
Rule 6 of the 1960 Rules read thus: "6.
(i) The number of posts to be filled in the Bombay Service of Engineers, Class I, by promotion of officers from the Bombay Service of Engineers Class II shall be about 25 per cent of the total number of superior posts, in the Bombay Service of Engineers, Class I cadre.
This percentage 'should be aimed at for confirmations made after 1st November, 1956, subject of course, to Class II officers of the requisite fitness and length.
of serv ice being available.
(ii) For absorption into Class I, a Class II officer must be in the permanent Bombay Service of Engineers, Class II cadre, should have at least 15 years ' service to his credit in Class II in temporary and permanent capacities, and should be holding an officiat ing divisional rank, at the time of such absorption.
On such absorption, the Class II officer shall be confirmed as an Executive Engineer.
(iii) The seniority of the Class II promo tees shall be fixed below the bunch of the Assistant Engineers, any one of whom is duo for confirmation as Executive Engineer during the calendar year, provided that an Class II promotee shall be placed senior to a direct recruit to Class I Assistant Engineer who has been officiating as Executive Engineer from a date earlier than the class II promo tee.
In the latter ease, the Class II promo tee though holding a post and lien as a confirmed Executive Engineer shall be 786 shown both under Permanent Executive Engineers and also along with the directly recruited Class I Assistant Engineers, with a suitable remark under the permanent Executive Engi neers list.
This is also subject to further conditions as in paragraph 7 below." In spite of the provisions contained in rules 2 and 6, sufficient number of direct recruits ,to Class I service were not available, which caused the apprehension that for the next few years it may not be possible to fill 75% of the superior posts from amongst direct recruits to Class I.
In order to meet this.
situation, it was provided by rule 7 that, as far as possible, promotions as officiating Execu tive Engineers shall be so made that the promotee under consideration from Class II has to his credit at least 6 years ' longer service than a promotee under consideration from Class I, subject, generally, to the condition that a Class I officer shall not hold a divisional rank at less than 4, and a Class II officer at less than 7 years ' serv ice.
Clause (iii) of rule 7 emphasised that if any promo tions were made from Class.
II to Class I service to the confirmed posts of Executive Engineers beyond the quota available to Class II service personnel, there, would have to be a consequent reduction in the promotion of Class II employee.s to Class I appointments in the following years in order to work up the overall percentage of 75:25.
Clause (iv) of rule 7 provided that if any confirmation is made from the bunch of temporary Executive Engineers.
who had no lien on any cadre, such confirmation shah be counted against the quota of 25% which was meant for the non direct recruits to Class I service.
Since the challenge to the vires of rule 8(iii) has occupied the best part of the arguments and since the High Court of Bombay and Gujarat have differed on that question it would be necessary to set out the whole of rule 8.
(i) The Sub Divisional posts in the Department are at present manned by direct recruits.
to Bombay Service of Engineers, Class II cadre, Deputy Engineers confirmed from subordinate Service of Engineers, the temporary Deputy Engineers recruited by the Bombay Public Service Commission, Officiating Deputy Engineers and similar other categories.
These various categories are being compiled into two lists only, viz. Bombay Service of Engineers Class 11 cadre of permanent Deputy Engineers and a list of officiating Deputy Engineers.
The future recruitment to Bombay Service of Engineers, Class II cadre, shall be made by nomination of candidates recruited direct by competitive examination, held by the Commission and by promotion from the list of officiating Deputy Engineers.
The number of such promotions shall be about one third the number of direct recruits appointed in that year.
(ii) All direct recruitment, of temporary Deputy Engineers having been stopped, further officiating vacancies will be 787 manned from the ranks of the subordinate Service of Engineers.
For this purpose, a State wide Select Seniority list will be maintained of members of the Subordinate Service of Engineers cadre, considered fit to hold sub divisional charges.
The list shall be compiled as on 30th June each year.
For inclusion in this list, a graduate shall have to, his credit not less than 3, a Diploma holder not less than 8, and a non qualified person not less than 13 years ' service as Overseer.
For confirmation as a Deputy Engineer, the officer would be expected to have put in not less than 3 years ' service as officiating Deputy Engineer.
(iii).
The probationers recruited directly to the Bombay Service of Engineers, Class II cadre in any year shall, in a bunch, be placed senior to promotees confirmed during that year." The Rules of 1960 were made by the Government of Bombay on April 29, 1960 and within two days thereafter, that is, on May 1, 1960 State of Bombay was bifurcated into the States of Maharashtra and Gujarat.
With a view to avoiding any administrative difficulty, the Government of Gujarat passed a resolution on May 1, 1960 providing that all rules, regulations, circulars, etc.
prevailing in the former State of Bombay will continue to operate in the new State of Gujarat until changed or modified by that Government.
The Rules of 1960 were amended by the Government of Gujarat by a notification dated August 21, 1965 issued in the exer cise of powers conferred by the proviso to article 309 of the Constitution.
By that notification, the Government of Gujarat introduced a new clause, clause 10, in the Rules of 1960 providing that candidates selected through the competi tive examination and appointed to posts in the Gujarat Service of Engineers, Class I and Class II, shall if so required, be liable to serve in any Defence Service or post connected with the defence of India, provided that such a candidate shall not be required to serve as aforesaid after the expiry of ten years from the date of his appointment or after attaining the age of 40 years.
The terms of this Gujarat amendment are not the subject of controversy but it became necessary to refer to the amendment since it is argued that even if the Rules of 1960, being in the nature of executive instructions, did not have statutory force, those rules acquired a statutory character by being recognised and amended by the notification of August 21, 1965 which was issued under the proviso to art, 309 of the Constitution.
On the bifurcation of the State of Bombay, 181 permanent and 220 temporary posts of Deputy Engineers were allocated to the state of Gujarat.
In practice however, 99 permanent posts of Deputy Engineers were vacant in the State of Guja rat against which confirmation had to be made by that Gov ernment.
Some of the Deputy Engineers who were promoted to those posts from lower ranks were also allocated to the Stare of Gujarat and several of them having 788 completed three years ' qualifying service had become eligi ble for confirmation under rule 8(ii) of the 1960 Rules.
But they were denied confirmation in spite of their long service and in spite of the existence of clear vacancies in substantive posts of Deputy Engineers.
Since the quantum of pension also depended in those days on the average substan tive pay, the denial of confirmations to the promotee Deputy Engineers led to great dissatisfaction amongst them.
Some, who had officiated in those appointments for several years, had to retire without being confirmed.
On March 28, 1961 the Government of Gujarat passed an order provisionally confirming 37 officiating Deputy Engineers with effect from May 1, 1960.
On August 7 1968 it confirmed another batch of 26 officiating Deputy Engineers with retrospective effect from May 1, 1960 and directed that the order of provisional confirmation dated March 28, 1961 shall be treated as final.
In so far as the Gujarat appeals are concerned there are no further rules or resolutions to be considered.
But the Government of Maharashtra issued two.
resolutions after the bifurcation of the State of Bombay.
On July 29, 1963 it passed a resolution laying down principles of seniority and on December 19, 1970 it passed a resolution superseding the resolution passed by the Government of Bombay on April 29, 1960.
Rule 33 of the 1970 rules provides: "Seniority 33.
There shall be two parts of the seniority list in each cadre in Class I and Class 11 viz. Part A of confirmed officers and Part B of those who are not confirmed.
(a) In Part A the names shall be arranged with reference to the year of confirmation.
(b) The confirmed officers shall be treated as senior to the unconfirmed Officers in the respective cadre.
(c) In Part B of the seniority list of any cadre, the names shall be arranged with refer ence to the date of continuous officiation except where a promotion in an officiating capacity was by way of purely temporary or local arrangement.
" In Gujarat, there are no resolutions corresponding to, those of 1963 and 1970 issued by the Maharashtra Government.
Civil Appeal No. 1113 of 1974 by the promotees arises court of the judgment dated January 17, 1974 of the Bombay High Court dismissing SpeCial Civil Application No. 815, of 1972 filed by them against the State and the direct re cruits.
Four Special Civil Applications were filed in the Gujarat High Court which were disposed of by it by a common judgment dated July14, 1973.
S.C. As.
1099 of 1969.
422 of1970 and 957 of 1970 were filed by the direct recruits while S.C.A. No. 1480 of 1971 was filed by the promotees. ' The promotees failed in the Bombay High Court but succeeded in the Gujarat High Court.
Both the High Courts have granted certificates of fitness for filing appeals in tiffs Court.
789 Before us, Mr. K.K. Singhvi and Mr. R.K. Garg appeared for the promotees while Mr. M.V. Paranjpe and Mr. M.K. Ramamurti appeared for the direct recruits.
Mr. M.C. Bhandare appeared for the State of Maharashtra and Mr. D.V. Patel for the State of Gujarat.
Mr. Patel took a non contentious attitude, which highlights how difficult it was for the State counsel to support any particular cause in view of the shifting stand taken up by both the State Gov ernments from time to time.
Several points were raised be,fore us and a large number of decisions were cited in support thereof, but the main question for decision in these appeals is whether departmen tal promotees and direct recruits appointed as Deputy Engi neers in the Engineering Services of the Governments of Maharashtra and Gujarat belong to the same class so that they must be treated with an even hand or whether they belong to different classes or categories and can justifia bly be treated unequally.
Concededly, they are being treated unequally in the matter of seniority because whereas, promo tees rank for seniority from the date of their confirmation the seniority of direct recruits is reckoned from the date of their initial appointment.
The disparity is indeed so glaring that though direct recruits have to successfully complete a two years ' probationary period before confirma tion, even that period is not excluded while counting their seniority.
A promotee ranks below the direct recruit even if he has officiated continuously as Deputy Engineer for years before the appointment of the direct recruit is made and even if he, the promotee, could have been confirmed in an available substantive vacancy before the appointment of the direct recruit.
Learned counsel for the direct recruits have stoutly defended the preferential treatment accorded to them by contending, inter alia, that since the promotees do.
not belong to Class II service until they are confirmed, they have no fight to.
rank for seniority along with the direct recruits who enter that class or cadre on the very date of their initial appointment.
The fact that the Government did not confirm a particular promotee even though a substan tive vacancy was available in which he could have been confirmed cannot, according to the direct recruits, make any difference to that position.
For facilitating a proper understanding of this problem it is necessary to take bird 's eye view of the various rules and resolutions which were passed by the two State Govern ments, most of which we have already noticed.
In this be half, attention has to be called particularly to: (1) The rules framed by the Government of Bombay on September 21, 1939 under section 241 (2)(b).of the Government of India Act, 1935; (2) The rules framed by the Government of Bombay on November 21, 1941 regarding fixation of seniority (3) The letter dated January 11, 1949 written by the Chief Secra tary, Government of Bombay, to the Honorary Secretary, Bombay Civil Service Association: (4) The Resolution of the Government Of Bombay dated April 29, 1960 containing Rules regarding recruitment of Class I and Class II Engineering Services and regarding fixation of seniority; (5) The 790 Resolution of the Government of Maharashtra dated July 29, 1963 laying down principles of seniority; (6) The Notifi cation dated August 21, 1965 issued by the Government of Gujarat under the proviso to.
article 309 of the Constitu tion, introducing clause 10 in the Rules of 1960; (7) The Resolution of the Government of Maharashtra dated December 19, 1970 superseding the Resolution of April 29, 1950 and framing new rules of seniority; and (8) The Circulars dated January 12, 1961, March 15, 1963 and October 18, 1968 issued by the Government of Maharashtra, converting a cer tain number of temporary posts into permanent posts from time to time.
It is common ground that except the Bombay Rules dated September 21, 1939 and the Gujarat Notification dated August 21, 1965 the rest of the rules are in the nature of execu tive instructions.
The Rules of 1941, 1960, 1963, 1965 and 1970 were not framed by the State Government concerned in the exercise of constitutional or statutory power.
The Rules of 1960 and 1970 were issued "By order and in the name of the Governor," but that does not lend support to the construction faintly suggested on behalf of the direct recruits that the two sets of rules must be deemed to have been made under article 309 of the Constitution.
All execu tive action of the Government of a Stale is required by article 166 of the Constitution to be taken in the name of the Governor.
The appeals have therefore to be disposed of on the basis that except for the Bombay rules dated September 21, 1939 and the Gujarat Notification dated August 21, 1965 the remaining rules, whether of recruitment or of seniority, are in the nature of executive instructions.
These in structions, unlike rules regulating recruitment and condi tions of service framed under the proviso to article 309 of the Constitution or section 241(2)(b) of the Government of India Act, 1936, cannot have any retrospective effect.
The 1939 rules called "Recruitment Rules of the Bombay Service of Engineers (Class I and Class II)" have constitu tional authority but being rules made to regulate the methods of recruitment", they afford no assistance in finding a solution to the rival claims to seniority laid by the promotees and direct recruits.
The rules neither fix a quota for recruitment from the two, avenues nor do they provide, in any other manner, a guideline for fixation of seniority as between appointees recruited from different sources.
Rule 10 on which the promotees rely as affording to them a guarantee in the matter of promotion is also beside the point because the crux of their grievance is not that they are denied opportunities of promotion but that they are discriminated against in the matter of seniority in comparison with the direct recruits.
By its resolution dated November 21, 1941 the Government of Bombay, Political and services Department, directed that in the case of direct recruits appointed substantively on probation, the seniority should be determined with reference to the date of appointment on probation while in the case of officers promoted to "substantive vacancies", the seniority should be determined with reference to the date of their promotion to the substantive vacancies, pro vided there has been no break in their service prior to their confirmation in those vacancies.
This Reso lution expressly 791 governed the seniority of direct recruits and promoted officers in all provincial services except the Bombay Serv ice of Engineers, Class I Since Deputy Engineers do not belong to Class I Service, their seniority was governed by the Resolution.
The wording of the Resolution leaves no doubt that the Government of Bombay applied: two different standards for fixing inter se seniority of direct recruits and promotees appointed as Deputy Engineers.
The former were entitled to reckon their seniority with effect from the. date of their initial appointment on probation while the seniority of the latter had to be determined with reference to the date of their promotion to, substantive vacancies, subject to the further qualification that there was no break in their service prior to their confirmation in those vacancies.
Thus, for purposes of seniority, the promo tees had to depend firstly on the availability of substan tive vacancies and secondly on the arbitrary discretion of the Government to confirm or not to confirm them in those vacancies.
The fact that a substantive vacancy had arisen and was available did not, proprio vigore, confer any right on the promotee to be confirmed in that vacancy.
The 1941 Rules contained the real germ of discrimination because the promotees had to depend upon the unguided pleasure of the Government for orders of confirmation.
In the pre Consti tution era, such hostile treatment had to be suffered si lently as a necessary incident of government service.
It is curious that though the 1941 rules expressly recite that the principles contained therein should be observed in determining the seniority of direct recruits and promoted officers in the provincial Services except the Class I Bombay Service of Engineers, Shri L.M. Ajgaonkar, Deputy Secretary to the Government of Maharashtra says in his affidavit dated July 25, 1973 that in practice the Rules of 1941 were never applied to Class II officers in the Engineering Service and that their seniority used to be determined by the same rules by which the seniority of Class I officers was determined.
It is difficult to accept this bare statement which is not even supported by a proper verification.
Shri Ajgaonkar 's affidavit contains an omni bus and rolled up clause of verification at the end, which detracts from the weight of his assertion.
Turning next to the letter dated January 11, 1949 writ ten by the Chief Secretary, Government of Bombay, to the Honorary Secretary, Bombay Civil Service Association, we find it difficult to uphold the claim of the _promotees that the Rules of 1941 were modified by that letter.
The letter was written in answer to, the representation dated July 28, 1948 made by the Bombay Civil Service Association to, the Government of Bombay regarding emergency recruitment to the Indian Administrative service and "other matters".
Paragraph 2 of the letter says that promotees can have no grievance in the matter of seniority since the seniority of a direct recruit to the cadre of "Deputy Collectors" vis a vis a promoted officer is determined not according to the date of confirmation but according to the principles laid down in the Rules of 1941, i.e. with reference to the date of first appointment on probation in the case of direct recruits and of continious officiation in the ease of pro moted officers.
In the first place, 792 this part of the letter on which the promotees rely deals expressly and exclusively with the case of Deputy Collectors which makes it difficult, without any further data, to extend the benefit of what is said therein to Deputy Engi neers, working in an entirely different branch of govern ment service.
The Chief Secretary 's letter is a reply to the Association 's letter which the promotees did not pro duce.
The Association had addressed its letter not to the Ministry which handled problems of Engineering Services but to the Ministry of Home and Revenue, the latter of which was concerned to consider the grievance of Deputy Collectors.
Lastly the opening sentence of paragraph 2 of the Chief Secretary 's reply shows that he was referring to a class of service in which a quota system was then operating.
Admit tedly, the quota system properly so called, did not apply either under the 1939 or under the 1941 rules to Engineering Services.
The Chief Secretary 's reply cannot, therefore improve the promotees ' case.
But we disapprove that instead of explaining the circumstances in which the reply was sent, the State Government should merely say through Shri Ajgaon kar 's affidavit that it craves "leave to refer" to the reply for its "true effect".
The Government could surely have produced the letter of the Association which would have set this part of the controversy at rest.
That takes us to the 1960 Rules which are the meat of the matter.
We have already extracted rules 6 and 8 fully but it will be necessary to recapitulate briefly the scheme of the 1960 rules.
Under these rules, the,ratio of ap pointment by nomination and promotion of both Class I and Class II Engineering Services was fixed, as far as practica ble, at 75: 25.
Candidates appointed by nomination, i.e. direct recruits, were to be on probation for two years out of which, normally, one year was to be spent on training.
On satisfactory completion of probation, the direct recruits were to be confirmed as Assistant Engineers in Class I or as Deputy Engineers in Class II, as the case may be.
For ab sorption in Class I, a Class II officer had to be in the permanent Bombay Service of Engineers, Class II cadre.
He was further required to have at least 15 years ' service to his credit in Class II in temporary and permanent capaci ties.
In addition to these qualifications, he has to be holding, at the time of his absorption in Class 1, an offi ciating divisional rank.
On such absorption the Class II officer was to be confirmed as an Executive Engineer.
The Rules of 1960 show that the seniority of Class II promotees was to be fixed below the bunch of Assistant Engineers, any one of whom was due for confirmation as an Executive Engi neer during the calendar year.
But no Class II promotee could be placed above a direct recruit recruited to Class I, who was officiating as Executive Engineer from a date earlier than the Class II promotee, Rule 8(1) says that the various categories which manned the Class I sub divisional posts were being compiled into.
two lists: (i) One list of Bombay Service of Engineers Class 1I cadre of permanent Deputy Engineers and (ii) the other list of officiating Deputy Engineers.
The future recruit ment to Class II cadre was to be made by (a) nomination of candidates recruited directly by competitive examination and (b) promotion from the list of officiating Deputy Engineers, 793 in the ratio of 2/3rd and 1/3rd respectively.
After recit ing that direct recruitment of temporary Deputy Engineers was stopped, rule 8(ii) provides that further officiating vacancies would be manned from the ranks of the Subordi nate Service of Engineers.
For this purpose a statewise Select Seniority List was to be maintained of members to the Subordinate Service of Engineers, considered fit to hold subdivisional charge.
For inclusion in this list graduates, diploma holders and non qualified persons had to have to their credit Service of not less than 3, 8 and 13 years respectively.
For confirmation as a Deputy Engineer the officer was expected to have put in not less than three years ' service as officiating Deputy Engineer.
Then comes the much debated clause (iii) of rule 8: "(iii) The probationers recruited directly to the Bombay Service of Engineers, Class II cadre in any year shall, in a bunch, be placed senior to promotees con firmed during that year.
It is patent that this clause is highly discriminatory against promotees and accords a preferential treatment to direct recruits.
Its principal justification is said to be that persons who are promoted as officiating Deputy Engi neers do not belong to Class II cadre so long as they are not confirmed as Deputy Engineers, whereas direct recruits appointed on probation as Deputy Engineers enter that class or cadre on the very date of their appointment since, on satisfactory completion of probation, confirmation is gua ranteed to them.
This contention needs careful examination.
There is no universal rule, either that a cadre cannot consist of both permanent and temporary employees or that it must consist of both. ' That is primarily a matter of rules and regulations governing the particular service in relation to which the question regarding the composition of a cadre arises.
For example, in Bishan Sarup Gupta vs Union of India(1) the cadre of Income Tax officers Class I, Grade II was held by this Court to consist of both permanent and temporary pests.
Similarly, in A.K. Subraman vs Union of India, (2) while holding that the cadre of Executive Engi neers in Class I Central Engineering Service consisted both of permanent and temporary posts, it was pointed out by this Court that a cadre may consist of permanent posts only or "sometimes, as is quite common these days, also of temporary posts".
Counsel for direct recruits relied upon a decision of this Court in Ganga Ram & Others vs Union of India(3) for showing that a cadre cannot consist of temporary posts but that decision rested on the finding, arising out of the rules contained in the Indian Railway Establishment Manual, that direct recruits and promotees constitute different classes.
The question which we have to consider at this stage is not whether direct recruits and promotees appointed as Deputy Engineers in the Bombay and Gujarat service of Engineers belong to different classes but Whether officiat ing Deputy Engineers belong to class II cadre at all.
(1) ; (2) [1975] 2 S.C.R. 979 (3) ; 794 On the state of the record in the Bombay and Gujarat appeals, such as it is, we find it difficult to hold that officiating Deputy Engineers do not belong to Class 1I cadre of the Bombay and Gujarat Service of Engineers.
In the Maharashtra writ petition, 815 of 1972, as many as four affidavits. were filed on behalf of the State Government by Shri L.M. Ajgaonkar.
These are dated July 25, December 17, December 21, 1973 and January 17, 1974.
The question whether officiating Deputy Engineers belong to Class II cadre was of the essence of the dispute in the High Court and was squarely raised by the promotees.
Yet, in none of the affidavits did the State Government say that they did not belong to Class II cadre.
The last affidavit dated January 17, 1974 was filed after the High Court had dictated its judgment in open Court for three days, and even then the affidavit is significantly silent on the question.
The only explanation of this can be that according to the State Government, officiating Deputy Engineers belong to Class II cadre.
The resolution dated November 8, 1962 issued by the Government of Maharashtra.
Buildings and Communications Department, shows unmistakably that even temporary posts of Deputy Engineers were treated as temporary additions to Class II cadre.
An additional Division with four subdivi sions was sanctioned by that resolution for construction of a section of National Highway No. 8.
Temporary posts had therefore to be created for that project for a period of one year.
The resolution says that "The posts of Executive Engineers and Deputy Engineers should be treated as tempo rary additions to their respective cadres." In so far as the Gujarat appeals are concerned, Shri N.S. Nagrani, Under Secretary to the Government of Gujarat, P.W.D., filed an affidavit dated April 28, 1970 in one of the writ petitions, 422 of 1970.
He says in that affidavit that "temporary posts are to be treated as temporary additions to the respective cadres of B.S.E. Class I and Class II", that "permanent posts are not created anew but come into existence by the conversion of the existing tempo rary posts into permanent posts" and that "both the tempo rary posts and permanent posts are two categories of posts belonging to the same cadre".
To the similar effect is the affidavit dated June 22, 1970 made in another writ petition, 1099 of1969, by Shri A.R. Bhatt, Under Secretary to, the Government of Gujarat, P.W.D. He says therein that "there are no separate categories of permanent and temporary posts of Deputy Engineers.
Temporary post of Deputy Engineers are treated as temporary additions to the G.S.E. Class II cadre.
" Pleading on behalf of the Gujarat Government, Shri Bhatt stoutly resisted the claim of direct recruits that they had prior claim for consideration for promotion to the posts of Executive Engineers on the ground that they belong to the Class II cadre while the officiating Deputy Engineers do not.
We cannot ignore these sworn assertions made solemnly by officers of the Maharashtra and Gujarat Governments.
The fact that the permanent strength of the.
cadre was deter mined on the basis of permanent posts at any given time, as for example when the Bombay 795 Government passed resolutions on March 22, 1937 and April 13, 1945 cannot detract from the position that even tempo rary posts of Deputy Engineers were treated as additions, though temporary, to Class II cadre.
The government offi cers who swore the affidavits knew of these resolutions and yet they were instructed to state, a position Which they contended for more then once, that officiating Deputy Engineers belonged to Class II cadre.
The learned counsel for the direct recruits laid great emphasis on the lists referred to in clauses (i) and (ii) o[ rule 8 for showing that officiating Deputy Engineers do not belong to Class 11 cadre of Engineering Service.
This contention has to be rejected since the point is concluded by a decision of this Court in P.Y. Joshi vs State of Maharashtra.
(1) It was contended in that case on behalf of direct recruits that officiating Deputy Engineers could only be considered as promoted to the grade of Deputy Engi neers on confirmation and therefore the 7 years ' qualifying service which they had to put in before being promoted as officiating Executive Engineers must be reckoned from the ' date of their confirmation as Deputy Engineers in support of this contention reliance was placed in that case on clause (ii) of rule 8 and it was argued that no person could be "promoted" as a Deputy Engineer unless he was first put in the list of officiating Deputy Engineers.
This argument was squarely dealt with and repelled by this Court by hold ing that the list referred to in clause (ii) of rule 8 is the same list which is referred to in the latter part of clause (i) of that rule which speaks of "future recruitment".
Consequently, a promoted officiating Deputy Engineer, who belonged to Class II cadre, was held entitled to be considered for promotion under rule 7 to the post of officiating Executive Engineer if he had put in 7 years ' qualifying service.
The eligiblity for promotion did not require that the officiating Deputy Engineer must have put in 7 years ' service after the date of his confirmation.
It must necessarily follow that "promotion" which the latter part of rule 8(i) relating to future recruitment speaks of means promotion as an officiating Deputy Engineer from the Select List prepared under clause (ii) of rule 8.
A person thus promoted from the Select List as an officiat ing Deputy Engineer is as full and complete a member of the Class II cadre as a person directly appointed as a Deputy Engineer.
In tiffs view of the matter, the prescription contained in the closing sentence of rule 8(i) that "the number of such promotions shall be about 1/3rd the number of direct recruits appointed in that year" would apply to initial appointments and cannot govern the confirmation of those who have already been appointed to Class II cadre.
In other words, direct recruits and promotees have to.
be appointed in the proportion of 75: 25 to Class II cadre, the former as Deputy Engineers and the latter as officiating Deputy Engineers, but once that is done, the quota rule would cease to apply with the result that confirmations in the posts of Deputy Engineers are not required to be made in the proportion in which the initial appointments had (1) 796 to be made.
Thus rule 8(i) only requires that for every three direct recruits appointed as Deputy Engineers only one promotee can be appointed as officiating Deputy Engineer.
The rule cannot be construed to mean that.
for every three confirmations, of Deputy Engineers, not more than one promo tee can be confirmed as Deputy Engineer.
In A. K. Subraman (supra) it was held by this Court, while interpreting rules relating to Central Engineering Service Class I, that though in cases where recruitment is made from different sources the quota system can be validly applied, the quota rule was to be enforced at the time of initial recruitment to the posts of officiating Executive Engineers and not at the time of their confirmation.
The Court further observed that there was a well recognised distinction between promotion and confirmation and that the tests to be applied for the purposes of promotion are entirely different from those that had to be applied at the time of confirmation.
If officiating Deputy Engineers belong to Class II cadre as much as direct recruits do and if the quota system cannot operate upon their respective confirmation in that cadre, is there any valid basis for applying different standards to the members of the two group for determining their seniori ty? Though drawn from two different sources, the direct recruits and promotees constitute in the instant case a single integrated cadre.
They discharge identical functions, bear similar responsibilities and acquire an equal amount of experience in their respective assignments.
And yet clause (iii) of rule 8 provides that probationers recruited during any year shall in a bunch be 'treated as senior to promo tees confirmed in that year.
The plain arithmetic of this formula is that a direct recruit appointed on probation say in 1966, is to be regarded as senior to a promotee who was appointed as an officiating Deputy Engineer, say in 1956, but was confirmed in 1966 after continuous officiation till then.
This formula gives to the direct recruit even the benefit of his one year 's period of training and another year 's period of probation for the purposes of seniority and denies to promotees the benefit of their long and valuable experience.
If there was some intelligible ground for this differentiation bearing nexus with efficiency in public services, if might perhaps have been possible to sustain such a classification.
It is interesting that time and again the State Governments themselves found it difficult to justify the hostile treatment accorded to the promotees.
In various affidavits filed on their behalf, entirely contra dictory contentions were taken, sometimes in favour of the promotees and sometimes in favour of direct recruits.
In stead of adopting an intelligible differentia, rule 8 (iii) leaves seniority to be determined on the sole touchstone of confirmation which Seems to us indefensible.
Confirmation is one of the inglorious uncertainities of government serv ice depending neither on efficiency.
of the incumbent nor on the availability of substantive vacancies.
A glaring in stance widely known in a part of our country is of a distin guished member of the judiciary who was confirmed as a District Judge years after he was confirmed as a Judge of the High Court.
It is on the record of these writ petitions that officiating Deputy Engineers were not confirmed even though substantive vacancies were available in which they could have been confirmed.
It shows that confirmation does not have to conform to any set rules and whether an employee should be confirmed or not depends on the sweet will and pleasure of the government.
797 There is no substance in the plea that direct recruits must be given weightage on the ground that the engineering services require the infusion of new blood since it is a highly specialised service.
Were it so, the Government would not have itself reduced the proportional representa tion gradually so as to tilt the scales in favour of promo tees.
Besides, the plea that engineering service is a spe cialised service is made not by the Government but by direct recruits who, obviously, are interested in so contending.
Nor indeed is the apprehension justified that the higher echelons of engineering services will in course of time be manned predominantly by promotees.
Those recruited directly as Assistant Engineers in Class I can, under the rules, officiate as Executive Engineers after 4 years ' service and are eligible for confirmation as Executive Engineers after a total service of 9 years.
Promotees can hardly ever match with that class in terms of seniority.
Learned counsel for direct recruits relied on the deci sion of this Court in B.S. Gupta vs Union of India(1) where it was observed that when recruitment is made from several sources, it may be necessary in the public interest to depart from the normal rule of seniority and to provide that dates other than the dates of appointment will determine inter se seniority of officers.
These observations have to be understood in the context which the Court itself clari fied by saying that the, problem before it was not of dis crimination in the matter of promotion from an integrated service constituted from two sources but the problem was of integrating two sources in one service by adjusting inter se seniority (p. 115).
Besides, the rule of seniority pre scribed in that case was not shown to suffer from the in firmity from which rule 8 (iii), suffers.
Reliance was also placed by the direct recruits on another decision of this Court in V.B. Badami vs State of Mysore,(2) in which it was held that in cases where rules prescribe a quota between direct recruits and promotees, confirmations for substantive appointments can only be made in clear vacancies occurring in the permanent strength of the cadre and that confirmed persons have to be treated as senior to those who are officiating.
This decision is distinguishable because it is based on the consideration that rule 9 of the Probation Rules of 1957 provided for confirmation of a probationer as a full member of the serv ice in any substantive vacancy in the permanent cadre and that rule established the exclusion of temporary posts from the cadre (p.822).
Since the cadre consisted of permanent posts only, confirmation in permanent posts necessarily determined the inter se seniority of officers.
Rule 8(ii) in the instant case adopts the seniority cum merit test for preparing the statewise Select List of seniority.
And yet clause (iii) rejects the test of merit altogether.
The vice of that clause is that it leaves the valuable right of seniority to depend upon the mere accident of confirmation.
That, under articles 14 and 16 of the Constitution, is impermissible and therefore we.must strike down rule g(iii) as being unconstitutional.
(1) ; (2) [1976]1 S.C.R. 815 798 On July 29, 1963 the Government of Maharashtra in its General Administration Department passed a resolution super seding the rules of November 21, 1941 and framing new rules for determining the inter se seniority of direct recruits and promotees.
Paragraph A of the 1963 resolution provides that the seniority of direct recruits and promoted officers should be determined according to the date of appointment on probation in the case of direct recruits and according to the date of promotion to officiate continuously in the case of those appointed by promotion, irrespective of whether the appointments are made in temporary or in permanent vacan cies.
Paragraph B of the resolution says that a list of services in respect of which special orders for fixation of seniority are in force and to which the resolution will not apply would be issued in due course.
It is contended on behalf of the Maharashtra promotees that the rules of 1963 superseded the 1960 rules by neces sary implication and therefore the State Government had no power or authority to apply the criterion of seniority fixed under the 1960 rules after their repeal by the 1963 rules.
This contention has not only the merit of plausibility but is apparently supported by an observation in P. Y. Joshi (supra) case.
We are however satisfied that the Bombay High Court was right in rejecting the contention.
The quota system was the very essence of 1960 rules and if it was desired to abrogate that system it is unlikely that the 1963 rules will not even refer to those of 1960.
The rules of 1941 having been expressly superseded by the 1963 rules, it is difficult to accept that along with the 1941 rules the resolution of 1963 would not have referred to the 1960 rules also.
Secondly, the resolution dated December 19, 1970 of the Government of Maharashtra expressly superseded the 1960 rules which shows that the latter were in force until 1970 and were not superseded by the 1963 rules.
In fact, the resolution of 1970 refers to all previous resolutions except the resolution of 1963 which shows that the latter was not applicable to engineering services.
It is true that in P.Y. Joshi 's case (supra) it was observed that the 1963 rules repealed those of 1960 but that is a mere passing observa tion.
The question in regard to such repeal did not arise for decision in that case and it appears that no argument whatsoever was addressed to the Court on this question.
None of the considerations mentioned by us were placed before the Court in that case.
We therefore agree with the High Court that the 1960 rules were not superseded by those of 1963.
We have already indicated that in Gujarat there is no resolution corresponding to that of 1963.
In the Gujarat writ petitions it was argued that the 1960 rules, though originally in the nature of executive instructions, acquired a statutory force and character by reason of their amendment by the rules of 1965 which were made by the Governor of Gujarat in exercise of the power under the proviso to article 309 of the Constitution.
This argument was rightly rejected by the High Court because all that was done by the rules of 1965 was to introduce a new rule, rule 10, in the 1960 rules.
The rules of 1960 were neither reiterated nor re enacted by the rules of 1965 and the new rule introduced into the rules of 1960 is not of such a character as to compel the inference that the rule making authority had applied its mind to be rules of 1960 with a view to 799 adopting them.
In Bachan Singh vs Union of India(1), on which the direct recruits rely, the amendment made vital changes in the main fabric of the original rules which led this Court to the conclusion that the original rules became statutory rules by incorporation.
This question is not relevant in the Maharashtra appeal since there are no rules in Maharashtra corresponding to those of 1965 in Gujarat.
The challenge to rule 33 of the rules dated December 19, 1970 framed by the Government of Maharashtra is based on grounds identical with those on which the validity of rule 8(iii) of the 1960 rules was assailed.
The rules of 1970, which supersede the rules of 1960, were framed in order (i) to alter the ratio between direct recruits and promotees which was "causing hardship" to promotees; (ii) to correct the manifest error resulting from the fact that "A large number of temporarily promoted officers both in Class I and Class II could not be confirmed in spite of permanent vacan cies being available"; and (iii) to ensure the efficiency of the engineering services as a whole.
Rule 6 provides briefly that officers who are confirmed in or who have a lien on a post will be members of the Maharashtra Service of Engineers Class I or Class II as the case may be Those who do not have such a lien and who may be officiating in any one of the cadres of Class I or Class II will be treated as temporary members of their respective cadres.
Rules 7 to 11 deal with direct appointments to the posts of Assistant Engineers Class I and Assistant Engineers Class II.
By rule 11, such appointees are to be confirmed after a training of one year and a further probation for a period of not less than one year in their respective cadres.
Rules 12 to 23 deal with appointments by promotion to Class 11 service.
Rule 12(a) as amended by the Government resolution dated January 20, 1972 provides that the cadre of Deputy Engineers will consist of (i) all officers confirmed upto the date of commencement of the rules as Deputy Engineers, whether actually working in or only having a lien on the posts; (ii) all direct recruits who have been appointed upto the date of commencement of the rules on probation against permanent posts of Deputy Engineers (iii) all officers who were offi ciating as Deputy Engineers on 30th April, 1960, provided their promotions prior to 30th April, 1960 are not deemed to be fortuitous; and (iv) those who were not promoted prior to 30th April, 1960, but who have been included in the Select Lists for the period prior to 30th April 1900 of Overseers fit to be Deputy Engineers.
RuIe 12(c) fixes the ratio between direct recruits and promotees at 34: 66 instead of 75: 25 as under the 1960 rules.
Rule 33 called "Seniority", which we have extracted already, provides that there shall be two parts of the seniority list in each cadre in Class I and Class Ii, part A of confirmed officers and part B of those who are not confirmed.
In part A the names are to be arranged with reference to the year of confirmation.
Con firmed officers are to be treated as senior to the uncon firmed officers in the respective cadres.
In part B the names are to be arranged with reference to the date of continuous officiation except where promotion in an offici ating capacity is by way of a purely temporary or local arrangement.
(1) ; 800 Rule 33, in so far as it makes seniority dependent upon the fortuitous circumstance of confirmation, is open to the same objection as rule 8(iii) of the 1960 rules and must be struck down for identical reasons.
The circulars dated January 12, 1961, March 15, 1963 and October 18, 1969 which the promotees want to be enforced are issued by the Finance Department and being in the nature of inter departmental communications, they cannot confer any right on the promotees.
The Bombay High Court was therefore right in not accepting this part of the promo tees ' case.
We also agree with the view taken by the High Courts of Bombay and Gujarat, for the reasons mentioned by them, that the rules under consideration do not in any manner violate the provisions of the Bombay Reorganisation Act, 11 of 1960.
The proviso to section 81 (6) of that Act says that the condi tions of service applicable to any person allotted to the States of Maharashtra or Gujarat shall not be varied to his disadvantage except with the previous approval of the Cen tral Government.
Neither the rules of 1960 and much less the rules of 1970 alter the conditions of service of Deputy Engineers to their disadvantage within the meaning of the proviso.
We are not unmindful of the administrative difficulties in evolving a code of seniority which will satisfy all conflicting claims.
But care ought to be taken to avoid a clear transgression of the equality clauses of the Constitu tion.
The rules framed by the State Governments were con stitutionally so vulnerable that the administration was compelled to adopt inconsistent postures from time to time leaving the employees no option save to resort to courts for vindication of their rights.
In this process, courts, high and low, had to discharge functions which are best left to the expertise of the appropriate departments of the Govern ment.
Having struck down certain rules, we do not want to take upon ourselves the task of framing rules of seniority.
That is not the function of this Court and frankly it lacks the expertise and the data to do so.
We how.
ever hope that the Government will bear in mind the basic principle that if a cadre consists of both permanent and temporary employees, the accident of confirmation cannot be an intelligible criterion for determining seniority as between direct re cruits and promotees.
All other factors being equal, con tinuous officiation in a non fortuitous vacancy ought to receive due recognition in determining rules of seniority as between persons recruited from different sources, so long as they belong to the same cadre, discharge similar functions and bear similar responsibilities.
Saying anything beyond this will be trespassing on a field which does not belong to the courts.
We would like to clarify that the list of seniority, for the period till November 1, 1956, prepared by the Maharash tra Government by its resolution dated April 10, 1970 has been approved by the Government of India.
That list would therefore govern the seniority of direct recruits and promo tees as on November 1, 1956.
Secondly, it seems to us difficult to uphold the direction given by the Gujarat High Court that interim promotions made during the pendency of writ petitions should not be disturbed until the expiration of one month from the date of the seniority as finally fixed by the Government and intimated to the con 801 cerned parties.
Interim promotions which do not comply with the constitutional requirements and which under the judgment of the Gujarat High Court are bad cannot be permitted to stand.
We accordingly set aside that direction.
These then are our reasons in support of the order which we passed on January 31, 1977.
That order reads thus: "Civil Appeal No. 1113 of 1974 is filed by the promo tees and it arises out of special Civil Application No. 815 of 1972 filed by them in the Bombay High Court.
We set aside the judgment of the High Court and allow the appeal.
Civil Appeal No. 286 of 1974 is filed by direct re cruits and it arises out of Special Civil Application No. 1099 of 1969 filed by them in the High Court of Gujarat.
We confirm the judgment of the High Court and dismiss the appeal.
Civil Appeal No. 287 of 1974 is filed by direct re cruits and it arises out of Special Civil Application No. 422 of 1970 filed by them in the High Court of Gujarat.
We confirm the judgment of the High Court and dismiss the appeal.
Civil Appeal No. 242 of 1974 and Civil Appeal No. 285 of 1974 are cross appeals.
Both of these appeals arise out of Special Civil Application No. 1418 of 1971 which was field by the promotees in the High Court of Gujarat.
Civil Appeal No. 242 of 1974 is filed by the promotees in this Court challenging the decision of the Gujarat High Court to the extent to which they failed.
Civil Appeal No. 285 of 1974 is filed by the direct recruits challenging the afore said decision to the extent to which the High Court allowed the reliefs claimed by the promotees.
We allow Civil Appeal No. 242 of 1974 partly and dismiss Civil Appeal No. 285 of 1974.
The reasons in support of the conclusions to which we have come in these appeals will be given later.
The extent to which the appeals are allowed or dismissed will become clear from those reasons.
[/INST]From time to time the Life Insurance Corporation and its employees arrived at settlement relating to the terms and conditions of service of Class III and Class IV employees including bonus payable to them.
Clause (8) of the Settle ment dated January 24, 1974, which related to payment of bonus, provided (i) that no profit sharing bonus shall be paid but the Corporation may, subject to such directions as the Central Government may issue from time to time, grant any other kind of bonus to its Class III and Class IV employees; (ii) that an annual cash bonus will be paid to all Class III and Class IV employees at the rate of 15% of the annual salary actually drawn by an employee in respect of the financial year to which the bonus relates and (iii) that save as provided therein all other terms and conditions attached to the admissibility and payment of bonus shall be as laid down in the Settlement on bonus dated June 26, 1972.
Clause (12) of the Settlement which refers to the, period of settlement provided (1) that the Settlement shall be effective from April 1, 1973 for a period of four years and (2) that the, terms of the Settlement shall be subject to the approval of the Board of the Corporation and the Central Government.
One of the administrative instructions issued by the Corporation in regard to the payment of cash bonus under cl.
8(ii) of the Settlement was that in case of retirement or death, salary up to the date of cessation of service shall be taken into account for the purpose, of determining the amount of bonus payable to the employee or his heirs and the other was that the bonus shall be paid along with the salary for the month of April but in case of retirement or death, payment will be made soon after the contingency.
The payment of Bonus (Amendment) Act.
1976 considerably curtailed the rights of the employees to bonus in industrial establishments.
But in so far as the employees of the Corporation were concerned this Act had no application because by reason of section 32 of the Payment of Bonus Act, the Corporation was outside the purview of its operation.
The Central Government however decided that the employees of establishments which were not covered by the Bonus Act would not be eligible for payment of bonus but exgratia payment in lieu of bonus would be made to them.
Pursuant to this decision the L.T C. was advised by the Ministry of Finance, Government of India, that no further payment of bonus should be made to its employees without getting the same cleared by the Government.
The Corporation accordingly issued administrative instructions not to pay bonus to its employees under the existing provisions until further instructions.
To the employees ' assertion that the Corporation was bound to, 335 pay bonus in accordance with the terms of the Settlement the Corporation cOntended that payment of bonus by the Corporation was subject to such directions as the Central Government might issue from time to time, and since the Central Government had advised it not to make any payment of bonus without its specific approval, bonus could not be paid to the employees.
Thereupon, the All India Insurance Employees ' Association moved the High Court for issue of a writ directing the Corporation to act in accordance with the terms of the Settlement dated January 24, 1974 read with administrative instructions dated March 29, 1974 and not to refuse to pay cash bonus to Class III and Class IV employees.
A single Judge of the High Court allowed the writ petition.
While the Letters Patent Appeal was pending, Parliament passed the Life Insurance Corporation (Modification of Settlement) Act, 1976 (which is the Act impugned in this case).
In the Letters Patent Appeal the Corporation stated that in view of the impugned Act , there was no necessity for proceeding with the appeal and hence the Division Bench made no order in the appeal.
Since the effect of the impugned Act was to deprive Class III and Class IV employees of bonus payable to them in accordance with the terms of the Settlement, two of the associations filed writ petitions in this Court challenging the constitutional validity of the impugned Act.
It was contended on their behalf that even if the impugned Act rendered cl.
(8) (ii) ineffective with effect from April 1, 1975 it did not have the effect of absolving the Life Insurance Corporation from its obligation to carry out the writ of Mandamus issued by the High Court and (2) that the right of Class III and Class IV employees to annual cash bonus for the years 1975 76 and 1976 77 under Cl.
8(ii) of the Settlement was property and since the impugned Act provided for compulsory acquisition of this property.
without payment of compensation, it was violative of article 31(2) of the Constitution.
Allowing the writ petitions Beg C.J. (concurring with the majority) HELD : Section 3 of the Life Insurance Corporation (Modification of Settlement) Act, 1976 is struck by the provisions of article 19(1)(f) and is not saved by article 19(6) of the Constitution.
[346 A] 1.
The Statement of Objects and Reasons of the Act discloses that the purpose of the impugned Act was to undo settlements arrived at between the Corporation and Class III and Class IV employees on January 24 and February 6, 1974 and recognised by the High Court.
In Smt.
Indira Gandhi vs Raj Narain this Court held that even a constitutional amendment cannot authorise the assumption of judicial power by Parliament.
One of the tests laid down was whether the decision is of a kind which requires hearing to be given to the parties i.e., whether it involves a quasi judicial procedure.
A decision reached by the Central Government is the result of a satisfaction on matters stated there and would imply quasi judicial procedure where the terms of a settlement had to be reviewed or revised.
But, the legislative procedure.
followed in this case does not require that to, be done.
It would be unfair to adopt legislative procedure to undo a settlement which had become the basis of a decision of a High Court.
Even if legislation can remove the basis of a decision it has to do it by an alteration of general rights of a class but not by simply excluding two specific settlements between the Corporation and its employees from the purview of section 18 of the which had been held to be valid and enforceable by a High Court.
[341 G, H, 342 A C] 2(a) The object of the Act was in effect to take away the force of the judgment of the High Court.
Rights under that judgment could be said to, rise independently of article 19, of the Constitution.
To give effect to that judgment is not the same thing as enforcing a right under article 19.
It may be that a right under article 19 becomes linked up with the enforceability of the judgment.
Nevertheless the two could be viewed as separable sets of rights.
If the right conferred by the judgment independently is sought to be set aside section 3 would be invalid for trenching upon the judicial power.
[343 B D] 336 (b) A restriction upon a right may even cover taking away of the right to increased remuneration in the interests of the general public.
But the present is a pure and simple case of deprivation of rights of the employees without any apparent nexus with any public interest.
In the instant case the impugned Act is a measure which seeks to deprive workers of the benefits of settlement arrived at and assented to by the Central Government under the provisions of the .
Such a settlement should not be set at naught by an Act designed to defeat the purpose.
In judging the reasonableness of an Act the prospects held out, the representations made, the conduct of the Government and equities arising therefrom may all be taken into consideration.
[342 E F, 344 E F] 3.
Even though the real object of the Act was to set aside the result of mandamaus, the section does not mention this object.
This was perhaps because the jurisdiction of a High Court and the effectiveness of its orders derived their force from article 226 of the Constitution.
Even if section 3 seeks to take away the basis of the judgment without mentioning it, yet where the rights of the citizens against the State are concerned the court should adopt an interpretation which upholds those rights.
Therefore, the rights which had passed into those embodied in a judgment and become the basis of a mandamus from the High Court, could not be taken away in an indirect fashion.
[343 D E].
Even though the Directive Principles contained in article 43, cast an obligation on the State to secure a living wage for the workers and is part of the principles declared fundamental in the governance of the country, it is not a fundamental right which can be enforced.
Even though the Directive Principles give a direction in which the fundamental policies of the State must be oriented, yet this Court cannot direct either the Central Government or the Parliament to proceed in that direction.
Even if the Directives are not directly enforceable by a Court they cannot be declared ineffective.
They have the life and force of fundamentals.
The best way to give vitality and effect to them is to use them as criteria of reasonableness.
[344 B C] 5(a) Articles 358 and 359(1A) provide that as soon as the Proclamation of emergency cease to operate the effect of suspension must vanish "except as respects things done or omitted to be done before the law so ceases to have effect. ' [346 B C] (b) The term "things done or omitted to be done", should be interpreted very narrowly.
In the present case it means that the settlements are not to be deemed to be wiped off.
All that it means is that no payment of bonus could be demanded during the emergency but as soon as the emergency was over, the settlement would revive and what could not be demanded during the emergency would become payable even for the period of emergency for which payment was suspended.
In other words valid claims cannot be washed off by the emergency per se.
They can only be suspended by a law passed during the operation of articles 358 and 359(1A).
[346 C F] (Per Chandrachud, Fazal Ali and Shinghal, JJ.).
Concurring with the majority.
The impugned Act violates article 31(2) and is, therefore, void.
[369 G] (Per Bhagwati, Iyer and Desai, JJ.) Irrespective whether the impugned Act is constitutionally valid or not, the Corporation is bound to obey the Writ of Mandamus issued by the, High Court and to pay annual cash bonus for the year 1975 76 to Class III and Class IV employees.
[352 D E] 1.
Section 3 of the impugned Act merely provided that the provisions of the Settlement, in so far as they related to payment of annual cash bonus to Class in and Class IV employees, shall not have any force or effect and shall not be deemed to have had any force or effect from April 1, 1975.
The writ of Mandamus issued by the High Court was not touched by the impugned Act.
The right of the employees to annual cash bonus ' for the year 1975 76 became 337 crystallised in the judgment and this right was not sought to be taken away by the impugned Act.
The Judgment continued to subsist and the corporation was bound to pay bonus in obedience to the writ of Mandamus.
By the time the Letters Patent Appeal came up for hearing, the impugned Act had already come into force and the Corporation could have successfully contended in the appeal that since the Settlement, in so far as it provided for payment of annual cash bonus, was annihilated by the impugned Act with effect from 1st April, 1975 and so the employees were not entitled to bonus for the year 1975 76 and hence no writ of Mandamus could issue against the Corporation directing it to make payment of bonus.
If such contention had been raised, there is little doubt that the judgment of the single Judge would have been upturned.
But that was not done, and the judgment of the single Judge became final and binding oil the parties.
[353 A F, 355 C] Shri Prithvi Cotton Mills Ltd. vs Broach Borough Municipality, [1970] 1 SCR 358 and Patel Gordhandas Hargovindas vs Municipal Commissioner, Alimedabad, ; ; distinguished and held inapplicable. 2(a).
The argument on behalf of the Corporation that on a proper interpretation of the clauses annual cash bonus payable under cl.
8(ii) was, by reason of cl.
8(i) subject to the directions issued by the Central Government from time to time and the Government having stopped further payment of bonus, the employees were not entitled to claim annual cash bonus, is erroneous.
The employees had absolute right to receive annual cash bonus from the Corporation in terms of el. 8(ii) and it was not competent to the Central Government to issue any directions to the Corporation to refuse or withhold payment of the same.
[356 D H] (b) Although under regulation 58 of the Service Regulations non profit sharing bonus could be granted subject to the directions of the Central Government and if the Government issues a direction to the contrary bonus could not be paid by the Corporation, in the instant case, as provided in cl. 12 of the Settlement, the Central Government approved the payment of bonus under cl. 8(ii).
That having been done it was not competent to the Central Government thereafter to issue another contrary direction which would have the effect of compelling the Corporation to commit a breach of its obligation under section 18(1) of the to pay annual cash bonus under clause 8(ii).
The overriding power given to the Central Government to issue directions from time to time contained in cl.
8(i) is conspicuously absent in cl. 8(ii).
The power contained in cl.
8(i) cannot be projected or read into cl. 8(ii).
These two clauses are distinct and independent.
While cl. 8(i) is a general provision, el. 8(ii) specifically provides that cash bonus in the manner prescribed therein shall be paid to the employees.
This specific provision is made subject only to the approval of the Central Government, which was obtained.
[357 A F] (c) Moreover, under cl.
8(ii) read with the administrative instruction issued by the Corporation, annual cash bonus accrued from day to day, though payable in case of retirement, resignation or death on the happening of that contingency and otherwise on the expiration of the year to which the bonus related, Thus the annual cash bonus payable for the year 1975 76 was a debt due and owing from the Corporation to each of the employees.
, On the date when the impugned Act came into force each of the employees was entitled to a debt due and owing to him from the Corporation.
[357 H, 358 A] 3(a) The impugned Act must be held to be violative of article 31(2) since it did not provide for payment of any compensation for the compulsory acquisition of the debts.
[369 C] (b) The direct effect of the impugned Act was to transfer ownership of the debts due and owing to Class III and Class IV employees in respect of cash bonus to the Life Insurance Corporation and since the Corporation is a Corporation owned by the State, the impugned Act was a law providing for compulsory acquisition of the debts by the State within the meaning of article 31(2A).
1369 B C] 338 (c) Choses in action can be acquired by the State.
So long as the acquisition sub serves a public purpose, it would satisfy the requirement of article 31(2).
There is a fundamental distinction between a chose in action and money.
A chose in action has not the same mobility and liquidity as money, and its value is not measured by the amount recoverable under it but depends on a variety of factors.
Where money is given as compensation for taking money the theory of forced loan may apply, but it is not applicable where a chose in action is taken and money representing its value is given as compensation.
[363 A, D F] R. C. Cooper vs Union of India, ; ; Madhav Rao Scindia vs Union of India : ; reiterated.
State of Bihar vs Kameshwar Singh, ; State of Madhya Pradesh vs Ranojirao Shinde, ; ; dissented; Deokinandan Prasad vs State of Bihar, [1971] Suppl.
S.C.R. 634; State of Punjab vs K. R. Erray & Sobhag Rai Mehta, ; ; State of Gujarat, vs Sri Ambica Mills Ltd., ; and Slat(, of Kerala vs The Gwalior Rayon Silk Mfg.
(Wvg.) Co. Ltd., ; followed; State of Madhya Pradesh vs Ranojirao Shinde, [1968] 3 S.C.R. 489; State of Bihar vs Kameshwar Singh, and Bombay Dyeing and Manufacturing Co. Ltd. vs State of Bombay, ; explained; ; and ; held no longer good law.
(d) The debts due and owing from the Corporation in respect of annual cash bonus were clearly property of the employees within the meaning of article 31(2) and they could be compulsorily acquired under article 31(2).
Similarly their right to receive cash bonus for the period from the date of commencement of the impugned Act upto March 31, 1977 was a legal right enforceable through Court of law.
[360 B C] (a) Property within the meaning of articles 19(1)(f) and 31(2) comprises every form of property, tangible or intangible, including debts and choses in action such is unpaid accumulation of wages, pension, cash grants etc.
[360 A] R. C. Cooper vs Union of India, ; ; H. H. Maharajadhiraja Madhay Rao Jiwaji Rao Scindia Bahadur & Ors.
vs Union of India; , ; State of M.P. vs Ranojirao Shinde & Anr., ; ; Deokinandan Prasad vs State of Bihar, [1971] Supp.
S.C.R. 634; State of Punjab vs K. R. Erry & Sobhag Rai Mehta, [1973] 2 S.C.R. 485; and State of Gujarat & Anr vs Shri Ambica Mills Ltd., Ahmedabad, ; referred to.
4(a) The contention of the Corporation that when ownership of a debt is transferred it continues to exist as a debt but that when the debt is extinguished it ceases to exist as a debt and that extinguishment of a debt does not therefore involve transfer of ownership of the debt to the debtor is not well founded.
Where, by reason of extinguishment of a right or interest of a person, detriment is suffered by him and a corresponding benefit accrues to the State, there would be transfer of ownership of such right or interest to the State.
The question would always be : who is the beneficiary of the extinguishment of the right or interest effectuated by the law ? If it is the State, then there would be transfer of ownership of the right or interest to the State, because what the owner of the right or interest would lose by reason of the extinguishment would be the benefit accrued to the State [367 H, 368 B C] (b) Extinguishment of the debt of the creditor with corresponding benefit to the State or State owned/controlled Corporation would involve transfer of ownership of the amount representing the debt from the former to the latter.
This is the real effect of extinguishment of the debt and by garbing it in the form of extinguishment, the State or State owned/controlled Corporation cannot obtain benefit at the cost of the creditor and yet avoid ' the applicability of 339 article 31(2).
The verbal veil constructed by employing the device of extinguishment of debt cannot lot permitted to conceal or hide the real nature of the transaction [368 F B]
</s>
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<s>[INST] Summarize the judgementCivil Appeal No. 720 of 1978.
Appeal under section 116 A of the Representation of People Act 1951 from the Judgment and Order dated 7 2 1978 of the Punjab and Haryana High Court in E.P. No. 15/77.
Hardev Singh for the Appellant.
P. P. Rao, O. P. Sharma, R. Venkataramiah and R. C. Bhatia for the Respondents.
The Judgment of the Court was delivered by SHINGHAL J.
This appeal by election petitioner Harjit Singh Mann is directed against the judgment of the Punjab and Haryana High Court dated February 7, 1978, dismissing the petition by which he had challenged the election of Umrao Singh, respondent No. 1, hereinafter referred to as the respondent, from the Nakodar constituency of the Punjab Legislative Assembly.
The result of the election was declared on June 14, 1977, according to which the respondent was declared elected as he secured the highest votes at the poll.
503 Appellant Harjit Singh Mann could not contest the election as his nomination papers were rejected by the Returning Officer on May 19, 1977, which was the date fixed for the scrutiny of the nominations.
That was taken as one of the grounds for filing the election petition, the other ground being the commission of some corrupt practices by the respondent.
The respondent traversed the allegations.
The trial court examined some of the preliminary objections and framed eight issues.
The first two issues were decided in favour of the appellant.
As regards issue No. 3, the trial court held that a part of the allegation of corrupt practice which was sought to be incorporated in the amended petition, could not be taken into consideration as the amendment was applied for after the expiry of the period of limitation; and it was therefore ordered to be deleted.
The correctness of the above findings has not been challenged before us.
In fact we are required to consider the trial court 's findings only on issues Nos. 4, 5 and 6, which have all gone against the appellant.
Issues Nos. 7 and 8 have not been pressed for our consideration.
We shall therefore concern ourselves with three issues (Nos. 4, 5 and 6) and deal with them one by one.
Issue No. 4 was to the following effect, "Whether Jit Ram proposer of the petitioner reached the office of the Returning Officer at 2.50 p.m. and filed the nomination papers of the petitioner before 3.00 p.m. on 18 5 1977 and whether the endorsement made on the nomination papers that the nomination papers were received at 3.10 p.m. was wrongly made and thereby illegally rejected the nomination papers of the petitioner on 19 5 1977 ? If so, to what effect.
" The appellant 's allegation in this respect was that although Jit Ram (P.W. 7), who had proposed his candidature, reached the office of the Returning Officer after depositing the necessary security in the bank at 2.50 p.m. on May 18, 1977, and the Returning Officer placed the nomination papers on his table, he wrongly asked Jit Ram to take back the nomination papers saying that the time for filing them had expired.
It was further alleged that the Returning Officer got annoyed when Jit Ram protested that he had filed the nomination papers in time, and that he wrongly noted down the time of presentation of the nomination papers as 15.10 hours.
As has been stated, the trial court has disbelieved the averment of the petitioner in this respect and found the issue against him.
We have gone through the statement of Jit Ram P.W. 7 who, according to the appellant 's case, presented the nomination papers to 504 the Returning Officer.
The witness has however admitted in cross examination that when he was trying to deliver the nomination papers, the Returning Officer "said that he objected to the delivery of the nomination papers as the time was over".
The witness no doubt claimed that he reached the office of the Returning Officer, after depositing the security at about 2.45 p.m. and that when the Returning Officer told him that the time for the filing of the nomination papers had expired, some four other "persons" standing in the office of the Returning Officer said that "still two minutes remained for it becoming 3 O 'clock and some said that one minute still remained".
The trial court disbelieved that version of Jit Ram.
He really could not even read the time in the clock of the trial court, for when he deposed that it was 3.19 p.m., the time accordingly to that clock was 3.6 p.m.
Jit Ram did not therefore have the capacity of reading or stating the time correctly, and it may in fact be said that what he deposed about the presentation of the nomination papers a couple of minutes or a minute before 3 p.m. was nothing but hearsay.
The trial court has examined the other evidence of the parties, including the statement of Returning Officer Manohar Singh R.W.1, and we have no doubt that its finding that the nomination papers were filed 10 minutes after 3 p.m. is fully borne out by the evidence on the record and is correct.
It has to be appreciated that it is the requirement of the law that the Returning Officer should mention the time of the presentation of the nomination papers, and that endorsement exhibit P.W.1/19 has been proved by the Returning Officer.
It shows that the nomination papers were presented on May 18, 1977 at 15.10 hours by the proposer, and the endorsement to that effect was duly signed by the Returning Officer.
There is no reason to disbelieve that evidence.
The fact of late presentation of the nomination papers was reiterated by the Returning Officer in his order of scrutiny exhibit P.W. 1/20 on May 19, 1977.
In that order he clearly stated that as the nomination papers was delivered to him on May 18, 1977 after 3 p.m. i.e. at 15.10 hours by the proposer Shri Jit Ram, he rejected it for that reason and also for the reason that the required oath or affirmation was not made by the candidate.
It may be mentioned that the form of the nomination paper prescribed by the Conduct of Election Rules, 1961, provides for the issue of a receipt for the nomination paper and the notice of scrutiny, which has to be handed over to the person presenting the nomination paper.
The serial number of the nomination paper, the name of the candidate, the name of the constituency, the date and time of presentation of the nomination paper and the date and time fixed for its scrutiny had therefore to be mentioned in that receipt, and we find from the judgment of the trial court that the 505 non production of that receipt by the appellant has rightly been taken as a circumstance against him.
On the evidence before it the trial court was justified in finding issue No. 4 against the appellant and in holding that the nomination papers were filed after the expiry of the time prescribed for them i.e. at 3.10 p.m.
An attempt was made to argue that the delay in the presentation of the nomination papers in question could not justify its rejection as it was not a defect of a substantial character within the meaning of sub section
(4) of section 36 of the Representation of the People Act, 1951, hereinafter referred to as the Act.
In order to appreciate the argument it is necessary to make a cross reference to sub s.(1) of section 33 of the Act which provides as follows, "33(1) On or before the date appointed under clause (a) of section 30 each candidate shall, either in person or by his proposer, between the hours of eleven O 'clock in the forenoon and three o 'clock in the afternoon deliver to the returning officer at the place specified in this behalf in the notice issued under section 31 a nomination paper completed in the prescribed form and signed by the candidate and by an elector of the constituency as proposer".
It is therefore the requirement of that sub section that, inter alia, the nomination paper shall be delivered to the Returning Officer between the hours of eleven O 'clock in the forenoon and three O 'clock in the afternoon, so that a nomination paper delivered after three O 'clock in the afternoon cannot be said to comply with that provision of section 33.
Sub section (2) of section 36 of the Act, which provides for the examination of the nomination papers for the purpose of deciding all objections made to any nomination, requires that the Returning Officer shall reject any nomination paper on the grounds mentioned in the sub section.
We are concerned with ground No. (b) which provides as follows: "(b) that there has been a failure to comply with any of the provisions of section 33 or section 34".
So as there was failure to comply with that provision of section 33 which required the delivery of the nomination paper between the hours of eleven O 'clock in the forenoon and three O 'clock in the afternoon, the Returning Officer had really no option but to reject the nomination paper.
We have considered the argument that such a defect was not of a substantial character within the meaning of sub section
(4) of section 36 of the 506 Act, but we are unable to uphold it in the face of the clear requirement of ground (b) of sub section
(2) of section 36, referred to above.
It has to be appreciated that any other view would make the requirement for the presentation of the nomination paper before the last date for making nominations, and within the specified period of time, unworkable for it will not then be possible to draw a line upto which the delay in the delivery of the nomination papers could be condoned.
In fact if the requirement of the law in that respect is not observed, and its breach is considered to be a defect which was not of a substantial character, it may be permissible to go to the extent of arguing that the nomination paper may be filed even upto the date and time fixed for the scrutiny of the nominations.
That would not only cause administrative inconvenience but put the other candidates to a serious disadvantage for they would not be able to prepare themselves for any objection they may like to raise to the validity of the nomination at the time of the scrutiny of the nominations.
We have no hesitation therefore in taking the view that the failure to comply with the requirement that the nomination papers shall be delivered between the hours of eleven O 'clock in the forenoon and three O 'clock in the afternoon is mandatory and the Returning Officer was justified in rejecting the nomination paper in question because of its breach.
A similar provision in an election rule has been stated to be mandatory in Rogers on Elections, Volume III, twentyfirst edition, at page 74, and it has been observed that the rule must be "literally complied with".
Reference in this connection may be made to Cutting vs Windsor.
There Avory J., referred to the requirement of r. 7 in Part II of the third Schedule to the Municipal Corporations Act, 1882.
according to which the nomination paper had to be delivered before five O 'clock in the afternoon of the last day for the delivery of nomination papers, and rejected the argument that what had occurred there was a pure technicality.
He held as follows, "So far as rule 7 provided for the time within which nomination papers must be delivered at the town clerk 's office it was mandatory.
It was not within the discretion of the town clerk to receive nomination papers after the hour specified in the rule, nor was it competent to that Court to say that the delivery of a nomination paper after the prescribed time constituted a good nomination.
Mr. Windsor had never been duly nominated and his election must be declared void.
Mr. Cutting was the only other candidate and he must be declared to have been duly elected".
507 Horridge J., agreed with him saying that if Windsor had never been nominated it was impossible for the Court to say that his election was in accordance with the principles laid down in the body of the Act.
The same view has been expressed in Parker 's Conduct of Parliamentary Elections, 1970, on page 137, "The returning officer has no power to extend the time for delivery (see Howes vs Turner, , Cutting vs Windsor, 40 Times L.R. 395)".
The matter has been dealt with in Parliamentary Elections by A. Norman Schofield, second edition, on pages 149 150 under the rubic "Delivery at wrong time" and it has been held that the requirement in that respect is mandatory.
So as the provision of section 36 regarding the delivery of the nomination papers between the hours of eleven O 'clock in the forenoon and three O 'clock in the afternoon was not complied with, the Returning Officer had no option but to reject the nomination paper in question as required by section 36(2) (b) of the Act and the finding of the trial court in that respect is quite correct.
Issue No. 5 raises the question whether the appellant reached the office of the Returning Officer at 3.45 p.m. on May 18, 1977, and took oath in the presence of the Returning Officer who, however, failed to make the necessary endorsement on the nomination paper.
It is not in controversy that it was obligatory under cl.
(a) of article 173 of the Constitution for the appellant to make and subscribe, before a person authorised in that behalf by the Election Commission, an oath or affirmation according to the form set out for the purpose in the Third Schedule, and that he could not be qualified to be chosen to fill a seat in the Legislature of a State without doing so.
The importance of that requirement of the Constitution has been reiterated in sub section
(2) of section 36 of the Act for ground No. (a) thereof provides that the Returning Officer shall reject a nomination paper on the ground that on the date fixed for the scrutiny of nomination the candidate was, inter alia, not qualified to be chosen to fill the seat in the Legislative Assembly under article 173 of the Constitution.
The requirement for the making and subscribing the oath or affirmation was therefore clearly mandatory.
The appellant tried to establish the plea that he reached the office of the Returning Officer at 3.45 p.m. on May 18, 1977, and took 508 oath in the presence of the Returning Officer who, however, failed to make the necessary endorsement to that effect.
That averment was denied on behalf of the respondent, and we find that the trial court has adequately dealt with the evidence on the record in that respect.
It will be sufficient for us to mention that the Election Commission took care to point out the importance of the requirement for the making and subscribing the oath or affirmation in their "Handbook for Returning Officers", and directed that the "authorised person" before whom that was done would "forthwith give a certificate to the candidate" that he had made and subscribed the oath before him on the date and hour mentioned in the certificate.
It has been emphasised that the certificate would be given to the candidate without his applying for it, for that would avoid all controversy later on as to whether he had taken the oath or not.
Annexure VI provides for the issue of that certificate in the portion which appears just below the perforated portion of the form of oath or affirmation prescribed by the Constitution.
It may be pointed out in this connection that the appellant admitted in his statement that he was given a slip by his proposer Jit Ram P.W. 7, in which it was mentioned that he should take oath or make the affirmation before the Returning Officer on May 19, 1977.
It is therefore quite clear that the oath or affirmation had not been made or subscribed at the time of the presentation of the nomination papers, and as the appellant was not able to produce the certificate of his making or subscribing the oath or affirmation before the Returning Officer thereafter, in the manner alleged by him, there is nothing wrong with the view taken by the trial court that he did not really do so, and we do not think it necessary to reappraise the evidence in that connection.
Issue No. 6 dealt with the question whether the respondent was guilty of the corrupt practice of bribery alleged in paragraph 11 of the petition.
The allegations were amended by the appellant, but a part of them were ordered to be deleted and there is no grievance in that respect.
The remaining allegation was to the following effect, "11.
That after the last Parliament Elections and installation of Janta Party Government at the Centre, it became evident that the State Government would be toppled and the Ministers of the Previous Congress Government and specially respondent No. 1 with a view to bribe the voters or the Constituency, he started giving large sum of dis 509 cretionary grants in the Constituency.
To name a few Bara Pind, Littran, Dalla etc.
He used his influence in the Department that the funds were released during the Elections.
This was done with the object of influencing the electors of those villages to vote in favour of respondent No. 1.
Respondent No. 1 went to village Bara Pind on 25 5 1977 at 5.00 p.m. and in the presence of Master Jasmel Singh handed over a cheque No. K 314781 dated 29 4 1977 for a sum of Rs. 20,000/ out of the accounts of Punjab State Sports Council to the lady Sarpanch Smt.
Banti and Biant Kaur and gave a lecture requesting the co villagers to vote for him, since he had given the money.
On 27 5 1977 respondent No. 1 went to village Littran at 4 p.m. and gave a cheque of Rs. 5,000/ in the presence of about 50 villagers including Chanan Singh Mistri to section Balwant Singh Bali a cheque No. K 314782 and called upon those present to vote for him.
The cheque was issued out the funds of Punjab State Sports Council".
It is hardly necessary to say that the allegations were traversed by the respondent and the trial court found that they had not been established.
The corrupt practice which was thus alleged against the respondent was one under section 123(1) (a) (b), according to which any gift, offer or promise by a candidate or his agent or by any other person with the consent of a candidate or his election agent of any gratification, to any person whomsoever, with the object, directly or indirectly of inducing an elector to vote or refrain from voting at an election is a corrupt practice.
In view of the allegations mentioned above, it appears that it was not the allegation of the appellant that the gift, offer or promise was made as a reward to an elector for having voted or refrained from voting within the meaning of sub cl.
(ii), and it could only be said to fall under sub clause (b) of section 1(A) as the allegation was that the bribery was meant to induce the electors to vote for the respondent.
It is nonetheless an essential ingredient of the definition of the corrupt practice of "bribery" that the gift, offer or promise should be by the candidate or his agent or by any other person with the consent of the candidate or his election agent.
Part VI of the Act deals with disputes regarding elections and Part VII deals with Corrupt Practices and Electoral Offences.
Section 79 of the Act provides that both in Parts VI and VII, unless the context otherwise requires, the definitions mentioned in it would govern the interpretation of those parts.
Clause 510 (b) of the section defines the expression ' candidate ' as follows, " 'Candidate ' means a person who has been or claims to have been duly nominated as a candidate at any election".
It has therefore to be seen whether the respondent had been duly nominated as a candidate at the election in question, or whether he claimed to be duly nominated at that election at the time when the corrupt practice was alleged to have been committed by him.
It is nobody 's case that the respondent laid any such claim at any point of time until his nomination paper was scrutinised; and he was held to be a validly nominated candidate only after the nomination was scrutinised by the Returning Officer on May 19, 1977.
He could not therefore be said to be a 'candidate ' within the meaning of section 123 read with section 79 of the Act until that date.
The allegation in paragraph 11 of the election petition was to the effect that the cheque of Rs. 20,000/ was delivered at village Bara Pind on May 25, 1977 and the votes were solicited on that date.
As regards village Littran, the allegation was that a cheque of Rs. 5,000/ was delivered on May 27, 1977 and votes were solicited.
It is not disputed however that the precise evidence against the respondent was that he made an order for the delivery of Rs. 20,000/ on April 17, 1977 in respect of village Bara Pind and on April 29, 1977 in respect of village Littran, in his capacity as the Minister for Revenue.
Both these orders were therefore made before the respondent was a candidate at the election in question and it is not disputed before us that he ceased to be a minister on April 30, 1977, when Punjab was brought under the President 's rule.
So even if it were assumed that the respondent sanctioned the two payments for the purpose of gaining popularity in Bara Pind and Littran villages, with an eye to his ultimate candidature from Nakodar Assembly constituency, it cannot be said that his action amounted to a gift, offer or promise by him as a "candidate" at the election in question so as to amount to the corrupt practice of bribery under cl.
(1) of section 123 of the Act.
As regards the alleged distribution of cheques on May 25 and May 27, 1977, it will be enough to say that even if it were presumed that the respondent was allowed to do so after he ceased to be a Minister, the mere delivery of cheques could not possibly amount to bribery when, as has been stated, there was no element of bargain in regard to it.
It may be mentioned that the trial court rightly took the view that it was necessary for the purpose of proving the corrupt practice 511 of bribery to establish that there was an element of "bargaining" in what the respondent was alleged to have done for Bara Pind and Littran.
Reference in this connection may be made to the decision of this Court in Ghasi Ram vs Dal Singh and others where it was held with reference to the decision in Amirchand vs Surendra Lal Jha and others that if a Minister redress the grievances of a class of the public or people of a locality or renders them any help, on the eve of an election, it is not a corrup practice unless he obtains promises from the voters in return, as a condition for his help.
It was also held that the "evidence must show clearly that the promise or gift directly or indirectly was made to an elector to vote or refrain from voting at an election", and that "if there was good evidence that the Minister bargained directly or indirectly for votes, the result might have been different".
The decision in Ghasi Ram 's case (supra) was followed in Om Prabha Jain vs Abnash Chand and another, Bhanu Kumar Shastri vs Mohan Lal Sukhandia and others and Chaitanya Kumar Adatiya vs Smt.
Sushila Dixit and others.
It was therefore necessary for the appellant to plead and prove that there was bargaining between the respondent and the voters and he did what he is alleged to have done in Bara Pind and Littran for that reason but, as the trial court has pointed out, there was no such allegation in the election petition.
So when the element of bargain was completely absent from the allegation against the respondent, the trial court was justified in holding that the alleged corrupt practice had not been established.
The trial court has considered the evidence on the record in this respect and its finding on issue No. 6 is quite correct and nothing worthwhile has been urged before us to require its reconsideration.
As there is no merit in this appeal, it is dismissed with costs.
N.K.A. Appeal dismissed.
[/INST]The appellant was a voter in the Constituency from which the Respondent was elected as a member of the State Legislative Assembly.
His nomination paper was rejected by the Returning Officer on the ground that it was filed beyond the time prescribed for filing nomination paper and that he had not made and subscribed an oath on it, as required by law.
In his petition before the High Court the appellant contended that (1) the filing of nomination paper late by 10 minutes could not be a ground for rejecting the nomination paper and it was not a defect of substantial character within the meaning of section 36(4) of the Act, (2) the allegation that he had filed to make and subscribe the oath before the Returning officer as required by article 173 of the Constitution was not true and (3) the respondent was guilty of corrupt practice of bribery.
The High Court rejecting all the contentions, dismissed the petition.
Dismissing the appeal, this court ^ HELD : 1(a) It is the requirement of law that the Returning officer should mention the time of presentation of the nomination papers.
The endorsement by the Returning officer shows that the nomination paper was presented on May 18, 1977 at 15.10 by the proposer, and that the endorsement to that effect was duly signed by the Returning officer.
[504 E F] (b) It is not correct to say that the delay in presentation of the nomination paper was not a ground for its rejection as it was not a defect of substantial character within the meaning of Section 36(4) of the Representation of the People Act.
In the face of the clear requirement of section 36(2)(b) of the Act, any other view would make the requirement for the presentation of the nomination paper before the last date and within the specified period of time, unworkable for it will not then be possible to draw a line upto which the delay in the delivery of the nomination papers could be condoned.
If the requirement of the law in that respect is not observed, and its breach is considered to be a defect which was not of a substantial character it may be permissible to go to the extent of arguing that the nomination paper may be filed even upto the date and time fixed for the scrutiny of the nominations.
That would not only cause administrative inconvenience but put the other candidate to a serious disadvantage for they would not be able to prepare themselves for any objection they may like to raise to the validity of the nomination, at the time of scrutiny of the nominations.
[505 H, 506 A C] 502 (c) The requirement that the nomination papers shall be delivered between the hours of eleven O 'clock in the forenoon and three O 'clock in the afternoon is mandatory and the Returning officer has no option but to reject the nomination paper as required by Section 36(2) of thee Act.
[505 G H] (2) The trial court held that the oath ar affirmation which was required to be made or subscribed by the candidate had not been made and subscribed at the time of the presentation of the nomination papers.
As the appellant was not able to produce the certificate of his making and subscribing the oath or affirmation before the Returning officer thereafter, in the manner alleged by him, there is nothing wrong with the view taken by the trial court that he did not really do so [508 A B, D E] (3) It is an essential ingredient of the definition of corrupt practice of "bribery" that the gift, offer or promise should be by the candidate or his agent or by any other person with the consent of the candidate or his Election Agent.
The trial court rightly took the view that it was necessary for the purpose of proving the corrupt practice of bribery to establish that there was an element of "bargaining" in what the respondent was alleged to have done for two villages.
When the element of bargain was completely absent from the allegation against the respondent, the trial court was justified in holding that the alleged corrup practice had not been established.
[809G, 510H, 511A, D E] Ghasi Ram vs Dal Singh and others ; , Amir Chand vs Surendra Lal Jha and others , Om Prabha Jain vs Abnash Chand and another ; ; Bhanu Kumar Shastri vs Mohan Lal Sukhadia and others ; ; Chaitanya Kumar Adatiya vs Smt.
Sushila Dixit and others , referred to.
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<s>[INST] Summarize the judgementCivil Appeal No. 3482 of 1984.
Appeal by Special Leave from the Judgment and Order dated the 8th May, 1984 of the Patna High Court in Second Appeal No. 182 of 1978.
Jayanarayan, Miss section Agarwal D.S. Mehra and R. P. Singh for the Appellant.
Lal Narain Sinha and D. P. Mukharji for the Respondent.
After hearing counsel for the parties we are clearly of the view that the judgment of the High Court cannot be sustained for two reasons.
Firstly, the High Court had earlier remanded the case to the trial court and called for a finding from the trial court on the question of partial eviction.
The trial court while recording its finding was of the view that the question of partial eviction should be considered in the light of the requirement of the landlord as deposed to by him.
In doing so, the High Court failed to take into account the proviso to Section 12 (1) (c) of the Bihar Building (Lease, Rent & Eviction) Control Act of 1977, which in terms enjoins that what is necessary to be considered is the 'reasonable ' requirement of the landlord and whether it would be 'Substantially ' satisfied by evicting the tenant from a part only of the premises.
The Court has therefore, in the first instance, to determine the extent of the premises which the landlord "reasonably" requires.
Determine it objectively and not on the basis of his ipse dixit or his mere desire to occupy as much as he wants.
But the Court has to furthermore apply a test as to whether such requirement, as the Court considers reasonable, will be 'substantially ' satisfied (not fully satisfied) by ordering partial eviction.
This vital aspect has been 640 altogether overlooked by the trial court.
Secondly, since the High Court had directly called for a finding from the trial court itself, the High Court should have scrutinized the said finding with special reference to the question of partial eviction even on facts as the finding of the trial court standing on its own (not confirmed by appellate court) is not conclusive on facts even in a second appeal.
This is so because the High Court had called for a finding of fact from the trial court bypassing the appellate court and thus deprived the right of appeal to the District Judge (last court on facts) which, for aught we know, might not have agreed with the trial court and may have considered the question from the point of view indicated by us, viz, giving full effect to the concept of reasonable extent of the requirement from the perspective of 'substantials ' satisfaction of such requirement as considered to be reasonable objectively.
Only in case the District Judge would have agreed with the finding of the trial court then it may have become a finding of fact which was binding on the High Court in second appeal.
Besides the question as to the connotation of the word 'substantial ' was itself a substantial point of law there being no decision of the Patna High Court on this specific point.
Other Acts in various States do not embody the concept of "substantial" satisfaction.
These decision would therefore be of no avail in the context of the facts of the present case.
In these circumstances, it cannot be said that the finding of the trial court, which is not the final court on facts, is conclusive and immune from the scrutiny of the High Court even in a second appeal.
We therefore, allow appeal, set aside the decree of the High Court and remand the case to the High Court to decide the question fresh after considering the evidence on record in the light of the aforesaid observations.
The appeal is disposed of accordingly.
In the meantime there will be stay of dispossession.
The High Court is requested to expedite the hearing of the case.
[/INST]Section 2(k) of the (the Act, for short) defines an 'industrial dispute ' to mean any dispute or difference between employers and employers, or between employers and workmen or between workmen and workmen, which is connected with the employment or non employment or the terms of employment or with the conditions of labour, of any person.
Section 7 A of the Act provides that the appropriate Government may by notification in the Official Gazette constitute one or more Industrial Tribunal for the adjudication of industrial disputes relating to any matter whether specified in the Second Schedule or the Third Schedule.
Entry at plecitum 7 in the Third Schedule reads 'Classification by grades '.
Sec, 4 of the (1946 Act, for short) also requires the employer in an industrial establishment to make provision in the standing orders for every matter set out in the Schedule which is applicable to the industrial establishment.
The Schedule provides, amongst others, for making provision in the standing orders for classification of workmen for example, whether permanent, temporary apprentices, probationers or badlis.
The Government of Maharashtra referred to the Industrial Tribunal a dispute between appellants workmen and the respondent employer as to whether "All the employees who are acting continuously in higher grades for more than three months should be confirmed in the respective grades immediately and all the benefits should be given to the concerned employees with retrospective effect had they been confirmed immediately after three months of their continuous acting.
" The respondent raised a preliminary objection that the dispute was not an industrial dispute within the meaning of the expression in the Act, because if the demand as raised is conceded, it would tantamount to allowing the workmen to decide the work force required in various grades which is a managerial function.
The Industrial Tribunal up 642 held the preliminary objection and rejected the Reference as incompetent holding that the demand shorn of verbiage is one for promotion which is the managerial function and therefore cannot be the subject matter of industrial adjudication.
Hence this appeal by special leave.
Allowing the appeal and remitting the matter to the Tribunal for disposing of the Reference on merits, ^ HELD: (1) It is well settled that certified Standing Orders under the 1946 Act which have a statutory flavour prescribe the conditions of service and they shall be deemed to be incorporated in the contract of employment of each workman with his employer.
Since there is a statutory obligation on the employer in an 'industrial establishment ' to classifi workmen under the 1946 Act, the classification would be permanent, temporary, apprentices, probationers and all other known categories, such as, acting, officiatingetc.
In respect of the classification, a dispute can conceivably arise between the employer and the workmen because failure of the employer to carry out the statutory obligation would enable the workman to question his action which will bring into existence a dispute.
It would become an industrial dispute because it would be connected with the condition of employment.
It becomes a condition of employment because necessary conditions of service have been statutorily prescribed one such being classification of workmen.
Therefore, without anything more where the demand of the workmen was to confirm employees employed in an acting capacity in a grade, it would unquestionably be an industrial dispute.
[646C G] Sudhir Chandra Sarkar vs Tata Iron & Steel Co. Ltd., , referred to.
(2) Even if one does not reach the conclusion that the dispute raised in question would be an industrial dispute by reference to the Standing Orders certified under the 1946 Act, a mere reference to Entry 7 of the Third Schedule read with Sec.
7 A would clinch the issue.
Entry at plecitum 7 in the Third Schedule reads "Classification by grades".
If there is any dispute in respect of classification by grades, it will necessarily be an industrial dispute.
This would flow indisputably from the language of section 7 A which provides for setting up of Industrial Tribunal for adjudication of industrial dispute relating to any matter specified, amongst others, in the Third Schedule.
In the instant case, the demand of the workmen was for classification of the workmen officiating in the higher grades either as permanent or temporary and they should not be continued indefinitely as temporary by making them permanent on rendering of continuous service in the higher grade for a period of three months.
The demand involves both the classification of employees and classification by grade.
Therefore, the Industrial Tribunal overlooked this obvious fact situation by mis interpreting the demand and reached a wholly untenable conclusion that the demand was for promotion which appeared to the Tribunal to be a managerial function and beyond the reach of adjudication.
[647 C E] (3) Even on the footing of the law as it stands at present in this country that promotion is a management function, the industrial dispute referred 643 to the Tribunal was not one for claiming promotion.
The Tribunal committed a grave error in so misinterpreting the dispute referred to it.
The Tribunal overlooked the fact that the demand was in respect of workmen already promoted i.e. in respect of whom managerial function of selecting personnel for promotion had been already performed.
The demand was in respect of already promoted workmen, may be in an officiating capacity, for their classification from acting or temporary to confirmed, that is, permanent, in the higher grade to which they were promoted, after a reasonable period of service which according to the Union must be three months of service.
By no canon of construction this demand could be said to be one for promotion.
[550 B D] Management of Brooke Bond India (P) Ltd. vs Workmen ; and The Hindustan Lever Ltd. vs The Workmen ; held inapplicable.
In the decisions of this Court in Management of Brooke Bond India (P) Ltd. vs Workmen ; and The Hindustan Lever Ltd. vs The Workmen it is assumed without controversy that promotion is a managerial function.
But in view of the decision of this court in All India S.M. and A.S.M. 's Association vs General Manager, Central Railway ; , it is time to reconsider this archaic view of the laissez faire days that promotion is a management function.
The expression "terms and conditions of employment" would ordinarily include not only the contractual terms and conditions but those terms which are understood and applied by the parties in practice or habitually or by common consent without ever being incorporated in the contract.
[649 E G] British Broadcasting Corporation vs Hearn & Others, and R. Industrial Disputes Tribunal & Anr.
vs Ex parte Queen Mary College University of London, , referred to.
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<s>[INST] Summarize the judgementAppeals Nos. 702 and 703 of 1967.
Appeals from the judgment and order dated September 28, 1960 of the Madhya Pradesh High Court in Misc.
First Appeals Nos. 12 and 16 of 1958.
M. C. Chagla, Rameshwar Nath and Swaranjit Ahuja, for the appellant (in both the appeals).
section T. Desai and D. N. Mukherjee, for respondent No. 1 (in both the appeals).
I. N. Shroff, for respondents Nos. 2 and 3 (in C.A. No. 703 of 1967) and respondent No. 2 (in C.A. No. 702 of 1967).
The Judgment of the Court was delivered by Grover, J.
These appeals which have been brought by cer tificates from a common judgment of the Madhya Pradesh High Court arise out of certain acquisition proceedings.
The facts may be stated.
Plots Nos. 670, 671 and 735 situate in Madan Mahal Extension area, Jabalpur were acquired by the State Government under the Land Acquisition Act 1894, hereinafter called the 'Act ', for constructing the Home Science College.
In the present appeals we are concerned mainly with Plot No. 670.
On August 31, 1940, a deed of lease had been executed on behalf of the Municipal Corporation granting a lease free of premium to the Hitkarini Sabha, Jabalpur, which is the appellant before us.
The laese was in respect of 10 Acres of land comprising Plot No. 670 and another strip of land measuring 0.621 Acres as described in the deed and delineated in the plan annexed thereto.
The period of the lease was 30 years and the purpose for which the land was to be used was for locating and running the Hitkarini City College.
Amongst other terms and conditions the, appellant was to pay a yearly rent of Rs. 5 / , for 1 0 acres and Re. 1 / for the other strip of land besides, paying, and discharging all rates and taxes etc.
The appellant, on the expiry of the lease, was entitled 495 to have the same renewed on , such terms and conditions as might be agreed between the parties.
The appellant had built a, college hostel on the aforesaid land and had also used the attached ground as playground for students.
The Collector of Jabalpur, by his award dated July 18, 1955 dealt with the claims filed by the appellant and the Municipal Corporation and after disposing of certain preliminary objections he assessed the compensation for the lands in all the three plots at As.0/8/ per sq.
According to the Collector the appellant was not merely a lessee or tenant at will as contended by the Corporation but was a lessee for the term mentioned in the lease deed dated August 31, 1940, the lease having been made for a specific purpose, i.e. for locating and running a City College.
As regards Plot No. 670 the apportionment was made between the appellant The appellant and the Corporation were dissatisfied with the award of the Collector.
Applications for reference were made under section 18 (1) of the Act.
The Additional District Judge held that the price should be 10 As.
per sq.
and that the appellant and the Municipal Corporation were entitled to equal compensation for plot No. 670.
The Corporation and the appellant filed appeals to the High Court.
The decision of the Additional District Judge, fixing the price of the land at As.
0/8/ per sq.
ft. was affirmed.
As regards the dispute regarding apportionment the High Court held, following a decision of a Division Bench of the same court in Dagdulal vs Municipal Committee, Burhar(1), that the lease deed having been executed by the Administrator during the time when the Corporation stood superseded was ineffective to convey the lease hold interest to the appellant.
However, the appellant had been paving refit at the stipulated rate which had been accepted for a long time by the Corporation.
It amounted, therefore, to the creation of a tenancy by necessary implication and the relationship of landlord and tenant came into existence.
On the character of tenancy, whether it should be deemed to be from year to year or whether it should be on terms contained in the lease deed, the High Court held that the tenancy continued on the terms contained in the lease deed.
The High Court then proceeded to say : "The lease deed in this case was executed on 31 8 1940 and was for a period of thirty years.
It was, therefore to remain in force for 15 years more after the date of acquisition.
There is a renewal clause which has been already quoted above.
The lessee is entitled for renewal "on such terms and conditions as, may be agreed to between the parties".
It appears to.
us that the clause (1) 496 is uncertain and vague and does not form a valid contract for renewal of the lease.
Normally in a covenant for renewal there is an express agreement that the lease would be continued on the same terms and conditions subject to a reservation that the rent way be enhanced under certain circumstances.
In the instant, case, ill the terms and conditions have been left to the agreement of patties which may not take place at all.
Although a renewal is contemplated no terms on which it can be granted have been fixed between the parties.
Under section 29 of the Indian Contract Act such a contract cannot be enforced.
, It has been held in Ramaswami vs Rjajagopala (I.L.R. I I Mad. 260) that a lease whereby a tenant agreed to pay whatever rent the Landlord might fix was void for uncertainty".
The apportionment was made on acturial basis between the appellant and the Corporation in the ratio of 1038 : 962.
Before us two matters have been sought to be raised.
One one relates to the quantum of compensation awarded by the learned Additional District Judge and the other to the apportionment between the appellant and the Corporation.
We shall first deal with apportionment.
It has been argued that since the High Court had held that the tenancy continued on the terms contained in the lease deed benefit should have been given of the renewal clause also.
The High Court had taken the view that that clause was uncertain and vague and did not form a valid contract for the renewal of the lease.
Our attention has been invited to a judgment of the Mysore High Court in H. V. Rajan vs C. N.Gopal & Others.(1) There the relevant portion of the renewal clause was "lessee shall have the option of five years but subject only to such terms and conditions as may be mutually agreed upon".
It was observed that ordinarily the renewal clause in a lease deed was an important term of the agreement and the courts would be reluctant to ignore that clause on the ground that it was vague unless on a reasonable construction no meaning could be attached to it.
An agreement to renew the lease, without more, must be deemed to be an agreement to renew as per the original terms.
Even if the renewal provided was dependent on the agreement between the parties the clause merely provided for an agreement on reasonable terms.
If the parties could not agree as to those terms the courts could step in.
In our judgment it is altogether unnecessary to decide the true scope and effect of the renewal clause contained in the deed executed on August 31, 1940.
At the time the lease was executed (1) A.I.R. 1961 Mys.
497 there used to be a Municipal Committee in Jabalpur Aparently it became a Corporation later.
The Committee was superseded in Charge of the Committee Jabalpur as also Secretary of the Municipal Committee had signed the lease on behalf of that Committee.
In the decision of the Madhya Pradesh High Court in Dagdulal 's(1) case the view had been expressed that so long as Municipal Committee was not reconstituted the ownership of the property stood transferred by operation of law to the State Government and therefore the Administrator had no power whatsoever to sell the property which had vested in the Government.
The Additional District Judge had observed that the lease deed had been executed in pursuance of a resolution which had already been passed by the Municipal Committee.
The High Court, however, found on the evidence produced before the Additional District Judge that the final resolution passed by the Municipal Committee was only for the grunt of a license and not a lease to the appellant.
The deed of lease, therefore, was, held to be ineffective for conveying any lease hold interest to it.
But still the High Court held that the tenancy was to last for a period of thirty years.
We are wholly unable to comprehend how any lease could be spelt out of the deed dated August 31, 1940 for a period of 30 years containing the renewal clause which has already been mentioned.
If the officer who executed the lease deed had no power to lease out the property in question the grant of the lease was wholly null and void.
It is true that by acceptance of the rent from the appellant the relationship of landlord and tenant came into existence between the parties but Mr. Chagla for the appellant has not been able to show how a lease for a period of 30 years together with a renewal clause could be held to have been created or to have come into existence.
It may be mentioned that we are not concerned with the period of 30 years which has already been taken into consideration by the High Court because no appeal has beep filed on that point by the Corporation.
The only matter which requires determination is whether the High Court, while deciding the question of apportionment, should have given due affect to the renewal clause.
In our opinion the High Court could riot have done so.
If the so called deed of lease dated August 31, 1940 was wholly ineffective and void for the purpose of demising the land for a period of 30 years one could only look at the provisions of the Transfer of Property Act for determining the term for which the tenancy came into existence.
Under section 106 of that Act the ,tenancy, in the present case, could be only from month to month because the immovable property had not been leased out (1) 498 for agricultural or manufacturing purpose in which case the lease would have been from year to year.
We are therefore unable to accede to the contention that the renewal clause in the lease deed dated August 31, 1940 was effective and should have been taken into consideration while making the apportionment between the appellant and the Corporation.
The next question relating to quantum can be disposed of shortly.
The sole criticism of Mr. Chagla is that the potential value of the plot in question was not taken into consideration.
It is true, as pointed out in Raja Vyrigherla Marayana Gajapatiraju vs The Revenue Divisional Officer Vizagapatam(1) that where the land to be valued possesses some unusual or unique features as regards its position or its potentialities the court determining the market value will have to ascertain as best as it can from the materials before it what a willing vendor might reasonably expect to obtain from a willing purchaser for the land in that particular position and with those particular potentialities.
It has been urged that Plot No. 670 had a special situation or position in view of its size, locality, nearness to business centre and the Madan Mahal Station.
But the value which was fixed by the Additional District Judge and the High Court was fixed by reference to sales of plots of comparable nature.
The following portion of the judgment of the High Court shows how the matter was dealt with "We may observe that the two witnesses relied upon by the appellants purchased small plots at the rate of Re. 1/ per sq.
As the map of the Wright Town Madan Mahal Extension area produced by the Corporation before us shows, these plots are in a fully developed lay out having roads and drains round about.
We had asked the Corporation to calculate how much area out of the acquired sites would be required to be left open for roads and drains and they have calculated that about 70,000 sq.
ft. would have to be left open for this pur pose.
Obviously, therefore, it is only the remaining plot which would have value as building sites.
Besides leaving so much area open, costs will have to be incurred in developing the roads, and drains for which the Corporation has estimated the cost to be Rs. 8,500/ .
Considering all these factors and also calculating the built up area in the lay outs surroundings the acquired land, we find that it is only eighty per cent of the land which can be sold as building site.
On these calculations if the average price of the plots sold in the locality is taken to be /12/ per sq.
the (1)66 I.A. 104.
499 overall price of the acquired land without roads and drains would work out to a little less than / 9/ per sq.
To put the matter, in a different way, the value of / 10/ per sq.
found by the Additional Judge would work out to a little over /12/ per sq.
ft., if only the area which could be built upon is considered saleable as building site.
We,therefore, find that the price at /10/per sq.
allowed by the Additional District judge, is not unreasonable; if anything it errs on the generous side".
We have no manner of doubt that the High Court had taken all the factors into consideration while assessing the value.
In the result the appeals fail and are dismissed.
There will be no order as to costs.
Appeals dismissed.
[/INST]The Municipal Corporation of Jabalpur purporated to grant a leave of certain land to the appellant Sabha.
According to the document the period of lease was 30 years.
The appellant was entitled on the expiry of the lease to, have the same renewed on such terms and conditions as might be agreed between the parties, The appellant made a college hostel on the aforesaid land and had also used the attached ground as playground for students.
A portion of the said land was sought to be acquired by the State Government under the Land Acquisition Act, 1894 for constructing the Home Science College.
The Collector of Jabbulpur by his award dated July 18, 1955 dealt with the claims filed by the appellant and the Municipal Corporation and assessed the compensation at As.
/8/ per sq.
Apportionment was made between the appellant and the Corporation on the footing that the appellant was not merely a tenant at will as contended by the Corporation but was a lessee for the terms mentioned in lease.
The appellant and the Corporation made applications for reference under section 18(1) of the Act.
The Additional District Judge held that the price should be As. /10/ per.
sq ft.
and that the appellant and ' the Municipal Corporation were entitled to equal compensation.
The Corporation and the appellant filed appeals to the High Court.
The decision of the Addl.
District Judge fixing the price of the land As. /10/ per sq.
ft. was affirmed.
As regards the dispute regarding apportionment the High Court held that the lease deed having been exempted by the Administrator during the time when the Corporation stood superseded was ineffective to convey the leasehold interest to the appellant.
However, the appellant was paying the rent which had been accepted for a long time by the Corporation.
there was thus a tenancy by necessary implication.
The High Court further held that the lease was to continue for the period of 30 years mentioned in the deed but there was no valid contract for renewal of least because the clause relating to that was vague and uncertain.
The apportionment was made on acturial basis between the appellant and the Corporation in the ratio of 1038 : 962.In appeal before the Court the quest ions relating to quantum of compensation and the apportionment between the appellant and the Corporationfell for consideration.
HELD : (1) No lease could be spelt out of the deed dated August 31, 1940 for a period of 30 years containing the renewal clause.
If th officer who executed the lease deed had no power to lease out the property in question the grant of the lease was wholly null and void.
It is true that by the acceptance of rent from the appellant the relationship of landlord and tennant came into xistence.
But that did not show that a lease deed for a period of 30 years with a renewal clause had come into existence.
[497E] Since the lease deed was ineffective the lease could be under the provisions of section 106 of the 'transfer of 'Pro@y Act, only from.
mouth 494 to month because the immovable property had not been leased out for agricultural or manufacturing purpose in which case it would have been from year 'Lo year.
Therefore the :contention that the renewal clause was effective and should have been taken into consideration while making the apportionment between the appellant and the Corporation could not be accepted.
(The question whether the High Court was right in holding that the period of lease was 30 years was not gone into because the Corporation had filed no appeal against that portion of the decision.
[497H] Dagdulal vs Municipal Committee, Burhar, (19 '60) M.P.L.J. 627 and H. V. Ranan vs G. N. Gopat & Ors.
A. I. R. 1961 Mys. 29, referred to.
(2) The value which was fixed by the Addl.
District Judge and the High Court was fixed by reference to sales of plots of comparable nature.
There was no doubt that the High Court had taken all the factors into consideration while as essing the value and there was no reason to interfere in this regard.
[499A C] Raja Vyigheria Narayana Gajapatiraju vs The Revenue Divisional Officer Vizagapatam, 66 I.A. 104, referred to.
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<s>[INST] Summarize the judgementCivil Appeal No. 2994 of 1979.
Appeal by Special Leave from the Judgment and Decree dated 11 7 1979 of the Patna High Court in Civil Writ Petition No. 1936 of 1979.
Dr. Y. section Chitale and P. P. Singh for the Appellant.
R. B. Datar and Miss A. Subhashini for the Respondent.
The Collector of Central Excise & Customs, Patna, invited, by an advertisement dated 30th July, 1975, applications for filling up some posts of Inspector of Central Excise.
Among those eligible for selection were "sportsmen who have represented the Universities in the Inter University Tournament conducted by the Inter University Sports Board.
" The appellant, who was studying in the M. A. (Political Science) in the Mithila University, was one of the applicants and he was directed to appear for a physical test and an interview.
On 12th December, 1975 the Collector of Central Excise and Customs issued a letter informing the appellant that he had been selected for appointment in a temporary vacancy of Inspector, and that he would be on probation for a period of two years.
The appellant joined the post and continued therein.
On 30th April, 1976 he received a letter from the Assistant Collector (Headquarters) Central Excise pointing out that he had submitted attested copies only of the sports certificates along with his application for appointment and he was directed to submit the original certificates.
The appellant forwarded the original certificates.
Nothing happened for some time, and the appellant continued in the post without any objection.
It was almost a year later that the Assistant Collector (Headquarters) wrote to the appellant to supply details of the tournament at 732 which he had represented the University.
On 27th February, 1978 the appellant referred to the Sports certificate date 28th July, 1975 issued by the Deputy Registrar of the L. N. Mithila University, Darbhanga.
The original certificate had been sent by him to the Collector, along with the other certificates on 5th May, 1976.
The appellant explained that he had qualified and was selected, to represent the Mithila University in the Inter University Tournament to be held at Banaras Hindu University, Varanasi, in the year 1972 but that a serious illness had intervened and prevented him from actually participating in the tournament.
He pointed out that this had been made clear by him during the interview for selection before the Appointments Committee and that as he had been discharging his duties to the satisfaction of his superior officers ever since December, 1975 and had, in fact, captained the sports team on behalf of the Excise Department at Calcutta for two years, he was astonished that the question should be raised now.
Another fourteen months later, on 16th June, 1979, the Assistant Collector (Headquarters) made an order, purporting to be under the proviso to sub rule (1) of Rule 5 of the Central Civil Service (Temporary Service) Rules 1965, terminating the services of the appellant.
The appellant then applied for relief under Article 226 of the Constitution to the High Court against the order, but the High Court has summarily dismissed the writ petition.
In this appeal, the appellant contends that he fulfiled the conditions of eligibility and that there was no justification for terminating his services.
The case of the respondents is that the appellant was appointed under a mistake inasmuch as the condition of eligibility required actual representation of a University in an Inter University Tournament conducted by the Inter University Sports Board and that, therefore, the appellant was not entitled to any relief against the termination of his services.
Having given the matter our careful consideration, it seems to us that the respondents have proceeded on a technical view of the matter wholly unjustified by the intent behind the condition of eligibility.
The condition required that the applicant should have been a sportsman who had represented his university in an Inter University Tournament conducted by the Inter University Sports Board.
There is no dispute before us that the appellant did qualify, and was selected, for representing the Mithila University in the Inter University Tournament at the Banaras Hindu University in the year 1972.
All that remained was that he should have participated in the tournament.
Unfortunately, for him, he fell ill and was unable to do so.
The fact that he fell ill, 733 and for that reason was unable to represent his university, is not disputed.
There is nothing to show that but for that illness he would not have actually taken part in the tournament.
It seems to us that on a reasonable view of the facts the appellant should be taken to have fulfilled the condition of eligibility.
The terms and conditions of service are intended to be construed reasonably, and too technical a view can defeat the essential spirit and intent embodied in them.
The intention was to appoint meritorious sportsmen to the posts, and that object is served if a person who had qualified and was selected for representing his university in an Inter University Tournament conducted by the Inter University Sports Board is appointed, notwithstanding that he was actually prevented from participating because of reasons beyond his control.
We have no doubt that on the interpretation which has found favour with us the appellant will be entitled to a certificate of eligibility, a requirement postulated by the terms of his appointment.
The appeal is allowed, the order dated 16th June, 1979 made by the Assistant Collector (Headquarters) is quashed and the respondents are directed to treat the appellant as continuing in service.
The appellant is entitled to his costs throughout.
S.R. Appeal allowed.
[/INST]The petitioners in their writ petitions to this Court alleged that they were carrying on small scale industries for the manufacture of resin and turpentine oil and that they applied to the Government for allotment of resin for their industries but the Government referring to their policy decision of March 20, 1978 refused to make any allotment, and that they purchased raw material from the open market and managed to run their industries.
They further alleged that while they were refused allotment of supply of raw materials, the State, respondent No. I made allotments to respondent nos.
4 to 16 n although most of them were not even formally registered at the time of making the impugned orders of allotment and that they were consequently adversely discriminated against, while respondent nos.
4 to 16 were favoured and as such the impugned orders of allotment were liable to be struck down " violative of Article 14 of the Constitution of India.
The State, respondent No. 1 contested the writ petition, denied the material allegations of the petitioners and alleged that the allocations were made in conformity with the State Industrial Policy decision of securing the balanced economic and regional development of the State that there was a preponderance of industries in the Jammu Region, and that the industries of the petitioners as well as respondent nos.
4 to 16 were also functioning in that region.
Allotments of resin were made districtwise, 110 applications were received and considered and allotment was made to respondents nos.
4 to 16.
On the question whether the orders of the 1st respondent allotting quotas of resin to respondent nos.
4 to 16 were arbitrary and violative of Article 14 of The Constitution.
^ HELD : 1(i) Respondent No. 1 has not explained as to how and on what basis if any, the allotments were made by the impugned orders in favour of the new allottees respondent nos.
1 to 16 whose industries were located in the Jammu region.
[847 C] (ii) Although the State Government has taken reliance on the State Industrial Policy decision, it does not appear to have followed it in practice, except in the cases of five respondents.
No reasonable basis had been adopted in making the allotments in favour of the new allottees and denying the allotments to the petitioners.
[84913 F] 842 2.
The rule of equality does not mean mathematical equality.
It permits of practical inequalities.
What is needed is that the selection of quota seekers as in the instant case should have a rational relation lo the object sought lo be achieved in the industrial policy decision of the State.
If the selection or differentiation is arbitrary and lacks a rational basis it offends Article 14.
[849 D] 3.
"Equality before the Law" or "equal protection of the laws` ' within the meaning of Article 14 of the Constitution of India means absence of any arbitrary discrimination by the law or in their administration.
No undue favour to one or hostile discrimination to another should be shown.
A classification is reasonable when it is not an arbitrary selection but rests on differences pertinent to the subject in respect of which the classification is made.
The classification permissible must be based on some real and substantial distinction, a just and reasonable relation to the objects sought to be attained and cannot be made arbitrary and without any substantial basis.
[848 H 849 A] State of West Bengal vs Anwar Ali, [19521 SCR 284 referred to.
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<s>[INST] Summarize the judgementCivil Appeal No. 403 of 1956.
Appeal from the judgment and order dated April 11, 1956, of the Madras High Court in Appeal No. 145 of 1952, arising out of the judgment and decree dated March 31, 1951 of the Court of the Subordinate Judge, South Kanara in Original Suit No. 24 of 1949.
M.K. Nambiyar, M. L. Naik, J. B. Dadachanji, S.N. Andley, Rameshwar Nath and P. L. Vohra, for the appellant in C.A. No. 403 of 1956 and respondents in special leave Petition No. 327 of 57. 897 C. K. Daphtary, Solicitor General of India, B. B. L. Iyengar and T. M. Sen, for the respondents in SI No. 403 of 56 and petitioner in special leave petition No. 327 of 1957.
November 8.
The following Judgment of the Court was delivered by VENKATARAMA AIYAR J.
The substantial question of law, which arises for decision in this appeal, is whether the right of a religious denomination to manage its own affairs in matters of religion guaranteed under article 26(b), is subject to, and can be controlled by, a law protected by article 25(2)(b), throwing open a Hindu public temple to all classes and sections of Hindus.
In the District of South Kanara which formed until recently part of the State of Madras and is now comprised in the State of Mysore, there is a group of three villages, Mannampady, Bappanad and Karnad collectively known as Moolky Petah; and in the village of Mannampady, there is an ancient temple dedicated to Sri Venkataramana, renowned for its sanctity.
It is this institution and its trustees, who are the appellants before us.
The trustees are all of them members of a sect known as Gowda Saraswath Brahmins.
It is said that the home of this community in the distant past was Kashmir, that the members thereof migrated thence to Mithila and Bihar, and finally moved southwards and settled in the region around Goa in sixty villages.
They continued to retain their individuality in their new surroundings, spoke a language of their own called Konkani, married only amongst themselves, and worshipped idols which they had brought with them.
Subsequently, owing to persecution by the Portuguese, they migrated further south, some of them settling at Bhatkal and others in Cochin.
Later on, a chieftain who was ruling over the Moolky area brought five of these families from Bhatkal, settled them at Mannampady, erected a temple for their benefit and installed their idol therein, which came to be known as Tirumalaivaru or Venkataramana, and endowed lands therefor.
In course of time, other families of Gowda 398 saraswath Brahmins would appear to have settled in the three villages constituting Moolky, and the temple came to be managed by members of this community residing in those villages.
In 1915, a suit, 0. section No. 26 of 1915, was instituted in the Court of the Subordinate Judge of South Kanara under section 92 of the Code of Civil Procedure for framing a scheme for this temple.
Exhibit A 6 is the decree passed in that suit.
It begins by declaring that "Shri Venkataramana temple of Moolky situated in the village of Mannampadi, Nadisal Mangane, Mangalore taluk is an ancient institution belonging to the Gowda Saraswath Brahmin community, i.e., the Commudity to which the parties to the suit belong residing in the Moolky Petah, i.e., the villages of Bappanad, Karnad and Mannampadi according to the existing survey demarcation".
Clause 2 of the decree vests the general control and management of the affairs of the temple, both secular and religious, in the members of that community.
Clause 3 provides for the actual management being, carried on by a Board of Trustees to be elected by the members of the community aforesaid from among themselves.
Then follow elaborate provisions relating to preparation of register of electors, convening of meetings of the general body and holding of elections of trustees.
This decree was passed on March 9, 1921, and it is common ground that the temple has ever since been managed in accordance with the provisions of the scheme contained therein.
This was the position when the Madras Temple Entry Authorisation Act (Madras V of 1947), hereinafter referred to as the Act, was passed by the Legislature of the Province of Madras.
It will be useful at this stage to set out the relevant provisions of the Act, as it is the validity of section 3 thereof that is the main point for determination in this appeal.
The preamble to the Act recites that the policy of the Provincial Government was "to remove the disabilities imposed by custom or usage on certain classes of Hindus against entry into Hindu temples in the Province which are open to the general Hindu public".
899 Section 2(2) defines 'temple ' as "a place by whatever name known, which is dedicated to or for the benefit, of or used as of right by the Hindu community in" general as a place of public religious worship".
Section 3 (1) enacts that, "Notwithstanding any law, custom or usage to the contrary, persons belonging to the excluded classes shall be entitled to enter any Hindu temple and offer worship therein in the same manner and to the same extent as Hindus in general; and no member of any excluded class shall, by reason only of such entry or worship, whether before or after the commencement of this Act, be deemed to have committed any actionable wrong or offence or be sued or prosecuted therefor.
Section 6 of the Act provides that, "If any question arises as to whether a place is or is not a temple as defined in this Act, the question should be referred to the Provincial Government and their decision shall be final, subject however to any decree passed by a competent civil court in a spit filed before it within six months from the date of the decision of the Provincial Government".
It is the contention of the appellants and that, in our opinion, is well founded that the true intent of this enactment as manifest in the above provisions was to remove the disability imposed on Harijans from entering into temples, which were dedicated to the Hindu public generally.
Apprehending that action might be taken to put the provisions of this Act in operation with reference to the suit temple, the trustees thereof sent a memorial to the Government of Madras claiming that it was a private temple belonging exclusively to the Gowda Saraswath Brahmins, and that it therefore did not fall within the purview of the Act.
On this, the Government passed an order on June 25, 1948, Exhibit B 13, that the temple was one which was open to all Hindus generally, and that the Act would be applicable to it.
Thereupon, the trustees filed the suit, out of which the present appeal arises, for a declaration that the Sri Venkataramana temple at Moolky was not a 900 temple as defined in section 2(2) of the Act.
It was alleged in the plaint that the temple was founded for the benefit of the Gowda Saraswath Brahmins in Moolky Petah, that it had been at all times under their management, that they were the followers of the Kashi Mutt, and that it was the head of the Mutt that performed various religious ceremonies in the temple, and that the other communities had no rights to wor ship therein.
The plaint was filed on February 8, 1949.
On July 25, 1949, the Province of Madras filed a written statement contesting the claim.
Between these two dates, the Madras Legislature had enacted the Madras Temple Entry Authorisation (Amendment) Act (Madras XIII of 1949), amending the definition of ,temple ' in section 2(2) of Act V of 1947, and making consequential amendments in the preamble and in the other provisions of the Act.
According to the amended definition, a temple is "a place which is dedicated to or for the benefit of the Hindu community or any section thereof as a place of public religious worship".
This Amendment Act came into force on June 28, 1949.
In the written statement filed on July 25, 1949, the Government denied that the temple was founded exclusively for the benefit of the Gowda Saraswath Brahmins, and contended that the Hindu public generally had a right to worship therein, and that, therefore, it fell within the definition of temple as originally enacted.
It further pleaded that, at any rate, it was a temple within the definition as amended by Act XIII of 1949, even if it was dedicated for the benefit of the Gowda Saraswath Brahmins, inasmuch as they were a section of Hindu community, and that, in consequence, the suit was liable to be dismissed.
On January 26, 1950, the Constitution came into force, and thereafter, on February 11, 1950, the plaintiffs raised the further contention by way of amendment of the plaint that, in any event, as the temple was a denominational one, they were entitled to the protection of article 26, that it was a matter of religion as to who were entitled to take part in worship in a temple, and that section 3 of the Act, in so far as it provided for 901 the institution being thrown open to communities other than Gowda Saraswath Brahmins, was repugnant to article 26(b) of the Constitution and was, in consequence, ' void.
On these pleadings, the parties went to trial.
The Subordinate Judge of South Kanara, who tried the suit, held that though the temple had been originally founded for the benefit of certain immigrant families of Gowda Saraswath Brahmins, in course of time it came to be resorted to by all classes of Hindus for worship, and that accordingly it must be held to be a temple even according to the definition of temple ' in section 2(2) of the Act, as it originally stood.
Dealing with the contention that the plaintiffs had the right under article 26(b) to exclude all persons other than Gowda Saraswath Brahmins from worshipping in the temple, he held that " matters of religion " in that Article had reference to religious beliefs and doctrines, and did not include rituals and ceremonies, and that, in any event, articles 17 and 25(2) which had been enacted on grounds of high policy must prevail.
He accordingly dismissed the suit with costs.
Against this decision, the plaintiffs preferred an appeal to the High Court of Madras, A. section No. 145 of 1952.
It is now necessary to refer to another litigation inter partes, the result of which has a material bearing on the issues which arise for determination before us.
In 1951, the Madras Legislature enacted the Madras Hindu Religious and Charitable Endowments Act, (Madras XIX of 1951) vesting in the State the power of superintendence and control of temples and Mutts.
The Act created a hierarchy of officials to be appointed by the State, and conferred on them enormous powers of control and even management of institutions.
Consequent on this legislation, a number of writ applications were filed in the High Court of Madras challenging the validity of the provisions therein as repugnant to articles 19, 25 and 26 of the Constitution, and one of them was Writ Petition No. 668 of 1951 by the trustees of Sri Venkataramana Temple at Moolky.
They claimed that the institution being a denominational one, it had a right under 902 article 26(b) to manage its own affairs in matters of religion, without interference from any outside authority ' and that the provisions of the Act were bad as violative of that right.
By its judgment dated December 13, 1951, the High Court held that the Gowda Saraswath Brahmin community was a section of the Hindu public, that the Venkataramana Temple at Moolky was a denominational temple founded for its benefit, and that many of the provisions of the Act infringed the right granted by article 26(b) and were void.
Vide Devaraja Shenoy vs State of Madras (1).
Against this judgment, the State of Madras preferred an appeal to this Court, Civil Appeal No. 15 of 1953, but ultimately, it was withdrawn and dismissed on September 30, 1954.
It is the contention of the appellants that by reason of the decision given in the above proceedings, which were inter partes, the issue as to whether the temple is a denominational one must be held to have been concluded in their favour.
To resume the history of the present litigation: Subsequent to the dismissal of Civil Appeal No. 15 of 1953 by this Court, the appeal of the plaintiffs, A.S. No. 145 of 1952, was taken up for hearing, and on the application of the appellants, the proceedings in the writ petition were admitted as additional evidence.
On a review of the entire materials on record, including those relating to the proceedings in Writ Petition No. 668 of 1951, the learned Judges held it established that the Sri Venkataramana Temple was founded for the benefit of the Gowda Saraswath Brahmin community ' and that it was therefore a denominational one.
Then, dealing with the contention that section 3 of the Act was in contravention of article 26(b), they held that as a denominational institution would also be a public institution, article 25(2)(b) applied, and that, thereunder, all classes of Hindus were entitled to enter into the temple for worship.
But they also held that the evidence established that there were certain religious ceremonies and occasions during which the Gowda Saraswath Brahmins alone were entitled to participate, and that that right was protected by article 26(b).
(1) 903 They accordingly reserved the rights of the appellants to exclude all members of the public during those ceremonies and on those occasions, and these were specified in the decree.
Subject to this modification, they dismissed the appeal.
Against this judgment the plaintiffs have preferred Civil Appeal No. 403 of 1956 on a certificate granted by the High Court.
There is also before us Petition No. 327 of 1957 for leave to appeal under article 136.
That has reference to the modifications introduced by the decree of the High Court in favour of the appellants.
It must be mentioned that while the appeal was pending, there was a reorganisation of the States, and the District of South Kanara in which the temple is situated, was included in the State of Mysore.
The State of Mysore has accordingly come on record in the place of the State of Madras, and is contesting this appeal, and it is that State that has now applied for leave to appeal against the modifications.
The application is very much out of time, and Mr. M. K. Nambiar for the appellants vehemently opposes its being entertained at this stage.
It is pointed out that not merely had the State of Madras not filed any application for leave to appeal to this Court against the decision of the Madras High Court but that it accepted it as correct and actually opposed the grant of leave to the appellants on the ground that the points involved were pure questions of fact, that no substantial question of law was involved, and that the judgment of the High Court had recognised the rights of all sections of the Hindu public.
It is argued that when a party acquiesces in a judgment and deliberately allows the time for filing an appeal to lapse, it would not be a sufficient ground to condone the delay that he has subsequently changed his mind and desires to prefer an appeal.
The contention is clearly sound, and we should have given effect to it, were it not that the result of this litigation would affect the rights of members of the public, and we consider it just that the matter should be decided on the merits, so that the controversies involved might be finally settled.
We have accordingly condoned the delay, and have heard counsel on this application.
115 904 In view of this, it is unnecessary to consider the questions discussed at the Bar as to the scope of article 132, who are entitled to appeal on the strength of a certificate granted under that Article, and the ,forum in which the appeal should be lodged.
It is sufficient to say that in this case no appeal, was, in fact, filed by the respondent.
On the arguments addressed before us, the following questions fall to be decided : (1)Is the Sri Venkataramana Temple at Moolky, a temple as defined in section 2 (2) of Madras Act V of 1947 ? (2) If it is, is it a denominational temple ? (3) If it is a denominational temple, are the plain tiffs entitled to exclude all Hindus other than Gowda Saraswath Brahmins from entering into it for worship, on the ground that it is a matter of religion within the protection of article 26(b) of the Constitution ? (4) If so, is section 3 of the Act valid on the ground that it is a law protected by article 25 (2) (b), and that such a law prevails against the right conferred by article 26 (b); and (5)If section 3 of the Act is valid, are the modifications in favour of the appellants made by the High Court legal and proper ? On the first question, the contention of Mr. M. K. Nambiar for the appellants is that the temple in question is a private one, and therefore falls outside the purview of the Act.
This plea, however, was not taken anywhere in the pleadings.
The plaint merely alleges that the temple was founded for the benefit of the Gowda Saraswath Brahmins residing in Moolky Petah.
There is no averment that it is a private temple.
It is true that at the time when the suit was instituted, the definition of 'temple ' as it then stood, took in only institutions which were dedicated to or for the benefit of the Hindu public in 'general, and it was therefore sufficient for the plaintiffs to aver that the suit temple was not one of that character, and that it would have made no difference in the legal position whether the temple was a private one, or whether it was intended for the benefit of a section of the public.
But then, ,the Legislature amended the definition of 'temple ' 905 by Act XIII of 1949, and brought within it even institutions dedicated to or for the benefit of a section, of the public; and that would have comprehended a temple founded for the benefit of the Gowda Saraswath Brahmins but not a private temple.
In the written statement which was filed by the Government, the amended definition of 'temple ' was in terms relied on in answer to the claim of the plaintiffs.
In that situation, it was necessary for the plaintiffs to have raised the plea that the temple was a private one, if they intended to rely on it.
Par from putting forward such a plea, they accepted the stand taken by the Government in their written statement, and simply contended that as the temple was a denominational one, they were entitled to the protection of article 26 (b).
Indeed the Subordinate Judge states in para.
19 of the judgment that it was admitted by the plaintiffs that the temple came within the purview of the definition as amended by Act XIII of 1949.
Mr. M. K. Nambiar invited our attention to Exhibit A 2, which is a copy of an award dated November 28, 1847, wherein it is recited that the temple was originally founded for the benefit of five families of Gowda Saraswath Brabmins.
He also referred us to Exhibit A 6, the decree in the scheme suit, 0.
section No. 26 of 1915, wherein it was declared that the institution belonged to that community.
He contended on the basis of these documents and of other evidence in the case that whether the temple was a private or public institution was purely a matter of legal inference to be drawn from the above materials, and that, notwithstanding that the point was not taken in the pleadings, it could be allowed to be raised as a pure question of law.
We are unable to agree with this submission.
The object of requiring a party to put forward his pleas in the pleadings is to enable the opposite party to controvert them and to adduce evidence in support of his case.
And it would be neither legal nor just to refer to evidence adduced with reference to a matter which was actually in issue and on the basis of that evidence, to come to a finding on a matter which was not in issue, and decide the rights of parties on the 906 basis of that finding.
We have accordingly declined ;to entertain this contention.
We hold, agreeing with the Courts below, that the Sri Venkataramana Temple at Mookly is a public temple, and that it is within the operation of Act V of 1947.
(2)The next question is whether the suit temple is a denominational institution.
Both the Courts below have concurrently held that at the inception the temple was founded for the benefit of Gowda Saraswath Brahmins; but the Subordinate Judge hold that as in course of time public endowments came to be made to the temple and all classes of Hindus were taking part freely in worship therein, it might be presumed that they did so as a matter of right, and that, therefore, the temple must be held to have become dedicated to the Hindu public generally.
The learned Judges of the High Court, however, came to a different conclusion.
They followed the decision in Devaraja Shenoy vs State of Madras (supra), and hold that the temple was a denominational one.
The learned SolicitorGeneral attacks the correctness of this finding on two grounds.
He firstly contends that even though the temple might have been dedicated to the Gowda Saraswath Brahmins, that would make it only a communal and not a denominational institution, unless it was established that there were religious tenets and practices special to the community, and that that had not been done.
Now, the facts found are that the members of this community migrated from Gowda Desa first to the Goa region and then to the south, that they carried with them their idols, and that when they were first settled in Moolky, a temple was founded and these idols were installed therein.
We are there.
fore concerned with the Gowda Saraswath Brahmins not as a section of a community but as a sect associated with the foundation and maintenance of the Sri Venkataramana Temple, in other words, not as a mere denomination, but as a religious denomination.
From the evidence of P. W. 1, it appears that the Gowda Saraswath Brahmins have three Gurus, that those in Moolky Petah are followers of the head of the Kashi Mutt, and that it is he that performs some of the 907 important ceremonies in the temple.
Exhibit A is a document of the year 1826 27.
That shows that the head of the Kashi Mutt settled the disputes among the Archakas, and that they agreed to do the puja under his orders.
The uncontradicted evidence of P. W. I also shows that during certain religious ceremonies, persons other than Gowda Saraswath Brahmins have been wholly excluded.
This evidence leads irresistibly to the conclusion that the temple is a denominational one, as contended for by the appellants.
The second ground urged on behalf of the respondent is that the evidence discloses that all communities had been freely admitted into the temple, and that though P. W. I stated that persons other than Gowda Saraswath Brahmins could enter only with the permission of the trustees, there was no instance in which such permission was refused.
It was contended that the inference to be drawn from this was that the Hindu public generally had a right to worship in the temple.
The law on the subject is well settled.
When there is a question as to the nature and extent of a dedication of a temple, that has to be determined on the terms of the deed of endowment if that is available, and where it is not, on other materials legally admissible; and proof of long and uninterrupted user would be cogent evidence of the terms thereof.
Where, there.
fore, the original deed of endowment is not available and it is found that all persons are freely worshipping in the temple without let or hindrance, it would be a proper inference to make that they do so as a matter of right, and that the original foundation was for their benefit as well.
But where it is proved by production of the deed of endowment or otherwise that the original dedication was for the benefit of a particular community, the fact that members of other communities were allowed freely to worship cannot lead to the inference that the dedication was for their benefit as well.
For, as observed in Babu Bhagwan Din vs Gir Har Saroop (1), "it would not in general be consonant with Hindu sentiments or practice that worshippers should be turned away".
On the findings of the Court (1) (1939) L. R. 67 I. A. 1. 908 below that the foundation was originally for the benefit of the Gowda Saraswath Brahmin community, the fact that other classes of Hindus were admitted freely into the temple would not have the effect of enlarging the scope of the dedication into one for the public generally.
On a consideration of the evidence, we see no grounds for differing from the finding given by the learned Judges in the court below that the suit temple is a denominational temple founded for the benefit of the Gowda Saraswath Brahmins, supported as it is by the conclusion reached by another Bench of learned Judges in Devaraja Shenoy vs State of Madras (supra).
In this view, there is no need to discuss whether this issue is res judicata by reason of the, decision in Writ Petition No. 668 of 1951.
(3) On the finding that the Sri Venkataramana Temple at Moolky is a denominational institution founded for the benefit of the Gowda Saraswath Brahmins, the question arises whether the appellants are entitled to exclude other communities from entering into it for worship on the ground that it is a matter of religion within the protection of article 26 (b).
It is argued by the learned Solicitor General that exclusion of persons from entering into a temple cannot ipso facto be regarded as a matter of religion, that whether it is so must depend on the tenets of the particular religion which the institution in question represents, and that there was no such proof in the present case.
Now, the precise connotation of the expression "matters of religion " came up for consideration by this Court in The Commissioner, Hindu Religious Endowments, Madras vs Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt (1), and it was held therein that it embraced not merely matters of doctrine and belief pertaining to the religion but also the practice of it, or to put, it in terms of Hindu theology, not merely its Gnana but also its Bakti and Karma Kandas.
The following observations of Mukherjea J., (as he then was) are particularly apposite to the present discussion : " in the first place, what constitutes the essential (1) ; 909 part of a religion is primarily to be ascertained with reference to the doctrines of that religion itself.
If the tenets of any religious sect of the Hindus prescribe ' that offerings of food should be given to the idol at particular hours of the day, that periodical ceremonies should be performed in a certain way at certain periods of the year or that there should be daily recital of sacred texts or oblations to the sacred fire, all these would be regarded as parts of religion and the mere fact that they involve expenditure of money or employment of priests and servants or the use of marketable commodities would not make them secular activities partaking of a commercial or economic character; all of them are religious practices and should be regarded as matters of religion within the meaning of article 26 (b).
" It being thus settled that matters of religion in article 26 (b) include even practices which are regarded by the community as part of its religion, we have now to consider whether exclusion of a person from entering into a temple for worship is a matter of religion according to Hindu Ceremonial Law.
There has been difference of opinion among the writers as to whether image worship had a place in the religion of the Hindus, as revealed in the Vedas.
On the one hand, we have hymns in praise of Gods, and on the other, we have highly philosophical passages in the Upanishads des cribing the Supreme Being as omnipotent, omnicient and omnipresent and transcending all names and forms.
When we come to the Puranas, we find a marked change.
The conception had become established of Trinity of Gods, Brahma, Vishnu and Siva as manifestations of the three aspects of creation, preservation and destruction attributed to the Supreme Being in the Upanishads, as, for example, in the following passage in the Taittiriya Upanishad, Brigu Valli, First Anuvaka: " That from which all beings are born, by which they live and into which they enter and merge.
" The Gods have distinct forms ascribed to them and their worship at home and in temples is ordained as certain means of attaining salvation.
These injunctions have had such a powerful hold over the minds of the 910 people that daily worship of the deity in temple came to be regarded as one of the obligatory duties of a Hindu. 'It was during this period that temples were constructed all over the country dedicated to Vishnu, Rudra, Devi, Skanda, Ganesha and so forth, and wor ship in the temple can be said to have become the practical religion of all sections of the Hindus ever since.
With the growth in importance of temples and of worship therein, more and more attention came to be devoted to the ceremonial law relating to the construction of temples, installation of idols therein and conduct of worship of the deity.
and numerous are the treatises that came to be written for its exposition.
These are known as Agamas, and there are as many as 28 of them relating to the Saiva temples, the most important of them being the Kamikagama, the Karanagama and the Suprubedagama, while the Vikhanasa and the Pancharatra are the chief Agamas of the Vaishnavas.
These Agamas, contain elaborate rules as to how the temple is to be constructed, where the principal deity is to be consecrated, and where the other Devatas are to be installed and where the several classes of worshippers are to stand and worship.
The following passage from the judgment of Sadasiva Aiyar J. in Gopala Muppanar vs Subramania Aiyar (1), gives a summary of the prescription contained in one of the Agamas: " In the Nirvachanapaddhathi it is said that Sivadwijas should worship in the Garbagriham, Brahmins from the ante chamber or Sabah Mantabam, Kshatriyas, Vysias and Sudras from the Mahamantabham, the dancer and the musician from the Nrithamantabham east of the Mahamantabham and that castes yet lower in scale should content themselves with the sight of the Gopuram.
" The other Agamas also contain similar rules.
According to the Agamas, an image becomes defiled if there is any departure or violation of any of the rules relating to worship, and purificatory ceremonies (known as Samprokshana) have to be performed for restoring the sanctity of the shrine.
Vide judgment of (1) 911 Sadasiva Aiyar J. in Gopala Muppanar vs Subramania Aiyar (supra).
In Sankaralinga Nadan vs Raja Rajeswara Dorai(1), it was held by the Privy Council ' affirming the judgment of the Madras High Court that a trustee who agreed to admit into the temple persons who were not entitled to worship therein, according to the Agamas and the custom of the temple was guilty of breach of trust.
Thus, under the ceremonial law pertaining to temples, who are entitled to enter into them for worship and where they are entitled to stand and worship and how the worship is to be conducted are all matters of religion.
The conclusion is also implicit in article 25 which after declaring that all persons are entitled freely to profess, practice and propagate religion, enacts that this should not affect the operation of any law throwing open Hindu religious institutions of a public character to all classes and sections of Hindus.
We have dealt with this question at some length in view of the argument of the learned Solicitor General that exclusion of persons from temple has not been shown to be a matter of religion with reference to the tenets of Hinduism.
We must accordingly hold that if the rights of the appellants have to be determined solely with reference to article 26 (b), then section 3.
of Act V of 1947, should be held to be bad as infringing it.
(4) That brings us on to the main question for deter mination in this appeal, whether the right guaranteed under article 26 (b) is subject to a law protected by article 25 (2) (b) throwing the suit temple open to all classes and sections of Hindus.
We must now examine closely the terms of the two articles.
article 25, omitting what is not material, is as follows: " (1) Subject to public, order, morality and health and to the other provisions of this Part, all persons are equally entitled to freedom of conscience and the right to freely profess, practise and propagate religion.
(2) Nothing in this article shall affect the operation of any existing law or prevent the State from making any law . . . . . . . . . . (1) (1908) L.R. 35 I.A. 176.
116 912 (b)providing for social welfare and reform or the throwing open of Hindu religious institutions of a public character to all classes and sections of Hindus".
Article 26 runs as follows: "Subject to public order, morality and health.
every religious denomination or any section thereof shall have the right (a)to establish and maintain institutions for religious and charitable purposes; (b) to manage its own affairs in matters of religion; (c) to own and acquire movable and immovable property; and (d) to administer such property in accordance with law.
" We have held that matters of religion in article 26(b) include the right to exclude persons who are not entitled to participate in the worship according to the tenets of the institution.
Under this Article, therefore, the appellants would be entitled to exclude all persons other than Gowda Saraswath Brahmins from entering into the temple for worship.
Article 25(2)(b) enacts that a law throwing open public temples to all classes of Hindus is valid.
The word `public 'includes, in its ordinary acceptation, any section of the public, and the suit temple would be a public institution within article 25(2)(b), and section 3 of the Act would therefore be within its protection.
Thus, the two Articles appear to be apparently in conflict.
Mr. M. K. Nambiar contends that this conflict could be avoided if the expression "religious institutions of a public character" is understood as meaning institutions dedicated to the Hindu community in general, though some sections thereof might be excluded by custom from entering into them, and that, in that view, denominational institutions founded for the benefit of a section of Hindus would fall outside the purview of article 25(2)(b) as not being dedicated for the Hindu community in general.
He sought support for this contention in the law relating to the entry of excluded classes into Hindu temples and in the history of legislation with reference thereto, in Madras.
According to the Agamas, a public temple enures, 913 where it is not proved to have been founded for the benefit of any particular community, for the benefit of all Hindus including the excluded classes.
But the extent to which a person might participate in the worship therein would vary with the community in which he was born.
In Venkatachalapathi vs Subbarayadu (1), the following statement of the law was quoted by the learned Judges with apparent approval:, "Temple, of course, is intended for all castes, but there are restrictions of entry.
Pariahs cannot go into the court of the temple even.
Sudras and Baniyas can go into the hall of the temple.
Brahmins can go into the holy of the holies.
" In Gopala Muppanar vs Subramania Aiyar (Supra), Sadasiva Aiyar J. observed as follows at p. 258: "It is clear from the above that temples were intended for the worship of people belonging to all the four castes without exception.
Even outcastes were not wholly left out of the benefits of temple worship, their mode of worship being however made subject to severe restrictions as they could not pass beyond the Dwajastambam (and some times not beyond the temple outer gate) and they could not have a sight of the images other than the procession images brought out at the times of festivals.
" The true Position, therefore, is that the excluded classes were all entitled to the benefit of the dedication, though their actual participation in the worship was insignificant.
It was to remove this anomaly that legislation in Madras was directed for near a decade.
First came the Malabar Temple Entry Act (Madras XX of 1938).
Its object was stated to be " to remove the disabilities imposed by custom and usage on certain classes of Hindus in respect of their entry into, and offering worship in, Hindu temples".
Section 2(4) defined 'temple ' as " a place which is used as a place of public worship by the Hindu community generally except excluded classes. .
Sections 4 and 5 of the Act authorised the trustees to throw such temples open to persons belonging to the excluded classes under (1) (1890) I.L.R.113 Mad.
914 certain conditions.
This Act extended only to the District of Malabar.
Next came the Madras Temple Entry Authorisation and Indemnity Act (Madras Act XXII of 1939).
The preamble to the Act states that " there has been a growing volume of public opinion demanding the removal of disabilities imposed by custom and usage on certain classes of Hindus in respect of their entry into and offering worship in Hindu temples ", and that " it is just and desirable to authorize the trustees in charge of such temples to throw them open to. the said classes ".
Section 3 of the Act authorised the trustees to throw open the temples to them.
This Act extended to the whole of the Province of Madras.
Then we come to the Act, which has given rise to this litigation, Act V of 1947.
It has been already mentioned that, as originally passed, its object was to lift the ban on the entry into temples of communities which are excluded by custom from entering into them, and I temple ' was also defined as a place dedicated to the Hindus generally.
Now, the contention of Mr. Nambiar is that article 25(2)(b) must be interpreted in the background of the law as laid down in Gopala Muppanar vs Subramania Aiyar (supra) and the definition of 'temple ' given in the statutes mentioned above, and that the expression " religious institutions of a public character " must be interpreted as meaning institutions which are dedicated for worship to the Hindu community in general, though certain sections thereof were prohibited by custom from entering into them, and that, in that view, denominational temples will fall outside article 25(2)(b).
There is considerable force in this argument.
One of the problems which had been exercising the minds of the Hindu social reformers during the period preceding the Constitution was the existence in their midst of communities which were classed as untouchables.
A custom which denied to large sections of Hindus the right to use public roads and institutions to which all the other Hindus had a right of access, purely on grounds of birth could not be considered reasonable and defended on any sound democratic 915 principle, and efforts were being made to secure its abolition by legislation.
This culminated in the enactment of article 17, which is as follows: " Untouchability ' is abolished and its practice in any form is forbidden.
The enforcement of any disability arising out of ' Untouchability ' shall be an offence punishable in accordance with law." Construing article 25(2)(b) in the light of article 17, it is arguable that its object was only to permit entry of the excluded classes into temples which were open to all other classes of Hindus, and that that would exclude its application to denominational temples.
Now, denominational temples are founded, ex hypothesis for the benefit of particular sections of Hindus, and so long as the law recognises them as valid and article 26 clearly does that what reason can there be for permitting entry into them of persons other than those for whose benefit they were founded ? If a trustee diverts trust funds for the benefit of persons who are not beneficiaries under the endowment, he would be committing a breach of trust, and though a provision of the Constitution is not open to attack on the ground that it authorises such an act, is it to be lightly inferred that article 25(2)(b) validates what would, but for it, be a breach of trust and for no obvious reasons of policy, as in the case of article 17 ? There is, it should be noted, a fundamental distinction between excluding persons from temples open for purposes of worship to the Hindu public in general on the ground that they belong to the excluded communities and excluding persons from denominational temples on the ground that they are not objects within the benefit of the foundation.
The former will be hit by article 17 and the latter protected by article 26, arid it is the contention of the appellants that article 25(2)(b) should not be interpreted as applicable to both these categories and that it should be limited to the former.
The argument was also advanced as further supporting this view, that while article 26 protects denominational institutions of not merely Hindus but of all communities such as Muslims and Christians, article 25(2)(b) is limited in its operation to Hindu temples, and that it could 916 not have been intended that there should be imported into article 26(b) a limitation which would apply to institutions of one community and not of others.
Article 26, it was contended, should therefore be construed as falling wholly outside article 25(2)(b), which should be limited to institutions other than denominational ones.
The answer to this contention is that it is impossible to read any such limitation into the language of article 25 (2) (b).
It applies in terms to all religious institutions of a public character without qualification or reserve.
As already stated, public institutions would mean not merely temples dedicated to the public as a whole but also those founded for the benefit of sections thereof, and denominational temples would be comprised therein.
The language of the Article being plain and unambiguous, it is not open to us to read into it limitations which are not there, based on a priori reasoning as to the probable intention of the Legislature.
Such intention can be gathered only from the words actually used in the statute; and in a Court of law, what is unexpressed has the same value as what is unintended.
We must therefore hold that denominational.
institutions are within article 25 (2) (b).
It is then said that if the expression " religious institutions of a public character" in article 25 (2) (b) is to be interpreted as including denominational institutions, it would clearly be in conflict with article 26 (b), and it is argued that in that situation, article 26 (b) must, on its true construction, be held to override article 25 (2) (b).
Three grounds were urged in support of this contention, and they must now be examined.
It was firstly argued that while article 25 was stated to be " subject to the other provisions of this Part" (Part 111), there was no such limitation on the operation of article 26, and that, therefore, article 26 (b) must be held to prevail over article 25 (2) (b).
But it has to be noticed that the limitation " subject to the other provisions of this Part" occurs only in cl.
(1) of article 25 and not in el.
Clause (1) declares the rights of all persons to freedom of conscience and the right freely to profess, practise and propagate religion.
It is t is right that 917 is subject to the other provisions in the Fundamental Rights Chapter.
One of the provisions to which the right declared in article 25 (1) is subject is article 25 (2), A law, therefore, which falls within article 25 (2) (b) will control the right conferred by article 25 (1), and the limitation in article 25 (1) does not apply to that law.
It is next contended that while the right conferred under article 26(d) is subject to any law which may be passed with reference thereto, there is no such restriction on the right conferred by article 26(b).
It is accordingly argued that any law which infringes the right under article 26 (b) is invalid, and that section 3 of Act V of 1947 must accordingly be held to have become void.
Reliance is placed on the observations of this Court in The Commissioner, Hindu Religious Endowments, Madras vs Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt (supra) at page 1023, in support of this position.
It is undoubtedly true that the right conferred under article 26(b) cannot be abridged by any legislation, but the validity of section 3 of Act V of 1947 does not depend on its own force but on article 25(2)(b) of the Constitution.
The very Constitution which is claimed to have rendered section 3 of the Madras Act void as being repugnant to article 26(b) has, in article 25(2)(b), invested it with validity, and, therefore, the appellants can succeed only by establishing that article 25(2)(b) itself is inoperative as against article 26(b)).
And lastly, it is argued that whereas article 25 deals with the rights of individuals, article 26 protects the rights of denominations, and that as what the appellants claim is the right of the Gowda Saraswath Brahmins to exclude those who do not belong to that denomination, that would remain unaffected by article 25(2)(b).
This contention ignores the true nature of the right conferred by article 25(2)(b).
That is a right conferred on "all classes and sections of Hindus" to enter into a public temple, and on the unqualified terms of that Article, that right must be available, whether it is sought to be exercised against an individual under article 25(1) or against a denomination under article 26(b).
The fact is that though article 25(1) deals with rights of individuals, article 25(2) is much wider in 918 its contents and has reference to the rights of communities, and controls both article 25(1) and article 26(b).
The result then is that there are two provisions of equal authority, neither of them being subject to the other.
The question is how the apparent conflict between them is to be resolved.
The rule of construction is well settled that when there are in an enactment two provisions which cannot be reconciled with each other, they should be so interpreted that, if possible, effect could be given to both.
This is what is known as the rule of harmonious construction.
Applying this rule, if the contention of the appellants is to be accepted, then article 25(2)(b) will become wholly nugatory in its application to denominational temples, though, as stated above, the language of that Article includes them.
On the other hand, if the contention of the respondents is accepted, then full effect can be given to article 26(b) in all matters of religion, subject only to this that as regards one aspect of them, entry into a temple for worship, the rights declared under article 25(2)(b) will prevail.
While, in the former case, article 25(2)(b) will be put wholly out of operation, in the latter, effect can be given to both that provision and article 26(b).
We must accordingly hold that article 26(b) must be read subject to article 25(2)(b).
(5)It remains to deal with the question whether the modifications made in the decree of the High Court in favour of the appellants are valid.
Those modifications refer to various ceremonies relating to the worship of the deity at specified times each day and on specified occasions.
The evidence of P. W. I establishes that on those occasions, all persons other than Gowda Saraswath Brahmins were excluded from participation thereof.
That evidence, remains un contradicted, and has been accepted by the learned Judges, and the correctness of their finding on this point has not been challenged before us.
It is not in dispute that the modifications aforesaid relate, according to the view taken by this Court in The Commisssioners Hindu Religious Endowments, Madras vs Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt 919 (supra), to matters of religion, being intimately connected with the worship of the deity.
On the finding that the suit temple is a denominational one, the modifications made in the High Court decree would be within the protection of article 26(b).
The learned Solicitor General for the respondents assails this portion of the decree on two grounds.
He firstly contends that the right to enter into a temple which is protected by article 25(2)(b) is a right to enter into it for purposes of worship, that that right should be liberally construed, and that the modifications in question constitute a serious invasion of that right, and should be set aside as unconstitutional.
We agree that the right protected by article 25(2)(b) is a right to enter into a temple for purposes of worship, and that further it should be construed liberally in favour of the public.
But it does not follow from this that that right is absolute and unlimited in character.
No member of the Hindu public could, for example, claim as part of the rights protected by article 25(2)(b) that a temple must be kept open for worship at all hours of the day and night, or that he should personally perform those services, which the Archakas alone could perform.
It is again a well known practice of religious institutions of all denominations to limit some of its services to persons who have been specially initiated, though at other times, the public in general are free to participate in the worship.
Thus, the right recognised by article 25(2)(b) must necessarily be subject to some limitations or regulations, and one such limitation or regulation must arise in the process of harmonising the right conferred by article 25(2)(b) with that protected by article 26(b).
We have held that the right of a denomination to wholly exclude members of the public from worshipping in the temple, though comprised in article 26(b), must yield to the overriding right declared by article 25(2)(b) in favour of the public to enter into a temple for worship.
But where the right claimed is not one of general and total exclusion of the public from worship in the temple at all times but of exclusion from certain religious services, they being limited by the rules of 117 920 the foundation to the members of the denomination, ,then the question is not whether article 25(2)(b) over rides that right so as to extinguish it, but whether it is possible so to regulate the rights of the persons protected by article 25(2)(b) as to give effect to both the rights.
If the denominational rights are such that to give effect to them would substantially reduce the right conferred by article 25(2)(b), then of course, on our conclusion that article 25(2)(b) prevails as against article 26(b), the denominational rights must vanish.
But where that is not the position, and after giving effect to the rights of the denomination what is left to the public of the right of worship is something substantial and not merely the husk of it, there is no reason why we should not so construe article 25(2)(b) as to give effect to article 26(b) and recognise the rights of the denomination in respect of matters which are strictly denominational, leaving the rights of the public in other respects unaffected.
The question then is one of fact as to whether the rights claimed by the appellants are strictly denominational in character, and whether after giving effect to them, what is left to the public of the right of worship is substantial, That the rights allowed by the High Court in favour of the appellants are purely denominational clearly appears from the evidence on record.
P.W. 1 put forward two distinct rights on behalf of the Gowda Saraswath Brahmins.
He firstly claimed that no one except members of his community had at any time the right to worship in the temple except with their permission; but he admitted that the members of the public were, in fact, worshipping and that permission had never been refused.
This right will be hit by article 25 (2) (b), and cannot be recognised.
P.W. I put forward another and distinct right, namely, that during certain ceremonies and on special occasions, it was only members of the Gowda Saraswath Brahmin community that had the right to take part therein, and that on those occasions, all other persons would be excluded.
This would clearly be a denomi national right.
Then, the question is whether if this right is recognised, what is left to the public of their 921 right under article 25(2)(b) is substantial.
The learned Solicitor General himself conceded that even apart from the special occasions reserved for the Gowda Saraswath Brahmins, the other occasions of worship were sufficiently numerous and substantial, and we are in agreement with him.
On the facts, therefore, it is possible to protect the rights of the appellants on those special occasions, without affecting the substance of the right declared by article 25( 2)(b); and, in our judgment, the decree passed by the High Court strikes a just balance between the rights of the Hindu public under article 25(2)(b) and those of the denomination of the appellants under article 26(b) and is not open to objection.
Then, it is said that the members of the public are not parties to the litigation, and that they may not be bound by the result of it, and that, therefore, the matter should be set at large.
Even if the members of the public are necessary parties to this litigation, that cannot stand in the way of the rights of the appellants being declared as against the parties to the action.
Moreover, the suit was one to challenge the order of the Government holding that all classes of Hindus are entitled to worship in the suit temple.
While the action was pending, the Constitution came into force, and as against the right claimed by the plaintiffs under article 26(b), the Government put forward the rights of the Hindu public under article 25 (2)(b).
There has been a full trial of the issues involved, and a decision has been given, declaring the rights of the appellants and of the public.
When the appellants applied for leave to appeal to this Court, that application was resisted by the Government inter alia on the ground that the decree of the High Court was a proper decree recognising the rights of all sections of the public.
In view of this, there is no force in the objection that the public are not, as such, parties to the suit.
It is their rights that have been agitated by the Government and not any of its rights.
In the result, both the appeal and the application for special leave to appeal must be dismissed.
922 The parties will bear their own costs throughout.
The appellants will take their costs out of the temple funds.
Appeals Dismissed.
[/INST]An application was filed seeking eviction of the tenant appellant by the landlord respondent on various grounds.
The Rent Controller granted an order for eviction only under Section 14(1)(e) of the Delhi Rent Control Act for bona fide use and occupation.
The order of the Rent Controller for eviction was confirmed in appeal by the Tribunal.
Before the High Court, it was contended on behalf of the appellant that as the lease of the plot on which the build ing stood was cancelled by the DDA, the landlord respondent ceased to be the owner thereof and, therefore, the require ment of Section 14(1)(e) was not satisfied and the respond ent was not entitled to the decree for eviction.
The High Court held that the landlord, whose lease had been terminat ed, but was in possession, continued to be a tenant holding over and, therefore, he continued to be the owner, and maintained the decree for eviction.
In the appeal before this Court, it was contended on behalf of the appellant that in order to get a decree for eviction on the ground of bona fide requirement, the land lord must establish that he was the owner of such property, that where the property was built up on a plot of land taken on lease from the Delhi Development Authority, it could not be said that the landlord was the owner of the property and that as the lease had been terminated, the landlord could not claim to be the owner of the property, and, therefore, the decree for eviction on ground of bona fide requirement could not be maintained.
1076 On behalf of the respondent it was contended that al though notice was issued, but subsequently the matter re mained stayed and the respondent landlord continued to be in possession and did not cease to be the owner of the proper ty, that whole of the premises in question did not stand on the plot, lease of which had been cancelled by DDA and a major part of.
the premises stood on another plot which continued to be on lease in favour of the respondent, and that the tenant was estopped from challenging the title of the landlord, as the relationship of the landlord and tenant was admitted and it was not open to the tenant to contend that the respondent landlord had no title to the property.
Dismissing the appeal, this Court HELD: The word "owner" has not been defined in the Delhi Rent Control Act.
[1081E] The term "owner" has to be understood in the context of the background of the law and what is contemplated in the scheme of the Act.
The Act has been enacted for protection of the tenants.
But, at the same time, it has provided that the landlord under certain circumstances will be entitled to eviction and bona fide requirement is one of such grounds.
[1081G H; 1082D] Ordinarily, the concept of the ownership may be abso lute ownership in the land as well as of the structure standing thereon.
But in the modern context, where all lands belong to the State, the persons who hold properties will only be lessees or the persons holding the land on some term from the Government or the authorities constituted by the State.
The legislature, when it used the term "owner" in section 14(1)(e), did not think of ownership as absolute ownership.
[1081F G] The meaning of the term "owner" is vis a vis the tenant i.e. the owner should be something more than the tenant.
In cases where the plot of land is taken on lease, the struc ture is built by the landlord and he is the owner of the structure.
So far as the land is concerned, he holds the long lease and as against the tenant he will fail within the ambit of the meaning of the term "owner" as contemplated under section 14(1)(e).
[1082B C] In the instant case, although there were some proceed ings for the cancellation of the lease, the lease had not come to an end.
No steps have been taken for dispossesion and only the formality of depositing the penalities and filing of the Indemnity Bond remained to be done, on ful filling which the lease would he restored in the name of the legal 1077 representatives.
Therefore, it could not be said that the respondent landlord had ceased to be the owner of the prem ises.
[1085G H, 1086B] T.C. Rekhi vs Smt.
Usha Gujaral, [1971] Rent Control Journal Page 322 at 326, referred to.
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<s>[INST] Summarize the judgementl Appeals Nos. 153 and 154 of 1960.
Appeals by special leave from the Award dated February 5,1959, of the Industrial Tribunal, Bombay, in Reference (I.T.) No. 212 of 1958.
S.D. Vimadalal, section N. Andley and J. B. Dadachanji, for the appellant in C. A. No. 153/60 and Respondent in C.A. No. 154/60.
M.C. Setalvad, Attorney General for India and Janardan Sharma, for the respondents in C.A. No. 153/ 60 and Appellants in C.A. No. 154/60.
December 9.
The Judgment of the Court was delivered by WANCHOO, J.
The only question raised in these two appeals by special leave is about the quantum of bonus to be paid to the workmen (hereinafter called the respondents) by Voltas Limited (hereinafter called the appellant) for the financial year 1956 57.
The dispute between the parties was referred to the adjudication of the industrial tribunal Bombay.
The appellant, it appears, had already paid 4 1/2 months ' basic wages as bonus for the relevant year but the respondents claimed it at the rate of six months ' basic wages subject to the minimum of Rs. 250 per employee.
169 The tribunal went into the figures and after making the relevant calculations came to the conclusion that the available surplus worked out according to the Full Bench formula justified the grant of bonus equal to five months ' basic salary; it therefore ordered payment of this amount excluding the amount already paid.
The appellant in its appeal claims that the tribunal should have allowed nothing more than what the appellant had already paid; the respondents in their appeal on the other hand claim that they should have been allowed six months ' bonus.
The principles on which bonus has to be calculated have already been decided by this Court in the Associated Cement Companies Ltd. vs Their Workmen (1) and the only question that arises for our consideration is whether the tribunal in making its calculations has acted in accordance with those principles.
This leads us to the consideration of various points raised on behalf of the parties to show that the tribunal had not acted in all particulars in accordance with the decision in the Associated Cement Companies ' case (1).
We shall first take the points raised on behalf of the appellant.
The first point raised is that the tribunal was wrong in not allowing a sum of rupees one lac paid as contribution to political fund as an item of expense.
It is urged that this is a permissible item of expense and therefore the tribunal should not have added it back in arriving at the gross profits.
We are of opinion that the tribunal was right in not allowing this amount as expenditure.
In effect this payment is no different from any amount given in charity by an employer, and though such payment may be justified in the sense that it may not be against the Articles of Association of a company it is nonetheless an expense which need not be incurred for the business of the company.
Besides, though in this particular case the donation considering the circumstances of the case was not much, it is possible that permissible donations may be out of all proportion and may thus result in reducing the available (1) [1059] 2 S.C.R. 925.
22 170 surplus from which low paid workmen are entitled to bonus.
We are therefore of opinion that though the law or the rules of the company may permit the appellant to pay such amounts as donations to political funds, this is not a proper expense to be deducted when working out the available surplus in the light of the Full Bench formula.
The tribunal 's decision therefore on this point must be upheld.
The second contention of the appellant relates to deduction of what it calls extraneous income.
This matter has been considered by this Court in The Tata Oil Mills Co. Ltd. vs Ite Workmen and Others (1) and what we have to see is whether in accordance with the decision in that case, the appellant 's claim for deducting certain amounts as extraneous income is correct.
Learned counsel for the appellant has pressed four items in this connection.
The first item relates to a sum of Rs. 3.47 lacs.
It is said that this was not the income of the year and therefore should not have been taken into account in arriving at the gross profits.
The exact position with respect to this item is not clear and in any case learned counsel for the appellant appearing before the tribunal conceded that the amount could not be deducted from the profits.
In view of that concession we are not prepared to allow the deduction of this amount as extraneous income.
The second item is a sum of Rs. 1.76 lacs in respect of the rebate earned on insurance by the appellant with other companies by virtue of its holding principal agency.
Obviously this is part of the insurance business of the appellant and the work in this connection is entirely handled by the insurance department of the appellant; as such the tribunal was right in not allowing this amount as extraneous income.
The third item is a sum of Rs. 3 33 lacs being gain on foreign exchange transactions.
These transactions are carried on in the normal course of business of the appellant.
As the tribunal has rightly pointed out, if there had been loss on these transactions it would have certainly gone to reduce the gross profit,%; if there is a profit it has to be taken into account as (1)[1960] 1 S.C.R. 1. 171 it has arisen out of the normal business of the appellant.
The tribunal was therefore right in not allowing this amount as extraneous income.
The last item is a sum of Rs. 9.78 lacs being commission on transactions by government agencies and other organisations with manufacturers abroad direct.
It seems that the appellant is the sole agent in India of certain foreign manufacturers and even when transactions are made direct with the manufacturers the appellant gets com mission on such transactions.
The tribunal has held that though the transactions were made direct with the foreign manufacturers, the respondents were entitled to ask that the commission should be taken into account inasmuch as the respondents serviced the goods and did other work which brought such business to the appellant.
It seems that there is no direct evidence whether these particular goods on which this commission was earned were also serviced free by the appellant like other goods sold by it in India.
We asked learned counsel for the parties as to what the exact position was in the matter of free service to such goods.
The learned counsel however could not agree as to what was the exact position.
It seems to us that if these goods are also serviced free or for charges but in the same way as other goods sold by the appellant in India, the respondents are entitled to ask that the income from commission on these goods should be taken into account.
As however there is no definite evidence on the point we cannot lay down that such commission must always be taken into account.
At the same time, so far as this particular year is concerned we have to take this amount into account as the appellant whose duty it was to satisfy the tribunal that this was extraneous income has failed to place proper evidence as to servicing of these goods.
A claim of this character must always be proved to the satisfaction of the tribunal.
In the circumstances we see no reason to interfere with the order of the tribunal so far as this part of its order is concerned.
Two other points have been urged on behalf of the 172 appellant with respect to the interest allowed on capital and on working capital.
The tribunal has allowed the usual six per cent on capital and four per cent on working capital.
The appellant claimed interest at a higher rate in both cases.
We agree with the tribunal that there is no special reason why any higher rate of return should be allowed to the appellant.
This brings us to the objections raised on behalf of the respondents.
The main objection is to a sum of Rs. 4.4 lacs allowed by the tribunal as income tax, which is said to be with respect to the previous year.
It appears that there is a difference between the accounting year of the appellant and the financial year.
In the particular year in dispute there was an increase in the rate of tax which resulted in extra payment which had to be paid in this year.
In these special circumstances, therefore, the tribunal allowed this amount and we see no reason to disagree.
Next it is urged that the tribunal had allowed a sum of Rs. 4.76 lacs for making provision for gratuity as a prior charge.
This is obviously incorrect, as this Court has pointed out in the Associated Cement Companies ' case (1) that no fresh items of prior charge can be added to the Full Bench formula, though at the time of distribution of available surplus such matters, as provision for gratuity and debenture redemption fund, might be taken into account.
This disposes of the objections relating to the accounts.
Two other points have been urged on behalf of the respondents.
They are with respect to (1) salesmen and (2) apprentices.
The tribunal has excluded these two categories from the award of bonus made by it.
The respondents contend that they should also have been included.
We are of opinion that the decision of the tribunal in this behalf is correct.
So far as salesmen are concerned, the tribunal has examined the relevant decisions of other tribunals and has come to the conclusion that salesmen who are given commission on sales are not treated on par with other workmen in the matter of bonus.
It has also been found that the clerical work done by salesmen is small and incidental to their duty as such; salesmen have (1) 173 therefore been held not to be workmen within the meaning of the Industrial Disputes Act.
The tribunal has pointed out that the commission on an average works out at about Rs. 1,000 per mensem in the case of salesmen and therefore their total emoluments are quite adequate.
Besides, the salesmen being paid commission on sales have already taken a share in the profits of the appellant on a fair basis and therefore there is no justification for granting them further bonus out of the available surplus of profits.
As for the apprentices, the tribunal has held that there is a definite term of contract between them and the appellant by which they are excluded from getting bonus.
Besides, as the appellant has pointed out, the apprentices are merely learning their jobs and the appellant has to incur expenditure on their training and they hardly contribute to the profits of the appellant.
The view of the tribunal therefore with respect to apprentices also is correct.
We now turn to calculation of the available surplus according to the decision in the Associated Cement Companies ' case (1).
The gross profit found by the tribunal will stand in view of what we have said with respect to various items challenged by either party.
The chart of calculation will be as follows: in Lacs Gross profits Rs. 109.97 Less depreciation 3.28 Balance 106.69 Less income tax @ 51.15 per cent.
54.20 Balance 52.49 Less dividend tax, wealth tax etc.
7.50 Balance 44.99 Less return on capital at 6 per cent.
13.20.
Balance 31.79 Less return on working capital at 4 per cent.
1.66 Available surplus 30.13.
(1) 174 Out of this, the tribunal has allowed five months ' basic wages as bonus to the respondents which works out at Rs. 16.80 lacs.
In the circumstances it cannot be said that the award of the tribunal is not justified.
We do not think that we would be justified in giving anything more than what the tribunal has awarded, because the appellant has to provide for a fund for gratuity, for it is a new concern which took over the old employees of another concern when it was started and has thus a greater liability towards gratuity than otherwise would be the case.
We are therefore of opinion that the tribunal 's award of five months ' basic wages as bonus for the year in dispute should stand.
We therefore dismiss both the appeals.
In the circumstances we pass no order as to costs.
Appeals dismissed.
[/INST]Under the customary law prevalent amongst the Hindu Jats of Grewal got in Ludhiana, a daughter is a preferential heir to her father in respect of his self acquired property to his collaterals.
Rattigan 's Digest of Customary Law, paragraph 23, which records the correct law on the point, is not in conflict with Riwaji am, 1882, Question NO. 43, which refers only to ancestral property and not to self acquired property at all.
Mt. Hurmate vs Hoshiaru, A.I.R. 1944 Lah.
21, approved.
Mohinder Singh vs Kher Singh, A.I.R. 1949 East Punjab 328, disapproved.
Mt. Subhani vs Nawab, A.I.R. 1941 (P.C.) 21, referred to.
Case law discussed.
The doctrine of surrender in Hindu Law is based on a theory of complete self effacement by the widow in favour of the reversioner and in order that such surrender can accelerate the reversion, it must be of the entire interest in the entire property.
The law does not recognise a partial self effacement nor a division between ancestral and non ancestral property.
The exception made in respect of a small portion of the property retained for the widow 's maintenance does not detract from the rigour of the rule.
Rangaswami Gounden vs Nachiappa Gounden, (1918) L.R. 46 I.A. 72 and Phool Kaur vs Prem Kaur, ; , referred to.
Consequently, in a case where a Hindu widow of the Jat Grewal got made a gift only of the self acquired property of her husband to her daughters such gift had not the effect of a surrender in law so as to accelerate the daughters ' succession and the gift could not be valid beyond her lifetime.
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<s>[INST] Summarize the judgementAppeal.
1644 of 1966.
Appeal by special leave from the judgment and order dated January 18, 1966 of the Allahabad High Court in Civil Revision Application 24 of 1966.
V. A. Sevid Muhammad and section P. Nayar, for the appellant.
section C. Agarwal, R. K. Garg, D. P. Singh and section Chakravarty.
for respondents Nos. 1 to 28 and 30 to 57.
727 The Judgment of the Court was delivered by Dua, J.
This appeal by special leave is directed against the order of a learned Single Judge of the Allahabad High Court affirming on revision under section 115 Civil P.C. the order of the learned Additional District Judge, Jhansi, who had allowed the respondent 's appeal from the order of the learned City Magistrate, Jhansi, made on an application presented by the respondents under section 15 of the IV of 1936.
The City Magistrate was the " 'authority" appointed under section 15 and the district court was the court of appeal under section 17 of the said Act.
The respondents through the Assistant Secretary of the National Railway Mazdoor Union Work shop Branch, Jhansi had asserted in their application under section 15 that they were workers within the meaning of section 2(1) of the (63 of 1948) and complained that they were denied wages for overtime work done by them on the erroneous ground that they were not workers within the aforesaid provision.
The learned Magistrate held that the respondents had been entrusted with purely clerical duties and they were not connected in any manner with the manufacturing process.
On this conclusion their application was dismissed.
On appeal the learned Additional District Judge disagreed with this view and came to the conclusion that the work done by the respondents was incidental to or connected with the manufacturing process.
It was observed in the order that some of the respondents were entrusted with the duty of checking the time work of each worker in the workshop, a few others were timekeepers and the remaining respondents prepared account sheets on the basis of the time sheets and did other work incidental to the running of the work shop including payment of wages to the staff of the workshop and the office.
The High Court on revision as already observed, affirmed the order of the learned Additional District Judge.
On appeal in this Court the short question we are called upon to decide is whether the respondents, who are time keepers fall within the purview of the definition of "worker" as contained in section 2 (1) of the .
The respondents have raised a preliminary objection that the appeal is incompetent on the ground that respondent No, 29 (T. A. Kolalkar) had died after the order of the High Court but his name continued to appear in the array of respondents.
As his legal representatives had not been brought on the record, the appeal against him is incompetent and since there was a joint application on behalf of all the respondents which was dealt with and decided by a common order by the learned Magistrate, the appeal against the other respondents must also be held to be incompetent.
The impugned order having become final as the 728 deceased T. A. Kolalkar, the present appeal against other respondents should, according to the argument, be held to be incompetent because the reversal of the impugned order as against them would give rise to conflicting decisions on the point.
Recently this Court disallowed.a similar objection in Indian Oxygen Ltd. vs Shri Rani Adhar Singhand others(1) and when the attention of the respondent 's learned counsel was drawn to that decision, the objection was not seriously pressed.
We now turn to the merits of the appeal.
The word "worker" is defined in section 2(1) of the to mean "a person employed directly or through any agency, whether for wages or not, in any manufacturing process, or in cleaning any part of the machinery or premises used for a manufacturing process, or in any other kind of work incidental to, or connected with, the manufacturing process, or the subject of the manufacturing process.
" This definition seems to us to be fairly wide because it takes within its sweep not only persons employed in any manu facturing process but also in cleaning any part of the machinery or premises used for a manufacturing process and goes far beyond the direct connection with the manufacturing process by extending it to other kinds of work which may either be incidental to or connected with not only the manufacturing process itself but also the subject of the manufacturing process.
The word " manufacturing process" is defined in section 2(k) of the in fairly wide language.
It means any process for : "(i) making, altering, repairing, ornamenting, finishing, packing. oiling, washing, cleaning breaking up, demolishing, or otherwise treating or adapting any article or substance with a view to its use, sale, transport, delivery or disposal, or (ii) pumping oil, water or sewage, or (iii) generating, transforming or transmitting power; or (iv) composing types for printing by letter press, lithography, photogravure or other similar process or book binding; (v) constructing, reconstructing, repairing, refitting, finishing or breaking up ships or vessels;" Now the conclusion of the learned Additional District Judge on the nature of work of the respondents, which, in our opinion, (1) Civil Appeal No. 1444 of 1966 decided on 24th Sept. 1968.
729 being one of fact, must be held to be binding on the High Court on revision and also not open to reassessment on the merits in this Court on special leave appeal from the order of the High Court on revision, is that, the time keepers prepare the pay sheets of the workshop staff, maintain leave account, dispose of settlement cases and maintain records for statistical purposes.
Fourteen of the respondents, according to this conclusion, are timekeepers who maintain attendance of the staff, job card particulars of the various jobs under operation and time sheets of the staff working on various shops dealing with the production of Railway spare parts and repairs etc.
Four of the respondents are head time keepers entrusted with the task of supervising the work of other respondents.
The question arises if on this conclusion it can be held that as a matter of law the respondents fall outside the definition of "worker" as contemplated by section 2( 1) of the and that the High Court erred in dismissing the revision.
The appellant 's learned counsel has submitted that the expression "incidental to" or "connected with" connotes a direct connection with the manufacturing process and therefore if the duties assigned to the respondents have no such direct connection with the manufacturing process then they cannot fall within the purview of the word "worker".
In support of his submission lie has referred to some law dictionaries.
In Law Lexicon in British India by Ramanathan Iyer "incidental power" is stated to be, power that is directly and immediately appropriate to the existence of the specific power granted and not one that has a slight or remote relation to it.
The word "incidental" in the expression "incidental labour" as used in Mechanic 's Lien Statutes allowing liens for work and labour performed in the construction, repairs etc.
of a building etc.
is stated in this Law Lexicon to mean labour directly done for and connected with or actually incorporated in the building or improvement : service indirectly or remotely associated with the construction work is not covered by this expression.
Reference has next been made by the counsel to the Law Dictionary by Ballentine where also the expression "incidental power" is stated in the same terms.
In Stroud 's Judicial Dictionary the meaning of the words "incident" and "incidental" as used in various English statutes have been noticed.
We do not think they can be of much assistance to us.
The decision in Haydon vs Taylor(1) noticed in this book at first sight appeared to us to be of some) relevance, but on going through it, we do not find it to be of much help in construing the statutory provisions with which we are concerned.
Similarly the decision in Frederick Hayes Whymper vs John Jones Harney(2) seems to be of little guidance.
(1) ; (2) 730 On behalf of the respondents our attention has been drawn to a decision of this Court.
in Nagpur Electric Light and Power Co. Ltd. V. Regional Director Employees State Insurance Corporation Etc.(1).
This decision deals with the Employees State Insurance Act and on a comparison of the definition of the word "employee" as contained in section 2(9) of that Act with the definition of the word "worker" in section 2 (1) of the , it is observed That the former definition is wider than the latter.
It is further added that the benefit of the does not extend to field workers working outside the factory whereas the benefit of the Employees State Insurance Act extends inter alia to the em ployees mentioned in section 2 (9) (i) whether working inside the factory or establishment or elsewhere.
Reliance has, however, been Placed on behalf of the respondents on the observations at page 99 of the report where reference is made to the clerks entrusted with the duty of time keeping and it is observed that all these employees are employed in connection with the work of the factory.
A person doing non manual work has been held in this case to be included in the word "employee" within the meaning of section 2 (9) (i) if employed in connection with the work of the factory.
The ratio of this decision which is concerned with the construc tion of different statutory language intended to serve a different object and purpose is of no direct assistance in construing the definition of the word "worker" as used in the .
The respondents ' counsel has then submitted that the previous history of the Act throws helpful light on the legislative intendment and in this connection he has referred to the definition of the word "worker" in the XXV of 1934.
The word "Worker in section 2 (h) of that Act was defined to mean : "a person employed, whether for wages or not, in any manufacturing process, or in cleaning any part of the machinery or premises used for a manufacturing process, or in any other kind of work whatsoever incidental to or connected with the manufacturing process or connected with the subject of the manufacturing ,process, but does not include any person solely employed in a clerical capacity in any room or place where no manufacturing process is being carried on.
" It is argued that the deletion of the words conveying exclu sion of persons solely employed in a clerical capacity in a place where no manufacturing process is carried on suggests that the present definition of "worker" is wide enough to take within its fold even those persons who are employed solely in clerical capacity if otherwise they fall within the definition.
The appellant counsel has, on his part, by reference to tile definition in the Act (1) 731 of 1934, argued that the deletion of the word "whatsoever" after " any other kind of work" is indicative of the legislative intention to restrict the scope of "any other kind of work" in the current Act.
The was enacted to consolidate and amend the, law regulating labour in factories.
It is probably true that all legislation in a welfare state is enacted with the object of promoting general welfare; but certain types of enactments are more responsive to some urgent social demands and also have more immediate and visible impact on social vices by operating more directly to achieve social reforms.
The enactments with which we are concerned, in our view, belong to this category and, there .
fore, demand an interpretation liberal enough to achieve the legislative purpose, without doing violence to the language.
The definition of "worker" in the , therefore, does not seem to us to exclude those employees who are entrusted solely with clerical duties, if they otherwise fall within the definition of the word "worker".
Keeping in view the duties and functions of the respondents as found by the learned Additional District Judge, we are unable to find anything legally wrong with the view taken by the High Court that they fall within the definition of the, word "worker".
Deletion of the word "whatsoever" on which the appellant 's counsel has placed reliance does not seem to make much difference because that word was, in our view, redundant.
We have not been persuaded to hold that the High Court was in error in affirming the decision of the learned Additional District Judge.
In the result this appeal fails and is dismissed with costs.
R.K.P.S. Appeal dismissed.
[/INST]The first respondent was the owner of some buildings within the appellant Municipality.
The appellant was governed by the Madras District Municipalities Act,, 1920, till April 1, 1965, when the Mysore Municipalities Act, 1964 came into force and thereafter by the Mysore Act.
For the year 1966 67 the appellant issued notices of demand for payment of property tax under the Madras Act.
The tax was higher than under the Mysore Act.
The first respondent challenged the levy by a writ petition, and the appellant justified the levy under section 382(1) of the Mysore Act and its provisos.
The High Court quashed the demand notices.
In appeal to this Court, HELD : Under the second and third provisos to section 382(1) of the Mysore Act if a property tax has been imposed by the Madras Act, even though the rate of such tax is higher than that under the Mysore Act, the higher tax could be collected.
The provisions of Madras Act namely sections 78, 81, 82, 124 and r. 8 of 'Schedule IV of the Act, show that the municipal tax is an annual tax leviable for a particular official year and the assessment list on the basis of which the tax is assessed is for such official year.
Though, ordinarily, the Municipality would have to prepare a fresh assessment list every year, r. 8 of Schedule IV of the Madras Act which, by virtue of section 124 has to be read as part of Chapter VI of the Act dealing with Taxation and Finance permits the Municipal Council to continue the same assessment list for the next 4 succeeding years and to revise it once every 5 years.
But, in order to enable the Municipal Council to levy and collect a tax, under section 78 it has to pass a resolution determining to levy a tax, the rate at which such tax has to be levied as also the date from which it shall be levied.
In the present case, no such resolution was passed by the Municipal Council.
Therefore, by merely preparing the assessment registers under the Madras Act on April 1, 1964, which will have currency for a period of 5 years till March 31, 1969, it cannot be said that a tax or that a tax at a higher rate had been imposed.
No such tax having been imposed under the Madras Act, the provisos to section 382(1) of the Mysore Act do not apply and the demands for payment of the property tax were not justified.
[757 E H; 758 D H; 759 A] Municipal Corporation vs Hiralal, ; , followed.
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<s>[INST] Summarize the judgementCriminal Appeal No. 829 of 1985.
From the Judgment and order dated 28.11.1983 of the Andhra Pradesh High Court in Crl.
Case/Petn.
No. 290 of 1983.
R. Venkataramani and R. Ayyam Perumal for the Appellant.
A. Subba Rao for the Respondents.
The Judgment of the Court was delivered by, OZA, J.
This appeal has been filed by the appellant after obtaining leave from this Court against an order passed by the High Court of Andhra Pradesh dated 28.11.1983 wherein the High Court rejected a Revision Petition filed by the appellant.
Against the appellant a complaint was filed in the Court of Metropolitan Magistrate, Hyderabad under Section 120(b) read with Sections 467 and 471 of the Indian Penal Code.
After summons were issued the appellant raised objection about the maintainability of this prosecution for want of sanction under Section 197 of the Criminal Procedure Code.
The objection was rejected by the Metropolitan Magistrate, Hyderabad and against the order of the Metropolitan Magis trate a Revision Petition was filed in the High Court which has been rejected by the impugned order passed by the Andhra Pradesh High Court.
The learned Metropolitan Magistrate held that Section 197 is attracted only when a public servant is not removable from his office save by or with the sanction of the Govern ment.
The appellant is an officer who is removable from his office by a competent authority and no sanction of the Government is necessary.
Consequently Section 197 in terms does not apply.
This view was affirmed by the High Court of Andhra Pradesh.
It was contended by the learned counsel that after nationa lisa 218 tion as the banks are nationalised the appellant will fall within the definition of public servant and therefore Sec tion 197 will be attracted.
It was also contended that although the appellant is removable by an authority which is not Government but the authority has been empowered under the regulations and these regulations have been framed with the sanction of the Government and under these circumstances therefore the view taken by the Courts below is not correct.
Section 197 of the Code of Criminal Procedure reads: "When any person who is or was a Judge or Magistrate or a Public servant not removable from his office save by or with the sanction of the Government is accused of any offence alleged to have been committed by him while acting or purporting to act in the discharge of his official duty, no Court shall take cognizance of such offence except with the previous sanction (a) in the case of a person who is employed or, as the case may be, was at the time of commission of the alleged offence employed, in connection with the affairs of the Union, of the Central Government; (b) in the case of a person who is employed or, as the case may be, was at the time of commission of the alleged offence employed, in connection with the affairs of a State, or the State Government.
(2) No Court shall take cognizance of any offence alleged to have been committed by any member of the Armed Forces of the Union while acting or purporting to act in the discharge of his official duty, except with the previous sanction of the Central Government.
(3) The State Government may, by notification, direct that the provisions of sub section (2) shall apply to such class or category of the members of the Forces charged with the mainte nance of public order as may be specified therein, wherever they may be serving, and thereupon the provisions of that sub scction will apply as if for the expression "Central Government ' occurring therein the expression "State Government" were substituted.
(4) The Central Government or the State Gov ernment as the case may be, may determine the person by whom, the manner in 219 which, and the offence or offences for which, the prosecution of such Judge, Magistrate or public servant is to be conducted, and may specify the Court before which the trial is to be held.
" It is very clear from this provision that this Section is attracted only in cases where the public servant is such who is not removable from his office save by or with the sanction of the Government.
It is not disputed that the appellant is not holding a post where he could not be re moved from service except by or with the sanction of the Government.
In this view of the matter even if it is held that appellant is a public servant still provisions of Section 197 are not attracted at all.
It was contended by the learned counsel that the compe tent authority who can remove the appellant from service derives his power under regulations and these regulations ultimately derive their authority from the Act of Parliament and therefore it was contended that the regulations are flamed with the approval of the Central Government but it does not mean that the appellant cannot be removed from his service by anyone except the Government or with the sanction of the Government.
Under these circumstances on plain read ing of Section 197 the view taken by the Courts below could not be said to be erroneous.
We therefore see no reason to entertain this appeal.
It is therefore dismissed.
A.P.J. Appeal dismissed.
[/INST]On a complaint being filed under section 120(b) read with ss.467 and 471 of the Indian Penal Code, the Metropolitan Magistrate summoned the appellant and thereafter rejected his objection about the maintainability of his prosecution for want of sanction under section 197 of the Criminal Procedure Code, holding that section 197 does not apply because the appel lant is an officer who is removable from his office by a competent authority and no sanction of the Government is necessary.
This view was affirmed by the High Court.
In the appeal to this Court, on behalf of the appellant it was contended: (i) that after the nationalisation of the Department of the appellant he will fall within the defini tion of public servant and, therefore, section 197 will be at tracted and (ii) that although the competent authority who can remove the appellant from service is not the Government, but it has been empowered under the regulations framed under the Act of Parliament with the approval and sanction of the Central Government and, therefore, the view taken by the Courts below is not correct.
Dismissing the Appeal, HELD: It is clear that section 197 of the Criminal Procedure Code is attracted only in cases where the public servant is such who is not removable from his office save by or with the sanction of the Government.
[219B] In the instant case, it is not disputed that the appellant is not 217 holding a post where he could not be removed from service except by or with the sanction of the Government.
In this view of the matter even if it is held that appellant is a public servant still provisions of section 197 are not attracted at all.
Therefore, the view taken by the Courts below could not be said to be erroneous.
[219D]
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<s>[INST] Summarize the judgementminal Appeal No. 168 of 1959.
Appeal by special leave from the judgment and order dated September 10, 1958, of the Patna High Court in Criminal Appeal No. 580 of 1953.
B. B. Tawakley and R. C. Prasad, for the appellant.
A. K. Dutt and section P. Varma, for the respondent.
April 18.
The Judgment of the Court was delivered by RAGHUBAR DAYAL, J.
This appeal, by special leave, is against the order of the Patna High Court dismissing the appellant 's appeal against his conviction for offences under section 161, Indian Penal Code and a. 5(2) of the Prevention of Corruption Act, 1947 (Act 11 of 1947), hereinafter called the Act.
The appellant was the Construction Engineer at Sindhri.
R. B. Basu was a contractor living in Calcutta and carrying on the business of the company named and styled the Hindustan Engineering and Construction Company.
The prosecution alleged, and the Courts below have found, that the appellant accepted the sum of Rs. 10,000 as illegal gratification from Basu at the Kelner 's Restaurant at Dhanbad Railway Station on July 18, 1951.
The Courts disbelieved the appellant 's defence that he had taken the envelope containing this amount not knowing that it contained this amount, but knowing that it contained papers relating to Basu 's con.
tracts.
The contentions raised on behalf of the appellant are: (i)that the provisions regarding the presumption contained in section 4 of the Act are unconstitutional; (ii) that the case was tried by the Special Judge who had no jurisdiction to try it; (iii) that there had been no proper corroboration of the statement of Basu about the accused demanding the bribe and accepting the amount as illegal gratification.
The Constitutionality of section 4 of the Act was sought to be questioned on the ground that it went against 52 the provisions of article 21 of the.
Constitution which reads: "No person shall be deprived, of his life or personal liberty except;according to procedure established by law.
" We do not consider this question to be a substantial question of law for the purpose of article 145(3), which lays down that the minimum number of Judges who are to sit for the purpose of deciding any case involving a substantial question of law as to the interpretation of the Constitution shall be five, in view of it being held that the word 'law ' in article 21 refers to law made by the State ' and not to positive law.
It has been held in A. K. Gopalan vs The State of Madras (1) that in article 21, the word law ' has been used in the sense of State made law and not as an equivalent of law in the abstract or general sense embodying the principles of natural justice, and 'procedure established by law ' means procedure established by law made by the State, that is to say, by the Union Parliament or the Legislatures of the States, Section 4 has been enacted by Parliament and therefore it must be held that what it lays down is a procedure established by law.
The appellant was tried by the Special Judge of Patna.
The offence was committed at Dhanbad, in Manbhum District.
The case was chalanned to the Magistrate at Dhanbad.
On an application by the accused, the High Court transferred it to the Court of the Munsif Magistrate at Patna.
Subsequent to this order of transfer, the Criminal Law Amendment Act, 1952 (Act XLVI of 1952) came into force on July 28, 1952.
The case, thereafter, was forwarded to the Special Judge at Patna in view of section 10 of the Criminal Law Amendment Act.
The contention for the appellant is that there was the Special Judge at Manbhum and flat he alone could have tried this case.
Section 7 of the Criminal Law Amendment Act, reads: (1) Notwithstanding anything contained in the Code of Criminal Procedure, 1898, or in any other law the offences specified in subjection (1) of section 6 shall be triable by special Judges only.
(1) ; 53 (2) Every '.offence specified in sub section (1) of section 6 shall be tried by the special Judge for the area within which it was committed, or where there are more special Judges than one for such area, by such one of them as may be specified in this behalf by the State Government.
(3)When trying any case, a special Judge may also try any offence other than an offence specified in section 6 with which the accused may, under the Code of Criminal Procedure, 1898, be charged at the same trial." Sub section (1) makes the offences under section 161, Indian Penal Code and section 5(2) of the Act triable by a; special Judge only.
The appellant has been tried by a special Judge appointed under the Act.
His grievance is not with respect to the competency of the Court which tried him, but is with respect to the trial Court having no territorial jurisdiction to try him, as sub section
(2) of section 7 provides that such offences would be tried by the special Judge for the area in which the were committed.
The offences were committed within the territorial jurisdiction of the special Judge at Manbhum and therefore could have been tried by him alone.
It would therefore appear that the special Judge at Patna had no jurisdiction to try this case.
Sub section (3) of section 8 of the Criminal Law Amendment Act reads: "Save as provided in sub section (1) or sub section (2), the provisions of the Code of Criminal Procedure, 1898 shall, so far as they are not inconsistent with this Act, apply to the proceedings before a special Judge; and for the purposes of the said provisions, the Court of the special Judge shall be deemed to be a Court of Session trying cases without a jury or without the aid of assessors and the person conducting a prosecution before a special Judge shall be deemed to be a public prosecutor.
" It follows that the provisions of section 526 of the Criminal Procedure Code empowering the High Court to transfer any case from a criminal Court subordinate to it (1) ; 54 to any other Court competent to try it, apply to the case before any special Judge.
If this case had been transferred to the Court of the Special Judge, Manbhum, on the coming into force of the Criminal Law Amendment Act, it would have been open to the High Court to transfer the case from that Court to the Court of the Special Judge, Patna.
The case had been transferred from Dhanbad to Patna at the request of the appellant.
The trial at Patna cannot be said to have prejudiced the appellant in any way.
The mere omission of a formal forwarding of this case to the Special Judge at Manbhum and of a formal order of the High Court to transfer it to the Court of the Special Judge at Patna, have not, in our opinion, prejudiced the appellant in any way.
When the case was taken up by the Special Judge, Patna, on October 23, 1952, the accused as well as the Public Prosecutor desired de novo trial.
No objection to the jurisdiction of the Court to try the case was taken at that time.
Such an objection appears to have been taken at the time of the arguments before the Special Judge and was repelled by him.
Such an objection was not raised before the High Court when the appellant 's appeal was first heard in 1955 or in this Court when the State of Bihar appealed against the order of the High Court.
All this indicates that the appellant did not feel prejudiced by the trial at Patna.
In view of section 531 of the Code of Criminal Procedure, the order of the Special Judge, Patna, is not to be set aside on the ground of his having no territorial jurisdiction to try this case, when no failure.
of justice has actually taken place.
It is contended for the appellant that section 531 of the Code of Criminal Procedure is not applicable to this case in view of sub section
(1) of section 7 and section 10 of the Criminal Law Amendment Act.
We do not agree.
The former provision simply lays down that such offences shall be triable by special Judges and this provision has not been offended against.
Section 10 simply provides that the cases triable by a special Judge under section 7 and pending before a Magistrate immediately before the commencement of the Act shall be forwarded for trial to the 55 special Judge having jurisdiction over such cases.
There is nothing in this section which leads to the non application of section 531 of the Criminal Procedure Code.
We are therefore of opinion that the order of the special Judge convicting the appellant cannot be quashed merely on the ground that he had no territorial jurisdiction to try this case.
The last contention for consideration is whether there had been proper corroboration of the statement of Basu about the accused demanding the bribe of Rs. 10,000 and accepting it on July 18, 1951, at the Kelner Refreshment Room, Dhanbad Railway Station.
We may briefly indicate the salient facts deposed to by Basu in this connection.
The appellant is said to have visited Calcutta in December 1950, to have gone to Basu 's house and to have asked him to pay a bribe of Rs. 10,000.
There is no direct corroboration of this statement by the testimony of any other witness.
Kanjilal, an employee of Basu, under in.
structions of his master, met the appellant in May, 1951, enquired of him whether he would accept the amount he had demanded in December and had not been so far paid, and got the reply that the amount would be: acceptable.
He conveyed this information to Basu.
Nothing was done till over a month and then too, not to make the payment, but to inform the authorities.
In June 1951, Basu informed Mr. K. N. Mookerjee, P. W. 3, the then Superintendent of Police, Special Police Establishment, about the accused 's demanding bribe and at his request delivered the letter, Exhibit 11/1, dated June 18, to him.
He made mention in this letter about the demand made in December 1950, but made no reference to the appellant 's expression of readiness to accept the amount in the month of May. Mr. Mookerjee took steps for laying the trap and deputed Mr. section P. Mookerjee, P.W. 1.
Kanjilal met the appellant on July 14 and arranged with him that he would go to Dhanbad railway station when Basu would also be reaching there and 'that the money would be paid there and that the date of that meeting would be communicated later.
Basu was told of this arrangement at Calcutta.
He, in his turn, informed the authorities.
July 18 was fixed for the purpose.
Kanjilal informed the appellant by telephone on July 16 that the meeting would be on the 18th and that Basu would be reaching Dhanbad by the Toofan Express at about 5 p.m.
The trap arrangements were completed and the trap party reached Dhanbad by the Toofan Express on July 18.
Kanjilal himself went to Sindhri on the morning of July 18 and confirmed the arrangement to the appellant.
The appellant also reached Dhanbad railway station at about 5p.m.
The members of the trap party took their seats at different tables in the corners of the Refreshment Room of Kellner 's Restaurant.
Basu, with the appellant, reached there and occupied another table.
Refreshments were taken.
Thereafter, Basu talked over matters about the contract with the appellant, moved near him, took out the file from his satchel and then, after some conversation, took out the envelope containing the currency notes of the value of Rs. 10,000 and having its one long edge slit.
This envelope was passed on to the appellant.
Basu states that he made a statement at the time that there were Rs. 10,000, which he could, not pay to the appellant so far.
The appellant took the envelope and put it in his trouser pocket.
The trap party, after getting the signal that the bribe money had been paid, surrounded the appellant and got the envelope from him.
, It was found to contain the very currency notes whose 'numbers had previously been noted by the Magistrate, Mr. Mahadevan.
There is no verbal corroboration of Kanjilal 's statement about the message he conveyed to the appellant either in May or on the telephone or on the morning of the 18th of July.
The Courts below have found corroboration of the statements of Basu from the circumstances that the demand of money in December 1950 was mentioned in June, 1951, to Mr. K. N. Mookerjee; that the trap must have been laid when Basu must have been 67 certain that the appellant would turn up at Dhanbad at the appointed time and that the appellant 's presence at Dhanbad railway station could not have been accidental but must have been the result of previous arrangement.
No infirmity can be found in this reasoning.
The appellant gave an explanation for his presence at the railway station that day.
It has not been accepted by the Courts below.
In fact, the learned counsel for the appellant did not press it for consideration at the second hearing of the appeal, on remand by this Court.
No doubt, the trap arrangements must have been made when there was a practical certainty that the appellant would turn up at Dhanbad railway station.
Basu is not expected to mention falsely in the month of June that the appellant made a demand of Rs. 10,000 in December 1950.
Ordinarily, one is not expected to make a complaint of such a demand after such a long period of time.
The interval of time seems to have been due possibly to a hope that matters may straighten out or that a lower sum might be acceptable as bribe to pass the pending bills of Basu.
The omission of the trap witnesses to corroborate Basu 's statement at the time of the passing on of the envelope to the appellant, in forming the appellant of the envelope containing Rs. 10,000, is really surprising when the party consisted of four persons who had gone there for the purpose of being witnesses of the appellant 's accepting the bribe and who could therefore be expected to be alert to hear what passed on between the appellant and Basu.
The question here is, what did the appellant expect the envelope to contain? It was no occasion for Basu to personally deliver any bills or papers concerning the contract business.
Such papers could have been sent in the regular course of business to the appellant 's office.
The appellant does not appear to have questioned Basu as to what the envelope contained, as he would have done, if he did not know for certain what it contained.
The appellant 's statement that he understood the envelope to contain bills etc., is not consistent with his putting the envelope in his 8 58 pocket.
The envolope is expected to be a fat one as it contained one hundred Rs. 100 currency notes.
An envelope containing business papers is not expected to be put in the trouser pocket.
One usually carries it in hand, or in one of the pockets of the coat or bush shirt one may be putting on.
When it is held that the appellant must have gone to Dhanbad railway station by arrangement, it becomes a moot point, what the purpose of the arrangement was.
Surely, it could not have been a mere delivering of certain bills and papers.
As already mentioned, it could have been sent to Sindhri by post or through Kanjilal or any other messenger.
The purpose of the meeting at Dhanbad railway station must have been different.
The appellant has failed to mention any purpose which could be accepted as correct.
It is true that the appellant was not specifically questioned, when examined under section 342, Criminal Procedure Code, with respect to his demanding Rs. 10,000 at Calcutta, Kanjilal 's visit to him in May and July and his telephonic call and the arrangement and about Basu 's statement at the time the envelope was passed on to him.
But we are of opinion that this omission has not occasioned any failure of justice.
The appellant fully knew what had been deposed to by witnesses and what had been the case against him.
He denied the correctness of the main allegation that he received Rs. 10, 000 as bribe.
We are therefore of opinion that the appellant knew when he took the envelope from Basu that he was getting Rs. 10,000 as bribe, which amount he had demanded, and that therefore the conviction of the appellant is correct.
The appeal is therefore dismissed.
Appeal dismissed.
[/INST]The appellant was born in India before the partition.
He left for Pakistan and returned to India in 1953 on a Pakistani passport and Indian visa.
He did not return to Pakistan before the expiry of the period for which he was permitted to stay in India under the visa.
He was convicted for a breach of paragraph 7 Of the Foreigners Order, 1948, which required every "foreigner" entering India to depart from India before the expiry of the period during which he was authorised to remain in India.
Held, that the appellant was not a foreigner on the date of his entry into India and his conviction was bad.
On the relevant date the appellant was a natural born British subject within section 1(1)(a) of the British Nationality and Status of Aliens Act, 1914, and consequently was not a foreigner as defined in section 2(a) of the , as it then stood.
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<s>[INST] Summarize the judgementCivil Appeal No. 1653 of 1979.
Appeal by special leave from the Judgment and Order dated 23.5.1979 of the Delhi High Court in E.F.A. No. 8/76.
Madan Bhatia and Sushil Kumar for the Appellant.
S N. Kacker, S.K.Mehta, P.N. Puri, E.M.S. Anam and M.K. Dua for the Respondents.
The Judgment of the Court was delivered by A.N. SEN J.
The principal question which falls for determination in this appeal by Special Leave granted by this Court, is whether Gyan Chand Jain, the Respondent No. 1 in this appeal, who purchased a two and half storeyed Bungalow at No. 5 C/96, W.E.A. Karol Bagh, New Delhi, at an auction sale held pursuant to the terms of the compromise decree between the morgagor and the morgagee, is entitled to recover actual physical possession of the portions in the occupation of the appellants as lessees, the leases in respect of which were created after the decree in the mortgage suit by consent between the parties had been passed, in an application made by the auction purchaser Gyan Chand Jain under O.XXI, rules 95 & 96 of the Code of Civil Procedure.
There is no serious dispute with regard to the facts material for the purpose of appeal.
Des Raj Agarwal, the sole proprietor of M/s. 178 Raj Kumar & Co., mortgaged the 2/1/2 storeyed bungalow No.5 C/96, WEA.
Karol Bagh, New Delhi (herein after referred to as the premises) along with various other properties with Oriental Bank of Commerce (hereinafter referred as the Bank) on 28.6.1960 by deposit of title deeds.
The Bank filed a suit to recover its dues on the mortgage on 6.11.1962.
On 3.9.1963, a decree was passed by consent of the parties in favour of the plaintiff mortgagee for the sum of Rs. 479177.49 with costs and future interest at 6% till realisation of the decretal amount.
The other relevant terms of the consent decree which are contained in clauses 8 and 9 of the compromise are to the following effects: "8.
If the judgment debtor pay Rs. 479177.49 less costs and interest as after March, 1961 within two years of the decree, then whole of the decree shall stand satisfied.
If full amount of the decree with costs and interest is not paid as agreed above, within two years of the decree, then the decree holder shall be free to enforce the decree against the property mortgaged which shall be sold in execution of the same and the decree holder shall be entitled to proceed against other property and person of the judgment debtor in the case of the proceeds of the property not being sufficient to satisfy the decree".
After the decree had been passed on 3.9.1963, it appears that the judgement debtor leased out different portions of the premises to Dev Raj Dogra, Ish Kumar Khosla and Balwant Singh, the appellants herein, 1966, 1967 and 1970 respectively.
The judgment debtor failed to make payment of the decreetal dues in terms of the provisions contained in the consent decree and the premises in question resold by public auction on 28.10.1971.
Gyan Chand Jain whose bid was the highest, was declared to be the purchaser of the premises and the sale in his favour was confirmed on 6.8.1973.
On 25.10.76 an application was made on behalf on Gyan Chand Jain, the auction purchaser, in the Delhi High Court under O. XXI rules 95 and 96 and also S.151 of the Code of Civil Procedure for the following reliefs: (i) Warrants of possession with the direction that vacant physical possession of the entire property be delivered to the applicant, be issued and vacant physical possession of the entire property be got delivered to the applicant; 179 (ii) in case the Hon 'ble Court comes to a conclusion that the applicant is not entitled to vacate physical possession of any part of the property symbolic possession of that part of the property be granted to him; (iii) notices be issued to the persons mentioned in para 9 above to show cause why vacant physical possession of the portion of the property in their occupation be not delivered to the applicant.
The three tenant who were in possession of the respective portions leased out to them and on whom notices had been served, contested the said application.
A learned Single Judge of the Delhi High Court passed an order of physical possession of the said portions in the respective occupation of the tenants, the appellants before us, to be made over to the auction purchaser Gyan Chand Jain.
The Learned Judge held that the tenancies in favour of the tenants had been created after institution of the suit by the Bank and after the passing of the compromise decree in the said suit; and, the said tenancies would have no effect on the rights acquired by the auction purchaser, in view of the provisions contained in section 52 of the Transfer of property Act.
The Learned Judge had relied on the judgment of a Division Bench of the Bombay High Court in the case of Ramdas Popat Patil vs Fakira Pandu Patil and Ors.(1) and also on decision of Division Bench of the Gujarat High Court in case Jagjiwandas a Firm vs Lakhiram Haridasmal and Ors.(2) The tenants preferred an appeal against the said order of the learned Judge.
Before the Division Bench of the Delhi High Court, it was urged on behalf of the tenants that the decision of the Division Bench relied on by the learned Single Judge had been subsequently over ruled by a decision of the Full Bench of the Bombay High Court in case of Anaji Thamaji Patil vs Ragho Bhivraj Patil and Anr.(3) and the correctness of the decision of the Gujarat High Court had also been questioned in this Full Bench judgment.
Various other arguments were also advanced before the Division Bench on behalf of the tenants and the said arguments have been noted in the judgment of the Division Bench.
The Division Bench however, dismissed the appeal, accepting the contention put forward on behalf of the respondent auction purchaser that the decision of this Court in the case of M/s Supreme General Films Exchange Ltd. vs His Highness Maharaja Sir Brijnath Singhji.
180 Deo of Maihar and Ors., concludes the controversy.
The Division Bench also referred to the decision of this Court in case Jayaram Mudaliar vs Avva Swami and Ors.(2) Against the judgment and decision of the Delhi High Court the tenants have preferred this appeal after obtaining special leave from this Court.
Mr. Bhatia, learned counsel appearing on behalf of the tenants the appellants before us, has urged that section 52 of the has no application to the facts and circumstances of this case, as the conditions laid down in the said Section for the applicability of the said section are not satisfied.
It is the argument of Mr. Bhatia that the requirements of the said Section are (1) there must be a suit or proceeding which is not a collusive one and any right to immovable property must be directly and specifically in question in the said suit or proceeding and (2) transfer or otherwise dealing with the property by any party to the suit or proceeding must affect the right of any other party thereto under any decree or order which may be passed therein.
Mr. Bhatia has contended that in the instant case the right that the mortgagee had was only to put the property to sale in the event of the mortgagor failing to pay the decreetal amount in terms of the provisions of the compromise decree.
It is his contention that the right to put the property to sale cannot be said to be a right to immovable property directly and specifically in question in the suit.
He also referred to section 65A of the which empowers the mortgagor while lawfully in possession of the mortgaged property to grant lease in terms of the provisions contained in the said Section.
He has submitted that section 65A should be read along with section 52 and both these sections have been incorporated with the object of preserving the interest of the mortgagee by making suitable provisions so that the security of the mortgagee might not in any way be affected by any act done by the mortgagor after the creation of the mortgage and also after the institution of any suit for enforcement of the mortgage.
It is his submission that in section 65A of the the Legislature has made it manifestly clear that the mortgagor will be entitled to grant a lease of the property in conformity with the provisions of the said Section and he submits that when a mortgagor grants a lease of the mortgaged property in terms of the provisions of Section 65 A of the , it cannot be said that the granting of any such lease affects the right of the mortgagee.
Mr. Bhatia has next contended that in any event S.52 makes provisions for the 181 parties to the suit or proceeding and can have no application to any outside auction purchaser who is not a party to the suit or proceeding and who only acquires his right after the sale in execution of the decree has been confirmed.
Mr. Bhatia argues that the judgment of the learned Single Judge of the Delhi High Court must be held to be wrong, as the learned Single Judge came to his decision relying on the decision of the Division Bench of the Bombay High Court in the case of Ramdas Popat Patil vs Fakira Pandu Patil and Ors.
(supra) and the decision of the Gujarat High Court in the case of Jagjiwandas a Firm vs Lakhiram Haridasmal and Ors.
(supra) and the decision of the Division Bench of the Bombay High Court in Ramdas Popat Patil 's case has been over ruled by the Ful Bench decision of the Bombay High Court in Anaji Thamaji Patil vs Ragho Bhivraj Patil and Anr.
(supra) in which the correctness of the decision of the Gujarat High Court has also been questioned.
Mr. Bhatia has commented that the decisions of this Court in the case of M/s. Supreme General Films Exchange Ltd. vs His Highness Maharaja Sir Brijnath Singhji Deo of Maihar and Ors.
(supra) and in the case of Jayaram Mudaliar vs Ayya Swami and Ors.
(supra) do not conclude the question involved in the instant case.
He has submitted that the rights of a third party auction purchaser to get physical possession of the property purchased at the auction sale was not considered by the Supreme Court in any of these two decisions; and he has further submitted that in these two cases the Supreme Court had indeed proceeded on the assumption that section 52 of the was applicable without considering whether the requirements of the said Section had been complied with or not, as these aspects were not argued before the Supreme Court in these two cases.
Mr. Bhatia has drawn our attention to O.XXI, rule 95 and also to rule 96 of the Code of Civil Procedure and has submitted that the rights of an auction purchaser are governed by the provisions contained therein.
It is the argument of Mr. Bhatia that in view of the provisions contained therein, the auction purchaser cannot claim physical possession of the portions in the occupation of the appellants, even though the appellants might have been inducted as tenants after the compromise decree in the suit had been passed.
Mr. Kakkar, learned counsel appearing on behalf of the auction purchaser, has submitted that as the tenants in the instant case were inducted not only after the institution of the suit for enforcement of the mortgage but also after the compromise decree had been passed, therein section 52 of the must be held to be applicable and it must be held that the tenancies were illegal and were created in breach of the provisions contained in section 52 of the 182 .
Mr. Kakkar has argued that section 65 A of the does not, in any way, control section 52 of the said Act.
It is his argument that section 65 A makes provisions with regard to the powers of the mortgagor to grant leases of the mortgaged property after the creation of the mortgage but before the institution of suit, while, on the other hand section 52 makes provisions for cases of transfer or otherwise dealing with any property after the institution of a suit or proceeding and section 52 imposes a complete ban on the transfer of any kind or dealing with immovable property except with the authority of the Court during the pendency of the suit or proceeding in which any right to immovable property is directly or specifically in question so that the rights of any party may not be affected when any decree or order is passed in the suit or in the proceeding.
Mr. Kakkar has referred to S.58 of the in support of his contention that in case of a mortgage, there is a transfer of an interest in specific immovable property for the purpose of securing of the payment of money advanced or to be advanced by way of loan.
He has argued that in a suit for the enforcement of mortgage it must, therefore, be held that the right to immovable property is directly and specifically in question; and he has further argued that after the decree for sale is passed in a mortgage suit the mortgagor loses even his right to redeem the property.
He has submitted that in the instant case tenancies have been created long after the compromise decree in which provision for sale of the mortgaged property had been made and the right of the mortgagee decree holder to put up the mortgaged property to sale had also arisen for failure on the part of the mortgagor judgment debtor to pay the decretal dues in terms of the compromise decree and the tenancies created by the mortgagor must be held to be illegal and void as they are clearly in contravention of the provisions contained in section 52 of the .
He submits that there cannot be any manner of doubt, that the creation of a tenancy affects the value of the property and to that extent affects the security, even though it may be said that the Legislature in its wisdom has thought it fit to permit the mortgagor to grant leases of the mortgaged property in terms of the provisions contained in section 65 A of the .
It is his argument that the Legislature has thought it fit not to impose any kind of absolute prohibition in respect of the dealing with any property by the mortgagor after the creation of a mortgage and has imposed only such restrictions which the Legislature thought would not prejudicially effect the security of the mortgagee; but the Legislature, however, in section 52 of the Act has thought fit to impose complete ban on the transfer 183 of or otherwise dealing with any property after the institution of a suit or proceeding in which the right to property is directly or specifically in question, so that the rights of any party thereto may not be affected under a decree or order which may be made in the suit or proceeding.
Mr. Kakkar has next submitted that the auction purchaser at the Court sale acquires all the right, title and interest of the mortgagor and also of the mortagee as a result of the purchase and the auction purchaser, therefore, steps into the shoes of the mortgagee and becomes entitled to obtain physical possession of the property purchased in the same manner as the mortgagee himself would have been able to do.
Mr. Kakkar in this connection has referred to the decision of this Court in the case Mangru Mahto and Ors.
vs Shri Thakur Taraknath Tarakeshwar Math and Ors.(1); and also to the decision of the Supreme Court in M/s. Supreme General Films Exchange Ltd. vs His Highness Maharaja Sir Brijnath Singhji Deo of Maihar and Ors.
(supra) It is the submission of Mr. Kakkar that the decisions of this Court in the case of M/s. Supreme General Films Exchange Ltd. (supra) and also in the case of Jayaram Mudaliar (supra) conclude the question involved in the present appeal and the Division Bench rightly dismissed the appeal relying on the said decisions.
Before we proceed to deal with the respective contentions of the parties, it will be convenient to consider the material provisions of the relevant statutes to which we were referred in the course of submissions made from the bar.
Section 52 of the reads as follows: "During the pendency in any Court having authority within the limits of India excluding the State of Jammu and Kashmir or established beyond such limits by the Central Government of any suit or proceeding which is not collusive and in which any right to immovable property is directly and specifically in question, the property cannot be transferred or otherwise dealt with by any party to the suit or proceeding so as to affect the rights of any other party thereto under any decree or order which may be made therein, except under the authority of the Court and on such terms as it may impose.
[Explanation For the purposes of this section, the pendency of a suit or proceeding shall be deemed to commence from the date of the presentation of the plaint or the institu 184 tion of the proceeding in a Court of competent jurisdiction, and to continue until the suit or proceeding has been disposed of by a final decree or order, and complete satisfaction or discharge of such decree or order has been obtained, or has be come unobtainable by reason of the expiration of any period of limitation prescribed for the execution thereof by any law for the time being in force.]" Material provisions of section 58 (a) and (b) of the said Act are in the following terms: "(a) A Mortgage is the transfer of an interest in specific immovable property for the purpose of securing the payment of money advanced or to be advanced by way of loan, an existing or future debt, or the performance of an engagement which may give rise to a pecuniary liability.
The transferor is called a mortgagor, the transferee a mortgagee; the principal money and interest of which payment is secured for the time being are called the mortgage money, and the instrument (if any) by which the transfer is effected is called a mortgage deed.
(b) Where, without delivering possession of the mortgaged property, the mortgagor binds himself personally to pay the mortgage money, and agrees, expressly or impliedly, that, in the event of his failing to pay according to his contract, the mortgagee shall have a right to cause the mortgaged property to be sold and the proceeds of sale to be applied so far as may be necessary, in payment of the mortgage money, the transaction is called a simple mortgage and the mortgagee a simple mortgagee." section 65A which was subsequently introduced into the Act by section 30 of the Transfer of Property (Amendment) Act, 1929 provides: "(1) Subject to the provisions of sub section (2), a mortgagor, while lawfully in possession of the mortgaged property, shall have power to make leases thereof which shall be binding on the mortgagee.
(2) (a) Every such lease shall be such as would be made in the ordinary course of management of the property concerned, and in accordance with any local law, custom or usage.
185 (b) Every such lease shall reserve the best rent that can reasonably be obtained, and no premium shall be paid or promised and no rent shall be payable in advance.
(c) No such lease shall contain a covenant for renewal.
(d) Every such lease shall take effect from a date not later than six months from the date on which it is made.
(e) In the case of a lease of buildings, whether leased with or without the land on which they stand, the duration of the lease shall in no case exceed three years.
and the lease shall contain a covenant for payment of the rent and a condition of re entry on the rent not being paid within a time therein specified.
(3) The provisions of sub section (1) apply only if and as far as a contrary intention is not expressed in the mortgagedeed; and the provision of sub section (2) may be varied or extended by the mortgage deed and, as so varied and extended shall, as far as may be, operate in like manner and with all like incidents, effects and consequences, as if such variations or extensions were contained in that sub section.
Rules 95 and 96 of O.XXI of the Code of Civil Procedure under which the auction purchaser in the instant case had made the application for possession are in the following effect: "95.
Where the immovable property sold is in the occupancy of the judgment debtor or of some person on his behalf or of some person claiming under a title created by the judgment debtor subsequently to the attachment of such property and a certificate in respect thereof has been granted under rule 94, the Court shall, on the application of the purchaser, order delivery to be made by putting such purchaser or any person whom he may appoint to receive delivery on his behalf in possession of the property, and, if need be, by removing any person who refuses to vacate the same.
Where the property sold is in the occupancy of a tenant or other person entitled to occupy the same and a certificate in respect thereof has been granted under rule 94, the Court shall, on the application of the purchaser, order delivery to be made by affixing a copy of the certificate of sale in 186 some conspicuous place on the property and proclaiming to the occupant by beat of drum or other customary mode, at some convenient place, that the interest of the judgment debtor has been transferred to the purchaser.
An analysis of section 52 of the indicates that for application of the said section the following conditions have be satisfied: 1.
A suit or a proceeding in which any right to immovable property must be directly and specifically in question, must be pending; 2.
The suit or the proceeding shall not be a collusive one; 3.
Such property during the pendency of such a suit or proceeding cannot be transferred or otherwise dealt with by any party to the suit or proceeding so as to affect the right of any other party thereto under any decree or order which may be passed therein except under the authority of Court.
In other words, any transfer of such property or any dealing with such property during the pendency of the suit is prohibited except under the authority of Court, if such transfer or otherwise dealing with the property by any party to the suit or proceeding affects the right of any other party to the suit or proceeding under any order or decree which may be passed in the said suit or proceeding.
It has to be noted that this section imposes a prohibition on transfer or otherwise dealing with any property during the pendency of a suit provided the conditions laid down in the section are satisfied.
section 58 makes it clear that in case of a mortgage there is a transfer of an interest in the specific immovable property mortgaged for the purpose of securing the payment of money advanced or to be advanced by way of a loan, an existing or future debt, or the performance of an engagement which may gives rise to pecuniary liability.
It further confers, in case of a simple mortgage where, without delivering the possession of the mortgaged property, the mortgagor binds himself personally to pay the mortgage money, a right on the mortgagee to cause the mortgaged property to be sold and the proceeds of sale to be applied, so far as may be necessary in payment of the mortgage debt, 187 section 65A which as we noticed earlier, was introduced by the Amending Act, 1929 in recognition of the mortgagor 's powers exercised bona fide to grant lease of the mortgage property in the usual course of management, makes provision with regard to the exercise of such powers by the mortgagor, while the mortgage subsists and the mortgagor is in lawful possession of the mortgaged property.
This section further makes it clear that any lease granted by the mortgagor in accordance with the provisions of this section would be binding on the mortgagee.
Rules 95 and 96 of O.XXI of the Code of Civil Procedure makes provisions for enabling a purchaser of immovable property in a Court sale after obtaining the necessary certificate from the Court in terms of the provisions contained in rule 94 of the Code to apply for delivery of possession of the immovable property purchased by him at the Court sale.
Rule 95 provides for actual physical possession and rule 96 provides for symbolic possession.
A plain reading of rule 95 which we have earlier set out, clearly establishes, that the purchaser will be entitled to physical possession of property purchased and the Court will direct delivery of actual possession of the property sold to him by removing any person who refuses to vacate the same, if need be, if the following conditions are satisfied: 1.
The property sold must be in the occupation of the judgment debtor; 2.
The property sold must be in the occupancy of some person on behalf of the judgement debtor: 3.
The property sold must be in the occupation of some person claiming under a title created by the judgment debtor subsequently to the attachment of the property.
Rule 96 on the other hand makes it clear that where the property sold is in the occupancy of a tenant or other person entitled to occupy the same, symbolic possession of the property in the manner provided in the said rule is to be made over to the purchaser after the purchaser has obtained the necessary certificate under rule 94 of the Code.
We shall now proceed to consider the decision of this Court in the case of M/s. Supreme General Films Exchange Ltd. vs His Highness Maharaja Sir Brijnath Singh Deo of Maihar and Ors.
(supra) and also the decision of this Court in Jayaram Mudaliar vs Ayya Swami and Ors (supra).
In the case of M/s. Supreme General Films Exchange 188 Ltd., the plaintiff respondent who were the mortgagee of a cinema theatre of which the appellant Supreme General Films Exchange Ltd. claimed to be a lessee in occupation, had filed a suit against the mortgagor and a decree by compromise had been passed in the said suit on 7th May, 1960.
By the said compromise decree it was agreed that the amounts due to the mortgagee decree holder would be realised by the sale of the theatre.
The Central Bank of India, another creditor of the mortgagor, assigned its rights under the decree to the plaintiff decree holder.
The theatre was attached in the course of execution of the decree.
The original lease of 1940 on the basis of which the appellant, the Supreme General Films Exchange Ltd. had entered into possession, expired in 1946 but thereafter the Company had continued in possession as a tenant holding over until the impugned lease deed of 1946 in favour of the company was executed.
The company filed a suit in 1954 for specific performance of the agreement to lease and the lease deed of 1956 was executed in compliance with the terms of the compromise decree passed in the said suit filed by the appellant company.
In the said suit for specific performance by the appellant company, the plaintiff mortgagee was not impleaded as a party.
The plaintiff mortgagee thereafter filed a suit claiming that the lease of 1956 was void as the same came within the mischief of Ss. 52 and 65A of the and also section 64 of the Code of Civil Procedure.
The appellant company contested the said suit contending inter alia that the suit of this nature filed by the plaintiff mortgagee did not lie as it fell outside the purview of section 42 of the Specific Relief Act.
The trial Court decreed the said suit of the plaintiff mortgagee and granted the declaration asked for.
The appellant company preferred an appeal against the decree of the trial Court to the High Court which dismissed the said appeal.
Thereafter the appellant company filed a further appeal to this Court by special leave granted by this Court.
This Court for reasons recorded in the judgment held that the plaintiff was entitled to the declaration asked for on proper construction of section 42 of the Specific Relief Act.
One of the contentions which was raised on behalf of the appellant in this Court was that section 52 of the was not attracted to the lease in question.
Dealing with contention this Court observed at pp.
243 244 as follows: "The contention that the case fell outside the purview of section 52 of the as the lease was executed in purported satisfaction of an antecedent claim rests upon the terms of an agreement of 1948, embodied in a letter, on the strength of which the defendant appellant had 189 filed his suit for specific performance.
We find that the terms of the compromise decree in that suit and lease deed of 1956 purported to confer upon the defendant appellant new rights.
Indeed, there are good grounds for suspecting that the compromise in the suit for specific performance was adopted as a device to get round legal difficulties in the execution of the lease of 1956 in favour of the defendant company.
We are unable to accept the argument, sought to be supported by the citation of Bishan Singh and Ors.
vs Khazan Singh and Anr.
(AIR that the lease was merely an enforcement of an antecedent or pre existing right.
We think that it purported to create entirely new rights pendent lite.
It was, therefore struck by the doctrine of lis pendens, as explained by this Court in Jayaram Mudaliar vs Ayyaswami and ors.
[1973 SCR. 139] embodied in Section 52 of the .
An alternative argument of the appellant was that a case falling within section 65A (2) (a) of the , confining the duration of a lease by a mortgagor to three years, being a special provision, displaces the provisions of section 52 of the .
This argument overlooks the special object of the doctrine of lis pendens which applies to a case in which litigation relating to property in which rights are sought to be created pendente lite by acts of parties, is peening.
Moreover, for the purposes of this argument, the defendant appellant assumes that the provisions of Section 65A(2) (e) are applicable.
If that was so, it would make no substantial difference to the rights of the defendant appellant, which would vanish before the suit was filed if Section 65A applies.
We, however, think that, as the special doctrine of lis pendens, is applicable here, the purported lease of 1956 was invalid from the outset.
In this view of the matter, it is not necessary to consider the applicability of Section 65A (2) (e), which the defendant appellant denies, to the facts of this case." This Court further held agreeing with the concurrent findings of the Trial Court and the High Court that the lease of 1956 was also struck by the provisions of section 64 of the Civil Procedure Code, as the property continued to remain under attachment at the time of the grant of the lease in 1956.
190 It may be noted that in the case the validity of the lease had been questioned by the mortgagee decree holder in a suit for appropriate declaration.
The claim was not for possession by a third party auction purchaser in a proceeding under rr. 95 and 96 of O.XXI of the Code of Civil Procedure and the merits of an application under the said provisions of the Code and the scope and effect thereof did not come up for consideration, In the case of Mangru Mahto and Ors.
vs Shri Thakur Taraknath Tarakeshwar Math and Ors.
(supra), the mortgagor had granted lease of the mortgaged property to certain persons.
In execution of the mortgage decree, the mortgagee himself purchased the property at the auction.
The lessees of the mortgaged property had allowed the property to be sold and had not applied for being added as a party.
The mortgagee had also obtained the money decree against one of the lessees and in execution of the decree had attached the mortgaged land.
The lessees filed claim petitions objecting to the attachment under O.XXI, rule 58 of the Code of Civil Procedure.
The claim petitions filed by the lessees were allowed and the executing court held that the leases were genuine.
The mortgagee auction purchaser did not file any suit under Order XXI, rule 63 but latter filed a suit against the mortgagor and the lessees for recovery of possession of the lands, alleging that the leases were collusive transactions and were otherwise not binding on him.
The Trial Court dismissed the suit holding that the leases were genuine; but the High Court decreed the suit holding that the leases were sham transactions and were made in contravention of section 65A of the .
The lessees thereafter preferred and appeal to this Court under certificate granted by the High Court.
One of the contentions raised before this Court was that as the mortgagee did not file a suit under o. XXI, rule 63 of the Code of Civil Procedure after the claim petitions of the lessees under O.XXI rule 58 of the Code of Civil Procedure had been allowed and the mortgagee was not entitled to maintain the suit for recovery of possession of the mortgaged land and for mense profits on the allegation that the leases were collusive transactions and were otherwise not binding on him.
This contention was negatived by this Court for reasons recorded in the judgment.
This Court further held that the validity of the leases granted by the mortgagor was not affected by section 65A of the as the leases were granted before the enactment of section 65 A.
As these aspects do not have any material bearing on the question involved in the present appeal, it does not become necessary for us to pursue these two aspects any further.
This Court, however, held that the leases in question were not granted by the mortgagor in the ordinary 191 course of management as the agent or bailiff of the mortgagee and were not binding on the mortgagee and in that view of the matter this Court dismissed the appeal.
This Court observed at p. 132 as follows: "A lease granted by the mortgagor, out of the ordinary course of management, though not binding on the mortgagee is binding as between the mortgagor and the lessee.
Such a lessee acquires an interest in the right of redemption and is entitled to redeem.
If such a lease is created before the institution of a suit relating to the mortgage, the lessee must be joined as a party to the suit under O. 34, r. 1, C.P.C.; otherwise he will not be bound by the decree passed in the suit and will continue to retain his right of redemption.
But in view of section 52 of the , if the mortgagor grants such a lease during the pendency of a suit for sale by the mortgagee, the lessee is bound by the result of the litigation.
If the property is sold in execution of the decree passed in the suit, the lessee cannot resist a claim for possession by the auction purchaser.
The lessee could apply for being joined as a party to the suit and ask for an opportunity to redeem the property.
But if he allows the property to be sold in execution of the mortgage decree and they have now lost the present case, the lessees allowed the suit lands to be sold in execution of the mortgage decree and they have now lost the right of redemption.
They cannot resist the claim of the auction purchaser of recovery of possession of the lands.
" It may be noted that the Court immediately after the aforesaid observations has further observed as follows: "If a mortgagor in possession of the mortgaged property executes a lease of the property in the ordinary course of management as the agent or bailiff of the mortgagee during the pendency of a suit by the mortgagee to enforce the mortgage, a question may arise whether such a lease is in the eye of the law a lease granted by the mortgagee through his agent and therefore binding on him.
But in the present case, that question does not arise as the leases were not granted by the mortgagor in the ordinary course of management as the bailiff or agent of the mortgagor.
" It is to be noticed that this decision arose out of the suit instituted by the mortgagee auction purchaser for recovery of possession of 192 mortgaged property sold in execution of the mortgage decree and purchased by the mortgagee himself and the decision in the case rested mainly on the basis that the lease was not granted by the mortgagor in the usual course of business.
This case was also not concerned with an application by an outside auction purchaser for physical possession of the property purchased by him in an application made under O.XXI, rr. 95 and 96 of the Code of Civil Procedure, and the Court did not have to consider this scope and effect of a proceeding under O.XXI, rr. 95 and 96 of the Code of Civil procedure.
In our opinion, it cannot, therefore, be said that these two decisions of this Court conclude the question involved in the present appeal before us.
It may be true that section 52 and section 65 A of the operate in different spheres.
S.65 A, as we have earlier noticed deals with the powers of the mortgagor to grant a lease of the mortgaged property., while the mortgagor remains in lawful possession of the same.
section 52 deals with cases of transfer of or otherwise dealing with any immovable property after any suit or proceeding in which any right to the said immovable property is directly and specifically in question, has been filed.
It is also to be noted that section 65 A which came to be inserted by the Amending Act 1929, is neither made 'subject to ' nor 'not withstanding the provisions ' contained in section 52 of the Act.
section 52 will, however, be only applicable, if the requirements of the said section are satisfied.
We have earlier noticed what the requirements of the said section are.
In the instant case, it does not become necessary for us to consider whether the grant of any lease by a mortgagor in conformity with the provisions of section 65 A of the during the pendency of a suit by the mortgagee to enforce the mortgage will attract the provisions of section 52 of the Act or will be outside the mischief of the provisions of the said section on the ground that the creation of such a lease may not affect the rights of the mortgagee under any decree or order which may be passed in the suit.
We have earlier quoted the observations of this Court in the case of Mangru Mahto (supra) and it will be noticed that the Supreme Court in the said case did not decide this question and left this question open.
In the instant case an outside auction purchaser is seeking recovery of the physical possession of the property purchased by him at the auction from the appellants who are in possession of different portions of the said premises as tenants of the said por 193 tions.
The auction purchaser in the instant case was not the mortgagee and he was no party to the suit in which the compromise decree was passed.
section 52 in clear terms speaks of the rights of the parties to the suit or proceeding.
In this connection it may be noted that this Court in the case of Jayaram Mudaliar (supra) held at p. 153 as follows: "It is evident that the doctrine, as stated in section 52, applies not merely to actual transfers of rights which are subject matter of litigation but to other dealings with it by any party to the suit or proceeding, so as to affect the right of any other party thereto.
Hence it could be urged that where it is not a party to the litigation but an outside agency such as the tax collecting authorities of the Government, which proceeds against the subject matter of litigation, without anything done by a litigating party, the resulting transaction will not be hit by section 52.
Again, where all the parties which could be affected by a pending litigation are themselves parties to a transfer or dealings with property in such a way that they cannot resile from or disown the transaction impugned before the Court dealing with the litigation the Court may bind them to their own acts.
All these are matters which the Court could have properly considered.
The purpose of Section 52 of the is not to defeat any just and equitable claim but only to subject them to the authority of the Court which is dealing with the property to which claims are put forward.
" The auction purchaser derives his right to obtain possession only after the sale in his favour has become absolute and sale certificate has been obtained by him.
The mode and manner of obtaining such possession are regulated by rr. 95 and 96 of the Code of Civil Procedure.
It is of interest to note that in the instant case, the auction purchaser had applied for obtaining possession under r. 95 which provides for actual possession and also under r. 96 which provides for symbolic possession.
We have earlier set out the provisions of these two rules.
In the facts and circumstances of this case, the auction purchaser, in view of the provisions contained in rule 95 which regulates the rights of the auction purchaser to obtain physical possession of the property purchased, is not entitled to recover the physical possession of the portions in the occupation of the appellants as tenants.
The appellants are not the judgment debtors.
They are not in occupation of the property on behalf of the judgment debtor.
They are also not claiming to be in occupation under 194 a title created by the judgment debtor subsequently to any attachment of the property.
There has been no question of any attachment in the instant case.
The appellants are in the occupation of the respective portions as tenants and they claim to occupy the same as such.
The question of validity or otherwise of the tenancy may have to be considered and determined in an appropriate proceeding.
In the present proceeding, the auction purchaser who is an outsider and was not a party to the suit resulting in the compromise decree in execution of which the property was put up for sale, is not entitled to recover physical possession from the appellants in view of the provisions contained in O. XXI, rule 95, and the auction purchaser must be held to be entitled to symbolic possession in terms of the provisions contained in O.XXI, rule 96 in respect of the portions in occupation of the appellants.
We, accordingly, allow this appeal.
We set aside the judgment and order passed by the High Court directing physical possession of the portions in the occupation of the appellants to be made over to the auction purchaser Gian Chand Jain, We direct that symbolic possession of the portions in occupation of the appellants is to be made over to the auction purchaser Gian Chand Jain.
In the facts and circumstances of this case, we make no order as to costs.
N.V.K. Appeal allowed.
[/INST]Order XXI Rules 95 and 96 of the Code of Civil Procedure enable a purchaser of immovable property in a Court sale, to apply for delivery of possession.
Rule 95 provides for actual physical possession and rule 96 provides for symbolic possession.
A purchaser will be entitled to physical possession of the property purchased if the property sold is in the occupation of the judgment debtor, of some person on behalf of the judgment debtor or some person claiming under a title created by the judgment debtor subsequent to the attachment of the property.
If the property sold is in the possession of a tenant or other person entitled to occupy the same, symbolic possession is to be made over to the purchaser under Rule 96.
The first respondent was an auction purchaser of property, of which the three appellants were tenants occupying different portions.
The property was mortgaged by its owner with a Bank.
As the amount due was not paid, the Bank instituted a suit for its recovery.
A decree was passed by consent of the parties which provided that if the amount was not paid within two years, the Bank could enforce the decree by sale of the property.
After the compromise decree was passed, the owner leased out different portions of the property to the appellants.
As the owner failed to make payment of the decreetal dues, the property was sold by Court auction and the first respondent, whose bid was the highest, was declared to be the purchaser of the premises, and the sale in his favour was confirmed.
The first respondent/auction purchaser filed an application under Order XXI, Rules 95 and 96 read with Section 151 of the Code of Civil Procedure in the High Court, for delivery of vacant physical possession of the entire property and prayed that if it was not possible to grant vacant physical possession of any part of the property, symbolic possession of that part may be granted.
This application was contested by the three appellants/tenants.
A Single Judge of the High Court holding that the tenancies in favour of the appellants having been created after the institution of the suit by the Bank and after the passing of the compromise decree in the said suit, and the said tenancies would have no effect on the rights acquired by the auction purchaser in view of Section 52 of the , and relying on the Division Bench Judgments of the Bombay High Court in Ramdas Popat Patil vs Fakira Patil and Ors.
AIR 1959 Bom 19 and of the Gujarat High Court in Jagjiwandas a Firm vs 175 Lakhiram Haridasmal and Ors.
AIR 1968 Guj 193 passed an order for delivery of physical possession of the portions in the respective occupation of the appellants.
In appeal it was contended that the Full Bench decision of the Bombay High Court in Anaji Thamaji Patil vs Ragho Bhivraj Patil and Anr.
AIR 1973 Bom 75, over ruled the Bombay Division Bench decision and doubted the correctness of the Gujarat decision, but the Division Bench of the High Court dismissed the appeal accepting the contention put forward on behalf of the respondent purchaser that the decision of this Court in M/s Supreme General Films Exchange Ltd. vs His Highness Maharaja Sir Brijnath ; concluded the controversy.
In the appeal to this Court, it was contend on behalf of the appellants that: (1) Section 52 of the has no application to the facts and circumstances of this case as the conditions laid down therein for its applicability are not satisfied.
(ii) The right that the mortgagee had was only to put the property to sale in the event of the mortgagor failing to pay the decreetal amount in terms of the provisions of the compromise decree, and this right cannot be said to be a right to immovable property directly and specifically in question in the suit.
(iii) Section 65A of the should be read alongwith Section 52 and both these sections have been incorporated with the object of preserving the interest of the mortgagee by making suitable provisions so that the security of the mortgagee might not in any way be affected by any act done by the mortgagor after the creation of the mortgage and also after the institution of any suit for enforcement of the mortgage.
(iv) Section 52 makes provisions for the parties to the suit or proceeding and can have no application to any auction purchaser who is not a party to the suit or proceeding and who only acquires his right after the sale in execution of the decree has been confirmed.
(v) The right of the third party auction purchaser to get physical possession of the property purchased at the auction sale was not considered by the Supreme Court in M/s Supreme General Films Exchange Ltd. vs His Highness Maharaja Sir Brijnath Singhji Deo of Maihar and Ors.
and Jayaram Mudaliar vs Ayya Swami and Ors.
AIR (vi) Order XXI, Rule 95 and Rule 96 of the Code of Civil Procedure provides that the rights of an auction purchaser are governed by the provisions contained therein and that the auction purchaser cannot claim physical possession of the portions in the occupation of the appellants even though they might have been inducted as tenants after the compromise decree in the suit had been passed.
On behalf of the first respondent auction purchaser it was submitted that (1) as the tenants were inducted not only after the institution of the suit for enforcement of the mortgage but also after the compromise decree that has been passed therein, Section 52 of the must be held to be applicable 176 and it must be held that the tenancies were illegal and were created in breach of these provisions.
S.(2) 65A the does not in any way control section 52.
S 65A makes provisions with regard to the powers of the mortgagor to grant leases of the mortgaged property after the creation of the mortgage but before the institution of suit, while section 32 makes provisions for cases of transfer or otherwise dealing with any property after the institution of a suit or proceeding and section 52 imposes a complete ban on the transfer of any kind or dealing with immovable property except with the authority of the Court during the pendency of the suit or proceeding so that the rights of any part may not be affected when any decree or order is passed.
Section 58 of the provides that a mortgage is a transfer of an interest in specific immovable property for the purpose of securing the payment of money advanced or to be advanced by way of loan.
In a suit for the enforcement of a mortgage, the right to immovable property is directly and specifically in question and after the decree for sale is passed, the mortgagor loses even his right to redeem the property.
The tenancies in the instant case having been created long after the compromise decree, are illegal and void and in contravention of section 52 of the Act.
The decisions of this Court in M/s Supreme General Films Exchange Ltd. Manager Mahto and Ors.
and Jayaram Mudaliar conclude the question involved in the appeal.
On the question whether the 1st Respondent as auction purchaser in an application under Or.
XXI, rules 95 and 96, of the Code of Civil Procedure is entitled to recover actual physical possession of the portions in the occupation of the appellants as lessees, the lease in respect of which were created after the decree in the mortgage suit by consent between the parties had been passed.
Allowing the appeal ^ HELD 1.
The Judgment and Order passed by the High Court directing physical possession of the portions in the occupation of the appellants to be made over to the auction purchaser Respondent No. 1 is set aside.
Symbolic possession of the portions in occupation of the appellants to be made over to the auction purchaser respondent.
[194 D] 2.
In the case of M/s Supreme General Films Exchange Ltd., the validity of the lease had been questioned by the mortgagee decree holder in a suit for declaration.
The claim was not for possession by a third party auction purchaser in a proceeding, under rules 95 and 96 of order XXI of the Code of Civil Procedure and the merits of such an application and the scope and effect of the said provisions of the Code did not come up for consideration.
In Mangru Matho and Ors.
vs Shri Thakur Taraknath Tarakeshwar Math and Ors.
a suit was instituted by the mortgagee auction purchaser for recovery of possession of mortgaged property sold in execution of the mortgage decree and purchased by the mortgagee himself and the decision rested mainly on the basis that the lease was not granted by the mortgagor in the usual course of business.
This case was also not concerned with an application by an outsider auction purchaser for physical possession of the property purchased by him in an application made under order XXI Rules 95 and 96 of the Code of Civil Procedure.
These two decisions do not therefore conclude the question involved in the present appeal.[190 A B, 191 H 192 C] 177 3.
The auction purchaser derives his right to obtain possession only after the sale in his favour has become absolute and sale certificate has been obtained by him.
The mode and manner of obtaining such possession are regulated by Rules 95 and 96 of the Code of Civil Procedure.[193 F] In the instant case a third party auction purchaser is seeking recovery of the physical possession of the property purchased by him at the auction from the appellants who are in possession of different portions of the said premises as tenants of the said portions.
The auction purchaser was not the mortgagee and he was no party to the suit in which the compromise decree was passed.
The auction purchaser in view of the provisions contained in Rule 95 which regulate the rights of the auction purchaser to obtain physical possession of the property, is not entitled to the recover the physical possession of the portions in the occupation of the appellants as tenants.
The appellants are not the judgment debtors.
They are not in occupation of the property on behalf of the judgment debt or.
They are also not claiming to be in occupation under a title created by the judgment debtors subsequent to any attachment of the property.
There is no question of any attachment in the case.
The appellants are in the occupation of their respective portions as tenants and they claim to occupy the same as such.
The auction purchaser must therefore be held to be entitled to only symbolic possession in terms of the provisions contained in Or XXI rule 96 in respect of the portions in occupation of the appellants.
[192 H 193 A, 193 H 194 A, C]
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<s>[INST] Summarize the judgementivil Appeal Nos.
565 570 of 1978.
Appeal from the Judgment and Order dated 8 2 1977 of the Calcutta High Court in Income Tax Reference Nos 398, 399 and 400/69 and 456 of 1969.
Devi Pal and D. N. Gupta for the Appellant.
section T. Desai, B. B. Ahuja and Miss A. Subhashini for the Respondent.
The Judgment of the Court was delivered by TULZAPURKAR, J.
These appeals, by certificates are directed against the common judgment and order rendered by the Calcutta High Court on February 8, 1977 in Income Tax Reference No.156 of 1969 and Income Tax References Nos. 398, 399 and 400 of 1969, whereby the assessee 's claim for deduction under s.36(1)(iv) of the Indian Income Tax Act, 1961 (hereinafter referred to as 'the Act ') in respect of three sums of Rs.95,421/ , Rs.1,00,564/ and Rs.1,17,969/ out of the total contributions made by the assessee to a recognised Provident Fund for the assessment years 1962 63, 1963 64 and 1964 65 respectively was disallowed and the principal question raised in these appeals is whether the expression "salary" as defined in Rule 2(h) in Part A of the Fourth Schedule to the Act includes "Commission" paid by the assessee to its salesmen in terms of their contracts of employment ? The assessee is a private limited company and carries on the business of manufacture and sale of duplicating machines and accessories.
It has in its regular employment three categories of salesmen machine salesmen, mixed salesmen and supply salesmen.
As a term of the contract of employment between the assessee and the salesmen of the aforesaid categories, the assessee, besides paying a fixed monthly salary also paid commission to them at fixed percentage of turnover achieved by each salesman, the rate of percentage varying according to the class of article sold and the category to which the salesman belonged.
The assessee maintained a regular Provident Fund for its employees which was recognised by the Commissioner of Income Tax some time in 1937 and the said recognition continued and was in force during the relevant years in question.
In the previous years ending 31st December 1961.
31st December 1962 and 31st December 1963 rele 792 vant to the assessment years 1962 63, 1963 64 and 1964 65 the assessee made contributions, out of its own moneys, to the individual accounts of these salesmen in the said Provident Fund on the basis of salary and commission paid to them and claimed such contributions as allowable deductions under section 36(1) (iv) of the Act and in that behalf reliance was placed by the assessee upon Rule 2 of the assessee company 's Recognised Provident Fund Scheme Rules under which "salary" meant not only the fixed monthly salary but also the commission and dearness allowance as might be paid by the company to its employees.
Out of such total contributions the Income Tax Officer disallowed the sums of Rs. 95,421/ , Rs. 1,00,564/ and Rs. 1,17,969/ on the ground that these amounts pertained to the commission paid by the assessee to its salesmen for the three years respectively and that under Rule 2(h) of Part A of the Fourth Schedule to the Act, which was applicable, the expression "salary" did not include such commission.
Three appeals, for the aforesaid three years, filed by the assessee were heard by two different Appellate Assistant Commissioners, one of whom rejected the appeal for the assessment year 1962 63 in view of Rule 2 (h) of Part A of the Fourth Schedule to the Act but the other Appellate Assistant Commissioner allowed the appeals for the assessment years 1963 64 and 1964 65 by accepting the assessee 's contention.
The assessee as also the Revenue preferred appeals to the Appellate Tribunal.
On the one hand, relying upon the dictionary meaning of the expression "salary" as given in the Shorter Oxford Dictionary and Stroud 's Judicial Dictionary and upon the manner in which the term was defined in Rule 2 of the assessee 's Recognised Provident Fund Scheme Rules, it was contended on behalf of the assessee that the commission of the nature paid by it to its salesmen was nothing but a composite part of the salary itself, the same being determinable as per the terms of the contract and as such the contributions on the basis of such commission made by the assessee to the Provident Fund were deductible under s.36(1)(iv) of the Act; it was further contended that since these payments were being admittedly made to a Provident Fund recognised by the Commissioner of Income Tax, which recognition was in force during the relevant years, the Taxing Authorities could not disallow the deduction claimed by the assessee, and the view taken by the Appellate Assistant Commissioner in respect of assessment years 1963 64 and 1964 65 was canvassed for acceptance.
On the other hand, the Revenue contended before the Tribunal that the definition of the expression "salary" as given in Rule 2(h) of Part A of the Fourth Schedule to the Act which applied to the recognised Provident Fund governed the matter and since that definition excluded all other allowances and perquisites the commission 793 paid by the assessee to its salesmen, which was nothing but some sort of allowance, could not be regarded as salary and, on that basis the Tribunal was pressed to accept the contrary view taken by the Appellate Assistant Commissioner for the assessment year 1962 63.
The Tribunal on a consideration of the rival submissions held that the commission paid by the assessee to various classes of salesmen was a part of the contractual obligation and as such was a part of the salary of the employees and contributions made on that basis were liable to be deducted under s.36(1)(iv) of the Act.
It also took the view that since the Provident Fund maintained by the assessee was a recognised Fund and since it fulfilled the condition laid down in Rule 4(C) of Part A of the Fourth Schedule to the Act the contributions by the employer to the same would be entitled to deduction under the said provision.
In this view of the matter the Tribunal by its order dated June 12, 1968 allowed the assessee 's appeal and dismissed the appeals of the Department.
At the instance of the Revenue the following two questions were referred to the High Court for its opinion: "(1) Whether, on the facts and in the circumstances of the case, the sums of Rs. 95,421/ , Rs. 1,00,564/ and Rs. 1,17,969/ disallowed by the Income Tax Officer out of the total contributions made by the assessee towards the provident fund were allowable under section 36(1)(iv) of the Income Tax Act, 1961 for the assessment years 1962 63, 1963 64 and 1964 65 respectively ? (2) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the provident fund maintained by the assessee satisfied the condition laid down in Rule 4(c) of the Fourth Schedule, Part 'A ' of the Income Tax Act, 1961 ?" The former question was the subject matter of Income Tax Reference No.156 of 1969 made under s.256(1) of the Act while the latter was the subject matter of Income tax References Nos. 398, 399 and 400 of 1969 made under s.256(2) of the Act.
These References were heard together and disposed of by the High Court by a common judgment and order dated February 8, 1977.
Rejecting the contentions urged on behalf of the assessee the High Court answered both the questions in the negative and in favour of the Revenue.
In doing so the High Court principally relied upon (3) Rule 2(h) of Part A of the Fourth Schedule to the Act where the expression "salary" has been defined as inclusive of dearness allowance but exclusive of all 794 other allowances and perquisites, (b) Circular No. 6 dated January 16, 1941 issued by the Central Board of Revenue under the Indian Income Tax Act, 1922 but which has been continued under s.297(k) of the Act, which provided that unless commission and bonuses are fixed periodical payments not dependent on a contingency, they are not covered by the term "salary" as used in Chapter IXA of the Act (1922 Act) and (c) observations of this Court in M/s Bridge & Roofs Co. Ltd. vs Union of India and Ors.
to the effect that "commission and other similar allowances are excluded from the definition of "basic wages" under the Provident Fund Act 1952 because it was not a universal rule that each and every establishment must pay commission to its employees".
The High Court further held that the Circular No. 80 dated March 4, 1972 on which reliance was placed by the assessee and which stated that "if the terms and conditions of service are such that commission is paid not as a bounty or benefit but is paid as a part and parcel of the remuneration for services rendered by the employees such payment may partake of the nature of salary rather than as a benefit or perquisite" could not be availed of because the same was not in existence during the relevant years and further it had been issued under s.40(c) (iii) of the Act and would not apply to s.36(1)(iv).
The High Court also held that the ordinary meaning of "salary" was a fixed monthly payment while "commission" was not such payment and, therefore, it could not be included within the scope and ambit of the term "salary", the meaning of which could not be extended by the assessee company by defining it in a particular manner in its Provident Fund Scheme Rules for the purposes of recognition of its Fund and deductibility as well.
The High Court 's view on both the questions is challenged by the assessee in the instant appeals preferred on the strength of the certificates granted by that Court under s.261 of the Act.
Counsel for the assessee raised a two fold contention in support of the appeals.
In the first place he contended that once recognition was granted by the Commissioner of Income Tax to the Provident Fund maintained by the assessee under the relevant rules and such recognition was in force during the relevant assessment years, the Taxing Authorities could not disallow the deductions claimed by interpreting the expression "salary" in Rule 2(h) of Part A of the Fourth Schedule to the Act so as to exclude the "commission" that was paid by the assessee to its salesmen, for, by doing so the Taxing Authorities would be sitting in judgment over the recognition granted and allowed to be retained by the Commissioner of Income Tax to the assessee.
It was 795 pointed out that Rule 4 of Part A of the Fourth Schedule to the Act set out the conditions, particularly, the one contained in cl.(c) of the said rule that were required to be satisfied before recognition could be granted and in the instant case the Commissioner after having been satisfied that the said conditions had been fulfilled had granted recognition to the Provident Fund maintained by the assessee.
In particular, counsel placed reliance upon the correspondence which took place between the assessee and the Commissioner of Income Tax, West Bengal, during the course of which, the Commissioner had by his letter dated September 9, 1937 required the assessee to inform him of the basis on which the commission payable to the salesmen participating in the fund was computed with a view to seeing whether the commission would be includible in the definition of "salary" for purposes of Chapter IXA of the 1922 Act and the assessee had by its reply dated September 11, 1937 stated that the commission was the monthly amount payable to the salesmen in accordance with their written contract and was based on a fixed term of rate and that it was after such correspondence that recognition was granted to the Provident Fund of the assessee and that the said recognition had continued and was in operation during the relevant assessment years.
He, therefore, urged that it was not open to the Taxing Authorities to reach a conclusion that the Provident Fund of the assessee did not satisfy the condition laid down in Rule 4(c) of Part A of the Fourth Schedule to the Act during the relevant years nor was it open to them to disallow the deductions claimed under s.36 (1)(iv) of the Act by interpreting the expression "salary" in Rule 2(h) in Part A of the Fourth Schedule to the Act as being exclusive of the commission of the nature and kind paid by the assessee to its salesmen.
Secondly, counsel contended that on a true and proper construction of the expression "salary occurring in the said Rule 2(h) the commission of the nature and type paid by the assessee to its salesmen under the terms of their contract of employment would be included or covered by that expression.
According to him, commission in business practice covered various kinds of payments made under different circumstances and in the cases where a servant was employed by a businessman and as a condition of his employment it was agreed that he would be paid for his services at a fixed rate of percentage over the turnover it was clear that such commission payable to the employee will par take of the character of "salary" received by him for his services.
the percentage basis being the measure of the salary; in other words, according to him, there was no difference between the concept of salary and the concept of commission if the latter was of the aforesaid nature or kind and as such the expression salary in Rule 2 (h) would include such commission.
In this behalf he relied upon a decision of the Allaha 796 bad High Court in the case of Raja Ram Kumar Bhargava vs Commissioner of Income Tax, U.P. He urged that the decision of this Court in M/s Bridge & Roofs Co. Ltd. vs Union of Indian & Ors.
(supra) on which the High Court has relied was inapplicable since it was a case under the Provident Fund Act, 1952 and this Court was required to construe the term 'basic wages ' appearing in that Act and in that context it observed that that term did not include any bonus, commission or other similar allowances.
He, therefore, urged that the Tribunal was right in allowing the deductions claimed by the assessee under s.36(1)(iv) of the Act.
On the other hand, counsel for the Revenue contended that notwithstanding the recognition accorded to the assessee 's Provident Fund by the Commissioner of Income Tax the assessee had to satisfy the taxing authorities every year that the Provident Fund maintained by it satisfied the conditions of Rule 4, particularly, the one contained in Rule 4(c) of Part A of the Fourth Schedule to the Act and if for any particular assessment year the assessee 's Provident Fund failed to satisfy the condition in Rule 4(c) of Part A of the Fourth Schedule to the Act the assessee could not claim deduction under s.36(1)(iv) of the Act in respect of such portion of the contribution made by it to the Fund as was in breach of the said condition.
Secondly, he urged that by relying upon the fact of recognition obtained by it and the further fact that such recognition had remained in force during the relevant assessment years the assessee could not by pass the real question that arose for determination before the taxing authorities for the relevant assessment years, namely, whether the expression 'salary ' as defined in Rule 2(h) of Part A of the Fourth Schedule to the Act included or excluded commission paid by the assessee to its salesmen and he urged that the definition of the expression 'salary ' as given in the said Rule 2(h) clearly showed that the 'salary ' did not include commission, for, according to him, the definition merely included dearness allowance and excluded all other allowances and perquisites and commission payable by the assessee to its salesmen was nothing but an allowance paid without reference to any time factor which is associated with salary or wages as an important concomitant thereof.
In this behalf reliance was also placed by him upon the Circular No.6 dated January 16, 1941 issued by the Central Board of Revenue under the 1922 Act and continued under s.297(k) of the 1961 Act wherein on the question whether the term 'salary ' as used in Chapter IXA (of the old Act) 797 included commissions and bonuses paid to the employees, the Board expressed its view that "unless commissions and bonuses are fixed periodical payments not dependent on a contingency they are not covered by the term 'salary ' as used in Chapter IXA of the Act." Counsel further contended that in the matter of deductions claimable in respect of contributions to the Provident Fund the position of the employer could not be different from that of the employee and in regard to employee 's contribution the condition required to be satisfied in Rule 4 (b) was to the effect that the contribution of an employee in any year shall be a definite proportion of his 'salary ' for that year and shall be deducted by the employer from the employee 's 'salary ' in that proportion at each periodical payment of such salary in that year, and credited to the employee 's individual account in the Fund and under s.80C read with Rule 7 of Part A of the Fourth Schedule to the Act the employee is entitled to a deduction in respect of his contribution which pertains to a definite proportion of the 'salary ' which would not include commission.
He therefore, urged that the High Court was right in answering both the questions against the assessee and in favour of the Revenue.
As stated at the outset, in our view, the main question raised in these appeals is whether the expression 'salary ' as defined in Rule 2(h) of Part A of the Fourth Schedule to the Act includes commission payable by an assessee to his or its employees in terms of their contracts of employment ? We shall, therefore, address ourselves to that question first and then deal with the aspect regarding the true impact of the recognition granted by the Commissioner of Income Tax under the relevant Rules to a Provident Fund maintained by an assessee.
The expression 'salary ' has been defined in section 17 of the Act as well as in Rule 2(h) of Part A of the Fourth Schedule to the Act but each of the said definitions serves a different purpose.
Section 17 defines the expression 'salary ' for purposes of sections 15 and 16 which deal with "Salaries" as a head of income, and under cl.(iv) of sub s.(1) that expression includes: "any fees, commissions, perquisites or profits in lieu of or in addition to any salary or wages.
" In Part A of the Fourth Schedule to the Act, which contains rules relating to Recognised Provident Funds the word 'salary ' has been defined in Rule 2(h) thus : "Salary" includes dearness allowance, if the terms of employment so provide, but excludes all other allowances and perquisites.
" 798 Since we are concerned in this case with contributions made to a recognised Provident Fund and deductions thereof under section 36(1) (iv) it will be the definition of 'salary ' as given in Rule 2(h) of Part A of the Fourth Schedule to the Act and not the one given in section 17 that will be applicable and will have to be considered.
Under section 36(1) (iv) the deduction allowable is in respect of "any sum paid by the assessee as an employer by way of contribution towards a Recognised Provident Fund or an approved superannuation fund, subject to such limits as may be prescribed for the purpose of recognising the Provident Fund or approving the superannuation fund, as the case may be." Rule 2(c) of Part A of the Fourth Schedule defines contribution" as meaning "any sum credited by or on behalf of any employee out of his salary, or by an employer out of his own monies, to the individual account of an employee, but does not include any sum credited as interest." Rule 4 of Part A of the Fourth Schedule lays down the conditions which are required to be satisfied by a Provident Fund in order that it may receive and retain recognition and the conditions in cls.(b) and (c) are material and these conditions are: "4(b) the contributions of an employee in any year shall be a definite proportion of his salary for that year, and shall be deducted by the employer from the employee 's salary in that proportion, at each periodical payment of such salary in that year, and credited to the employee 's individual account in the fund; (c) the contributions of an employer to the individual account of an employee in any year shall not exceed the amount of the contributions of the employee in that year, and shall be credited to the employee 's individual account at intervals not exceeding one year.
" It may be stated that so far as the employer is concerned the contributions credited by him to the employee 's individual account in the funds are deductible under section 36(1) (iv) whereas the contributions of an employee are deductible in the computation of his total income under s.80C read with Rule 7 of Part A of the Fourth Schedule to the Act and the scheme of cls.(b) and (c) of Rule 4 of Part A of the Fourth Schedule does suggest that in the matter of deductions claim 799 able in respect of contributions to the recognised Provident Fund the position of both the employer and the employee would be the same; but since in the case of an employee his contributions are to be a definite proportion of his salary for a particular year, the question whether such proportion would be inclusive of commission received by him from his employer must depend upon the true meaning or construction of the expression 'salary ' as occurring in Rule 2(h) of Part A of the Fourth Schedule; in other words, in the matter of deductions claimable in respect of contributions to the Recognised Provident Fund qua both the employer and the employee the question has to be answered by reference to the true meaning of the expression 'salary ' occurring in Rule 2(h).
Now, Rule 2(h) of Part A of the Fourth Schedule does not define the expression 'salary ' conceptually but merely proceeds to state what is included therein and what is excluded therefrom and, therefore, one is required to turn to the dictionary meaning of that expression as also to ascertain how judicial decisions have understood that expression.
According to the Shorter Oxford English Dictionary (3rd Edn.) 'salary ' means: "To recompense, reward; to pay for something done;" In Jowitt 's Dictionary of English Law (1959 Edn.) the term is explained thus: "a recompense or consideration generally periodically made to a person for his service in another person 's business; also wages, stipend or annual allowance." In Stroud 's Judicial Dictionary (4th Edn.) the expression 'salary ' is explained at item (2) thus: "Where the engagement is for a period, is permanent or substantially permanent in character, and is for other than manual or relatively unskilled labour, the remuneration is generally called a salary".
[Per Latham C. J., in Federal Commissioner of Taxation vs Thompson (J. Walter) (Aus.) Pty. Ltd. 69 C.L.R. 227].
It appears that conceptually 'salary ' and 'wages ' connote one and the same thing, namely, remuneration or payment for work done or services rendered but the former expression is generally used in connection with services of a higher or non manual type while the latter is used in connection with manual services.
In Gordon vs Jennings Grover J. observed as follows: 800 "Though this word (wages) might be said to include payment for any services, yet, in general, the word 'salary ' is used for payment or services of a higher class, and 'wages ' is confined to the earnings of labourers and artisans." In Mohmedalli vs Union of India this Court, while repelling the contention that the Employees ' Provident Fund Act 1952 was intended by Parliament to apply to employees who were mere wage earners and not salaried servants, has made observations clearly indicating that there is no difference between the two concepts of salary and wages.
Chief Justice Sinha speaking for the Court observed in para 10 of the judgment as follows: "It is a little difficult to appreciate the distinction sought to be made.
Both 'salary ' and 'wages ' are emoluments paid to an employee by way of recompense for his labour.
Neither of the two terms is a 'term of art '.
The Act has not defined wages; it has only defined "basic wages" as all emoluments which are earned by an employee while on duty or on leave with wages in accordance with the terms of the contract of employment and which are paid or payable in cash to him,. . 'Salary ', on the other hand, is remuneration paid to an employee whose period of engagement is more or less permanent in character, for other than manual or relatively unskilled labour.
The distinction between skilled and unskilled labour itself is not very definite and it cannot be argued, nor has it been argued, that the remuneration for skilled labour is not 'wages '.
The Act itself has not made any distinction between 'wages ' and 'salary '.
Both may be paid weekly, fortnightly or monthly, though remuneration for the day 's work is not ordinarily termed 'salary '.
Simply because wages for the month run into hundreds, as they very often do now, would not mean that the employees is not earning wages, properly so called.
A clerk in an office may earn much less than the monthly wages of a skilled labourer.
Ordinarily he is said to earn his salary.
But, in principle, there is no difference between the two.
" It will thus appear clear that conceptually there is no difference between salary and wages both being a recompense for work done or 801 services rendered, though ordinarily the former expression is used in connection with services of non manual type while the latter is used in connection with manual services.
It is further common knowledge that this compensation to the labourer or artisan could be a specified sum for a given time of service or a fixed sum for a specified work i.e. payment made by the job, the commonest example of the latter category being a piece rated worker.
In other words, the expression 'wages ' does not imply that the compensation is to be determined solely upon the basis of time spent in service; it may be determined by the work done; it could be estimated in either way.
If conceptually salary and wages mean one and the same thing then salary could take the form of payment by reference to the time factor or by the job done.
In fact, in the case of salary the recompense could be determined wholly on the basis of time spent on service or wholly by the work done or partly by the time spent in service and partly by the work done.
In other words, whatever be the basis on which such recompense is determined it would all be salary.
Having reached the above conclusion, we have to consider the nature of recompense that is being made by the assessee to its salesmen, whether the whole of it partakes of the character of salary or not? The definition of 'salary ' in Rule 2(h) includes dearness allowance if the terms of employment so provide and excludes all other allowances and perquisites.
It does not in terms exclude 'commission ' as such and, in our view rightly, for, though ordinarily according to the Shorter Oxford English Dictionary 'commission ' means 'a pro rata remuneration for work done as agent ', in business practice commission covers various kinds of payments made under different circumstances.
In Raja Ram Kumar Bhargava vs Commissioner of Income Tax, U.P. (supra) the Allahabad High Court has pointed out how in certain circumstances commission payable to an employee may, in fact, represent the salary receivable by him for the services rendered to the employer.
At page 694 of the report the relevant observation run thus: "The word "commission", in business practice, covers various kinds of payments made under different circumstances.
There are cases where a servant is employed by a businessman and, as a condition of his employment, it is agreed prior to the services having been rendered that he would be paid for his services at a fixed rate of percentage of the turnover or profits.
In such a case, it is clear that the commission payable to the employee will, in fact, represent the salary to be drawn by him for his services.
The payment on the percentage basis will only determine the measure of the salary.
" 802 It is thus clear that if under the terms of the contract of employment remuneration or recompense for the services rendered by the employee is determined at a fixed percentage of turnover achieved by him then such remuneration or recompense will partake of the character of salary, the percentage basis being the measure of the salary and therefore such remuneration or recompense must fall within the expression 'salary ' as defined in Rule 2(h) of Part A of the Fourth Schedule to the Act.
In the instant case before us, admittedly, under their contracts of employment the assessee has been paying and did pay during the previous years relevant to the three assessment years to its salesmen, in addition to the fixed monthly salary, commission at a fixed percentage of the turnover achieved by each salesman, the rate of percentage varying according to the class of article sold and the category to which each salesman belonged.
The instant case is therefore, an instance where the remuneration so recompense payable for the services rendered by the salesmen is determined partly by reference to the time spent in the service and partly by reference to the volume of work done.
But it is clear that the entire remuneration so determined on both the basis clearly partakes of the character of salary.
In our view, therefore, the commission paid by the assessee to its salesmen would clearly fall within the expression 'salary ' as defined in Rule 2(h) of Part A of the Fourth Schedule to the Act and as such the three sums of Rs. 95,421/ , Rs. 1,00,564/ and Rs. 1,17,969/ representing proportionate contributions appertaining to the commission paid by the assessee to its salesmen would be deductible under section 36(1) (iv) of the Act.
Turning to the Circular dated January 16, 1941 issued by the Central Board of Revenue on which counsel for the Revenue has relied, it cannot, in our view, affect the question of deductibility, for, if the commission paid by the assessee to its salesmen is covered by the expression 'salary ' on its true construction, which, according to us, it does, the Board 's view or instructions cannot detract from the legal position arising on such proper construction.
In any case we are of the view that by the said Circular what the Board wants to keep out of the term 'salary ' are payments by way of commission which do not partake of the character of salary.
Similarly the decision of this Court in M/s. Bridge & Roof Co. 's case (supra) on which the High Court has relied cannot avail the Revenue.
In the first place it was a case under the Provident Fund Act, 1952 where this Court was required to construe the expression 'basic wages ' as defined in section 2(b) of that Act and to decide whether 'production bonus ' was included in that expression and it was in that context that this Court made observations 803 to the effect that the said expression as defined therein did not include any bonus, commission or other similar allowances.
Secondly, as against the definition of 'basic wages ' in section 2(b) (ii) which excluded any dearness allowance, house rent allowance, over time allowance, bonus, commission or any other similar allowance, section 6, of the Act provided for inclusion of dearness allowance for the purposes of contribution and, therefore, this Court was concerned with trying to discover some basis for the exclusion in cl.
(ii) of section 2(b) as also for the inclusion of dearness allowance and retaining allowance (if any) in section 6 of that Act and the Court found that the basis for inclusion in section 6 and exclusion in cl.
(ii) of section 2(b) was that whatever was payable in all concerns and was earned by all permanent employees was included for the purpose of contribution under section 6 but whatever was not payable by all concerns and was not earned by all employees of a concern was excluded for the purposes of contribution and that is why commission or similar allowances were excluded from the definition of 'basic wages ', for commission and allowances were not necessarily to be found in all concerns nor were they necessarily earned by all the employees of the same concern.
It is, therefore, clear that the ratio of the decision and the observations made by this Court in a different context in that case would be inapplicable to the facts of the present case.
Having regard to the above discussion it is clear that the High Court 's view on the first question is clearly unsustainable and that question must be answered in favour of the assessee and against the Revenue.
Dealing next with the second question it seems to us clear that having regard to our view on the proper construction of the expression 'salary ' occurring in Rule 2(h) of Part A of the Fourth Schedule to the Act it must be held that the Tribunal was right in holding that the Provident Fund maintained by the assessee satisfied the condition laid down in Rule 4(c) of Part A of the Fourth Schedule and that question also must be answered in favour of the assessee and against the Revenue However, we would like to make some observations with regard to the true impact of the recognition granted by the Commissioner of Income Tax to a Provident Fund maintained by an assessee.
The facts in the present case that need be stressed in this behalf are that it was as far back as 1937 that the Commissioner of Income tax had granted recognition to the Provident Fund maintained by the assessee under the relevant rules under 1922 Act, that such recognition had been granted after the true nature of the commission payable by the 804 assessee to its salesmen under their contracts of employment had been brought to the notice of the Commissioner and that said recognition had continued to remain in operation during the relevant assessment years in question; the last fact in particular clearly implied that the Provident Fund of the assessee did satisfy all the conditions laid down in Rule 4 of Part A of the Fourth Schedule to the Act even during the relevant assessment years.
In that situation we do not think that it was open to the taxing authorities to question the recognition in any of the relevant years on the ground that the assessee 's Provident Fund did not satisfy any particular condition mentioned in Rule 4.
It would be conducive to judicial discipline and the maintaining of certainty and uniformity in administering the law that the taxing authorities should proceed on the basis that the recognition granted and available for any particular assessment year implies that the Provident Fund satisfies all the conditions under Rule 4 of Part A of the Fourth Schedule to the Act and not sit in judgment over it.
There is ample power conferred upon the Commissioner under Rule 3 of Part A of the Fourth Schedule to withdraw at any time the recognition already granted if, in his opinion, the Provident Fund contravenes any of the conditions required to be satisfied for its recognition and if during assessment proceedings for any particular assessment year the taxing authority finds that the Provident Fund maintained by an assessee has contravened any of the conditions of recognition he may refer the question of withdrawal of recognition to the Commissioner but until the Commissioner acting under the powers reserved to him withdraws such recognition the taxing authority must proceed on the basis that the Provident Fund has satisfied all the requisite conditions for its recognition for that year; any other course is bound to result in chaos and uncertainty which has to be avoided.
Having regard to the above discussion, both the questions are accordingly answered in favour of the assessee and the appeals are allowed with costs.
P.B.R. Appeal allowed.
[/INST]The expression "salary," under section 17(1)(iv) of the Income Tax Act, 1961, includes "any fees, commissions, perquisites or profits in lieu of or in addition to any salary or wages"; under r. 2(h) in Part A of the Fourth Schedule to the Act, which contains Rules relating to recognised Provident Funds, the term `salary ' includes dearness allowance, if the terms of employment so provide, but excludes all other allowances and perquisites, where an assessee, as an employer, has paid any sum by way of contribution towards a recognised provident fund, section 36(1)(iv) allows such sum as a deduction in computing the income subject to such limits as may be prescribed for the purpose of recognising the provident fund.
The term "contribution ' is defined in r. 2(c), of part A of the Fourth Schedule as any sum credited by or on behalf of any employee out of his salary or by an employer out of his own moneys to the individual account of an employee but does not include any sum credited as interest.
The assessee maintained a provident fund which was recognised by the Commissioner of Income tax in 1937.
Under r. 2 of the Provident Fund Scheme Rules "salary" meant not only fixed monthly salary but also commission and dearness allowance as might be paid by the company to its employees.
As a term of the contract of employment, in addition to monthly salary, the assessee paid to each of the salesmen commission at a fixed percentage of turnover achieved by them.
The assessee 's shares of the contribution to the provident fund was calculated on the basis of both salary as well as the commission paid to each of the salesmen.
In respect of assessment years 1962 63, 1963 64 and 1964 65 the assessee claimed the whole amount paid by it towards provident fund contributions, as a deduction allowable under section 36(1)(iv) of the Income tax Act and for this purpose it relied on r. 2 of its Provident Fund Scheme Rules.
Out of the total Provident Fund contributions claimed as allowable deduction under section 36(1)(iv) the Income tax Officer disallowed that part of the assessee 's contribution which related to the amounts calculated on the basis of commission paid to the salesmen on the ground that under r. 2(h) of Part A of the Fourth Schedule the expression "salary" did not include commission paid to the employees.
789 The assessee 's appeal in respect of the assessment year 1962 63 was rejected by an Appellate Assistant Commissioner; but in respect of the other two assessment years another Appellate Assistant Commissioner allowed its appeals.
On further appeals both by the assessee and the Department the Appellate Tribunal held that the commission paid being a part of the contractual obligation, it was a part of the salary paid to the employees and therefore contributions made towards provident fund on the commission were allowable as a deduction under section 36(1)(iv) of the Act, and secondly since the provident fund was a recognised fund which fulfilled the conditions laid down in r. 4(c) of Part A of the Fourth Schedule, the employer 's contributions were entitled to be deducted.
The High Court answered the reference in favour of the Department.
It held that since commission, unlike salary, was not a fixed monthly payment it could not be included within the meaning of "salary" and that the meaning of the term "salary" could not be extended by the assessee by defining it in a particular manner in its provident fund scheme rules for the purpose of recognition of its fund.
The High Court relied upon a circular dated January 16, 1941 issued by the Central Board of Revenue which provided that unless commission and bonuses were fixed periodical payments not dependent on a contingency, they were not covered by the term "salary".
On further appeal to this Court it was contended on behalf of the Revenue that the definition of "salary" in r. 2(h) clearly showed that it did not include commission and since commission was nothing but an allowance paid without reference to any time factor which is associated with salary or wages, it is not deductible under section 36(1) (iv).
Allowing the assessee appeals, ^ HELD : The commission paid by the assessee to its salesmen would clearly fall within the expression "salary" as defined in r. 2(h) of Part A of the Fourth Schedule to the Act and the amounts representing proportionate provident fund contributions made by the assessee to its salesmen would be deductible under section 36(1)(iv) of the Act.
[802 E] 1(a) The expression "salary" has been defined in section 17 as well as in r. 2(h) of Part A of the Fourth Schedule.
But each of the definitions serves a different purpose.
Since this case is concerned with contributions made to a recognised provident fund and deductions thereof under section 36(1)(iv), it would be the definition of "salary" as given in r. 2(h) of Part A of the Fourth Schedule, and not the one given in section 17, that will be applicable.
A B] (b) Conceptually salary and wages connote one and the samething viz., remuneration or.
payment for work done or services rendered.
The former expression is generally used in connection with services of higher or non manual type while the latter is used in connection with manual services.
If conceptually salary and wages mean one and the same thing then salary could take the form of payment by reference to the time factor or by the job done.
In the case of salary the recompense could be determined wholly on the basis of time spent on service or wholly by the work done or partly by the time spent on service and partly by the work done.
In other words, whatever be the basis on which such recompense is determined it would all be salary.
[799 G; 801C] 790 Gordon vs Jennings, ; Mohmedalli vs Union of India, AIR 1964 SC 980: referred to.
(c) The definition of "salary" in r. 2(h) includes dearness allowance if the terms of employment so provide and excludes all other allowances and perquisites.
It does not, in terms, exclude commission.
But though the dictionary meaning of the term "commission" is "a pro rata remuneration for work done as agent", in business practice commission covers various kinds of payments made under different circumstances.
[801 E] (d) If under the terms of the contract of employment remuneration or recompense for the services rendered by the employee is determined at a fixed percentage of turnover achieved by him, then such remuneration or recompense will partake of the character of salary, the percentage basis being the measure of the salary.
Therefore, such remuneration or recompense must fall within the expression "salary" as defined in r. 2(h).
[802 A] In the instant case under the term of the contract of employment the assessee had been paying to the salesmen, in addition to the fixed monthly salary.
commission at a fixed percentage of the turnover.
It is, therefore, a case where remuneration or recompense payable for the services rendered by the salesman is determined partly by reference to the time spent in the service and partly by reference to the volume of work done.
The entire remuneration so determined on both the bases clearly partakes of the character of salary.
[802 C D] (e) The Circular dated January 16, 1941 issued by the Central Board of Revenue did not affect the question of deductibility because if the commission paid by the assessee to its salesmen was covered by the expression "salary" on its true construction, the Board 's view or instructions could not detract from the legal position arising on such construction.
What the Board, by the said circular, wanted to keep out of the term "salary" were payments by way of commissions which did not partake of the character of salary.
[802 F G] Bridge & Roofs Co. Ltd. vs Union of India & Ors. ; at p. 1477: held inapplicable.
2(a) The Tribunal was right in its view that the provident fund maintained by the assessee satisfied the condition laid down in r. 4(c) of Part A of the Fourth Schedule.
[803 G].
(b) After taking into account the true nature of the commission payable by the assessee to its salesmen under the terms of the employment, the Commissioner granted recognition to the provident fund, as far back as 1937 and that recognition continued to remain in operation during the relevant assessment years.
The provident fund clearly satisfied all the conditions laid down in r. 4 of Part A of the Fourth Schedule.
It was, therefore, not open to the Taxing Authorities to question the recognition on the ground that the assessee 's provident fund did not satisfy any particular condition mentioned in r. 4.
For the sake of certainty and uniformity in administering the law the Taxing Authorities should proceed on the basis that the recognition granted and available for any particular assessment year implied that the provident fund satisfied all the conditions in that rule.
Under r. 3 the Commissioner had ample power to withdraw at any time the recognition already granted if the provident fund contravened any of the conditions required to be satisfied for its recognition.
791 But until the Commissioner withdrew such recognition, the Taxing Authorities must proceed on the basis that the provident fund satisfied all the requisite conditions for its recognition for that year.
Any other course would result in uncertainty.
[803 H 804 F]
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<s>[INST] Summarize the judgementil Appeals Nos.
194 of 1956 and 353 of 1958.
Appeals by special leave from the judgment and orders dated December 26, 1953 and April 30, 1957, of the Custodian General and Deputy Custodian General of Evacuee Property in Revision Nos.
5055R/Judl/ 1953 and.
1161/R/Judl/1954 respectively.
Achhru Ram and T. R. V. Sastri, for the appellants.
N. section Bindra and D. Gupta, for respondents.
March 21.
The Judgment of the Court was delivered by 459 DAS, GUPTA, J.
Of these two appeals, one (Civil Appeal No. 194 of 1956) is against the order of the Custodian General of India, declining to interfere with ' the order of the Custodian of Evacuee Property, Orissa, in respect of certain properties claimed by the appellant as his; and the other appeal (Civil Appeal No. 353 of 1958) is against the order of the Deputy Custodian General of India, declining to interfere with the order of the Custodian of Evacuee Property, Madras, in respect of properties situate in Madras, claimed by the same appellant as belonging to him.
Though most of the considerations that arise in the two appeals are identical, it will be convenient to take them up one after the other so as not to confuse a clear understand ing of the facts on which these considerations which are all based on question of law arise.
The appellant Fazal Bhai Dbala and his brother Abdulla Dhala were partners in a business of hides and skins.
A deed of partnership was executed on January 1, 1941, and the firm was registered in the Register of Firms, Cuttack, under section 59 of the Indian Partnership Act.
On August 10, 1949, Abdulla Bhai Dhala executed a deed of sale in respect of some immovable properties at Jharsuguda in Orissa, and also certain properties, at Madras, in favour of Fazal Bhai Dhala.
The consideration in the document was mentioned as Rs. 85,000 of which Rs. 50,000 was mentioned as the value of the Madras properties and Rs. 35,000 as the value of the Orissa properties.
The sum of Rs. 85,000 appears to have been paid in the presence of the Registrar by Fazal Bhai to Abdulla Bhai on August 11, 1949.
A deed of dissolution of the partnership was also executed on the following day the 12th August, 1949.
It was stated therein that the two partners had agreed "that the said partnership shall stand dissolved as and from 2 11 48 and it has further been agreed that as from that day, 2 11 1948, the said business of Fazalbhoy Dhala & Co shall belong to and be continued and carried on by Fazalbhoy Dliala.
" It was also stated that in view of the fact that "accounts of the said partnership have not yet been taken or settled and cannot be taken or 460 settled without much delay and trouble it has further been agreed that Fazal Bhai Dhala shall pay to Abdulla Dhala a sum of Rs. 40,000 in full settlement and satisfaction of all the claims, as partner of Abdulla Bhai Dhala against the partnership, its assets, goodwill etc., in respect of his share therein".
A receipt of the sum of Rs. 40,000 was also acknowledged in this deed.
On receipt of information that Abdulla Dhala had migrated to Pakistan after transferring his properties to his brother Fazal Bhai Dhala, the Assistant Custodian of Evacuee Property, Sambalpur (Orissa), issued a notice under section 7(1) of the Ordinance XXVII of 1949 to Fazal Bhai Dhala on December 30, 1949, in respect of im movable properties at Jharsuguda including the properties covered by the sale deed of August 10, 1949, and the business in hides and skins under the name of Fazalbhoy Dhala & Co., and certain immovable properties standing in the name of that firm.
In reply to the notice, Fazal Bhai contended that Abdulla Bhai was not an evacuee; and that in any case, he, Fazal Bhai, had become the sole proprietor of the business, with all assets and liabilities, with effect from November 2, 1948, when the partnership was dissolved and that while some of the immovable properties as mentioned in the notice had been conveyed to him by a deed of sale by Abdulla Bhai, the rest being assets of the firm of Fazal Bhai Dhala, had vested in him after the dissolution of partnership, he prayed that his "title" in the assets of the firm, and in the immovable properties, mentioned in the notice should be confirmed.
The Assistant Custodian held after consideration of the evidence that though the transfer of the properties mentioned in the sale deed was for adequate and valuable consideration it was not at all bona fide: as regards the other properties ' and the hides and skins business itself the Assistant Custodian held that Abdulla Bhai had no interest as the partnership had been dissolved on November 2, 1948.
Against this decision Fazal Bhai appealed to the Custodian and prayed that the order of the Assistant Custodian as regards the properties mentioned in Schedule "A" (1) and (II) mentioned in the notice under sub section 1 of section 7 of the Government of India Ordinance 461 No. XXVII of 1949 should be sot aside.
The Custodian agreed with the Assistant Custodian, in respect of these properties, and held that these had been rightly declared as evacuee properties.
He went further and held that there was no justification for the Assistant Custodian taking a different view as regards the other properties.
His conclusion was that "in fact, with regard to these properties also the same amount of mala fides was present and as such these should also be included in the list of evacuee properties"; and that "it is but proper that the entire 8 annas share of the properties mentioned in Schedules A and B of the evacuee Abdulla should be treated as evacuee properties".
The Custodian finally ordered: "in consequence of my above decision according to section 6 of the Evacuee Interest Separation Act, the entire properties in Schedules A and B should now be treated as evacuee pro perties and revised action should be taken to notify as ,such under section 7(3) of the Administration of Evacuee Property Act and the appellant be directed to get his 8 annas share in the properties separated in the Court of the Competent Officer".
Fazal Bhai moved the Custodian General of India for revision of this order of the Custodian, Orissa.
The Custodian General, however, refused to interfere.
It is proper to mention at the outset that it is no longer disputed that Abdulla Bhai is an evacuee, though the exact date from which he became such an evacuee does not clearly appear from the record, and that all the immovable properties, which are the subject matter of the appeal, were the assets of the firm Fazalbhai Dhala & Co. Four contentions were urged in support of the appeal.
The first contention, and the one to which Mr. Achhru Ram devoted a considerable portion of his argument, was that the Custodian General should have held that the Custodian acted without jurisdiction, and at any rate, irregularly in the exercise of his jurisdiction, if he had any, in interfering with the order passed by the Assistant Custodian that the immovable property and the hides business and the properties mentioned in Sell.
A III, that is the properties 462 other than those covered by the sale deed, were not evacuee properties and should be released.
Mr. Achhru Ram has pointed out that against the Assistant Custodian 's order in respect of these two items of properties the hides business and the immovable properties in Sch.
A III mentioned in the notice, the Custodian 's department had not preferred any appeal, so that the Custodian could not interfere with it, in exercise of his appellate jurisdiction.
Learned Counsel then contends that the Custodian 's order in respect of these properties the hides business and the Jharsuguda properties in Sch.
A III could not have been passed, in exercise of the revisional jurisdiction conferred on him by section 26 of the Administration of Evacuee Property Act (Act No. XXXI of 1950), as no notice of such intention to examine the records in revision, had been issued to Fazal Bhai.
While it is true that the order does not clearly mention that in respect of the hides business and the Sch.
A III properties it was being made in exercise of revisional jurisdiction, it is clear that the only jurisdiction the Custodian could exercise, in the absence of any appeal against that portion of the Assistant Custodian 's order would be his revisional jurisdiction under section 26.
When we find that the Custodian has made the order it is proper and reasonable to hold that he passed it in the exercise of the only jurisdiction he had viz.
, the revisional jurisdiction and the fact that this was not clearly stated in the order can be no ground for holding that he was not exercising revisional jurisdiction.
It is quite another matter whether in the exercise of that jurisdiction, he proceeded in accordance with law.
Mr. Aehhru Ram contended that under the law, the Custodian was required to issue a notice to the parties concerned before exercising his, revisional jurisdiction.
Admittedly, no such notice was issued; and this omission to issue a notice was put by the appellant in the forefront of his grievances both in his petition for revision before the Custodian General and in the application for special leave to appeal to this Court.
Turning however to section 26 we find that there is no 463 provision for service of any notice.
The section runs thus: "26.
Powers of review or revision of Custodian etc.
(1) The Custodian, Additional Custodian, or( Authorised Deputy Custodian may at any time, either on his own motion or on application made to him in this behalf, call for the record of any proceeding under this Act which is pending before, or has been disposed of by, an officer subordinate to him for the purpose of satisfying himself as to the legality or propriety of any orders passed in the said proceeding, and may pass such order in relation thereto as he thinks fit: Provided that the Custodian, Additional Custodian or Authorised Deputy Custodian shall not pass an order under this sub section revising or modifying any order prejudicial to any person without giving such person a reasonable opportunity of being heard: Provided further that if one of the officers aforesaid takes action under this sub section, it shall not be competent for any other officer to do so. . .
The proviso secures the requirements of the principles of natural justice when it says that any order prejudicial to any person shall not be passed without giving such person a reasonable opportunity of being heard.
No specific provision for service of notice in order that such a reasonable opportunity of being heard be given has however been made by any rule.
It goes without saying that in the large majority of cases, the Custodian "will, in order to give the party concerned a reasonable opportunity of being beard, first give him a notice of his intention to examine the records to satisfy himself as to the legality or the propriety of any order passed by the subordinate officer and require such person to show cause if any why the order should not be revised or modified, and then if and when the party appears before him in response to the notice, the Custodian has also to allow him, either personally or through counsel, a reasonable opportunity of being heard.
In suitable cases it may be proper and necessary for the Custodian to allow 464 the party concerned even to adduce evidence.
There may be cases however where the party concerned is already before the Custodian, so that all that is necessary for the Custodian to do is to inform such party of his intention to examine the records to satisfy him,self whether a particular order should be revised, and then to give him a reasonable opportunity of being heard.
There would be no necessity in such a case to serve a formal notice on the party who is already before the Custodian and the omission to serve the notice can be of no consequence.
What the law requires is that the person concerned should be given a reasonable opportunity of being heard before any order prejudicial to him is made in revision.
If this reasonable opportunity of being heard cannot be given without the service of the notice the omission to serve the notice would be fatal; where however proper hearing can be given without service of notice, it does not matter at all, and all that has to be seen is whether even though no notice was given a reasonable opportunity of being heard was given.
A perusal of the Custodian 's judgment makes it reasonably clear that he informed the counsel who appeared on Fazal Bhai.
Dhala 's behalf, that he proposed to consider whether the order made by the Custodian in respect of the hides business and the Sch.
A III properties had been rightly made and to revise the same, if necessary, after giving a reasonable opportunity of being heard to Fazal Bhai on this point.
It is equally clear that the appellant 's advocate was fully heard in the matter.
We have no doubt therefore that the requirements of law as embodied in the proviso to section 26(1) of the Act were fully satisfied.
The contention that the Custodian acted without jurisdiction or irregularly exercised his jurisdiction must therefore fail.
The next contention raised in the appeal is to use the learned counsel 's own words that in view of section 43 of the Indian Partnership Act the partnership stood dissolved from November 2, 1948 and the Custodian had no jurisdiction to declare the "business" to be an evacuee property.
It does not appear to have been 465 disputed either before the Assistant Custodian or the Custodian that the partnership of Fazalbhai Dhala & Co., was a partnership at will.
The deed of dissolution ' was dated August 1.2, 1949 and it has been found by the Custodian that the deed of dissolution was purposely concluded to provide a common safeguard for properties to remain in the hands of the brothers.
The mention of the date November 2,1948 as the date of dissolution cannot therefore be accepted.
The firm must however be held to have been dissolved on August 12, 1949 on which date the deed of dissolution was executed.
The argument of the learned counsel appears to be that once the partnership business, was dissolved there could be no question of declaring the dissolved partnership as an evacuee property.
Once the fact of dissolution is accepted the declaration as regards the business must necessarily be construed as a declaration that the property that remained in Abdulla Bhai on the dissolution of the firm was an evacuee property.
It seems to us clear that that was really what is intended to be meant by the order made by the Custodian.
A further contention of the appellant is that the transactions evidenced by the two deeds, viz., the sale deed and the dissolution were merely in furtherance of the winding up of the affairs of the dissolved partnership and therefore in determining the validity or otherwise of the transactions it has to be borne in mind that Fazal Bhai could not resist the claim of the other partners to wind up.
The story that the dissolution of partnership had taken place earlier and the two deeds were excited later on has not been accepted by the Custodian and we can see no reason to interfere with his conclusion.
The deeds of sale were executed prior to the actual dissolution which was effected by the deed of dissolution there is no scope therefore for saying that the sale deed was in the course of the winching up of the affairs of the dissolution of partnership.
As regards the deed of dissolution itself it is wholly beside the point whether Abdulla Bhai could have resisted the claim to wind 59 466 up; for the declaration merely is that Abdulla Bhai 's share in the dissolved partnership as it stood on the date of dissolution is an evacuee property.
The validity of the dissolution is not touched.
It is hardly necessary to add that the dissolution of the partnership did not by itself mean that Abdulla 's share stood transferred to Fazal Bhai any more than that Fazal Bhai 's share stood transferred to Abdulla Bhai.
A purported transfer of Abdulla 's share was made by the deed itself.
But this having been held to be without good faith, had in view of section 40 of the Evacuee Property Act, no effect.
It has to be made clear that the Custodian would not be bound by the statements made in the deed of dissolution as regards the settlement of the accounts of the firm and that the Custodian, in whom the evacuee properties vest will have in respect of the dissolved business all the rights which Abdulla had under sections 37, 46, 47, 48 and other sections of the Partnership Act.
There remains for consideration the appellant 's contention that in any case the Custodian acted illegally in the exercise of his jurisdiction in ordering that "the entire properties in Schs.
A and B should now be treated as evacuee properties".
It appears that the order by the Custodian was made in these terms even though his conclusion was that "the entire 8 annas share of the properties mentioned in Schs.
A and B of the evacuee Abdulla should be treated as evacuee properties", in view of the fact that under the original definition of evacuee property in section 2(f) of the Administration of Evacuee Property Act (Act XXXI of 1950) it meant "any property in which any evacuee has any right or interest".
This definition has however since been amended and now evacuee property means "any property of an evacuee" instead of "any property in which an evacuee has any right or interest".
The legal position after the amendment therefore is that it is only the 8 annas share of Abdulla set out in the Schedule in the Assistant Custodian 's order dated the 28th January, 1950, which is evacuee property.
It is therefore necessary to state in clarification of the position that instead of the 467 entire Schedules A and B properties being treated as evacuee property only 8 annas share of these properties which belonged to the evacuee Abdulla should be treated as evacuee properties.
With this clarification of the Custodian 's order the appeal is dismissed.
There will be no order as to costs.
Pi The other appeal C. A. No. 353 of 1958 is in respect of properties in Madras.
Fazal Bhai made an application on July 21, 1950 purporting to be under section 40 of the Administration of Evacuee Property Act (Act XXXI of 1950) in reply to a notice which had been issued on him under section 7 of the Act.
His case, as in respect of the Orissa properties mentioned earlier, was that the dissolution of the firm took place in November, 1948 and that the final transaction and settlement of accounts was brought about by a deed of sale dated August 11, 1949 in respect of Orissa and Madras pro perties and a deed of dissolution dated August 12, 1949 for a consideration of Rs. 40,000 making in all the entire amount of Rs. 1,25,000 which in this final settlement had been agreed to be paid to Abdulla.
He prayed for a declaration that the properties mentioned in the notice be held to have been legally and properly passed to him, and that the transfer in his favour may be confirmed.
The Assistant Custodian of Evacuee Property, Madras, accepted Fazal Bhai 's case that the transfer was only a step in the apportionment of the assets of the firm and not a transfer outside the partition of the assets of the firm.
He held that the transfer was bona fide and made an order in these terms: "I therefore accept the dissolution of the firm of Fazalbhai Dhala and Company covered by the dissolution deed dated 12 8 49 and confirm the transfer of the immoveable properties covered by the deed dated 10 8 49 under section 40(5) of the .
" When this matter came to the notice of the Custodian General of Evacuee Property in the course of the proceedings before him in respect of the Orissa property, he observed: "As for the Madras properties, I notice that Mr. 468 Rathanam 's order was allowed to go unchallenged by the department and as it is not before me, therefore, I am not called upon to express my opinion.
" This was on December 26, 1953.
It appears that the Custodian General also made a suggestion to the Custodian, Madras, that he might examine the propriety of the order passed by the Assistant Custodian., Madras.
Accordingly, the Custodian, Madras, examined the records and issued notice to interested parties including Fazal Bhai Dhala to show cause why the Assistant Custodian 's order should not be set aside in revision.
Cause was shown by Fazal Bhai Dhala and thereafter after hearing arguments on his behalf by his Advocate, Mr. T. section Raghavachari, the Custodian held that "the transactions covered by the sale deed dated August 10, 1949 and the deed of dissolution dated the 12th August, 1949 were not bona, fide".
Accordingly, he set aside the order of the Assistant Custodian which confirmed the transfer of properties covered by these two deeds.
He directed the Assistant Custodian, Madras, to take steps under the Evacuee Property Act in respect of these evacuee properties consequent on the cancellation of the confirmation of transfer.
Fazal Bhai 's application to the Custodian General of Evacuee Property, India, for revision of the Custodian 's order was heard by the Deputy Custodian General of Evacuee Property, India, and was rejected.
The only additional ground urged by Mr. Achhru Ram in support of this appeal is that the notice issued on Fazal Bhai to show cause why the Assistant Custodian 's order should not be revised did not say anything as regards the Assistant Custodian 's order in respect of the business and so the Custodian had no jurisdiction to interfere with the Assistant Custodian 's order in so far as that order was in respect of the business ' Turning now to the Assistant Custodian 's order we find that in addition to confirming the transfer of immovable properties covered by the deed of August 10, '1949 he also said: " 'I therefore, accept the dissolution of the firm of Fazal Bhai Dhala & Company., 469 covered by the dissolution deed dated August 12, 1949.
The Custodian in his order dated July 5, 1954, has held that the transaction covered by the deed of ' dissolution also was not bona fide.
It has to be borne in mind that the purported dissolution of the firm in November, 1948, the settlement of accounts recorded in the deed of August, 1949 and the transfer of properties effected were all integral and indivisible parts of the same transaction.
While it is true that the notice issued to Fazal Bhai made no reference to the deed of dissolution, it is clear from Fazal Bhai 's own statement filed in response to this notice that he clearly understood that the revising authority would be considering the question of bona fides in respect of the numerous statements about the settlement of accounts in connection with the dissolution of business made in the deed of dissolution.
We are satisfied, therefore., that the appellant Fazal Bhai had reasonable opportunity of being heard as regards the bona fides of the transactions mentioned in the deed of dissolution.
As we have already mentioned in connection with the other appeal, the fact that the firm stood dissolved with effect from the date on which the deed of dissolution was executed can no longer be disputed.
The effect of the Custodian 's order in regard to the deed of dissolution merely is that the transactions mentioned in that deed on the purported basis of an earlier dissolution has been declared to be not bona fide and confirmation was refused of whatever transfers of properties were purported to have been effected by that deed.
This appeal, is, therefore,, dismissed with costs.
Appeals dismissed.
[/INST]Rule 268 of the Madras Motor Vehicles Rules, 1940, as it originally stood did not empower the Transport Authority to alter from time to time the starting places and termini for motor vehicles.
The rule was amended in 1950 so as to empower the Transport Authority to do so, and after giving notice to the appellant who was the owner of a bus stand in a municipality, which was being used for several years as the starting place and terminus for motor buses plying to and from the municipality, the Transport Authority passed a resolution changing the starting place and terminus for the convenience of the public.
The appellant applied for a writ of certiorari contending that r. 268 as amended was ultra vires as it went beyond the rule making powers conferred by section 68 (2) (r) of the and was also repugnant to article 19 (1) (g) of the Constitution: Held, (i) that the fixing and alteration of bus stands was not a purpose foreign to the " control of transport vehicles ", the purpose for which rules could be made under section 68 (1), and the power to make rules prohibiting the picking up or setting down of passengers at specified places mentioned in section 68 (2) (r) necessarily included the power to alter the situation of bus stands, and r. 268 as amended did not therefore go beyond section 68 (2) (r) ; (ii) the restriction placed upon the use of the bus stand for the purpose of picking up or getting down passengers to or from outward journeys cannot be considered to be an unreasonable restriction on the right to carry on any profession, trade or business of the appellant, and r. 268 was not in any way repugnant to article 19 (1) (g) of the Constitution.
The expression " duly notified stand " in the Madras means a stand duly notified by the Transport Authority.
There is no warrant for the view that it means a stand 291 notified by the municipality.
The provisions of section 270 (b), (c) and (e) do not affect the power of the Transport Authority to regulate traffic control or impose restrictions upon the licence of cart stands.
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<s>[INST] Summarize the judgementAppeal No. 1672 of 1966.
Appeal from the judgment and order dated 16th March 1965 of the Madras High Court in Appeal Suit No. 139 of 1961.
P. Balagopal A. Y. Rangam and Lily Thomas, Advocates for the appellant.
4 28 M.Natesan, R. Ramamurthi lyer and R. Gopalakrishnan, for the Respondent.
The Judgment of the Court was delivered 'by Grover, J.
This is an appeal by certificate from a decree of the Madras High Court.
The appellant mortgaged his property bearing No. 162A West Masi Street, Madurai town for a sum of Rs. 45,000/ with the. respondent Bank on October 14, 1950.
He agreed to repay Rs. 5,0001 within a specified date and the balance was payable within two years from the date of the deed together with interest, at 101%.
It was further agreed that if the mortgagor failed to pay the interest periodically and regularly he would be liable to.
pay interest at the rate of 12% per annum from the date of such ', default and further it he failed to pay the entire amount stipulated, within two years he would have to pay the whole amount together with interest at 3 1/2 % per annum.
The sum of Rs. 5,000/ was paid within the time specified but the balance remained unpaid.
In January 1952 the appellant and his wife borrowed Rs. 25,000/and, jointly executed a promote.
The wife deposited her title deeds relating to premises No. 162 West Masi Street.
On June 25, 1952: the appellant and his wife created a mortgage of their respective properties Nos. '1 62A and, 162 West Masi Street to secure repayment of a sum of Rs. 8850/ .
All the three mortgages were in favour of the respondent Bank.
In 1953 the Bank instituted a suit on the foot of the last two, mortgages and obtained a decree against the appellant and his wife.
, This decree appears to have been satisfied.
In April 1958 the suit out of which the present appeal has arisen was filed by the Bank on the foot of the mortgage dated October 14, 1950.
The main defence of the appellant, who was the sole mortgagor, was that the suit was not maintainable in view of the provisions of section 67A of the Transfer of Property Act and that the stipulation of interest was penal and in contravention of the provisions of the .
A number of other issues were framed but it is altogether unnecessary to mention them.
The trial court granted a preliminary decree for the recovery of principal amount, of Rs.
,40,000/ which remained unpaid with interest at 12% per.
annum from August 1, 1952 till the date of the decree and thereafter at 6% per annum till realisation.
An appeal was taken to the High Court where two points were agitated.
The first was based on the provisions of section 67A of the Transfer of Property Act and the second related to the rate of interest.
The High Court did not accede to any ' of the contentions and dismissed the appeal.
Section 67A of the Transfer of Property Act provides that a I mortgagee who holds two or more mortgages executed by the same,.
mortgagor in respect of each of which he has a right to obtain the same kind of decree under section 67 and who sues to obtain such decree 429 on any one of the mortgages, shall, in the, absence of a contract to the contrary, be bound to sue on all mortgages in respect of which the mortgage money has become due.
This section was inserted by the Amending Act 20 of 1929 in view of certain conflict among the High Courts in this country, with regard to the right of the mortgagee to sue at different times on different mortgages although the mortgagor was the same.
As pointed out in Mulla 's Transfer of Property Act, 5th Edn at page 481 sections 61 and 67A of this Act lay down the simple rule that if a mortgagor has made two or, more mortgages of the same property or of different properties to the same mortgagee the mortgagor may redeem each separately but that the mortgagee must enforce all or none.
To attract the applicability of section 67A it is essential that the, mortgagor must be the same and he should have executed two or more mortgages in respect of each of which he has a right to obtain the same kind of decree under section 67A.
In the present case it is not possible to hold that the mortgagor in the suit on the foot of.
the mortgage dated October 14, 1950 is the same as the mortgagor in the previous suit which was filed on the foot of the mortgages in favour of the appellant and his wife.
In the other two mortgages there were two mortgagors, one the appellant and the other his wife.
There is no statutory provision or rule or principle by which the wife and the, husband could be treated as one entity for the purpose of the mortgages.
Each was owner of a separate and distinct property and both joined in mortgaging their respective properties.
In Moro Raghunath vs Balaji(1) the first mortgage, was by two bro thers and the second mortgage of part of the same property was by one brother.
The Bombay High Court held that the suit to enforce the first mortgage did not bar a suit to enforce the second mortgage.
This was before the insertion of section 67A but the principle embodied in that section is clearly illustrated by that case.
The bar of section 67A, therefore, could not possibly come in the way of the institution of the present suit.
On the question of interest we are of the view in the light of the provisions of the mortgage deed and all the circumstances that the rate of 12% is unfair and penal.
We are inclined, therefore, to give this relief that the interest should be calculated 'at the rate of 10 1/2% (which was the original contractual rate) from the date of the mortgage to the date of the preliminary decree.
Thereafter the interest shall be Payable as directed by the trial court 'at the rate of 6% per annum till realisation.
With this 'modification the appeal is dismissed but in view of the entire circumstances the parties are left to bear their own costs in this Court.
Appeal dismissed.
G.C. (1) I.L.R. 13Bom.
[/INST]The appellant mortgaged his property bearing No. 162A West Masi Street Madurai Town for a sum of Rs. 45,000 with the respondent Bank on October 14, 1950.
In January 1952 the appellant and his wife borrowed Rs. 25,000 and jointly executed a pronote.
The wife deposited her title deeds relating to premises No. 162 West Masi Street On June 25, 1952 the appellant and his wife created a mortgage of their respective properties Nos.
162A and 162 West Masi Street to secure repayment of a sum of Rs. 8,850.
All the three mortgages were in favour of the respondent Bank.
In 1953 the Bank instituted a suit on the foot of the last two mortgages and obtained a decree against the appellant and his wife.
This decree was satisfied.
In April 1958 the Bank filed a suit on the foot of the mortgage dated October 14, 1950.
The main defence of the appellant, who was the sole mortgagor, was that the suit was not maintainable in view of the provisions of s, 67A of the Transfer of Property Act and that the stipulation of interest was penal and in contravention of the provisions of the .
The trial court decreed the suit and the High Court dismissed the appeal.
By special leave appeal was filed in this Court.
HELD : If a mortgagor has made two or more mortgages of the same property or of different properties to the same mortgagee the mortgagor may redeem each separately but the mortgagee must enforce all or none.
To attract the applicability of section 67A it is essential that the mortgagor must be the same and he should have executed two or more mortgages in respect of each of which he has a right to obtain the same kind of decree under section 67.
In the present case it was not possible to hold that the mortgagor in the suit on the foot of the mortgage dated October 14, 1950 was the same as the mortgagor in the previous suit which was filed on the foot of the mortgages in favour of the appellant and his wife.
In the other two mortgages there were two mortgagors one the appellant and the other, his wife.
There is no statutory provision or rule or principle by which the wife and the husband could be treated as one entity for the purpose of the mortgage.
Each was owner of a separate and distinct property and both joined in mortgaging their respective properties.
The bar of section 67A therefore could not possibly come in the way of the institution of the ' present suit.
[429 B F] Moro Raghunath vs Balaji, I.L.R , approved & applied.
(ii)In the light of the provisions of the mortgage deed and all the circumstances the interest rate of 12% was unfair and penal.
Rate suitably Reduced.
[429 G]
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<s>[INST] Summarize the judgementAppeal No. 24 of 1962.
Appeal by special leave from the award dated November 23, 1960, of.
the Central Government Industrial Tribunal, Dhanbad in reference No. 31 of 1960.
M. C. Setalvad, Nonicoomar Chakravarty and B. P. Maheshwari, for the appellant.
M. K. Ramamurthi, for Dipat Datta Choudhri, for respondents Nos. 1 to 13.
January 23.
The judgment of the Court was delivered by WANCHOO, J.
This is an appeal by special leave against the order of the Central Government Industrial Tribunal, Dhanbad.
The brief facts necessary for present purposes are these.
A dispute was referred by the Central Government under s, 10 of the Industrial Disputes Act, No. 14 of 1947, (hereinafter referred to as the Act) with reference to the thirteen workmen involved in this appeal in the following terms "Whether the dismissal of the following thirteen workmen of Bhatdee Colliery, swa 711 justified ? If not, to what relief are they entitled and from which date ?" It appears that the thirteen workmen had physically obstructed the surface trammers working in the colliery on different dates, namely October 20, October 27, and November 3,1959 .some of them had also incited the other workmen to join in this act of obstructing the loyal and willing trammers so that they may be prevented from working.
This happened during a strike which was begun on October 20, 1959 by the Colliery Mazdoor sangh to which the thirteen workmen in question belonged.
In consequence the appellant served charge sheets on the thirteen workmen on November 9, 1959 charging that "they physically obstructed the surface trammers on duty at No. 1 and 2 Inclines from performing their duties and controlling the movement of the tubs by sitting in between tramline track and inciting" on various dates, thus violating regulation 38 (1) (b) of the Coal Mines Regulations.
They were asked to explain within 48 hours why disciplinary action should not be taken against them under r. 27 (19) and r. 27 (20) of the Coal Mines Standing Order.
The workmen submitted their explanations and an inquiry was held by the Welfare Officer of the appellant.
The Welfare Officer found all the thirteen workmen guilty of the charges framed against them and recommended their dismissal.
As another reference was pending before this very tribunal in November 1959, the appellant made thirteen applications to the tribunal under section 33 (2) (b) of the Act for approval of the action taken.
Though the workmen submitted their replies in those proceedings they did not contest them thereafter, and the tribunal approved of the action taken.
Thereafter the present reference was made under S.10 of the Act.
The case put forward by the workmen in the present reference was that there was no proper 712 enquiry as the workmen were not given a chance to defend themselves.
It was further submitted that the dismissals were nothing but victimisation pure and simple for trade union activities.
The tribunal apparently held that the inquiry was proper, though it has not said so in so many words in its award.
It may be added that it could hardly do otherwise, for it had already approved of the action taken on applications made under section 33 (2)(b) of the Act.
If the inquiry had not been proper,the tribunal would not have approved of the dismissals.
But the tribunal held that this was a case of victimisation.
It therefore set aside the order of dismissal and ordered the reinstatement of the thirteen workmen within one month of its order becoming operative and ordered that they should be treated as on leave without pay during the period of forced unemployment.
It did not grant back wages as the workmen had also contributed to their forced unemployment to some extent.
In the present appeal, the appellant contends that there was no evidence to justify the conclusion of the tribunal that the dismissals were an act of unfair labour practice or victimisation.
We are of opinion that this contention of the appellant must prevail.
The tribunal was.
not unaware of the fact that where a domestic inquiry is held properly.
the tribunal does not sit in appeal on the findings of the domestic tribunal and it can only interfere with the punishment inflicted as a result of the domestic inquiry where there is want of good faith or basic error or violation of the principles of natural justice, or where the findings are perverse or baseless or the case is one of victimisation or unfair labour practice.
We have already indicated that the tribunal did not find that there was any basic error or violation of the principles of natural justice in the holding of the inquiry; nor did it find that the findings of the inquiry 713 officer were perverse or baseless.
It could hardly do so in the face of its own approval of the action taken on applications made to it under section 33 (2) (b) of the Act, for if it had found that the inquiry was not proper, it would not have approved of the action taken against the workmen by the appellant when it was approached under section 33 (2) (b).
We must therefore proceed on the assumption that the inquiry was held properly and the inquiry officer who held the inquiry was justified on the evidence before him in coming to the conclusion which he did, namely, that the charges had been proved.
The tribunal however posed a further question as to victimisation in this way : "But even if assume that these men were guilty of the offence complained of, let me pause and consider if there is victimisation." .It then proceeded to point out that the workmen concerned had put in ten years service or more and their previous record of service was good.
They were important office bearers of the union and some of them were also protected workmen.
It then referred to previous disputes between the appellant and the union of which these workmen were members and was of the view that the union and its leaders were "eye sore to the appellant.
" The tribunal was, however, conscious that merely because certain workmen were protected workmen they were not thereby given complete immunity for anything that they might do even, though it might be misconduct meriting dismissal.
But it, pointed out that the misconduct complained in this case entailed fine, suspension or dismissal of the workmen, and the appellant chose dismissal, which was the extreme penalty.
It referred to a decision of the Calcutta High Court in National Tobacco Company of India Ltd. vs Fourth Industrial Tribunal (1), where it was held that in a case where the punishment meted out was unconscionable or grossly out of proportion to the nature of the offence that may itself be a ground for holding that the 714 dismissal was an act of victimisation.
It seems to have held that the punishment of dismissal in this case was unconscionable or at any rate grossly out of proportion to the nature of the offence and therefore came to the conclusion that this was a case of victimisation.
Now there is no doubt that though in a case of proved misconduct, normally the imposition of a penalty may be within the discretion of the management there may be cases where the punishment of dismissal for the misconduct proved may be so unconscionable or so grossly out of proportion to the nature of the offence that the tribunal may be able to draw an inference of victimisation merely from the punishment inflicted.
But we are of opinion that the present is not such a case and no inference of victimisation can be made merely from the fact that punishment of dismissal was imposed in this case and not either fine or suspension.
It is not in dispute that a strike was going on during those days when the misconduct was committed.
It was the case of the appellant that the strike was unsatisfied and illegal La it appears that the Regional Labour Commissioner, Central, Dhanbad, agreed with this view of the appellant.
It was during such a strike that the misconduct in question took place and the misconduct was that these ' thirteen workmen physically obstructed other workmen who were willing to work from doing their work by sitting down between the tramlines.
This was in our opinion serious misconduct on the part of the ' thirteen workmen and if it is found as it has been found proved punishment of dismissal would be perfectly justified.
It cannot therefore be said looking at the nature of the offence that the punishment inflicted in this case was grossly out of, proportion or was unconscionable, and the tribunal was not justified in coming to the conclusion that this was a case of victimisation because the appellant decided to dismiss these workmen and was not prepared to let them off with fine or suspension.
715 There is practically no other evidence in support of the finding of the tribunal.
It is true that the relations between the appellant and the union to which these workmen belonged were not happy.
It is also proved that there was another union in existence in this concern.
Perhaps the fact that there were two unions would in itself explain why the relations of the appellant with one of the unions to which these workmen belonged were not happy.
But the fact that the relations between an employer and the union were not happy and the workmen concerned.
were office bearers or active workers of the union would by itself be no evidence to prove victimisation, for if that were so, it would mean that the office bearers and active workers of a union with which the employer is not on good terms would have a carte blanche to commit any misconduct and get away with it on the ground that relations between the employer and the union were not happy.
We are therefore of opinion that the finding of victimisation in this case is based, merely on conjectures and surmises.
We have already considered the main reason given by the tribunal, namely, the nature of the punishment, and have held that that cannot be said to be unconscionable or grossly out of proportion to the nature of the offence.
Another reason given by the tribunal in support of the finding of victimisation is also patently wrong.
The tribunal says that in reports made to the police certain persons were mentioned as having taken part in the misconduct of October 27, 1959; but in the written statement filed by the appellant two other persons, namely Ratan Gope and Sohan Gope who were not mentioned in the police report, were also mentioned as having taken part in the incident of October 27.
The tribunal thereby concluded that Sohan Gope and Ratan Gope were falsely implicated in the incident of October 27.
Curiously, however, it went on to say that this might be a mistake 716 but added that it meant dismissal of these people and the finding in this respect was not only wrong but perverse.
It does appear 'that by mistake in para.
5 of the appellant 's written statement before the tribunal names of Ratan Gope and Sohan Gope are mentioned as having taken part in the incident of October 27.
But the charge sheets which were given to them were only about the incident of October 20.
The finding of the domestic inquiry also was with respect to the incident of October 20.
So it seems that there was no justification for the tribunal to hold that the finding was perverse, because there was no finding that these two persons had taken part in the incident of October 27.
There can be little doubt that there was a mistake in the written statement of the appellant for there was no charge against these two people about the incident of October 27 and no finding about it by the Welfare Officer.
The tribunal therefore was patently wrong in using this mistake as evidence of victimisation.
We are therefore of opinion that there is no evidence worth the name in the present case to support the tribunal 's finding as to victimisation and consequent want of good faith.
In the circumstances the tribunal 's award must be set aside.
We therefore allow the appeal. set aside the award of the tribunal and uphold the dismissal of the thirteen workmen concerned.
In the circumstances there will be no order as to costs.
Appeal allowed.
[/INST]The four accused persons stood their trial before the Additional Sessions judge for the murder of one Vishwanath.
The charge against them was that they in view of their common grudge a against the deceased, combined together and did away with the deceased.
They were charged under section 302 read with section 34 of the Indian Penal code and were also separately charged under section 302 of the Penal Code.
All pleaded not guilty to the charge and accused 1, 3 and 4 pleaded alibi, while accused 2 raised a plea of private defence.
The learned Additional Sessions judge acquitted all the accused on the ground that the prosecution witnesses were not speaking the truth and the version given by accused 2 was the probable one.
The State preferred an appeal to the High Court against the order of acquittal under section 302, read with section 34, but not against the acquittal under section 302 of the Penal Code.
The High Court acquitted accused 1, 3 and 4 on the ground that it was doubtful whether any one of them participated in the commission of the offence and convicted accused 2 on the ground that one or more of them might have participated in the offence.
Accused 2, the appellant, therefore, filed this appeal and contended that when three of the four named accused, who were charged under section 302, read with section 34, were acquitted, the court could not convict only one of the accused on the basis of constrictive liability.
Held that before a court could convict a person under section 302, read with section 34, it should come to a definite conclusion that the said person had a prior concert with one or more other persons, named or unnamed, for committing the said offence.
Held, further, that when accused were acquitted either on the ground that the evidence was not acceptable or by giving 679 benefit of doubt to them, the result in law would be the same it would mean that they did not take part in the offence.
The effect of the acquittal of accused 1, 3 and 4 is that they did not conjointly act with accused 2 in committing the murder.
If they did not act conjointly with the appellant, he could not have acted conjointly with them.
The judgment of the High Court does not indicate that persons other than the said accused participated in the offence, nor is there any evidence in that regard, therefore, the conviction of the appellant must be set aside.
Mohan Singh vs State of Punjab, [1962] Supp.
3 section C. R. 848, held inapplicable.
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<s>[INST] Summarize the judgementivil Appeal Nos.
282 283 of 1969.
Appeals by special leave from the Judgment and order dated the 15th October, 1968 of the Allahabad High Court in Second Civil Appeals Nos.
978/58 and 11 of 1959.
section Rangarajan, Mrs. section Bagga and Uma Jain for the Appellants.
K.L. Hathi, P.C. Kupur, R.S. Mehta, O.P. Verma and S.N. Singh for the Respondents.
The Judgment of the Court Was delivered by DESAI, J.
These two appeals by special leave arise from two Suits filed by Barkatullah and Sahfiullah for possession of land more 929 particularly set out at the foot of the plaint against the Zamindars and Prem Kumari and Noor Mohammad.
Briefly stated the plaintiffs ' A case was that they were Thekadars and the Theka was taken for personally cultivating the land and therefore under sec.
12 of the U P. Zamindari Abolition and Land Reforms Act, 1950 ( '1950 Act ' for short), they have become hereditary tenants and they were in possession of land on Ist April 1960.
It was alleged that the Zamindars had no right to lease the land after the plaintiffs became hereditary tenants yet Prem Kumari and Noor Mohammad took land on lease from Zamindars and entered possession after 1.4 1950.
It was alleged that the lessees from the Zamindar had no right to remain in possession as against hereditary tenants.
On this short ground the plaintiffs sought possession of the land.
The defendants were the Zamindars and two lessees contested the suit.
The averments made in para 4 of the plaint were not controverted specifically and it was merely stated that they are subject to additional pleas.
The only plea put forward on behalf of the lessees worth noticing is that the lessees were in cultivatory possession during the year 1359 F and being not a person who has become a bhumidar sirdar, Adhivasi or Asami is entitled to all the rights of Adhivasis under U.P. Land Reforms (Supplementary) Act, 1952 ( '1952 Act ' for short) The trial court dismissed the suit observing that the plaintiffs were Thekadars of the land and under sec.
12 of the 1950 Act have acquired rights of hereditary tenants but the lessees were in cultivatory possession in 1359 F and therefore have acquired the right of adhivasi.
Thekanama was held to be defective on the question of Theka being given exclusively for personal cultivation.
The two plaintiffs preferred two separate appeals and both the appeals were disposed of by the First Additional Civil and Sessions Judge, Gonda as per his judgment dated September 1, 1958.
Broadly stated, the learned Judge agreed with the findings of the trial court and dismissed the appeals.
The original plaintiffs carried the matter in .
second appeal.
Two separate appeals were preferred, by the time the appeals came up for hearing, a statement was made that both the plaintiffs have compromised the dispute inter Se and that the suit be treated as one and if the appeal is to be allowed, possession is to be given jointly to two appellants as against the respondents H The learned Judge disposed of both the appeals by common judgment reversing the decision of the trial court and the first 930 appellate court holding that the plaintiffs had acquired the status of A hereditary tenants and were in possession on 1.5.1950 and, therefore, the Zamindars had no right to dispossess the plaintiffs and induct the two lessees in possession.
It was further held that as the lessees came into possession under Zamindars who had no right to grant the lease possession of the lessees being thus unlawful against the plaintiffs, they could not have acquired the Adivasis rights.
Accordingly, the suit was decreed and a decree for possession was granted in favour of the plaintiffs.
Hence these two appeals by special leave Both the original lessees have died and their heirs and legal representative are prosecuting these appeals.
Mr. Rangarajan, learned counsel for the appellants urged that in view of the finding of the trial court that there was no specific authority given to the Thekadars for personal cultivation of the lands comprised in the Theka, the Thekadars plaintiffs did not acquire the right of hereditary tenants under sec 12 of the 1950 Act.
This was the principal contention urged in these two appeals.
1950 Act was a measure of agrarian reform enacted with a view to abolishing the Zamindari system and for acquisition of intermediaries ' rights.
Section 4 provided for vesting of estates in the State free from all encumbrances with effect from the date to be specified by the State Government in a notification.
Sec. 6, inter alia, provided the consequences of the vesting of an estate in the State, one such being that all rights, title and interest of all the intermediaries shall cease and be vested in the State.
1 2 provides that the Thekadars would acquire the rights of hereditary tenants in certain circumstances.
It reads as under; "(1) Where any land was in personal cultivation of a person on the 1st day of May, 1950 as a Thekadar 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.
931 (2) The fact that the land comprised in the theka has been in the personal cultivation of the thekedar since the commencement of the theka shall, notwithstanding anything contained in section 91 and 92 of the (I of 1872), be receivable in evidence for showing that the theka was of the nature referred to in sub section (1)".
1952 Act enacted certain supplementary provisions in respect of the 1950 Act.
3 of 1952 Act provided that every person who was in cultivatory possession of any land during the year 1359 Fasli but is not a person who as a consequence of vesting under section 4 of the 1950 Act has become a bhumidar, sirdar, adhivasi or asami under section 18 to 21 of the said Act shall be and is hereby declared to be, with effect from the appointed date (b) if the bhumidar or sirdar was not such a person, an adhivasi, and shall be entitled to all the rights and be subjected to all the liabilities conferred or imposed upon an asami or an adhivasi.
There is an explanation to the section which is not material.
Original lessees claimed that they have acquired the status of Adhivasi under section 3 of 1952 Act.
It is not in dispute that the original plaintiffs were Thekedars.
It was however contended that unless the Theka was exclusively far personal cultivation of the land comprised in the Theka, the Thekedars would not acquire the status of hereditary tenants.
Sec. 12 which has been extracted herein before specifically provides that where any land is in personal cultivation of a person on the 1st 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 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.
This section came in for interpretation in Babu Noorul Hasan Khan vs Ram Prasad Singh & Ors (1) wherein it was held 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.
But this is subject to two exceptions; one such being as enacted in 5.
l 2 which provides that if such land was in personal cultivation of a person on the 1st day of May, 1950, as a 932 thekedar thereof and if the theka was made with a view to the A cultivation of land by such thekedar personally, then because of the non obstante clause occurring in sub sec.
(I) of section 12 of the Act, the Thekedar would be deemed to be a hereditary tenant of the land entitled to hold land as such and liable to pay rent at hereditary rates.
If such hereditary tenant has lost possession he is entitled to regain his possession.
It was further held that 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 sec.
13(2) of the Act.
This interpretation of sec.
12 was re affirmed in Raghunandan Singh & Ors.
vs Brij Mohan Singh & Ors(1) It would thus appear well settled that before a Thekedar can claim the status of a hereditary tenant, he must not only be a Thekedar but the Theka must be specifically granted for personal cultivation of the land included in the Theka by the Thekedar.
The question therefore, is whether in this case the land included in the Theka of the original plaintiffs provided for personal cultivation of the land by the Thekedar or personal cultivation was incidental to other rights and obligations such as collection of rent .
from the other tenants ? This would necessitate examination of the original document creating Theka.
That was not read to us, but Mr. Rangarajan relied upon the following observation in the judgment of the learned trial Judge: "I have read the context (sic) (possibly contract, of the Thekanama.
There is no authority given specifically or impliedly for personal cultivation by the Thekedars of the land comprised in the Theka unless there was such a provision.
I fear no rights of hereditary tenancy could have been acquired by the plaintiffs.
" It was urged that the learned Judge specifically came to the conclusion that the Theka was not created exclusively and specifically for personal cultivation of the lands involved in the Theka.
The learned appellate Judge found that the Thekedars were in actual possession and personal cultivation of the land for a period of 11 years.
He further found that the Theka would be deemed to have been granted for 933 personal cultivation and if the plaintiffs (Thekedars) have been found to be in personal cultivation of the suit on 1st May, 1950 as Thekedars, they would be entitled to the benefit of sec.
12 of 1950 Act.
The learned appellate Judge then concluded that it is satisfactorily proved that the plaintiffs Thekedars were in possession on 1st May, 1950.
However the learned Judge declined to grant relief to the plaintiffs on the finding that the lessees had acquired Adhivasis right under 1952 Act.
It clearly transpires from the findings of the first appellate court, which is the last fact finding court, that the Theka was for personal cultivation of the land involved in the Theka and the Thekedars were personally cultivating the land for a period of 11 years.
The High Court in second appeal noticed that the Thekedars were personally cultivating the land.
Nothing was pointed out to us to show that Thekedars had any other duty to perform such as collecting rent from other tenants.
There is nothing in the record to show that the Theka was as a consideration for some other duties to be performed by the Thekedars to the Zamindars.
Therefore, the conclusion is inescapable, that the Theka was created exclusively for personal cultivation of the land involved in the Theka by the Thekedars.
If it is clearly established that the Theka was created exclusively for personal cultivation of the land by the Thekedars, the ratio of the decision of this Court would lead to the conclusion that the Thekedars acquired the status of the hereditary tenants under sec.
12 of the 1 950 Act.
The only question then remains for the consideration is whether the original lessees acquired Adhivasis rights under sec.
3 of the 1952 Act.
Sec. 3 which has been extracted herein before provides that any person who has not become a bhumidar, sirdar, adhivasi or asami under 1950 Act if he is in cultivatory possession of any land during the year 1359 Fasli and if the bhumidar or sirdar was not such a person, such a person in cultivatory possession would acquire the status of an adhivasi.
The High Court then examined what is the significance of the expression 'cultivatory possession ' in sec.
The High Court rightly held that if the Thekedars had acquired the status of hereditary tenants as Theka was up to and inclusive of the year 1359 Fasli, the Zamindars had no right to induct lessees in possession after depriving the Thekedars of their possession and therefore possession of the lessees was not 934 lawful against the Thekedars.
The High Court rightly held that A the lessees could not be said to be in cultivatory possession of the land on the appointed day.
In reaching this conclusion, the High Court relied upon a decision of this Court in Sonawati & ors.
vs Shri Ram Anr.(1) The Court held as under: "The expression "cultivatory possession" is not defined in the Act, but the Explanation clearly implies that the claimant must have a lawful right to be in possession of the land, and must not belong to the classes specified in the explanation.
"Cultivatory possession" to be recognized for the purpose of the Act must be lawful and for the whole year 1359 Fasli.
A trespasser who has no right to be in possession by merely entering upon the land forcibly or surreptitiously cannot be said to be a person in "cultivatory possession" within the meaning of section 3 of U.P. Act of 1952.
We are of the view that the Allahabad High Court was right in holding in Ram Krishna vs Bhagwan Baksh Singh(2) that a person who through force inducts himself over and into some land and succeeds in continuing his occupation over it cannot be said to be in cultivatory possession of that land so as to invest him with the rights of an asami or an adhivasi, and we are unable to agree with the subsequent judgment of a Full Bench of the Allahabad High Court in Nanhoo Mal vs Muloo and ors.(B) that occupation by a wrongdoer without any right to the land is 'cultivatory possession ' within the meaning of section 3 of the U.P. Act 31 of 1952".
Therefore in order to obtain the benefit of sec.
3 of 1952 Act, the person claiming to be in cultivatory possession must show that his or her possession was lawful.
The High Court consistent with certain findings of the trial Court and the first appellate court held that possession of the lessees in 1359 Fasli was not lawful and this necessarily follows from the finding given by the courts that the Thekedars were in cultivatory possession of the plots in dispute on the appointed day i.e. 1st May, 1950 and thereby became entitled to acquire the rights of hereditary tenants.
We are in agreement with the conclusion recorded by the High Court.
935 It must therefore follow as a necessary corollary that the lessees did not acquire the right of adhivasi and the hereditary A tenants would be entitled to a decree for possession.
Accordingly, the appeals fail and must be dismissed.
The appeals are thus dismissed with costs.
H.S.K. Appeals dismissed.
[/INST]The plaintiffs, who were Thekedars, filed two suits for possession of land Leased out by the Zamindars to the defendants lessees on the ground that since the Thekedars had become hereditary tenants under section 12 of the U.P. Zamindari Abolition and Land Reforms Act, 1 950 and were in possession of that land on 1st day of May, 1950, the Zamindars had no right to grant lease and the lessees had no right to enter and remain in possession of that land after that date.
The lessees pleaded that they were in cultivatory possession of the land during the year 1359 Fasli and were entitled to all the rights of adhivasis under the U.P. Land Reforms (Supplementary) Act, 1952.
The trial court dismissed the suits observing that the Thekedars had acquired rights of hereditary tenants but the lessees were in cultivatory possession in 1359 Fasli who had therefore acquired the right of adhivasi.
The first appellate court dismissed the appeals.
The High Court in second appeal reversed the decision of the trial court and the first appellate court and decreed the suits.
On appeal, it was contended that since there was no authority given to the Thekedars for personal cultivation of the lands comprised in the Theka the Thekedars did not acquire the right of hereditary tenants under section 12 of the 1950 Act.
Dismissing the appeals, ^ HELD: Section 12 of the 1950 Act provides that if any land was given to a person for personal cultivation by him on the 1st day of May 1950, as a Thekedar thereof, then because of the non obstante clause occurring in sub section (I) of section 12 the Thekedar would be deemed to be a hereditary tenant of the land entitled to hold the land as such and liable to pay rent at hereditary rates.
If such hereditary tenant has lost possession he is entitled to regain his possession.
If, however, the land was in the personal cultivation of the Thekedar who was appointed merely to collect rent from other tenants and incidentally allowed to cultivate the Sir, or Khudkasht land of the lessor then he will be a mere asami in accordance with section 13 928 of the Act.
Before a Thekedar can claim the status of a hereditary tenant, A he must not only be a Thekedar but the Theka must be specifically granted for personal cultivation of the land included in the Theka by the Thekedar.
[931 H, 932 A C] Babu Noorul Hasan Khan vs Ram Prasad Singh and Ors [1980] I SCR 977 and Raghunandan Singh and Ors vs Brij Mohan Singh and Ors.
, ; , referred to.
In the instant case the Theka was created exclusively for personal cultivation of the land involved in the Theka be the Thekedars and not as a consideration for some other duties to be performed by the Thekedars to the Zamindars.
The Thekedars were in possession of the land and were personally cultivating the land on the 1st day of May, 1950.
The Thekedars acquired the status of hereditary tenants under section 12 of the 1950 Act.
[933 C E] Section 3 of the 1952 Act provides that any person who has not become a bhumidar, sirdar, adhivas.
Or asami under the 1950 Act if he is in cultivatory possession of any land during the year 1359 Fasli and if the bhumidar or sirdar was not such a person, such person in cultivatory possession would acquire the status of an adhivasi.
To obtain the benefit of section 3 the person claiming to be in cultivatory possession must show that his or her possession was lawful.
[933 F G, 934 F] Sonawati and Ors.
vs Sri Ram and Anr., [1968] I SCR 617, referred to.
In the instant case since the Thekedars had acquired the status of hereditary tenants as Theka was up to and inclusive of the year 1359 Fasli, the Zamindars had no right to induct lessees in possession after depriving the Thekedars of their possession and therefore possession of the lessees in 1359 Fasli was not lawful.
Therefore the lessees did not acquire the right of adhivasi.
[933 H, 935 A]
</s>
|
<s>[INST] Summarize the judgementvil Appeal Nos. 4180 and 4181 of 1989.
From the Judgment and Order dated 20/21/22 7 1988 and 18/298 1988 of the Bombay High Court in Writ Petition Nos.
3313 and 3417 of 1987.
N.N. Keshwani and R.N. Keshwani for the Appellants.
383 A.B. Rohatgi, Mrs. Gool Barucha, M.J. Paul, Kailash Vasdev, R. Karanjawala, Mrs.M Karanjawala (NP) and H.S. Anand for the Respondents.
The Judgment of the Court was delivered by OJHA, J.
Special leave granted.
These civil appeals have been preferred against a common judgment of the Bombay High Court dismissing writ petition No. 33 13/87 filed by Arjun Khiamal Makhijani who is the appellant in one of these appeals and writ petition No. 3417/87 by Prithdayal Chetandas and others who are the appellants in the other civil appeal.
Jamnadas C. Tuliani who is respondent No. 1 in both these appeals is the owner and tile landlord of the suit premises comprising two bed rooms flat together with a garage on the ground floor and a store room on Bhulabhai Desai Road in the city of Bombay.
A suit was instituted by him for ejectment from the said premises against five defendants on the ground that they were tenants of the said premises and were in arrears of rent for a period of more than six months which they had not paid in spite of a notice of demand having been served on them as contemplated by sub section (2) of Section 12 of the Bombay Rents, Hotel and Lodging House Rates Control Act 1947 (hereinafter referred to as the Act) and were consequently liable for eviction under sub section (3)(a) of the Act as it then stood.
Two other grounds were pleaded by the re spondent No. 1 namely that the tenants had changed the user of the suit premises and that they had committed breach of terms and conditions of the tenancy.
Subsequently, Arjun Khiamal Makhijani aforesaid was impleaded as defendant No. 6 in the suit on the assertion that the tenants had illegally sublet a portion of the suit premises namely the garage to him and were consequently liable to be evicted on this ground also.
The suit was contested both by the tenants as well as by defendant No. 6.
The Trial Court recorded find ings in favour of the landlord in so far as the pleas of default in payment of rent and illegal sub tenancy are concerned.
The other two pleas namely that the tenants had changed the user of the suit premises and had also committed breach of terms and conditions of the tenancy were decided against the landlord.
On the basis of the findings on the pleas of default in payment of rent and illegal subletting, the suit was decreed.
Two appeals were preferred against the judgment of the Trial Court, one by the tenants and the other by defendant No. 6.
Both these appeals were dismissed and the tenants and defendant No. 6 aggrieved by the said decree filed two writ petitions in the High Court.
384 Against the common judgment of the High Court dismissing these writ petitions, the present civil appeals have been preferred.
Before dealing with the respective submissions made by learned counsel for the parties it may be pointed out that even though the finding that the tenants were defaulters in payment of rent has been upheld by the High Court, the other finding namely that the tenants had illegally sublet the garage of the suit premises to defendant No. 6 has been set aside and it has been held accepting the case of the tenants that the defendant No. 6 was a trespasser.
The tenants had also claimed before the High Court the benefit of sub sec tion (3) of Section 12 of the Act as substituted by Amend ment Act 18 of 1987 which came into force on 1st October 1987.
This plea too was repelled.
The defendant No. 6 before the High Court on the other hand took up the plea that in view of the finding in the suit that he was an illegal sub tenant of the garage since 1967, he was entitled to the benefit of sub section (2) of Section 15 of the Act as amended by the aforesaid Amendment Act 18 of 1987.
The High Court repelled this plea on the finding that he was not a sub tenant but a trespasser and also on the ground that he was not in possession on 1st February 1973, the relevant date mentioned in the said sub section.
The High Court also held that benefit of subsection (2) of Section 15 as amend ed, could not be given to defendant No. 6 in a writ peti tion, the same being not a proceeding contemplated by Sec tion 25 of the Amendment Act.
In order to appreciate the submissions made by learned counsel for the parties, it will be useful to extract sub section (3) as it stood at the time when the suit was instituted and sub section (3) as it stands after its amendment.
Subsection (3) as it stood when the suit was instituted reads as hereunder: "3(a) Where the rent is payable by the month and there is no dispute regarding the amount of standard rent or permitted increases, if such rent or increases are in arrears for a period of six months or more and the tenant neglects to make payment thereof until the expiration of the period of one month after notice referred to in sub section (2), the Court.
shall pass a decree for eviction in any such suit for recovery of possession.
(b) In any other case no decree for eviction shall be passed in any such suit if, on the first day of hearing of the suit or on or before such other date as the Court max fix, the tenant pays or tenders in Court the standard rent and permitted increases then due and thereafter continues to 385 pay or tender in Court regularly such rent and permitted increases till the suit is finally decided and also pays costs of the suit as directed by the Court.
" After its amendment as aforesaid, it reads: "(3) No decree for eviction shall be passed by the Court in any suit for recovery of posses sion on the ground of arrears of standard rent and permitted increases if, on the first day of hearing of the suit or on or before such other date as the Court may fix, the tenant pays or tenders in Court the standard rent and permitted increases then due and together with simple interest on the amount of arrears of such standard rent and permitted increases at the rate of nine per cent per annum; and thereafter continues to pay or tenders in Court regularly such standard rent and permit ted increases till the suit is finally decided and also pays costs of the suit as directed by the Court; Provided that, the relief provided under this sub section shall not be available to a tenant to whom relief against forfeiture was given in any two suits previously instituted by the landlord against such tenant." Sub section (2) of Section 15, on the other hand, after its amendment as aforesaid runs thus: "(2) The prohibition against the sub letting of the whole of any part of the premises which have been let to any tenant, and against the assignment or transfer in any other manner of the interest of the tenant therein, contained in subsection (1), shall, subject to the provisions of this subsection, be deemed to have had to effect before the 1st day of February 1973, in any area in which this Act was in operation before such commencement; and accordingly, notwithstanding anything con tained in any contract or in the judgment, decree or order of a Court, any such sublease, assignment or transfer of any such purported sublease, assignment or transfer in favour of any person who has entered into possession, despite the prohibition in subsection (1), as purported sub lessee, assignee or transferee and has continued in a possession on the date aforesaid shall be deemed to be valid and effectual for all purposes, 386 and any tenant who has sub let any premises or part thereof, assigned or transferred any interest therein, shall not be liable to eviction under clause (e) of sub section (1) of Section 13.
The provisions aforesaid of this sub section shall not affect in any manner the operation of sub section (1) after the date aforesaid." Since considerable emphasis has been placed on Section 25 of the Amendment Act 18 of 1987, the same may also be usefully quoted.
It reads: 25.
Nothing contained in the principal Act, as amended by this Act, shall be deemed to autho rise the re opening of any suit or proceeding for the eviction of any person from any prem ises to which the principal Act applies as if such proceeding had been finally disposed of before the commencement of this Act.
Explanation For the purposes of this section, suit or proceeding, as the case may be, shall not be deemed to have been finally disposed of, if in relation to that suit or proceeding, any appeal or proceeding is pending, or, if the period of limitation for preferring an appeal or proceeding, as the case may be, had not expired before the com mencement of this Act.
" It has been urged by the learned counsel for the tenants that 14th November 1967 was the first day of hearing of the suit and since in pursuance of an order passed by the Trial Court on that day, the tenants had deposited the entire arrears of rent on 9th January 1968 within the time granted by the Court and continued to deposit the monthly rent thereafter they could not be treated as defaulters in pay ment of rent even if the amendment made in sub section (3) of Section 12 by the Amendment Act 18 of 1987 was ignored.
We, however, find it difficult to agree with this submis sion.
It is not denied that the arrears of rent which were for a period of more than six months and in respect of which a notice of demand had been served on the tenants under sub section (2) of Section 12 of the Act had not been paid by the tenants to the landlord within one month of the service of the notice.
It is also not denied that during the said period of one month, no dispute regarding the amount of standard rent or permitted 387 increases was raised by the tenants.
On a plain reading of clause (a) of sub section (3) of Section 12 of the Act as it stood at the relevant time, the said clause was clearly attracted and the consequence provided therein had to follow namely a decree for eviction against the tenants had to be passed.
Clause (b) of sub section (3) on the face of it was not attracted inasmuch.
as the said clause applied only to a case not covered by clause (a).
This is amply borne out by the use of the opening words "In any other case" of clause (b).
In Harbanslal Jagmohandas and Anr.
vs Prabhudas Shiv lal, [1977] 1 S.C.C. page 576, these clauses (a) and (b) of sub section (3) of Section 12 of the Act came up for consid eration and it was held that the tenant can claim protection from the operation of the Section 12(3)(a) of the Act only if he makes an application raising a dispute as to standard rent within one month of the service of the notice terminat ing the tenancy.
In the instant case this had not admittedly been done by the tenants.
The consequence of non payment of arrears of rent claimed in the notice of demand was, there fore, inevitable.
In Jaywant section Kulkarni and Others vs Minochar Dosabhai Shroff and Others, [1988] 4 S.C.C.p.108, clauses (a) and (b) of sub section 3 of Section 12 again came up for consideration.
It was held: "Sub section (3)(a) of Section 12 categorical ly provided that where the rent was payable by the month and there was no dispute regarding the amount of standard rent or permitted increases, if such rent or increases were in arrears for a period of six months or more and the tenant neglected to make payment thereof until the expiration of the period of one month after notice referred to in subsection (2), the court shall pass a decree for evic tion in any such suit for recovery of posses sion.
In the instant case, as has been found by the court, the rent is payable month by month.
There is no dispute regarding the amount of standard rent or permitted in creases.
Such rent or increases are in arrears for a period of six months or more.
The tenant had neglected to make payment until the expi ration of the period of one month after notice referred to in subsection (2).
The Court was bound to pass a decree for eviction in any such suit for recovery of possession." Faced with this difficulty, learned counsel for the tenants urged that since the Act was a beneficial legisla tion the tenants having deposited the arrears of rent within the time granted by the Trial Court and having continued to deposit future rent thereafter the decree for 388 their eviction deserves to be reversed by this Court.
In so far as this submission is concerned, it may be pointed out that in Ganpat Ram Sharma and others vs Gayatri Devi, [1987] 3 SCC page 576, while dealing with almost a similar Rent Control Legislation it was held: "But quite apart from the suit being barred by lapse of time, this is a beneficial legisla tion, beneficial to both the landlord and the tenant.
It protects the tenant against unrea sonable eviction and exorbitant rent.
It also ensures certain limited rights to the landlord to recover possession on stated contingencies.
In Ganpat Ladha vs Sashikant Vishnu Shinde, [1978] 2 SCC page 73 while dealing with the scope of clauses (a) and (b) of sub section (3) of Section 12 of the Act, it was held: "It is clear to us that the Act interferes with the landlord 's right to property and freedom of contract only for the limited purpose of protecting tenants from misuse of the landlord 's power to evict them, in these days of scarcity of accommodation, by assert ing his superior rights in property or trying to exploit his position by extracting too high rents from helpless tenants.
The object was not to deprive the landlord altogether of his rights in property which have also to be respected.
Another object was to make possible eviction of tenants who fail to carry out their obligation to pay rent to the landlord despite opportunities given by law in that behalf.
Thus Section 12(3)(a) of the Act makes it obligatory for the Court to pass a decree when its conditions are satisfied as was pointed out by one of us (Bhagwati, J.) in Ratilal Balabhai Nazar vs Ranchhodbhai Shan kerbhai Patel, AIR 1968 Guj 172.
If there is statutory default or neglect on the part of the tenant, whatever may be its cause, the landlord acquires a right under Section 12(3)(a) to get a decree for eviction.
But where the conditions of Section 12(3)(a) are not satisfied, there is a further opportunity given to the tenant to protect himself against eviction.
He can comply with the conditions set out in section 12(3)(b) and defeat the landlord 's claim for eviction.
If, however, he does not fulfil those conditions, he cannot claim the protection of Section 12(3)(b) and in that event, there being no other protection available to him, a decree for eviction would have to go against him.
It is difficult to 389 see how by any judicial valour discretion exercisable in favour of the tenant can be found in Section 12(3)(b) even where the conditions laid down by it are satisfied to be strictly confined within the limits prescribed for their operation." (Emphasis supplied).
When the Act contains provisions, some of which fall under the category of beneficial legislation with regard to the tenant and the others with regard to the landlord, the assertion that even with regard to such provisions of the Act which fall under the purview of beneficial legislation for the landlord an effort should be made to interpret them also in favour of the tenant is a negation of the very principle of interpretation of a beneficial legislation on which reliance is placed on behalf of the tenants.
The argument indeed is self defeating and only justifies the cynical proverb Head I win tail you lose.
It is difficult to countenance the sentimental approach made by learned counsel for the tenants, for the simple reason that as pointed out in Latham vs
R. Johnson and Nephew Ltd., (408) sentiment is a dangerous will of the wisp to take as a guide in the search for legal principles.
Reliance was placed by learned counsel for the tenants on Vatan Mal vs Kailash Nath, [1989] 3 SCC page 79.
In that case provisions of Amending Ordinance No. 26 of 1975 whereby Section 13(a) was inserted in the Rajasthan Premises (Con trol of Rent and Eviction) Act, 1950, came up for considera tion.
After pointing Out that the object of inserting Sec tion 13(a) was to confer benefit on all tenants against whom suits for eviction on ground of default in payment of rent were pending and to achieve that object, the said Section had been given overriding effect, it was held that the interpretation of Section 13(a) must conform to the legisla tive intent and the courts should not take narrow restricted view which will defeat the purpose of the Act.
In our opin ion, in view of the mandatory provisions contained in Sec tion 12(3)(a) of the Act, the decision in the case of Vatan Mal, (supra) is not at all attracted to the facts of the instant case.
Clauses (a) and (b) of sub section (3) of Section 12 of Act are calculated to meet entirely different situations and the object of clause (b) was not to defeat the mandatory requirement of clause (a) scope of which has already been discussed above.
For the same reason, the decision of this Court in B.P. Khemka Pvt. Ltd. vs Birendra Kumar Bhowmick & Anr., [1987] 2 SCR page 559 on which too reliance has been placed by the learned counsel for the tenants is of no assistance to them.
390 It was then urged by the learned counsel for the tenants that notwithstanding the provisions contained in Section 12(3)(a) of the Act, this Court can still grant relief to the tenants in view of the power conferred on it under Article 142 of the Constitution "for doing complete justice" in the case.
Reliance in support of this submission has been placed on Smt.
Kamala Devi Budhia and others vs Hem Prabha Ganguli and Others, [1989] 3 SCC page 145.
This submission ignores the basic concept that Article 142 does not contem plate doing justice to one party by ignoring mandatory statutory provisions and thereby doing complete injustice to the other party by depriving such party of the benefit of the mandatory statutory provision.
In the case of Smt.
Kamala Devi Budhia, (supra), the question arose as to wheth er an application under Section 12 of the Bihar Buildings (Lease, Rent and Eviction) Control Act was competent or in the circumstances of the case only a suit under Section 11 thereof could be filed.
It was pointed out that it is the same Court before which both a suit under Section 11 and an application under Section 12 are to be filed and it was in this background that it was held: "If it is assumed that an application under Section 12 of the Act is not maintainable in the facts and circumstances of the present case, in our opinion, the proceeding has to be treated as a suit and the judgment of the learned Munsif as a decree therein.
A further question may arise as to the effect of the Judicial Commissioner, Ranchi declining to pass a formal decree of eviction and directing the appellants to make an application under Section 12(3) of the Act for that purpose.
Can this Court restore the decree of the trial court in absence of an appeal by the appel lants before the High Court? We think.that we can and we should. the question does not affect the substantive right of the parties as the controversy was concluded by the first appellate court in favour of the appellants.
What was left was only procedural in nature and inconsistent with our decision to treat the proceeding as a suit.
The occasion for filing an application under Section 12(3) can arise only where the matter is covered by Section 12, and as we have made an assumption in favour of the respondents that Section 12 has no application to the present case, there is no point in asking the appellants to file such an application.
As mentioned in Article 142 of the Constitution of India, this Court may pass such decree or make such order as is necessary for doing complete justice in any cause or matter pending before it, 391 and the present case is a most appropriate one for exercise of such power." (Emphasis supplied) The said decision apparently cannot be applied to the facts of the instant case.
Learned counsel for the tenants then urged, relying on Praduman Kumar vs Virendra Goyal (Dead) by L.Rs., [1969] 3 SCR page 950, that at all events the tenants were entitled to be relieved against forfeiture for non payment of rent under Section 114 of the Transfer of Property Act benefit of which could be given if deposit of rent was made at any stage of the hearing of the suit.
In our opinion, there is no substance in this submission either inasmuch as Section 114 of the Transfer of Property Act cannot be applied to a case where the suit for eviction of a tenant has been insti tuted not on the basis of forfeiture of lease under the Transfer of Property Act but on the basis of statutory provision dealing specifically with the rights and obliga tions of the landlords and tenants such as Section 12 of the Act.
In a case where a tenant renders himself liable to be evicted on the ground of being defaulter in the payment of rent as contemplated by sub sections (2) and (3)(a) of Section 12 of the Act, bar from the way of the landlord in instituting a suit for ejectment of a tenant is removed and he gets a right to have a decree for eviction.
Such removal of bar is not in any sense forfeiture of any rights under lease which the tenant held.
Section 114 of the Transfer of Property Act which provides relief against forfeiture for non payment of rent applies to a case where a lease of immovable property has determined by forfeiture for non payment of rent.
Section 111 of the Transfer of Property Act deals with various contingencies whereunder a lease of an immovable property determines.
Clause (g) contains one.of such contingencies being by forfeiture inter alia in case the lessee breaks an express condition which provides that on breach thereof the lessor may re enter.
In a case where forfeiture of lease is claimed for non payment of rent, it would, therefore, have to be established that one of the express conditions of the lease provided that on breach of that condition namely on nonpayment of rent the lessor was entitled to re enter.
It is only in those cases where such an express condition is contained in the lease and the lessee breaks the said condition and the lessor on his part gives notice in writing to the lessee of his intention to determine the lease that a lease of immovable property determines by forfeiture for non payment of rent.
In the instant case, the suit was not based on any such forfeiture of lease under the Transfer of Property Act but was filed for the 392 enforcement of the statutory right conferred on the landlord by subsections (2) and (3)(a) of Section 12 of the Act.
Lastly, it was urged by the learned counsel for the tenants that after clauses (a) and (b) of sub section (3) of Section 12 were substituted by the consolidated sub section (3) of the Amendment Act 18 of 1987, the tenants should have been given the benefit of the deposit of arrears of rent on the first day of hearing in pursuance of the order of the Trial Court dated 14th November, 1967, and of the deposits of future rent thereafter and at all events they were enti tled to make the necessary deposit after the commencement of the Amendment Act 18 of 1987.
In our opinion, the tenants are not entitled even to the benefit of the amended sub section (3) of Section 12 of the Act inasmuch as on a plain reading of the sub section it is not possible to give it a retrospective operation.
In this connection, it will be useful to notice that while amending sub section (2) of Section 15 of the Act, it was provided by the Amendment Act 18 of 1987 that the provisions which were substituted in the said sub section, shall be deemed to have been substituted on the 1st day of February 1973.
No such provision was made with regard to the substitution of sub section (3) of Sec tion 12 of the Act.
Sub section (3) uses the words "on the first day of the hearing of the suit or on or before such other day as the Court may fix".
If the deposit of arrears of rent on 9th January 1968 is pleaded as compliance of the deposit contemplated by the amended sub section (3) and even if for the sake of argument this plea is accepted, the said deposit would still not confer on the tenants the benefit of sub section (3) for the obvious reason that the said sub section contemplates not only the deposit of standard rent and permitted increases then due but also of simple interest on the amount of arrears of such rent and permitted in creases at the rate of nine per cent per annum.
Such amount of interest was admittedly not deposited by the tenants either on 9th January 1968 or on any date thereafter.
We owe turn to the submission of the learned counsel for the ten ants that the tenants were entitled to make the deposit contemplated by sub section (3) "on the first day of the hearing of the suit or on such other day as the Court may fix" after sub section (3) being substituted by the Amend ment Act 18 of 1987.
This argument ignores the difference between the terms "at the hearing of the suit" as used in Section 114 of the Transfer of Property Act and the term "on the first day of the hearing of the suit".
In the case of former, it may be possible to argue that the deposit can be made at any hearing of the suit either in the Trial Court or the Appellate Court, an appeal being a continuation of the suit but the said argument is not available in the latter case where the words used are "on the first day 393 of the hearing of the suit".
In the very nature of things it is not possible to contemplate numerous dates all of which may fulfil the requirement of being "the first day of the hearing of the suit".
In this connection, it would be useful to notice that the words "on the first day of the hearing of the suit or on or before such other day as the Court may fix" occurring in sub section (3) of Section 12 of the Act after its amendment by the Amendment Act 18 of 1987 occurred in clause (b) of the unamended sub section (3) also.
In S.D. Chagan Lal vs Dalichand Virchand Shroff and Others, [1968] 3 S.C.R. page 346 while dealing with the clauses (a) and (b) of the unamended sub section (3) of the Section 12 of the Act, it was held that the date fixed for settlement of issues was September 3, 1956 which can be taken to be the date of the first hearing of the suit for the purpose of the Act.
The same meaning obviously has to be given to the aforesaid words when they have been repeated in the amended sub section (3) of Section 12 of the Act.
The date fixed for settlement of issues in a suit cannot be equated with any other date or dates which may be fixed in the suit or the appeal.
The words "on or before such other dates as the Court may fix" occurring after the words "on the first day of the hearing of the suit" in subsection (3) of Section 12 of the Act were obviously meant to meet a situation where for some inevitable reason the necessary deposit could not be made on the day of the hearing of the suit and the Court extended the time to make such deposit.
A deposit made on or before such extended date would also meet the requirement of the subsection.
Even Section 25 of the Amendment Act 18 of 1987 would be of no assistance in so far as the interpreta tion of Section 12(3) of the Act is concerned.
The said Section provides for certain exceptions in which a suit or proceeding for the eviction of any person may be reopened.
A provision containing exceptions cannot be interpreted so as to enlarge the scope of sub section (3) of Section 12 of the Act.
The said Section 25 may be applicable to sub section (2) of Section 15 as amended by the Amendment Act 18 of 1987, the amendments whereunder were given retrospective effect as indicated earlier or also to a similar provision.
Clause (a) of the unamended sub section (3) of the Section 12 of the Act conferred a substantive right on the landlord to have a decree for eviction in his favour as held by this Court in the case of Ganpat Ladha, (supra) and such a right could be taken away only by a provision which either ex pressly took away that fight or could be interpreted to have taken away that right by necessary inendment We do not find any such indication either in the amended sub section (3) of Section 12 of the Act or even in Section 25 of the Amendment Act 18 of 1987.
By taking recourse to the process of reopen ing of proceedings one cannot put the hands of the clock back and create an artificial 394 date as the "first day of the heating of the suit".
No other point has been urged by learned counsel for the tenants and consequently we find no merit in the appeal filed on behalf of the tenants.
We now turn to the appeal filed by defendant No. 6 to whom the garage was found by the courts below to have been illegally sub let but who has been found to be a trespasser by the High Court.
As seen above, the High Court in its judgment under appeal repelled the claim of defendant No. 6 that he was entitled to the benefit of the amended sub section (2) of Section 15 of the Act on three grounds (i) that he was a trespasser and not a person to whom the garage had been illegally sub let, (ii) that he was not in posses sion on the relevant date namely 1st February, 1973 and (iii) that the said benefit could be extended only in a suit or proceeding under the Act and not in a writ petition which did not constitute a continuation of a suit or proceeding under the Act but was an independent proceeding under the Constitution.
It has been urged by learned counsel for defendant No. 6 that since the finding of the Courts below that the garage had been illegally sub let to the defendant No. 6 was in consonance with the pleading of the landlord in this behalf, the said finding could not be reversed in a. writ petition first, because it was not within the competence of the High Court to reverse that finding either under Article 227 or even under Article 226 of the Constitution and .secondly, that the landlord was bound by his admission in the plead ing.
In so far as the submission that the landlord was bound by his admission in the pleading is concerned, it is true that such an admission being a judicial admission under Section 58 of the Evidence Act stands on a higher footing than evidentiary admissions as held by this Court in Nagin das Ramdas vs Dalpatram Ichharam, [1974] 1 SCC page 242 but on the facts of the instant case to which reference shall be shortly made, it is the proviso to Section 58 which comes into play and the rights of the parties had to be determined de hors the said admission.
The said proviso contemplates that the Court may in its discretion require the facts admitted to be proved otherwise than by such admissions.
The scope of this provision did not fall for consideration in the case of Nagain Das (supra).
Reverting to the facts of the instant case it would be seen that there was a triangu lar dispute in this case.
After getting the plaint amended the landlord no doubt set up the case that the tenants had illegally sub let the garage to the defendant No. 6.
The case of the tenants, on the other hand, was that defendant No. 6 was a trespasser and they had never sub let the garage to him.
In so far as the defendant No. 6 is 395 concerned, the plea set up by him was that he came into possession of the garage in pursuance of an agreement en tered into between him and Daulat, son of one of the ten ants, for a period of six months.
As pointed out by the High Court in its judgment under appeal no positive plea of sub tenancy, whether lawful or unlawful was raised by defendant No. 6 in the Trial Court.
It is in this background that the controversy on the question as to whether the garage had been illegally sub let by the tenants to the defendant No. 6 had to be resolved.
First, since the defendant No. 6 himself had disputed the contention of the landlord that the garage had been illegally sub let to him by the tenants and had set up the agreement with Daulat who apparently had no interest whatsoever in the garage apart from being the son of one of the tenants, a finding that the garage had been sub let to the defendant No. 6 illegally could obviously not be given simply on the basis of the case set up by the landlord in this behalf.
Even if defendant No. 6 was permitted to take a somersault and set up a plea contrary to his pleadings, admitting the case of the landlord, any finding given on the basis of such admission would not be binding on the tenants who were contesting the plea of the landlord and had set up a case that defendant No. 6 was a trespasser and that the garage had never been sub let by them to him.
Such a finding as aforesaid vis a vis tenants would be a finding based on the admission of the landlord in his own favour.
To resolve the controversy as between the landlord and the tenants in this behalf, therefore, an independent finding on merits based on evidence and not on the basis of the plea raised by the landlord had to be given.
These are the peculiar facts of this case on account of which the proviso to Section 58 of the Evidence Act was clearly attracted and the parties had to be required to prove their respective cases by adduc ing evidence de hors the admission of the landlord in his plaint.
In so far as the submission made by learned counsel for defendant No. 6 that a finding of fact could not be inter fered with in a writ petition by the High Court is con cerned, by and large no exception can be taken thereto.
The rule in this behalf, however, is not inflexible but has exceptions recognised by judicial decisions which being well known are not necessary to be recapitulated.
For in stance this rule will not apply if a finding is arbitrary or based on no evidence or is such that no one properly in structed in law could have given it the same being in the teeth of some statutory provision or in ignorance of binding precedents.
In our opinion, the instant case is one which falls within the exception to the said rule.
It is true that the landlord by getting his plaint subsequently amended set up the plea that the garage had been illegally sub let by the tenants to defendant No. 6.
It is, 396 however, equally true that the said plea was categorically denied by the tenants and it was specifically asserted by them that they had never sub let the garage to defendant No. 6 and that the defendant No. 6 was a trespasser.
As regards the defendant No. 6 himself he pleaded to have come into possession of the garage for a period of six months on the basis of an agreement entered into between him and Daulat, the son of one of the tenants.
In the life time of his father Daulat could not have the status of a joint tenant and in the eye of law he had no interest in the garage, apart from using it in his capacity as the son of one of the tenants.
He was not in a position either to sub let the garage or even to grant a licence thereof.
As seen above, the High Court has emphasised in its judgment under appeal that no positive plea of sub tenancy, whether lawful or unlawful, was raised by defendant No. 6 in the Trial Court.
That apart, defendant No. 6 in unequivocal terms admitted in his deposition also before the Trial Court that he came in possession by virtue of the agreement with Daulat, the son of defendant No. 1.
He further admitted that he did not know that the defendant Nos. 1 to 5 were the tenants of the flat, store room and garage and that he did not make enquiry as to who were the tenants.
This being the situation there was no scope for even drawing an inference that taking of posses sion of the garage for six months by defendant No. 6 in pursuance of the agreement entered into between him and Daulat may have been with the tacit approval of the tenants namely defendant Nos. 1 to 5.
Nothing has been brought to our notice to indicate that the case of the landlord was that the tenants had sub let the garage to defendant No. 6 in his presence and he had personal knowledge about the transaction of sub letting.
The High Court has also pointed out in paragraph 25 of its judgment under appeal that in support of their plea that defendant No. 6 was a trespasser defendant Nos. 1 to 5 had led evidence and that the lower court had no justification to ignore that evidence.
It was apparently, therefore, a case where no one properly in structed in law could have come to the conclusion that the tenants had illegally sub let the garage to defendant No. 6.
In this state of affairs it cannot obviously be said that the High Court committed any error in holding that defendant No. 6 was a trespasser.
This being so, defendant No. 6 indisputably could not derive any benefit out of the amended subsection (2) of Section 15 of the Act.
The finding of the High Court that defendant No. 6 was not in possession on the relevant date namely 1st February, 1973 was based on the circumstance that on that date admit tedly the garage was in possession of a receiver appointed by the Court and not in possession of defendant No. 6.
It has been urged by learned counsel for defendant 397 No. 6 that possession of the receiver would enure to the benefit of defendant No. 6.
This proposition has been con tested by the learned counsel for the landlord.
We, however, do not find it necessary to go into this question in view of our conclusion that the finding of the High Court that the garage had not illegally been sub let to defendant No. 6 and that the said defendant was a trespasser is unassailable.
Even if the submission of learned counsel for defendant No. 6 in this behalf is accepted the nature of possession of defendant No. 6 on 1st February 1973 would be in no way better than of a trespasser.
For the same reason, we find it unnecessary to go into the correctness or otherwise of the view of the High Court that a writ petition being an inde pendent proceeding was not a proceeding in relation to a suit or proceeding under the Act.
It was lastly urged by learned counsel for defendant No. 6 that after the judgment had been delivered by the High Court on 22 July 1988 dismissing the two writ petitions it was not open to the High Court to reopen and hear the writ petitions on 18 August 1988 and 29 August 1988.
So far as this submission is concerned it may be pointed out that the very first sentence of the order of the High Court dated 18 August 1988 indicates that the judgment had not been deliv ered earlier but had only been dictated and the transcript was ready.
Listing the matter again for further hearing became necessary inasmuch as while dictating the judgment a factual position was noticed that defendant No. 4 had died and there was nothing to show that his heirs had been brought on record.
Learned counsel for the parties appeared on that date and an affidavit was taken on record.
They prayed for time to make submissions on the said question.
The matter was ordered to stand over till 29 August 1988 and in the meantime an affidavit in reply to the affidavit taken on record as aforesaid was permitted to be filed.
Time given to defendant No. 1 to file affidavit in support of the undertaking given by him earlier was also extended to 29 August 1988.
This submission also made by learned counsel for defendant No. 6 has, therefore, no substance.
In view of the foregoing discussion, there is no merit even in the appeal filed by defendant No.6.
In the result, both the appeals fail and are dismissed.
In the circumstances of the case, however, there shall be no order as to costs.
R.N.J. Appeals dismissed.
[/INST]Jamunadas C. Tuliani is the owner and the landlord of the suit premises.
He instituted a suit for ejectment against five defendants on the ground that they were tenants of the said premises and were in arrears of rent for a period of more than six months which had not been paid inspite of notice having been served on them as required by Section 12(2) of the Bombay Rents, Hotel and Lodging House Rates, Control Act, 1947 (hereinafter referred to as the Act) and were consequently liable for eviction under sub section 3(a) of the Act as it then stood.
Two other grounds were that the tenants had changed the user of the suit premises and they had committed breach of the terms and conditions of the tenancy.
Subsequently Arjun Khiamal Mak hijani was impleaded as defendant No. 6 in the suit on the assertion that the tenants had illegally sub let a portion of the premises namely garage to him and were thus liable to be evicted on that ground also.
The Trial Court decreed the suit in favour of the land lord on the plea of default in payment of rent and illegal sub letting.
The other two pleas that the tenants had changed the user of the suit premises and had committed breach of terms and conditions of tenancy were decided against the landlord.
Two appeals were preferred against the judgment of the Trial Court, one by the tenants and the other by the defend ant No. 6 and both these appeals were dismissed.
Aggrieved by the said decree the tenants and defendant No. 6 filed two writ petitions in the High Court.
Against the common judg ment of the High Court dismissing these writ petitions, the present civil appeals have been preferred.
381 Dismissing both the appeals, the Court, HELD: (i) On a plain reading of clause (a) of sub sec tion (3) of section 12 of the Act as it stood at the rele vant time, the said clause was clearly attracted and the consequence provided therein had to follow namely a decree for eviction against the tenants had to be passed.
Clause (b) of sub section (3) of the face of it was not attracted inasmuch as the said clause applied only to a case not covered by clause (a).
This is amply borne out by the use of the opening words "In any other case" of clause (b).
[387A B] (ii) Article 142 of the Constitution does not contem plate doing justice to one party by ignoring mandatory statutory provisions and thereby doing complete injustice to the other party by depriving such party of the benefit of the mandatory statutory provisions.
[390B] (iii) In a case where a tenant renders himself liable to be evicted on the ground of being defaulter in the payment of rent as contemplated by sub sections (2) and 3(a) of Section 12 of the Act, bar from the way of the landlord in instituting a suit for ejectment of a tenant is removed and he gets a right to have a decree for eviction.
Such removal of bar is not in any sense forfeiture of any rights under the lease which the tenant held.
In the instant case, the suit was not based on such forfeiture of lease under the Transfer of Property Act but was filed for the enforcement of the statutory right conferred on the landlord by sub sections (2) and 3(a) of Section 12 of the Act.
[391D; 391H;392A] (iv) The tenants are not entitled even to the benefit of the amended sub section (3) of Section 12 of the Act inas much as on a plain reading of the sub section it is not possible to give it a retrospective operation.
[392C ] The date fixed for settlement of issues in a suit cannot be equated with any other date or dates which may be fixed in the suit or the appeal.
[393C] The words "on or before such other date as the Court may fix" occurring after the words "on the first day of the hearing of the suit" in sub section (3) of Section 12 of the Act were obviously meant to meet a situation where for some inevitable reason the necessary deposit could not be made on the day of the hearing of the suit and the Court extended the time to make such deposit.
[393D] 382 By taking recourse to the process of reopening of pro ceedings one cannot put the hands of the clock back and create an artificial date as the "first day of the hearing of the suit." [393H; 394A] (v) Interpretation of statutes: "When the Act contains provisions, some of which fall under the category of beneficial legislation with regard to the tenant and the others with regard to the landlord, the assertion that even with regard to such provisions of the Act which fail under the purview of beneficial legislation for the landlord an effort should be made to interpret them also in favour of the tenant is a negation of the very principle of interpretation of a beneficial legislation on which reliance is placed on behalf of the tenants.
The argument indeed is self defeating and only justifies the cynical proverb Head I win tail you lose.
It is difficult to countenance the sentimental approach made by learned counsel for the tenants, for the simple reason that as pointed out in Latham vs R. Johnson and Nephew Ltd., (408) sentiment is a dangerous will of the wisp to take as a guide in the search for legal principles." [389B D] Harbanslal Jagmohandas and Anr.
vs Prabhudas Sivlal, [1977] 1 SCC page 576; Jaywant section Kulkarni & Ors.
vs Mino char Dosabhai Shroff & Ors., [1988] 4 SCC P. 108; Ganpat Ram Sharma & Ors.
vs Gayatri Devi, [1987] 3 SCC P. 576; Ganpat Ladha vs Sashikant Vishnu Shinde, [1978] 2 S.C.C.P. 573; Latham vs R. Johnson & Newhew Ltd., (408); Vatan Mal vs Kailash Nath, [1989] 3 S.C.C.P. 79; B.P. Khemda Pvt. Ltd. vs Birendra Kumar Bhowmick & Anr., [1987] 2 S.C.R.P. 559; Smt.
Kamala Devi Budhia & Ors.
vs Hem Prabha Ganguli & Ors., [1989] 3 S.C.C.P. 145; Praduman Kumar vs Virendra Goyal (Dead) by L.Rs., [1969] 3 S.C.R.P. 950; S.D. Chagan Lal vs Dalichand Virchand Shroff & Ors., [1968] 3 S.C.R.P. 346 and Nagindas Ramdas vs Dalpatram Ichharam, [1974] 1 S.C.C.P. 242, referred to.
</s>
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<s>[INST] Summarize the judgementAppeals Nos. 1061 and 1627 to 1629 of 1966.
Appeals by special leave from the judgment and order dated March 9, 10, 1965 of the Bombay High Court in Revision Applications Nos.
1428, 1427, 1430 and 1676 of 1961.
M. C. Chagla, J. L. Hathi, K. L. Hathi and K. N. Bhat for the appellants (in all the appeals).
R. P. Bhat, Janendra Lal, R. A. Gagrat and B. R. Agarwala, for the respondent (in all the appeals).
The Judgment of the Court was delivered 'by Shah, J.
Under an indenture dated August 2, 1950, Dossibai respondent in this appeal granted a lease of 555 sq. yards in village Pahadi, Taluka Borivli to Mathura Prasad appellant herein for constructing buildings for residential or,business purposes.
The appellant constructed buildings on the land.
He then submitted an application in the Court of the Civil Judge, Junior Division, Borivli, District Thana, that the standard rent of the land be determined under section 11 of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947.
The Civil Judge rejected the application holding that the provisions of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, did not apply to open land let for constructing buildings for residence, education, business, trade or storage.
This order was confirmed on September 28, 1955, by a single Judge of the Bombay High Court in a group of revision applications : Mrs. Dossibai N. B. Jeejeebhoy vs Hingoo Manohar Missar : Nos. 233 to 242 of 1955.
But in Vinayak Gopal Limaye vs Laxman Kashinath Athavale(1) the High Court of Bombay held that the question whether section 6(1) of the Act applies to any particular lease must be determined on its terms and a building lease in respect of an open plot is not ex (1) I.L.R. 832 cluded from section 6(1) of the Act solely because open land may be used for residence or educational purposes only after a structure is built thereon.
Relying upon this judgment, the appellant filed a fresh petition in the Court of the Small Causes, Bombay, for an order determining the standard rent of the premises.
The application was filed in the Court of Small Causes because the area in which the land was situated had since been included within the limits of the Greater Bombay area.
The Trial Judge rejected the application holding that the question whether to an open piece of land let for the purpose of constructing buildings for residence.
education, business or trade section 6 (1) of the Act applied was res judicata since it had been finally decided by the High Court between the same parties in respect of the same land in the earlier proceeding for fixation of standard rent.
The order was confirmed by a Bench of the Court,of Small Causes and by the High Court of Bombay.
With special leave, the appellant has appealed to this Court.
The view expressed by the High Court of Bombay in Mrs. Dossibai N. B. Jeejeebhoy vs Hingoo Manohar Missar (Civil) Revision Application No. 233 of 1955 (decided on September 28, 1955) was overruled by this Court in Mrs. Dossibai N. B. Jeejeebhoy vs Khemchand Gorumal & Others(1).
In the latter case the Court affirmed the view expressed by the Bombay High Court in Vinayak Gopal Limaye 's case (2).
But all the Courts have held that the earlier decision of the High Court of Bombay between the same parties and relating to the same land is res judicata.
Section II of the Code of Civil Procedure which enacts the general rule of res judicata, insofar as it is relevant, provides : "No Court shall try any suit or issue in which the matter directly and substantially in issue has been directly and substantially in issue in a former suit between the same parties, or between parties under whom they or any of them claim litigating under the same title, in a Court competent to try such subsequent suit or the suit in which such issue has been subsequently raised, and has been heard and finally decided by such Court." The Civil judge, Junior Division, Borivli, was competent to try the application for determination of standard rent, and he held that s 6(1) of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, did not apply to open land let for construction of residential and business premises.
The rule of res judicata applies if "the matter directly and substantially in issue" in a suit or proceeding was directly and sub (1) I.L.R. (2) 833 stantially in issue in the previous suit between the same parties and had been heard and finally decided by a competent Court.
The Civil Judge, Junior Division, Borivli, decided the application between the parties to the present proceeding for determination of standard rent in respect of the same piece of land let for construction of buildings for residential or business purposes.
The High Court has held that a decision of a competent Court may operate as res judicata in respect of not only an issue of fact, but mixed issues of law and fact, and even abstract questions of law.
It was also assumed by the High Court that a decision relating to the jurisdiction of the Court to entertain or not to entertain a proceeding is binding and conclusive between these parties in respect of the same question in a later proceeding.
But the doctrine of res judicata belongs to the domain of procedure : it cannot be exalted to the status of a legislative direction between the parties so as to determine the question relating to the interpretation of enactment affecting the jurisdiction of a Court finally between them, even though no question of fact or mixed question of law and fact and relating to the right in dispute between the parties has been determined thereby.
A decision of a competent Court on a matter in issue may be res judicata in another proceeding between the same parties : the "matter in issue" may be an issue of fact, an issue of law, or one of mixed law and fact.
An issue of fact or an issue of mixed law and fact decided by a competent court is finally determined between the parties and cannot be re opened between them in another proceeding.
The previous decision on a matter in issue alone is res judicata : the reasons for the decision are not res judicata.
A matter in issue between the parties is the right claimed by one party and denied by the other, and the claim of right from its very nature depends upon proof of facts and application of the relevant law thereto.
A pure question of law unrelated to facts which give rise to a right, cannot be deemed to be a matter in issue.
When it is said that a previous decision is res judicata, it is meant that the right claimed has been adjudicated upon and cannot again be placed in contest between the same parties.
A previous decision of a competent Court on facts which are the foundation of the right and the relevant law applicable to the determination of the , transaction which is the foundation of the right and the relevant law applicable to the determination of the transactions which is the soured of the right is res judicata.
A previous decision on a matter in issue is a composite decision: the decision of law can not be dissociated from the decision on facts on which the right is founded.
A decision on an issue of law will be as res judicata in a subsequent proceeding between the same parties, if the cause of action of the subsequent Proceeding be the same as in the previous proceeding, but not when the cause of action is different, nor 834 when the law has since the earlier decision been altered by a competent authority, nor when the decision relates to the jurisdiction of the Court to try the earlier proceeding, nor when the earlier decision declares valid a transaction which is prohibited by law.
The authorities on the question whether a decision on a question of, law operates as res judicata disclose widely differing views.
In some cases it was decided that a decision on a question of law can never be res judicata in a subsequent proceeding between the same parties : Parthasardhi Ayyangar vs Chinnakrishna Ayyangar(1); Chamanlal vs Bapubhai (2) ; and Kanta Devi vs Kalawati(3).
On the other hand Aikman, J., in Chandi Prasad vs Maharaja Mahendra Mahendra Singh(1) held that a decision on a question of law is always res judicata.
But as observed by Rankin, C.J., in Tarini Charan Bhattacharjee vs Kedar Nath Haldar(5) : "Questions of law are of all kinds and cannot be dealt with as though they were all the same.
Questions of procedure, questions affecting jurisdiction, questions of limitation, may all be questions of law.
In such questions the rights of parties are not the only matter for consideration.
" We may analyse the illustrative cases retating to questions of law, decisions on which may be deemed res judicata in subsequent proceeding.
In Bindeshwari Charan Singh vs Bageshwari Charan Singh(1) the Judicial Committee held that a decision of a court in a previous suit between the same parties that section 12A of the Chota Nagpur Encumbered Estates Act 6 of 1876 which renders void a transaction to which it applies was inapplicable, was Yes judicata.
In that case the owner of an impartable estate, after his estate was released from management, executed a maintenance grant in favour of his minor son B, but without the sanction of the Commissioner as required by section 12A of the, Act.
B on attaining majority sued his father and brothers for a maintenance grant at the rate of Rs. 4,000 per annum.
The claim was decreed, and the plaintiff was awarded a decree for a grant of Rs. 4,000 inclusive of the previous grant of 1909, and the Court held that the grant of 1909 was valid in law.
The father implemented the decree and made an additional maintenance grant upto the value of the decreed sum.
In an action by the sons of B 's brothers challenging the two grants on the plea that the grants were illegal and not binding upon them, the Judicial Committee held that the plea was barred as res judicata in respect of both the grants in respect of the first because there was an express decision on the validity of the first grant in the earlier suit, and in respect of the second the (1) I.L.R. (3) A.I.R. [1946] Lah. 419.
(5) I.L.R. (2) I L.R, (4) I.L.R. 23 All.
(6) L.R. 63 I.A. 53.
83 5 decision in the first suit was res judicata as to the validity of the second grant which was made in fulfillment of the obligation under the Court 's decision.
The Judicial Committee held that in respect of the first grant, the decision that section 12A did not apply to the grant, was res judicata, and in respect of the second grant the construction between the same parties of section 12A was res judicata.
Validity of the second grant was never adjudicated upon in any previous suit; the second grant was held valid because between the parties it was decided that to the grant of maintenance of an impartible zamindari section 12A of the Chota Nagpur Encumbered Estates Act had no application.
This part of the judgment of the Judicial Committee is open to doubt.
Where the law is altered since the earlier decision, the earlier decision will not operate as res judicata between the same, parties : Tarini Charan Bhattacharjee 's case(1).
It is obvious that the matter in issue in a subsequent proceeding is not the same as in the previous proceeding, because the law interpreted is different.
In a case relating to levy of tax a decision valuing property or determining liability to tax in a different taxable period or event is binding only in that period or event, and is not binding in the subsequent years, and therefore the rule of, res judicata has no application; see Broken Hill Proprietary Company Ltd. vs Municipal Council of Broken Hill(2) A question of jurisdiction of the Court, or of procedure, or a pure question of law unrelated to the right of the parties to a previous suit, is not res judicata in the subsequent suit.
Rankin, observed in Tarini Charan Bhattacharjee 's case(1) : "The object of the doctrine of res judicata is not to fasten upon parties special principles of law as applicable to them inter se, but to ascertain their rights and the facts upon which these rights directly and substantially depend; and to prevent this ascertainment from becoming nugatory by precluding the parties from reopening or recontesting that which has 'been finally decided.
" A question relating to the jurisdiction of a Court cannot be deemed to have been finally determined by an erroneous decision of the Court.
If by an erroneous interpretation of the statute the Court holds that it has no jurisdiction, the question would not, in our judgment, operate as res judicata.
Similarly by an erroneous decision if the Court assumes jurisdiction which it does.
not possess under the statute, the question cannot operate as res judicata bet (1) I.L.R. (2) 83 6 ween the same parties, whether the cause of action in the subsequent litigation is the same or otherwise.
It is true that in determining the application of the rule of res judicata the Court is not concerned with the correctness or otherwise of the earlier judgment.
The matter in issue, if it is one purely of fact, decided in the earlier proceeding by a competent court must in a subsequent litigation between the same parties be regarded as finally decided and cannot be, reopened.
A mixed question of law and fact determined in the earlier proceeding between the same parties may not, for the same reason, be questioned a subsequent proceeding between the same parties.
But, where the decision is on a question law, i.e. the interpretation of a statute, it will be res judicata in a subsequent proceeding between the same parties where the cause of action is the same for the expression "the matter in issue" in section 11 Code of Civil Procedure means the right litigated between the parties, i.e. the facts on which the right is claimed or denied and the law applicable to the determination of that issue.
Where, however, the question is one purely of law and it relates to the jurisdiction of the Court or a decision of the Court sanctioning something which is illegal, by resort to the rule of res judicata a party affected by the decision will not be precluded from challenging the validity of that order under the rule of res judicata,for a rule of procedure cannot supersede the law of the land.
In the present case the decision of the Civil Judge, Junior Division, Borivli, that he had no jurisdiction to entertain the application for determination of standard rent, is, in view of the judgment of this Court, plainly erroneous : see Mrs. Dossibai N. B. Jeejeebhoy vs Khemchand Gorumal & Others(1) If the decision in the previous proceeding be.
regarded as conclusive it will assume the status of a special rule of law applicable to the parties relating to the jurisdiction 'of the Court in derogation of the rule declared by the Legislature.
The appeals are allowed, and the orders passed by the High Court and the Court of Small Causes are set aside and the proceedings are remanded to the Court of First Instance to deal with and dispose them of in accordance with law.
There will be no order as to costs throughout.
Y.P. Appeals allowed.
[/INST]In proceedings against the accused respondents the prosecution case was that on certain land belonging to one B where some of his men were gathering fruits, the respondents, armed with bhallas, lathis, etc., attacked these men killing two of them and injuring others.
The trial court convicted the respondents under section 302 read with section 149 I.P.C. of the murder of the two deceased persons and of offences for inflicting injuries on other persons.
The respondents ' appeal to the High Court was allowed and that Court set aside all the convictions and sentences.
The High Court found that the land in question was in the possession of one of the respondents and that on the date of occurrence, the members of the prosecution party including the murdered victims committed thefts of fruits on the land and that the respondents had the right of private defence of property against the theft; the theft of the fruits was committed under such circumstances as might reasonably cause apprehension that death or grievous bodily hurt would be the consequence if the right of private defence was not exercised.
Accordingly, the respondents ' right of private defence of property extended under section 103 I.P.C. to voluntarily causing death of the two murdered victims subject to the restrictions mentioned in section 99.
In appeal to this Court against the acquittal of the respondents, it was contended that they were members of an unlawful assembly prosecuting the common object of forcibly preventing the two deceased from collecting 'fruit from the land in question and if necessary in causing the murder of the said two persons for the purpose; that some of them caused the murder of the two victims and that thereby all of them committed offences under section 302 read with section 149.
HELD : The respondents could not be convicted under section 302 read with section 149 I.P.C., nor was it possible to convict them under section 302 read with section 34.
In order to attract the provisions of section 149 the prosecution must establish that there was an unlawful assembly and that the crime was committed in prosecution of the common object of the assembly.
Under the fourth clause of section 141 an assembly of five or more persons is an unlawful assembly if the common object of its members is to enforce any right or supposed right by means of criminal force or show of criminal force to any person.
Section 141 must be read with Ss. 96 to 106 dealing with the right of private defence.
Under section 96 nothing is an offence which is done in the exercise of the right of private defence.
The assertion of a right of private defence within the limits prescribed by law cannot fall within the expression "to enforce any right or supposed right" in the fourth clause of section 141.
[362 C] 359 As it had been found 'in the present case that the land in question was in the possession of one of the respondents, the object of the respondents ' party was to prevent the commission of theft of the fruits in exercise of their right of private defence of property.
This object was not un lawful.
Nor was it possible to say that their common object was to kill the two deceased victims.
Those who killed them exceeded the right of private defence and may be individually held responsible for the murders.
But the murders were not committed in prosecution of the common object of the assembly or were such as the members of the assembly knew to be likely to be committed in prosecution of the common object.
The accused respondents could not be made constructively responsible for the murders under section 302 read with section 149.
[363 B] Kapildeo Singh vs The King, ; Kishori Prsad & Ors.
vs State of Bihar Cr.
Appeal No. 191 of 1966 decd.
on 5 12 1968; and.
Gurudittamal vs State of U.P.
A.I.R. 1965 S.C. 257; referred.
</s>
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<s>[INST] Summarize the judgementAppeal No. 770 of 1963.
WITH Civil Appeals Nos. 771 778, 883 and 884 of 1963.
Appeals from the judgment and order dated April 19, 1963, of the Andhra Pradesh High Court in Writ Petitions Nos.
267 275 and 289 and 295 of 1963.
A. V. Viswanatha Sastri, P. Babula Reddy and K. R. Chaudhuri, for the appellants (in C.A. No. 77/1963).
P. Babula Reddy and K. R. Chaudhuri, for the appellants (in C. A. Nos.
771 777/1963).
K. R. Chaudhuri, for the appellants (in C.A. No. 778/1963).
K. Srinivasa Murthy and K. R. Chaudhuri, for the appellants (in C. A. Nos. 883 and 884 of 1963).
D. Narasaraju, Advocate General, Andhra Pradesh, P. R. Ramachandra Rao and B. R. G. K. Achar, for the respondents (in all the appeals).
January 27, 1964.
The Judgment of the Court was delivered by AYYANGAR J.
This batch of 11 Appeals which have been consolidated for hearing are directed against the common judgment of the High Court of Andhra Pradesh and are before us on the grant of a certificate of fitness under article 133(1) of the Constitution by the said High Court.
The proceedings concerned in the appeals arise out of Writ petitions filed before the High Court by the several appellants before us under article 226 of the Constitution challenging the validity of three Schemes framed under Chapter IV A of the , nationalising motor transport in certain areas in the Kumool District of the State of Andhra Pradesh which for convenience we shall refer to as the impugned Schemes.
The appellants who impugn the validity of the schemes are the previously existing motor transport operators whose permits are liable to be modified or cancelled under the provisions of 334 the Schemes on their coming into force.
The impugned schemes were published by Government as G.O.Ms. 292, 293 and 294 of the Home, Transport Department on the 5th February, 1963 in virtue of the powers conferred on Government by sub section 2 of the 68 D of the .
The Andhra Pradesh State Road Transport Corporation which for shortness we shall refer to as the Corporation, besides the State of Andhra Pradesh and the Regional Transport Authority, Kurnool were impleaded as respondents to the petitions.
They are also the respondents before us.
By reason of the first Scheme, 34 routes were intended to be taken over, while under the 2nd and 3rd, 17 and 13 routes respectively were proposed to be nationalised.
The routes covered by these three schemes are all in the western half of the Kurnool District.
Before adverting to the points requiring consideration in the appeals, it would be convenient to set out the relevant statutory provisions relating to the nationalisation of Road Transport for it is primarily on their construction that the decision of the appeals would turn.
Chapter IV A containing special provisions relating to "State Transport Uundertakings" was introduced into the (Act IV of 1939) by an amendment effected by Central Act 1 of 1956 which came into effect on 16 2 1957.
The Chapter consists of sections numbered 68 A to 68 1.
68 A contains definitions and of these it is sufficient to refer to the definition of "State Transport Undertaking" which includes inter alia "any undertaking providing road transport service, where such undertaking is carried on by. any Road Transport Corporation established under sec.
3 of the Road Transport Corporation Act 1950.
" (to refer to the portion which is material.) (It might be mentioned that the Corporation, the first respondent before us is a body established under this enact ment.) 68 B reads: "The provisions of this Chapter and the rules and orders made thereunder shall have effect notwithstanding anything inconsistent therewith 335 contained in Chapter IV of this Act or in any other law for the time being in force or in any instrument having effect by virtue of any such law.
" The next section 68 C which is the one most involved in the appeals runs: "Where any State Transport undertaking is of opinion that for the purpose of providing an efficient, adequate, economical and properly coordinated road transport service, it is necessary in the public interest that road transport services in general or any particular class of such service in relation to any area or route or portion thereof should be run and operated by the State transport undertaking, whether to the exclusion, complete or partial, of other persons or otherwise, the State transport undertaking may prepare a scheme giving particulars of the nature of the services proposed to be rendered the area or route proposed to be covered and such other particulars respecting thereto as may be prescribed, and shall cause every such scheme to be published in the Official Gazette and also in such other manner as the State Government may direct." The first two sub sections of section 68 D enable persons affected by a Scheme published under section 68 C to file objec tions thereto before the State Government within thirty days after the publication of the Scheme.
It further provides for the State Government considering the objections raised by persons affected by the Scheme after giving an oppor tunity to the objectors and the "undertaking" to be heard in the matter before approving or modifying the Scheme.
The Scheme so approved or modified is required to be published in the State Gazette and on such publication it becomes final and is to be called "the approved scheme".
This is followed by sub sec.
(3) which reads: "The scheme as approved or modified under sub section
(2) shall then be published in the Official 336 Gazette by the State Government and the same shall thereupon become final and shall be called the approved scheme and the area or route to which it relates shall be called the notified area or notified route: Provided that no such scheme which relates to any inter State route shall be deemed to be an approved scheme under it has been published in the Official Gazette with the previous approval of the Central Government.
" Section 68 E provides : "any scheme published under sub section
(3) of section 68 D may at any time be cancelled or modified by the State transport undertaking and the procedure laid down in section 68 C and section 68 D shall so far as it can be made applicable be followed in every case where the scheme is proposed to be modified as if the modification proposed were a separate scheme.
" Section 68 F is really consequential on the approval of the scheme and sub section
(1) thereof enacts: "Where, in pursuance of an approved scheme, any State Transport Undertaking applies in the manner specified in Chapter IV for a stage carriage permit or a public carrier 's permit or a contract carriage permit in respect of a notified area or notified route, the Regional Transport Authority shall issue such permit to the state transport undertaking, notwithstanding anything to the contrary contained in Chapter IV.
" Its second sub section enables the Regional Transport Authority to refuse renewal of any other permits to private operators and otherwise to deal with those permits so as to give effect to the Scheme.
Sections 68 G and 68 H deal with the payment of compensation and the methods by which the same should be computed but as these.
are not material, we shall not quote them.
337 Section 68 1 empowers the State Government to make rules for the purpose of carrying into, effect the provisions of Chapter IV A and among the specific purposes for which such rules may be framed is one under section 68 1(2) (a) which provides for the form in which any scheme or approved scheme may be published under section 68 C or sub section (3) of Section 68 D and as usual a residuary clause reading: " any other matter which has to be or may be con sidered.
" These draft schemes prepared by the Corporation were published under section 68 D in the official Gazette on the 29th of November, 1962.
The appellants among others filed objections to the schemes and thereafter there was a hearing of these objections by the Transport Minister of the State under section 68 D(2) on the 11th of January, 1963.
The Minister passed an order according approval to the schemes on the 12th of February, 1963, and the schemes as finalised were published in the Gazette on the next day, February 13, 1963.
In pursuance of the provisions of the schemes the Corporation made application to the Regional Transport Authority for permits.
Soon thereafter the appellants and a few others filed writ petitions invoking the jurisdiction of the High Court under article 226 of the Constitution praying for the quashing of the schemes.
These petitions were dismissed by the High Court by a common judgment on the 19th of April, 1963, holding that the objections made to the validity of the schemes would not be sustained.
The learned Judges, however, on the application of the Appellants granted a certificate of fitness under article 133 in pursuance of which these appeals have been preferred.
The points urged by the appellants before us in support of their submission regarding the invalidity of the impugned schemes, were substantially the same as were urged before High Court and which the learned Judges repelled.
Briefly stated the principal ones were: (1) that the schemes did not in reality reflect the opinion of the Corporation that "it was necessary in the public interest that the Road Transport services in the area or over the route, specified in the 134 159 S.C. 22 338 schemes should be run and operated by the State Transport Undertaking" as is required by section 68 C but that the schemes owed their origin to the direction of the Chief Minister of Andhra Pradesh who acted mala fide in directing the Transport Undertaking to frame the impugned schemes for the areas for which they were purported to be framed; (2) that the decision by the Transport Minister overruling the objections raised by the several road transport operators to the schemes was also mala fide, in that he too acted in pursuance of the mala fide intentions of the Chief Minister of Andhra Pradesh; (3) that the provisions of the schemes (and this applied both to the draft schemes published by the Corporation as well as the approved schemes published under section 68 D(3) did not conform to the statutory requirements of section 68 C and rule 4 of the Rules regarding the particulars to be embodied in the schemes and that in consequence the core of the scheme was in violation of Rule 68(E) of the Act; (4) that the schemes comprised not merely intrastate routes but also included inter state transport routes and in the latter case the procedure prescribed by the proviso to section 68 D was not followed and hence all the impugned schemes which are integrated ones are bad and require to be set aside.
There were also a few minor ones which we shall notice and examine later.
We shall deal with these four points in the same order.
Before taking up the first one viz., that the draft scheme in section 68 D really did not originate from the Corporation, the State Transport Undertaking, but that it was done under the direction of the Chief Minister who, it was alleged for reasons which were set out in the affidavits and to which we shall refer presently was stated to have compelled, directed or induced the Corporation to do so, it would be necessary to give a short resume of the history of nationalised transport in Andhra Pradesh as well as certain events in Andhra Pradesh politics which have been the subject of allegations in these proceedings.
The present State of Andhra Pradesh is made up of two distinct areas (1) what is known as the "Telengana area" consisting of nine districts of the old Hyderabad State and (2) the "Andhra area" which separated from Madras i.e. from the composite 339 Madras State, in October 1953 and which comprised 11 districts.
These two areas were integrated under the States Re organization Act, 1956, to form the present State of Andhra Pradesh.
In the Telengana area the road transport services had been run by the Government of the Nizam since the year 1932 and by 1956 private motor road transport operators had been completely eliminated from this entire area.
In the Andhra Area comprising the 11 districts how ever, nationalisation of motor transport had not been under taken.
Soon after the formation of the State of Andhra Pradesh, the Andhra Pradesh State Road Transport Corporation was established with effect from 11th of January, 1958 with a view to take steps for extending nationalised transport to the Andhra areas of the State.
Certain routes in three of the 11 Districts Krishna, West Godavari and Guntur were nationalised from 1959 onwards.
The Vijayawada Masulipatam and Vijayawada Guntur routes were nationalised in the first instance and thereafter by about September, 1959, almost the entire routes in Krishna District were nationalised.
The next district to be taken up was West Godavari which was done in March, 1960.
The process was nearly completed in this district by the 1st of February, 1960, except for a few routes.
The Government had sanctioned certain schemes for nationalisation in Guntur District which were expected to be completed by October, 1961.
The question which was thereafter the subject of consideration was the manner in which and the stages whereby nationalisation of the motor transport throughout the State might be brought about.
With this object the Corporation adopted a resolution in 1960 by which it decided to appoint an expert Committee to go into question as to the working of nationalised transport with a view to improve its efficiency as well as for drawing up plans for the future expansion of the road transport services in the State.
The terms of reference to that Committee were comprehensive and it started functioning very soon after the members were appointed.
Shri section Anantharama krishnan, Chairman of Messrs. Simpson & Co. Ltd., Madras, one of the principal motor transport operators of the Madras State, was the Chairman of the Committee and it comprised three other members who were officials of the 340 Andhra Pradesh State Government.
The Committee made various recommendations in the Report which it submitted to the Corporation on the 9th February, 1961.
Among the several recommendations which this Committee made, what is of relevance to the present appeals and on which reliance was placed in support of the plea that the impugned schemes were vitiated by mala fides are those contained in Chapter IX of the Report and in particular the priorities of areas for taking up nationalisation which the Committee recommended in paragraph 125.
They set out in paragraph 124 the factors which should be taken into account in fixing the order in which new areas should be taken up for nationalisation as being (1) "the most profitable areas should be taken up first;" (2) "from the traffic point of view there should be contiguous expansion;" (3) "from the administrative point of view it is convenient to nationalise bus services district by district;" and (4) "the proposal to form large sized divisions should be borne in view.
" Adopting these criteria the Committee stated in paragraph 125 "that the nationalisation of bus transport may be extended to the remaining districts in the Andhra area as indicated below: 1961 621 guntur District 1962 63 Nellore and Chittor Districts 1963 64 Cuddapah and Kurnool Districts 1964 65 Anantapur and East Godavari Districts 1965 66 Visakhapatnam and Srikakulam Dis tricts".
The Committee also added in paragraph 126 "we recommend that a policy decision may be taken by Government on the proposal to extend nationalisation of bus services to the remaining Andhra Districts during the Third Five Year Plan.
The order in which the new areas will be taken over may also be decided by Government.
The Corporation will then be able to make its plans well in advance, and arrange to provide all the facilities that are needed for expanding its activities to other districts.
" This report of the 34I Anantharamakrishnan Committee was the subject of con sideration by the Corporation and they accepted in March, 1962 the above recommendation regarding the phased pro.programme of nationalisation of districts in the order indicated s and embodied this recommendation in their Administration Report for the period January 11, 1958, (the day on which the Corporation was formed) to March 31, 1961 which was submitted to the Government as required by section 35(2) of the Road Transport Corporation Act, 1960, on the 7th of April, 1962.
In this last document they said speaking of future trends, "the programme for nationalisation of transport services in the remaining of the Andhra Pradesh is as indicated below: 1961 62 Guntur District 1962 63 Nellore and Chittor Districts 1963 64 Cuddapah and Kurnool Districts 1964 65 Ananthapur and East Godavari Districts 1965 66 Vishakhapatnam and Srikakulam Dis tricts.
" In the impugned schemes, however, the Corporation made an alteration in the order of the Districts successively to be taken up for nationalisation.
It would be seen that after Guntur District which was neatly completed by the end ,of 1961 the next districts to be taken up during the 1962 63 would have been Nellore and Chittor Districts in that order and it was only thereafter that the District of Cuddapah and after it Kurnool would be taken up.
That was the recommendation of the Anantharamakrishnan Committee and which had been accepted by the Road Transport Corporation as late as April, 1962 and it may be mentioned in this connection that the Vice Chairman of the Road Transport Corporation was himself a member of the Anantharamakrishnan Committee.
By its resolution dated, 4th May, 1962, the Road Transport Corporation decided that instead of the above order Kurnool, Nellore and Cuddapah Districts in that order would be chosen for nationalisation and in the three schemes which were formulated in pursuance of this Resolution the western half of Kurnool was selected as the area to be nationalised in the first instance.
342 As we have indicated earlier the appellants before us are transport operators whose routes are all in the western half of the, Kurnool District.
It is this change in the orders of the Districts in which the routes are to be nationalised and the choice of the Western part of Kurnool for being taken up in the first instance that are alleged to be due to the mala fide intentions of the Chief Minister and this forms the main ground upon which the validity of the schemes is impugned.
The allegations in this respect may now be stated.
In the affidavit in support of the Writ Petition No. 267 of 1963 from which Civil Appeal No. 770 of 1963 arises, this is what is stated: "The General Elections for the various Constituencies of Assembly and Parliament were held in February, 1962.
It is well known that there are two groups in the Congress and they were actively ranged against each other.
The previous Chief Minister (Shri Sanjivayya) and the present Chief Minister (Shri Sanjiva Reddy) were both returned from Kurnool District in general elections.
T he then Chairman of the Zila Parishad Shri Vijaya Bhaskara Reddy contested unsuccessfully from Yemniganpur Constituency in Kurnool District.
(Yemniganpur is in the western part of the Kurnool District).
He is the active supporter of the present Chief Minister.
Shri C. Ram Bhopal son in law of the present Chief Minister also unsuccessfully contested from the Nandikothur Constituency in Kurnool District.
(Nandikothur is also in the western part of Kurnool).
The person who successfully opposed him Sri P. Venkatakrishna Reddy now M.L.A. is a partner in 'Venkata Krishna Bus Service Nandikothur.
This firm owns 2 permits and they stand in the name of Jayaramayya who was the Election Agent of Sri Venkata Krishna Reddy.
Two persons Sri Ganikhan and Sri Antony Reddy who are staunch supporters of 343 the present Chief Minister Sri Sanjiva Reddy were selected as Congress candidates by the Parliamentary Board at Delhi when Sanjiva Reddy was the President of the Indian National Congress, were also defeated in their respective Constituencies.
It was considered by one and all that leading transport operators among them, (the petitioners) were responsible for the defeat of these persons and this enraged the feelings of Shri Sanjiva Reddy against the operators in Kurnool District and particularly the operators whose routes lay in the western areas of the District and with a view to cause them loss and to ruin their business this nationalisation of transport in the western part of Kurnool was directed to be undertaken in spite of the Emergency and in spite of the incapacity of the Road Transport Corporation to fulfil their earlier commitments for want of buses.
The undivided brothers of Sri T. Narayan, a transport operator, namely Sri Venkataswamy contested the Assembly seat against Sri Sanjiva Reddy in the Dhone Constituency from which he was returned and he refused to withdraw even though lots of pressure were brought on him.
Sri Rajasekhara Reddy and Sri Vijayakumara Reddy sons of Sri P. Ranga Reddy, Minister in the previous Cabinet are also transport operators in the Kurnool District.
It is known to every one that Sri P. Ranga Reddy is in the group opposed to Sri Sanjiva Reddy.
Sri Y. Mahananda Reddy another transport operator is a staunch supporter of Sri P. Ranga Reddy.
When Sanjiva Reddy was President, of the Indian National Congress his selection, for the Congress ticket was set aside by him and one Vengal Reddy was selected by the Pradesh Congress Committee.
It is significant that the three schemes framed for the part of the Kurnool District relat e to the areas in 344 which the routes on which the above stated persons are running their buses.
It is also significant that the areas in Kurnool District where the supporters of the present Chief Min ister are having permits are not sought to be included in any of the three nationalisation schemes.
In the Nandyal area most of the transport operators are the supporters of the present Chief Minister and their routes are excluded from the schemes.
It is with a view to achieve the object of hitting against those operators who have fallen into disfavour and to protect those who are in his good books that the schemes have been evolved over routes and parts of the District.
" Two further matters were also urged as supporting this plea of mala fides.
The first was that with a view to carry out the original programme which was approved and confirmed by the Corporation in their Administration Report published on April 7, 1962, the routes in the Nellore District which according to the Anantharamakrishnan Commitee Report had to be taken up next were surveyed and though the elements of contiguity and profitable nature were both present in regard to the extension of the services to Nellore, contiguity by reason of the fact that some buses belonging to the Corporation and running from Guntur were already plying in Nellore District and the profitable nature since these were evaluated by the Anantharamakrishnan Committee whose recommendations were examined and approved by the Corporation, the nationalisation of the routes in Nellore was, however, abandoned and that of the western part of Kurnool was decided upon.
The other fact was that the National Defence Council passed a reso lution as late as the first week of November, 1962, urging the deferring of further nationalisation of transport services for the present and it was in the teeth of.
this resolution which was passed at the meeting at which the Chief Minister himself was present that the schemes of nationalisation of transport services in Kurnool district was published by the Corporation on the 29th November, 1962.
345 Before examining whether these allegations have been made out it would be necessary to explain the legal position in relation to which they have to be considered.
To begin with the schemes now impugned have been formulated by the Corporation which is an independent semi autonomous body brought into existence by the State Government by acting under the Road Transport Corporation Act, 1950.
Under section 68 C of the it is the Corporation which is the State Transport Undertaking which has to form the opinion whether "for the purpose of providing an efficient, adequate, economical and properly coordinated road transport service it is necessary in the public interest whether the service should be run and operated by the State Transport Undertaking.
" Secondly, it is the Corporation that has to be satisfied that such services should in public interests be provided "for any area or route".
In the present case, it is undoubtedly the Corporation that has published the schemes under section 68 C in which these two matters are stated to have been considered and decided upon by the Corporation itself.
It was not disputed by the appellants that whatever be the inclinations, desires or motives of the Chief Minister, if the Corporation had by an independent consideration of the situation decided on the formulation of the impugned schemes, their validity could not be successfully impugned mearly because the schemes satisfied the alleged grudge which the Chief Minister bore to the affected operators.
The argument urged by the appellants on this part of the case was however tow fold: (1) That it was not in fact the Corporation that formed the opinion indicated in section 68 C but really the Chief Minister; (2) That the Chief Minister was motivated by extraneous considerations, namely, to strike at his political opponents who worked either against himself or his friends, supporters and relations in the elections in February, 1962 and had devised the schemes in order to cause them loss and compass their ruin.
A subsidiary point was also urged that the Transport Minister who heard the objections under section 68 D(2) was also influenced by the Chief Minister.
It was thus said that the Chief Minister dominated at every stage through 346 which the schemes passed and that the schemes were really the result of his improper motive to ruin his political opponents.
It was again not disputed by the respondent that if these steps were made out the schemes would be invalid and ought to be quashed.
The learned Judges of the High Court have on this part of the case held: (1) That the allegations made against the Chief Minister had not been proved; (2) Assuming, however, that the Chief Minister was actuated by political motives to hit at his opponents, still, the schemes which were published by the Corporation, had been framed by the Corporation not at the dictation of the Chief Minister, but as a result of their own independent judgment; and (3) Lastly the learned Judgesheld that there was no proof that the Transport Minister who heard the objections raised by the appellants to the schemes was influenced by the Chief Minister or acted at his behest, and therefore that the schemes framed and approved were fully in conformity with the requirements of section 68 C.
The correctness of these conclusions have been challenged before us and the first matter that requires to be con sidered is as to whether the allegations against the Chief Minister have been made out.
The question raised has manifestly to be considered from two aspects.
The first is whether the facts alleged which were stated to have been the cause of the Chief Minister 's animus against the transport operators in the western part of Kurnool have been estab lished.
In regard to this the first point to be noticed is that the contents of the affidavit were not vague, but details were given and these were: (1) The existence of two groups in the Congress Party at the time of the General Elections in 1962, the Chief Minister being the head of one of them and of the other Mr. Sanjivayya; (2) That at the last General Elections certain candidates who were named and who are stated to have belonged to the group of the Chief Minister were defeated; (3) The Constituencies where they stood were in the western portion of the Kurnool District; (4) That this defeat was occasioned by persons belonging to the other group in the Congress Party whose names are 347 also given (5) That several of these members supporting the dissident group were motor transport operators and who are stated to have taken a prominent part in the elections and in the defeat of the candidates belonging to the Chief Minister 's group; (6) The matters in relation to Ranga Reddy and his sons etc.
These are what might be termed objective facts.
If these allegations were held not proved, then the entire plea of the appellants on this part of the case fails, because there would be no foundation for the submission regarding the mala fides of the Chief Minister.
If, how ever, these facts were held to be made out, the second aspect requires to be examined and that is whether the Court has material to hold that these facts led the Chief Minister to entertain feelings of personal hostility to these transport operators because of the aid and support the latter gave to the candidates belonging to the group opposed to him which led to the defeat of his partymen.
On this aspect the allegations were that the Chief Minister felt chagrined at the defeat of his partymen and supporters and desiring to wreak his vengeance against the motor transport operators of the western parts of Kurnool, his political opponents, instructed the Corporation to change the order in which the districts should be taken up for nationalisation and had Kurnool taken up first, departing from what had been decided upon, just a little while previously by the Cor poration, and that the Corporation gave effect to these in structions and directions by not only taking Kurnool first, but even in that district eliminating the private operators from the western portions of the district who were the poli tical opponents of the Chief Minister.
This, it is obvious, would be a matter of probabilities and of the inference to be drawn by the Court from all the circumstances on which no direct evidence can be adduced.
It is, no doubt, true that allegations of mala fides and of improper motives on the part of those in power are fre quently made and their frequency has increased in recent times.
It is also somewhat unfortunate that allegations of this nature which have no foundation, in fact, are made in 348 several of the cases which have come up before this and other Courts and it is found that they have been made merely with a view to cause prejudice or in the hope that whether they have basis in fact or not some of it at least might stick.
Consequently it has become the duty of the Court to scrutinise these allegations with care so as to avoid being in any manner influenced by them, in cases where they have no foundation in fact.
In this task which is thus cast on the courts it would conduce to a more satisfactory disposal and consideration of them, if those against whom allegations are made came forward to place before the court either their denials or their version of the matter, so that the court may be in a position to judge as to whether the onus that lies upon those who make allegations of mala fides on the part of authorities of the status of those with which this appealis concerned, have discharged their burden of proving it.
In the absence of such affidavits or of materials, placed before the Court by these authorities, the Court is left to judge of the veracity of the allegations merely on tests of probability with nothing more substantial by way of answer.
This is precisely the situation in which we find ourselves in the present case.
The learned Judges of the High Court have repelled the allegations contained in the affidavits which we have set out earlier on grounds and for reasons which do not appeal to us.
As the learned Advocate General did not seek to support those grounds and that reasoning we do not consider it necessary to set them out or deal with them.
If the reasons given by the learned Judges of the High Court be put aside, the position resolves itself into this that allegations with particularity and detail have been made in the petition.
We are here having in mind the allegations we have enumerated and categorised earlier as objective facts.
As to these there is no denial at all of them, not even by the Transport Minister who though he filed an affidavit, confined himself to the allegations regarding his having been dictated to by the Chief Minister when he approved the schemes, though it is obvious they are capable of denial and if need be with the same particularity with which they have been made in the petition.
The learn 349 ed judges of the High Court have not rejected the allega tions regarding the objective facts on the ground of their patent improbability or absurdity, nor did the learned Advo cate General make any submission on these lines.
The next question is as regards the inference to be drawn from these facts which in the absence of their denial have to be taken as true.
It is here that we have felt the greatest uneasiness, because if the facts which serve as the foundation for the plea of mala fides are made out, the only question would be whether the inference of mala fides on the part of the Chief Minister would be a reasonable one to draw.
It is at this point that we are faced with the neces sity of having to proceed without there being any effective answer to the propriety of drawing the inference which the appellants desire.
There has been no denial by the Chief Minister, nor an affidavit by any person who claims or can claim to know personally about the truth about these alle gations.
The Secretary to the Home Department one Mr. section A. lyengar has filed a counter affidavit in which the alle gations we have set out earlier have been formally denied.
He says, "I have been expressly instructed and authorised by the Hon 'ble the Chief Minister to state that the allegations suggesting personal animus and giving mandate are false and mischievous and have been deliberately made to create an atmosphere of sympathy".
The learned Advocate General did not suggest that the Court could act upon this second hand denial by the Chief Minister, as the statement by Sri section A. lyengar is merely hearsay.
We are, therefore, constrained to hold that the allegations that the Chief Minister was motivated by bias and personal ill will against the appellants, stands unrebutted.
The learned Advocate General realising this position, desired us to proceed on that basis and his submission was that assuming that the allegations made against the Chief Minister were made out and that he had bias and ill will against the appellants, still there was no proof that the Corporation which was an autonomous body was similarly moti vated and that unless the appellants were able to establish it, bias or ill will on the part of the Chief Minister would be irrelevant 350 We agree as already indicated that he is right in this submission.
This takes us to the consideration of the ques tion as to whether the Corporation carried out the mandate of the Chief Minister as was alleged by the appellants or whether the impugned schemes were formulated by them as a result of the opinion which they themselves formed that they were necessary in public interest for the purposes set out in section 68 C of the Act.
On this matter there is an affidavit by the Corporation denying the allegation made by the appellants that the Corporation acted merely as the tool of the Chief Minister in order to carry out his behest, and it is there asserted that the decision to frame the schemes was taken as a result of the independent opinion formed by them after an examination of the entire question.
The acceptability of these rival assertions were debated before us most strenuously during the hearing of these appeals.
Certain facts already set out have a bearing on this ques tion, and these we shall recall.
The Anantharamakrishnan Committee had laid down the criteria for determining the order in which areas and routes had to be selected for nationalisation, and applying these principles had drawn up a list of the remaining districts in which nationalisation should be successively taken up.
If that order was follow ed, Nellore would have been the next district to be taken up and the turn of the Kurnool District would have come up after nationalisation of the routes in the Nellore, Chittor and Cuddapah districts were completed.
This report had been submitted to the, Corporation in February, 1961 and after further detailed examination of these recommendations the Corporation had accepted the recommendation regarding the order of the Districts to be taken up for nationalisation and had embodied this approval in its Administration Report dated March 24, 1962 which was published in April, 1962.
It is only necessary to add that the Corporation had also had the routes in Nellore surveyed a little while before.
In February, 1962, however, the general elections to the Assembly and the Parliamentary Constituencies had taken place and the allegations of the appellants related to the feelings that arose during the course of elections.
The present Chief Minister assumed office as Chief 351 Minister on March 12, 1962.
On April 19, 1962, it is ad mitted that he summoned a conference of the Corporation and its officials at which, and this also is admitted, he sug gested that the nationalisation of bus routes in the Kurnool District should be taken up first.
Now the Chief Minister himself made a statement as to what he did at this meeting.
It is the case of the appellants that it was the mandate given to the Corporation by the Chief Minister at this Conference that brought about this change in the order of the districts to be taken up for nationalisation and not the independent opinion of the Corporation as to what was needed in the public interest as required by section 68 C.
As regards his part at the conference, the Chief Minister himself stated in the Assembly on July 26, 1962: "To say that the Corporation will do everything for the simple reason that it is an autonomous body, and also to say that we will not at all interfere, is not fair.
It will not be fair.
Now and then we shall have conferences.
For example, the Corporation wanted to nationalise Chittoor district.
We had discussions.
Kurnool is surrounded by three nationalised districts; one side Mahaboobnagar, one side Guntur and the other side the district of Nellore which is going to be nationalised.
I questioned as to why the district of Kurnool which is surrounded by three nationalised districts is left out, and instead the district of Chittoor which is abutting the borders of Madras and Bangalore is sought to be taken up.
They could not explain.
I said Kurnool district is a very compact one and three districts around it are nationalised.
They thought that was more practicable and reasonable.
Therefore they changed their minds.
As a result of such dis cussions, once in a way we (Government) do interfere but will not interfere in day to day administration.
" The conference, as stated earlier, addressed by the Chief Minister was on the 19th of April, 1962.
This was follow 352 ed by the resolution of the Corporation of May 4, 1962.
This ran: .lm15 "The Corporation noted the discussion which took place in the office of the Chief Minister on 19th April, 1962, in regard to programme of nationalisation of Road Transport Services during the Third Five Year Plan period and resolved that during the Third Five Year Plan three more districts in the order mentioned could be nationalised, viz., Kurnool, Nellore and Cuddapah in view of difficult financial position. .
Chief Executive Officer explained that as there is a depot at Kurnool and as Kurnool is contiguous to the nationalised districts, it would be easier to nationalise Kurnool rather Nellore district.
The nationalisation could be extended to the Nellore district after Kurnool district is nationalised.
The Corporation therefore resolved that Kurnool district could be taken up for nationalisation in preference to Nellore.
" In the counter affidavit which the Corporation filed to, the writ petition the Chief Executive Officer after denying that the Corporation was actuated by mala fides in framing the three impugned schemes, stated that the acceptance by the Corporation of the recommendation of the Anantharamakrishnan Committee was tentative and that it could not fetter them from discharging its powers and duties under the statute.
It gave the following reasons for the decision to nationalise Road Transport Services in a part of the Kurnool district in preference to other areas: (1) because there is a Government depot at Kurnool, (2) Kurnool is contiguous to the entire Telangana area which is rationalised and also contiguous to the nationalised area of Guntur.
It also stated that the choice was made in the interest of the maintenance of service contiguity and coordination and it added that "the impending completion of the Rangapur Bridge over the river Krishna, which when completed would facilitate the operation of direct services from Hyderabad through Kurnoof to the areas beyond.
" Besides it 353 asserted that the Corporation which was an autonomous statutory authority was vested with powers under the Road Transport Act and it was ', therefore, malicious to allege that the decision by the Corporation to prepare the impugned schemes was either influenced by the, Chief Minister or was under a mandate from him and it asserted that in formulating the schemes the necessary opinion under section 68 C was formed by itself.
The learned Judges of the High Court have accepted this statement, made on behalf of the Corporation and have repelled the attack made on it based on the schemes not having been formulated as a result of the opinion formed by the Corporation itself.
The learned Advocate General commended this approach and this conclusion for our acceptance.
He also pointed out that the Anantharama krishnan Committee had themselves indicated in paragraph 126 of their report that the order in which the new areas will be taken over for nationalisation might be decided by the Government, so that the order in which motor transport in the several districts should be nationalised, was not prescribed by the Committee as a rigid or hard and fast rule, but the order of the districts was treated even by them as a flexible one which was capable of and was intended to be, modified by the Government by making policy decisions on these matters taking into account not merely the finances available for nationalisation but also other relevant matters.
We have given the matter our best consideration, but we are unable to agree with the learned Judges of the High Court in their conclusion.
The first matter which stands out prominently in this connection is the element of time and the sequence of dates.
We have already pointed out that the Corporation had as late as March, 1962 considered the entire subject and had accepted the recommendation of the Anantharamakrishnan Committee as to the order in which the transport in the several districts should be nationalised and had set these out in their Administration Report for the three year period 1958 to 1961.
It must, therefore, be taken that every factor which the Anantha 134 159 S.C. 23 354 ramakrishnan Committee had considered relevant and material for determining the order of the districts had been independently investigated, examined and concurred in, before those recommendations were approved.
It means that upto March April, 1962 a consideration of all the relevant factors had led the Corporation to a conclusion identical with that of the Anantharamakrishnan Committee.
The next thing that happened was a conference of the Corporation and its officials with the Chief Minister on April 19, 1962.
The proceedings of the Conference are not on the record nor is there any evidence as to whether any record was made of what happened at the conference.
But we have the statement of the Chief Minister made on the floor of the State Assembly in which he gave an account of what transpired between him and the Corporation and its officials.
We have already extracted the relevant portions of that speech from which the following points emerge: (1) that the Chief Minister claimed a right to lay down rules of policy for the guidance of the Corporation and, in fact, the learned Advocate General submitted to us that under the Road Transport Corporation Act, 1950, the Government had a right to give directions as to policy to the Corporation; (2) that the policy direction that he gave related to and included the order in which the districts should be taken up for nationalisation; and (3) that applying the criteria that the districts to be nationalised should be contiguous to those in which nationalised services already existed, Kurnool answered this test better than Chittoor and he, applying the tests he laid down, therefore suggested that instead of Chittoor, Kurnool should be taken up next.
One matter that emerges from this is that it was as a result of policy decision taken by the Chief Minister and the direction given to the Corporation that Kurnool was taken up.
for nationalisation next after Guntur.
It is also to be noticed that if the direction by the Chief Minister, was a policy decision, the Corporation was under the law bound to give effect to it (vide, section 34 of the Road Transport Corporation Act, 1950).
We are not here concerned with the question whether a policy decision contemplated by section 34 of the Road Transport Act could relate to a matter which under section 68 C of the Act is left to the unfettered discretion and judg 355 ment of the Corporation, where that is the State Undertak ing, or again whether or not the policy decision has to be by a formal Government order in writing, for what is rele vant is whether the materials placed before the Court estab lish that the Corporation gave effect to it as a direction which they were expected to and did obey.
If the Chief Minister was impelled by motives of personal ill will against the Road Transport Operators in the western part of Kurnool and he gave the direction to the Corporation to change the order of the districts as originally planned by them and instead take up Kurnool first in order to prejudicially affect his political opponents, and the Corporation carried out his directions it does not need much argument to show that the resultant scheme framed by the Corporation would also be vitiated by mala fides notwithstanding the interposition of the semi autonomous Corporation.
It is also to be noticed that the Chief Minister in his statement to the Assembly stated that when he made an enquiry of the Corporation as to why they did not choose Kurnool as the next district, the officials of the Corporation had no answer to give.
It is somewhat remarkable that the Corporation and its officials should have remained silent and tongue tied notwithstanding that its Vice Chairman was a member of the Anantharamakrishnan Committee and had as a member thereof considered the entire question in all its aspects and laid down (1) the criteria for determining the order of priority; and (2) by applying these tests had laid down the priorities among the districts and more than this, the entire body of the Corporation had considered the several recommendations of the Committee in their report and while rejecting some had accepted this particular recommendation regarding the order in which the districts should be taken up and this last one had happened within a month or so before the conference addressed by the Chief Minister.
If in these circumstances the appellants allege that whatever views the Corporation entertained they were compelled to or gave effect to the wishes of the Chief Minister, it could not be said that the same is an unreasonable inference from facts.
It is also somewhat remarkable that within a little over two weeks from this Conference by its 356 resolution of May 4, 1962, the Corporation dropped Nellore altogether, a district which was contiguous to Guntur and proceeded to take up the nationalisation of the routes of the western part of the, Kurnool district and were able to find reasons for taking the step.
It is also worthy of note that in the resolution of the 4th May, 1962, of the Cor poration only one reason was given for preferring Kurnool to Nellore, namely, the existence of a depot at Kurnool because the other reason given, namely, that Kurnool was contiguous to an area of nationalised transport equally applied to Nellore and, in fact, this was one of the criteria on the basis of which the Anantharamakrishnan Committee itself decided the order of priority among the districts.
As regards the depot at Kurnool which was one of the two reasons set out in the resolution for the choice of that district in the first instance, learned Counsel for the appellants submitted that this reason was one invented to justify the Corporation 's action directed against them and to obviate the comment that the reason for the change was political and not for providing an adequate service for the area.
He submitted that the so called depot was merely a garage with a few repairing tools and not any full fledged repairing workshop.
None of the affidavits filed on behalf of the appellants, however, made any allegation regarding the nature of the facility afforded at this 'depot and so we are not in a position to act merely on the arguments adduced to us at the bar.
It has however to be noticed that the existence of this 'depot ' at Kurnool escaped the notice of the Anantharamakrishnan Committee, who in their report have devoted some attention to the need for depots and the equipment these should possess and referred to certain deficiencies which they noticed in the depots which they inspected.
The officials of the Corporation did not evi dently bring this depot at Kurnool to the notice of the Com mittee.
Again, when in their Administration Report, the Corporation accepted the recommendations as regards the order in which the districts, should be nationalised, the existence of this depot at Kurnool seems also to have escap ed the attention of the Corporation itself, as a factor to be taken into account in making the choice of the district.
But we are basing no; conclusion on this feature.
357 When the Transport Corporation, however, filed the counter affidavit it was not content to rest merely with the reasons given in the resolution as those which were taken into account in arriving at the decision but added one more, namely, the impending completion of the bridge at Rangapur across the Krishna as a further reason which had been taken into account for arriving at a decision.
What the Court is concerned with and what is relevant to the enquiry in the appeal is not whether theoretically or on a consideration of the arguments for and against, now advanced the choice of Kurnool as the next district selected for nationalisation of transport was wise or improper, but a totally different question whether this choice of Kurnool was made by the Corporation as required by section 68 C or, whether this choice was in fact and in substance, made by the Chief Minister, and implemented by him by utilising the machinery of the Corporation as alleged by the appellants.
On the evidence placed in the case we are satisfied that it was as a result of the conference of the 19th April, 1962, and in order to give effect to the wishes of the Chief Minister expressed there, that the schemes now impugned were formulated by the Corporation.
The next submission of the learned Advocate General was that even assuming the Chief Minister directed the order in which districts were to be taken up for nationalisation, still the scheme framed by the Corporation could not be assailed as not in conformity with the requirements of section 68 C of the Act so long as the choice of the "area" in which and the routes in it to be run by the Corporation was made by them alone.
This argument proceeds from the circumstance that even taking it that the Chief Minister directed the Corporation to take up the nationalisation of the routes in the Kurnool district in the first instance, there was no allegation that he gave any direction regarding the area in the district and the routes.
We fail to see any force in this argument.
If the choice of the district was that of the Chief Minister, the fact that within the area of the district pointed out to them, the Corporation selected some area within the district and the routes within that area, 358 cannot on any reasonable construction of section 68 C be a sufficient compliance with the statute.
We are disposed to read the word 'area ' in the section as meaning such 'area ' in the entire State as the Corporation should consider proper and not as the learned Advocate General would read as area within a circumscribed part of the State determined by an outside authority.
Besides .
there is really little or no explanation forth coming from the Corporation for choosing the western part of the Kurnool district for the exclusion of the private ope rators in the first instance.
The principal allegation regarding mala fides on the part of the Chief Minister made by the appellants was directed to demonstrate that the object of the present schemes was to eliminate operators whose routes lay on the western side of the district.
It is also stated in the affidavits that the friends or supporters of the Chief Minister were operating motor transport in the eastern part of Kurnool.
Therefore it might be expected that the counter affidavits filed offered a rational explanation as to why this portion of the Kurnool district was chosen in the first instance in preference to the other portion of the district.
Needless to say the resolution of the Corporation of May 4, 1962, offers no assistance in this matter and a,,; we have said earlier though the counter affidavits contained a denial of the allegation that the Corporation was acting at the behest of the Chief Minister, there is no explanation for the choice of the western portion.
Our conclusion therefore is that the impugned schemes are vitiated by the fact that they were not in conformity with the requirements of section 68 C.
The next question is as regards the approval of the schemes by the Transport Minister under section 68 D(3).
It was the case of the appellants that just like the Corporation, the Transport Minister also merely, carried out the wishes of the Chief Minister and that therefore the approval by the Transport Minister must be held to be vitiated by the mala fides of the Chief Minister.
In regard to this, however, two matters have to be remembered.
The first is that there is nothing on the record to show that the Chief 359 Minister influenced his colleague and beyond the fact that both the Chief Minister as well as the Transport Minister are members of the same Council of Ministers, there is nothing to indicate that the Chief Minister influenced the Transport Minister.
The other matter is that the Transport Minister had stated on oath that in considering the objec tions under section 68D(3) and approving the schemes he was uninfluenced by the Chief Minister.
We, therefore, consider that there is no basis for holding that the Transport Minister 's approval of the schemes does not satisfy the re quirements of the law.
In view that we take the schemes have to be set aside as not in conformity with section 68 C of the Act, the other objections raised do not require consideration but in view, however, of the arguments addressed to us on them we shall briefly deal with them.
The next point that was urged was that the schemes were not in conformity with section 68 C of the Act for another reason.
A scheme to be published by the Transport Undertaking is required by section 68 C to give "particulars of the nature of the services proposed to be rendered and such other particulars respecting thereto as may be prescribed", prescribed, of course, meaning "prescribed by rules".
These particulars, it is obvious, are required to be set out in the scheme, so that (a) transport operators running vehicles on the routes might know that they are affected by the scheme and might, if they see sufficient reason therefor, prefer objections under section 68 D(1); and (b) the operators and others formulate their objections properly, particularly in the matter of pointing out the deficiency or inadequacy of the schemes or the services proposed to be run under the schemes for the approving authority to consider.
It was urged on behalf of the appellants that the impugned scheme did not furnish particulars required by this provision.
The draft scheme, as published under section 68 C, and that as approved finally, contains six columns which are respec tively headed (1) Serial Number; (2) Name of the Route, indicating its course; (3) Length of the route in miles; (4) 360 Number of vehicles proposed to be operated on each route , (5) Total number of trips each way to be performed on each route; and (6) The nature of the services.
columns 4 and 5 do not contain the precise number of vehicles proposed to be operated or the precise total of the trips each way to be performed daily.
But on the other hand each of these columns is sub divided into two 4 and 4(a), 5 and 5 (a).
Under column 4 is given the minimum number of vehicles proposed to be operated and under 4(a) the maximum number.
Similarly column 5 sets out the minimum number, of total trips each way and 5 (a) the maximum number.
Now in several of these the variation between the maximum and the minimum in columns 4 and 5 is 1 to 2 i.e. if one is the minimum two is the maximum, and similarly if two is the minimum, four is the maximum, but there are others in which the variation is even more pronounced.
for instance, in scheme number one, in serial number 15 the minimum is one and the maximum three in both columns 4 and 5 and in serial number 16 the proportion between, the maximum and minimum is even more pronounced for in column 4 it is 1 to 4.
The position is similar in regard to serial No. 20.
The objection that is raised to this method of specifying the maximum and the minimum of the number of vehicles which will be put on the route and the number of trips which these vehicles will operate is, that one of the objects of the schemes is the provision, among others, of an adequate road transport service.
It is common ground that the persons affected by the schemes may object to the scheme on the ground that it does not offer an ade quate service and that this would be a relevant matter for consideration by the authority approving the scheme.
It is, therefore, urged on behalf of the appellants that the schemes as promulgated which disclose not the actual number of vehicles that would run or the number of trips which the vehicles would make, do not enable the affected objectors to raise their objections to the adequacy of the service pro posed and similarly do not afford requisite information to the approving authority under section 68D(3) to decide whether to approve the scheme or not.
Besides this general objection, it is pointed out that the specification of a minimum 361 and a maximum in columns 4 and 5 is contrary to what has been prescribed by the Andhra Pradesh Motor Vehicles Rules, 1957, made in relation to "the particulars to be contained in schemes under Ch.
IV A." Rule 4 of these Rules which have statutory force under section 68 C requires draft schemes and approved schemes to contain inter alia "the number of vehicles proposed to be operated on each route and the total number of trips to be performed daily on each route.
" By a rule framed on the 26th of December, 1958, the State Government framed a rule numbered as Rule 5 of these Rules which reads: "5.
The State Transport Undertaking may at its discretion, vary the frequency of services on any of the notified routes or within any notified area having regard to the needs of traffic during any period, either by increasing or decreasing the number of trips of the existing buses or by increasing or decreasing the number of buses.
" The validity of Rule 5 was one of the matters that was raised for consideration by this Court in Dosa Satyanaraya namurty etc.
vs The Andhra Pradesh State Road Transport Corporation(1) and this Court held that Rule 5 was repugnant to section 68 E which reads: "Any scheme published under sub section
(3) of section 68 D may at any time be cancelled or modified by the State Transport Undertaking and the procedure laid down in section 68 C and section 68 D shall, so far as it can be made applicable be followed in every case where the scheme is proposed to be modified as if the modifications proposed were a separate scheme." and struck it down.
Thereafter rule 5 was deleted, but rule 4 remains as we have set out.
The question for con sideration is whether the prescription of maxima and minima in columns 4 & 5 is in conformity with the requirements of Rule 4.
It was submitted on behalf of the appellants (1) that the reason why these maxima and minima were put 362 down in the schemes, contravening Rule 4, was in reality to avoid the operation of section 68 E and to get over the decision of this Court striking down Rule 5 and that for the same reason which underlay the decision of this Court in Dosa Satyanarayanamurty 's case(1) the prescription of maxima and minima contravened section 68 E as it operates in no way dissimilar to Rule 5 and that as this vice pervades the entirety of the scheme as published, all the three schemes should be set aside.
In further support of their submission the appellants relied on the affidavit filed by the Assistant Secretary to the Transport Department who stated that the prescription of maxima and minima was adopted because "it enabled the Corporation to provide adequate services with reference to the public needs, without having to go through the elaborate gamut of modifying the approved scheme for the purpose." The learned Judges of the High Court have repelled this contention on the ground of the analogy furnished by sections 46 and 48 of the Act under which applications for State carriage permits by private operators and the permits grant ed to them are required to state the minimum and maximum number of daily services proposed to be provided in relation to each route or area, was an indication that a scheme specifying the maxima and minima of the number of buses and services was in conformity with and did not contravene Rule 4.
The learned Advocate General adopted the same line of argument and submitted that the language of Rule 4 did not in terms prohibit the specification of a minimum and maximum and that Rule 5 which this Court struck down as being repugnant to section 68 E was attracted only when the maxima or minima set out in the scheme was departed from.
He, however, conceded that the gap, between the minimum and the maximum specified in a scheme might be so wide as to render the same a contradiction of Rule 4 but he submitted that the variations in the 3 schemes before us between columns 4 and 4 (a) and columns 5 and 5 (a) respectively were so slight as not to amount to a failure to fix the number of vehicles to be operated or the trips they would do on the routes.
(1) 363 In the case before us in view of the conclusion we have reached that some of the variations between the maxima and the minima in the number of vehicles proposed to be operated on each route are such as, adopting the test suggested by the learned Advocate General himself, to really contravene Rule 4 we have not thought it necessary to finally decide the larger question, whether the mere prescription of the maxima and minima, particularly for the reasons set out in the affidavit of the Assistant Secretary to the Transport Department, constitutes a violation of section 68 E as also of Rule 4 of the Motor Vehicles Rules, 1957 as to require the same to be struck down.
We might, however, mention in passing that we are not much impressed by the argument based on sections 46 and 48.
It must be remembered that we are concerned with a requirement of Ch.
IV A and under section 68 B of the Act, not only the provisions of that Chapter but the rules made thereunder are to have effect notwithstanding anything in Ch.
IV in which section 46 and section 48 occur.
This apart, the rule making authority had the analogy of the provisions of sections 46 and 48 before it, but yet chose not to adopt the same phraseology as was employed in these sections.
Besides, as the provisions of Ch.
IV A invade the rights of private operators to carry on business and is justified as a reasonable restriction on their rights in public interest, it might very well have been considered that a more precise indication should be afforded by the scheme to enable its adequacy to be tested by the quasi judicial procedure which has to be followed before the scheme becomes effective.
However, as stated already, there is no need to decide this matter finally in view of our conclusion that the scheme contravenes Rule 4 even on the test submitted by the Advocate General.
In saying this we have in mind routes 15, 16, 18 and 20 of scheme No. 1 in which the variation in the number of vehicles is 1 to 3, 1 to 4 and 3 to 8 and similarly in scheme No. 2 route No.1 where the variation is 6 to 12 and in scheme No. 3 route No. 1 the variation is 5 to 9.
We might mention that we have taken into account not merely the proportion but the variation in the number.
We have set these out as merely illustrative and we have not thought it necessary to make an exhaustive list of all the routes.
364 The next objection was that some of the routes included in the scheme were inter State routes and that under the proviso to section 68D(3) it could not be deemed to be an ap proved scheme unless the previous approval of the Central Government had been obtained.
We consider this objection as without force.
The route which is proposed to be nationalised under the scheme admittedly lies wholly within the State.
The right of the private operators to ply their vehicles beyond the State border is not affected by any of the schemes.
It would, therefore, follow that the proviso to section 68 D(3) is not attracted and consequently the scheme does not suffer from the defect alleged.
The next point made was that the language employed to indicate the nature of the service in column 6 of the schemes was vague, with the result that operators who had, in fact, been affected by the scheme understood the words employed as not affecting them and consequently did not make objections as they were entitled to under section 68 D(2).
We have examined the language employed and we consider that the submission does not deserve serious consideration nor we are satisfied that any party was really misled by ambiguous phrasing of column 6 of the scheme.
In fact, learned Counsel did not press this objection after the matter was discussed during arguments.
The next series of objections to the schemes are those which arise in Civil Appeals Nos. 771 to 778.
The point most strenuously contended related to an illegality which was alleged to have occurred in the implementation of the scheme.
Under section 68 (1) the State Transport Undertaking has to make the application in the manner specified in Chapter IV A for "a Stage Carriage permit. . . "to the Regional Transport Authority" and that Authority is directed to grant the permit to the Undertaking notwithstanding anything to the contrary in Ch.
In accordance with the provisions of this section the State Road Transport Corporation made an application for the grant of permits to the Regional Transport Authority.
The objection raised is that the application had to be made not to the Regional Transport Authority but only to the State Transport Autho rity which authority alone, it is urged, is competent to en 365 tertain applications for the grant of permits where the length of the route is 100 miles or over and such route is over a Trunk Road.
Three of the routes in scheme 2 with which Civil Appeal Nos.
773, 776 and 777 are concerned are of a length beyond 100 miles and the roadway on which the route lies are admittedly Trunk Roads.
Under Rule 141 of the Madras Rules permits on routes covering a distance of over 100 miles on Trunk Roads could be granted only by the State Transport Authority.
It was this Authority that had granted the permits to operate on these three routes to the respective appellants in these appeals.
The argument is that even when a Transport Undertaking applies for a stage carriage permit under section 68 F(1) it must comply with the provisions of Rule 141.
On the basis of this reasoning the appellants in these three Civil Appeals have applied for a writ of prohibition against the Regional Transport Authority before whom the applications have been filed.
Section 68 F(1) reads: "68 F(1).
Where, in pursuance of an approved scheme any State transport undertaking applies in the manner specified in Chapter IV for a stage carriage permit or a public carrier 's permit or a contract carriage permit in respect of a notified area or notified route, the Regional Transport Authority shall issue such permit to the State transport undertaking, notwithstanding anything to the contrary contained in Chapter IV.
" The learned Judges of the High Court have held that the Regional Transport Authority which is specifically mentioned in section 68 F(1) is empowered to issue the permit to the transport undertaking "notwithstanding anything to the contrary contained in Chapter IV" and that the section rendered the provisions of Rule 141 of the Motor Vehicles Rules inapplicable to cases covered by section 68 F(1).
We find ourselves in agreement with this view.
Besides, section 68 B of the Act enacts: "68 B.
The provisions of this Chapter and the rules and orders made thereunder shall have effect 366 notwithstanding anything inconsistent there with contained in Chapter IV of this Act or in any law for the time being in force or in any instrument having effect by virtue of any such law.
" Therefore any provisions in Chapter IV which are in consistent with those contained in Chapter IV A would to that extent be superseded.
No doubt, section 68 F(1) speaks of an application in the manner specified in Ch.
IV which if the words stood alone are capable of being understood as meaning the authority to whom the application has to be made, but as the authority to issue the permit in pursuance of the application is specified as the Regional Transport Authority and as that authority is directed to issue the permit notwithstanding anything in Ch.
IV so much of Ch.
IV or the Rules made thereunder, which specify the authority to grant the permit as being someone other than the Regional Transport Authority, is to that extent superseded.
It was pointed out that under Rule 141 the State Transport Autho rity was itself vested with the powers of the Regional Transport Authority where the route was of the description mentioned earlier, but this, in our opinion, makes no difference.
No doubt, in a State where there is no Regional Transport Authority at all [vide e.g. proviso to section 44(1)], but there is some other authority which functions as the Regional Transport Authority for the purposes of the Art, such an Authority might be that which would be comprehended by section 68 F(1) but where as in Andhra Pradesh there is admit tedly a Regional Transport Authority, we cannot accede to the submission that such authority is deprived of the power to issue a permit by reason of section 68F(1) merely because the Regional Transport Authority of that area cannot grant permits under Ch.
IV There were certain other points urged in Civil Appeal No. 771 which arose only if the Regional Transport Authority to whom applications under section 68 F(1) were made, was not competent to entertain application and issue a permit.
In view of our conclusion as regards the point urged in Civil Appeal No. 771 of 1963 do not arise.
367 There remains for being dealt with one minor point which was urged in Civil Appeals Nos. 883 and 884 which we consider entirely without substance.
The point was that the description of the route in the scheme was too vague and misleading, so much so that the appellants did not file their objections before the Government.
Taking the case of Civil Appeal No. 883, it is by an operator who runs a service from Uravakonda to Adoni.
Serial No. 16 of scheme No.1 describes the route as Adoni to Uravakonda.
It was urged that as the scheme notified the route Adoni to Ura vakonda but not Uravakonda to Adoni, the appellant thought that his route was not affected.
The objection is on its very face frivolous because throughout the scheme, it is only the terminal points that are specified and that speci fication carries with it and obviously implies that the ope ration of transport between the two terminii is intended to be nationalised.
The complaint in Civil Appeal No. 884 is the same, only the route is different.
This completes all the points that are urged before us.
In view of our conclusion that the schemes are vitiated by non compliance with the requirements of section 68 C and the Rules made thereunder, we hold that they have to be quashed as not warranted by law.
The appeals are accordingly allowed and the appellants are granted a declaration that the schemes are invalid and cannot be enforced.
The appellants would be entitled to their costs here and in the High Court one hearing fee '.
Appeals allowed.
AYYANGAR J.
When the judgment in the above appeals was pronounced on January 27, 1964 the learned Advocate for the appellants brought to our notice the following order passed by this Court on June 10, 1963 when the interim stay of the operation of the schemes which are impugned in the above appeals, was vacated on the opposition by the State Government: "Stay vacated on the learned Advocate General for Andhra Pradesh giving an undertaking that 368 in case the appeals succeed, the State will compensate the appellants for the loss incurred by them during the period that the appeals were pending in this Court by reason of the fact that they were not allowed to ply their buses on the routes under the respective permits granted to them.
The learned AdvocateGeneral further undertakes that this amount of compensation will be determined in the present proceedings themselves.
No order as to costs.
" The learned Counsel requested us that we should give some directions in terms of this undertaking.
[/INST]The respondent corporation appointed an expert committee to go into the question as to the working of nationalised transport in the State.
The Committee laid down the criteria for determining the order in which 331 areas and routes had to be selected for nationalisation and had drawn up a list of the remaining districts in which nationalisation should be successively taken up.
Accordingly, Nellore would have been the next district to be taken up and the turn of Kurnool district would have come up after nationalisation of the routes in Nellore, Chittore and Cuddapah districts were completed.
This report was submitted to the Corporation in February, 1961 and the Corporation accepted it and embodied the approval in its Administration Report dated March 24, 1962 which was published in April, 1962.
After the General Election in 1962 the Chief Minister assumed office as Chief Minister on March 12, 1962.
On April 19, 1962, he summoned a conference of the Corporation at which, he suggested that the nationalisation of bus routes in the Kurnool district should be taken up first.
By its resolution dated 4 5 1962, the Corporation made an alteration in the order of the districts, successively to be taken up for nationalisation and selected the western half of the Kurnool as the area to be nationalised in the first instance.
The appellants, motor transport operators whose routes were all in western half of the Kurnool districts filed objections to the Schemes before the Transport Minister.
The Transport Minister approved the schemes.
Thereafter, the Corporation applied to the Regional Transport Authority for permits.
The appellants then challenged the validity of the schemes in the High Court and in support of that allegations were made in the affidavit that the Chief Minister was motivated by bias and personal ill will against the appellants, that he felt chagrined at the defeat of his partymen and supporters and desiring to wreak his vengeance against the motor transport operators of the western parts of Kurnool, his political opponents, instructed the Corporation to change the order in which the districts should be taken up for nationalisalion and that the corporation gave effect to these instructions and directions.
These allegations were not denied by the Chief Minister, nor was an affidavit filed by any person who could claim to know personally about the truth about these allegations.
The High Court repelled these allegations and dismissed the petition.
On appeal by certificate the appellants mainly contended: (1) that the schemes did not in reality reflect the opinion of the Corporation as required by section 68 C of the Act, but that the schemes owed their origin to the direction of the Chief Minister who acted malafide in directing the Transport Undertaking to frame the impugned schemes; (2) that the approval of the schemes by the Transport Minister under section 68 D(3) must be held to be vitiated by the malafides of the Chief Minister; (3) that the impugned schemes did not conform to the statutory requirements of section 68 C and rule 4 of the Rules regarding the particulars to be embodied in the schemes; (4) that some of the routes included in the schemes were inter state routes and that under the proviso to section 68 D(3) it could not be deemed to be an approved scheme unless the previous approval of the Central Government had been ob tained and (5) that even when a transport undertaking applies for a stage carriage permit under section 68 F(1) it must comply with the provisions of r. 141 of the Rules.
Held: (1) On the evidence placed in the present case it must be held that it was a result of the conference of the 19th April, 1962 and in 332 order to give effect to the wishes of the Chief Minister expressed there, that the impugned schemes were formulated by the Corporation and therefore, it would be vitiated by malafides notwithstanding the interposition of the semi autonomous corporation.
Though the counter affidavits contained a denial of the allegation that the Corporation was acting at the behest of the Chief Minister, there was no explanation for the choice of the western portion of Kurnool district Therefore, the impugned schemes were vitiated by the fact that they were not in conformity with the requirements of section 68 C of the Act.
(ii) There was nothing on the record to indicate that the Chief Minister influenced the Transport Minister.
Besides, the Transport Minister stated on oath that in considering the objections under section 68 D(3) and approving the schemes he was uninfluenced by the Chief Minister.
Therefore, it cannot be held that his approval of the schemes did not satisfy the requirements of the law.
(iii) In the present case some of the variations between the maxima and minima in the number of the vehicles proposed to be operated on each route were such as to really contravene r. 4 of the Andhra Pradesh Motor Vehicles Rules.
Dosa Satyanarayanamurthy vs The Andhra Pradesh State Transport Corporation, , referred to.
(iv) The route which was proposed to be nationalised under the scheme admittedly lay wholly within the State.
The right of the private operators to ply their vehicles beyond the State border was not affected by any of the schemes.
Therefore, the proviso to section 68 D(3) was not attracted and consequently the schemes did not suffer from the defects alleged.
(v) The High Court was right in holking that the Regional Transport Authority which is specifically mentioned in section 68 F(1) is empowered to issue the permit to the transport undertaking "notwithstanding anything to the contrary contained in Chapter IV" and that the section rendered the provisions of r. 141 of the Motor Vehicles Rules inapplicable to cases covered by section 68 F(1).
No doubt, in a State where there is no Regional Transport Authority at all, but there is some other authority which functions as the Regional Transport Authority for the purposes of the Act, such an authority might be that which would be comprehended by section 68 F(1) but where as in Andhra Pradesh there is admittedly a Regional Transport Authority, it cannot be held that such authority is deprived of the power to issue a permit by reason of section 68 F(1) merely because the Regional Transport Authority of that area cannot grant permits under Chapter IV. 333
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<s>[INST] Summarize the judgementivil Appeal No. 414 of 1965.
Appeal from the judgment and order dated February 21, 1962, of the Punjab High Court in I.T. Reference No. 9 of 1959.
N.C. Chatterjee and R.V. Pillai, for the appellant.
C.K. Daphtary, Attorney General, R. Ganapathy lyer, R.N. Sachthey for R.H. Dhebar, for the respondent.
The Judgment of SUBBA RAO, MUDHOLKAR and RAMASWAMI JJ.
was .delivered by SUBBA RAO, J.
The dissenting Opinion of DAYAL and BACHAWAT JJ.
was delivered by BACHAWAT J. Subba Rao, J.
This appeal by certificate raises the main question whether section 2(6A)(d) of the Indian Income tax Act, 1922, hereinafter called the Act, is ultra vires the Central Legislature.
The assessee, a public limited company, was incorporated on May 23, 1945, under the Indian Companies Act, 1913, with a share capital of Rs. 50 lakhs.
On December 15, 1947, at the instance of the appellant the High Court sanctioned the reduction of the capital of the company from Rs. 50 lakhs to Rs. 25 lakhs.
On December 16, 1953, the High Court sanctioned a further reduction of the share capital from Rs. 25 lakhs to Rs. 15 lakhs.
On November 4, 1954, the Registrar of Companies granted the requisite certificate under section 61(4) of the Indian Companies Act.
On November 5, 1954, the appellant issued notices to the shareholders inviting applications for the refund of share capital so reduced.
On the receipt of the applications, appropriate debit entries were made in the accounts of the shareholders and the amounts were actually paid to them during the previous year, i.e., December 1, 1954, to November 30, 1955.
Under section 2(6A)(d) of the Act, "dividend" includes any distribution by a company on the reduction of its capital to the extent to which the company possesses accumulated profits, whether such accumulated profits have been capitalised or not.
In assessing the income of the appellant company for the assessment year 1956 57, the Income tax Officer held that the said dividends were distributed during the accounting year and on that finding he calculated the rebate on super tax in terms of el.
(i)(b) of the second proviso tO paragraph D of Part I1 of the first schedule to the Finance Act, 1956.
If the dividends were distributed during the accounting year.
i.e., December I, 1953, to November 30, 1954, the appellant would be entitled to a higher rate of rebate on super tax under el.
(ii) of the first proviso to paragraph D of Part II of the first schedule to the Finance Act, 1956.
The Income tax Officer further held that the 4 assessee 's accumulated profits at the time of the reduction of the Capital from Rs. 25 lakhs to Rs. 15 lakhs were Rs. 8,42,337.
On appeal the Appellate Assistant Commissioner accepted the said figure arrived at the Income tax Officer.
On further appeal, the Income tax Appellate Tribunal, for the reasons recorded by it in its order, reduced the figure under the said head by a sum of Rs. 3.61,40.5.
It was contended on behalf of the assessee that in as much as the certificate from the Registrar for the reduction of the capital from Rs. 25 lakhs to Rs. 15 lakhs was obtained on November 4, 1954, the distribution of the dividends should be deemed to have taken place during the year 1953 54 and, therefore, the said dividends were not exigible to tax for the assessment year.
The Incometax Officer, the Appellate Assistant Commissioner and the Tribunal concurrently rejected that plea and held that, as the actual payment to the shareholders of the refund of the capital and the debit in the accounts of the shareholders were effected in the accounting year, the said dividends must be held to have been distributed in the accounting year.
There is another sum of Rs. 11,687 3 0 received by the appellant as security deposit on account of empty bottles.
A question was raised whether the said amount could be considered as capital gains and, therefore, should be excluded from the accumulated profits.
The Appellate Tribunal held in favour of the assessee.
The assessee and the Commissioner of Income tax filed two applications before the Tribunal for referring questions of law arising out of the Tribunal 's order to the High Court.
The Tribunal referred the following questions of law to the High Court for its opinion.
(1) Whether the provisions of section 2(6A)(d) of the Indian Income tax Act are ultra vires of the Central Legislature.
(2) Whether the accumulated profits amounting to Rs. 4,69,244 13 0 could be deemed to have been distributed on the reduction of the capital from Rs. 25 lakhs to Rs. 15 lakhs within the meaning of Section 2(6A)(d) of the indian Income tax Act.
(3) Whether the amount of Rs. 11.687 3 0 received by the assessee us security deposit on account of empty bottles could be considered as Capital Gains.
(4) Whether the accumulated profits could be considered as dividend deemed to have been distributed in the assessment year 1955 56 in view of the certificate granted by the Registrar of Companies under Section 61(4) of the Indian Companies Act, 1913, or could be considered us dividend deemed to have been distributed in the assessment year 1956 57 because the debits of refunds were actually made in the accounts of the shareholders during the accounting period of the assessment year 1956 57.
5 The High Court answered all the questions against the assessee.
Hence the appeal.
Mr. N.C. Chatterjee, learned ,counsel for the assessee, did not contest the correctness of the answer given by the High Court in 'regard to the third question and, therefore, nothing further ' need be said about it.
The first question is whether section 2(6A)(d) of the Act is ultra vires the Central Legislature.
Sub.section (6A) was inserted in section 2 of the Act by section 2 of the Indian Income tax (Amendment) Act,.
1939 (Act VII of 1939).
Section 2(6A)(d) of the Act reads: " 'Dividend ' includes any distribution by a company on the reduction of its capital to the extent to which the company possesses accumulated profits which arose after the end of the previous year ending next before the 1st day of April, 1933, whether such accumulated profits have been capitalised or not." The said Act VII of 1939 was passed by the Central Legislature in exercise of its powers conferred under section 100 of the Government of India Act, 1935, read with entry 54 of List I of the.
Seventh Schedule thereof.
Entry 54 reads: "Tax on income other than agricultural income." Mr. Chatterjee contends that while the said entry 54 enables the appropriate Legislature to impose a tax on "income", the Legislature by enlarging the definition of dividend so as to include the amount received by a shareholder towards the share capital contributed by him, which cannot possibly be income, seeks to tax a capital receipt, and, therefore, the said clause is ultra vires the Central Legislature.
Mr. R. Ganapathy lyer, learned counsel for the Revenue, contends that a legislative entry must receive the widest connotation and should not be interpreted in any narrow or restricted sense, and if so construed the said entry enables the Legislature to make a law to prevent evasion of tax on income by devious methods and that the Legislature in the instant case seeks to prevent the growing evil of tax evasion by companies distributing profits under the guise of reduction of capital.
It is well settled rule of construction that entries in the legislative lists cannot be read in a narrow or restricted sense: they should be construed most liberally and in their widest amplitude.
In the words of Gwyer, C.J., in The United Provinces vs Atiqa Begum(1) "each general word should be held to extend to all ancillary or subsidiary matters which can fairly and reasonably be said to be comprehended by it.
" This Court in a number of decisions held that the expression "income" in entry 54 of List I of the Seventh Schedule to the Government of India Act, 1935, and the (1) 6 corresponding entry 82 of List 1 of the Seventh Schedule to the Constitution of India, shall be widely and liberally construed so as to enable a Legislature to provide by law for the prevention of evasion of income tax.
In Sardar Baldev Singh vs Commissioner Income tax, Delhi and Ajmer (1) this Court maintained the constitutional validity of section 23A(1) of the Income tax Act, which empowered the Income tax Officer to impose super tax in a case where a private limited company distributed less than sixty per cent.
of the total income of the company as dividends on the ground that the object of the section was to prevent avoidance of super tax by shareholders of a company in which the public were not substantially interested.
In Balaji vs Income tax Officer, Special Investigation Circle (2) this Court ruled that section 16(3)(a)(i) and (ii) of the Income tax Act, which enabled the Income tax Officer in computing the total income of a person to include the share of the income of his wife and minor sons therein, was constitutionally valid for the reason that it was intended to prevent evasion of tax by persons putting the properties in the names of their wives or minor children, as the case may be.
This Court again in Navnitlal C. Javeri vs
K.K. Sen, Appellate Assistant Commissioner Income tax, "D" Range, Bombay (3) sustained the validity of section 2(6A)(e) of the Indian Income tax Act, 1922, which included the definition of "dividend", inter alia, payment made by the company by way of advance or loan to a shareholder to the extent to which the company possessed accumulated profits on the ground that it was a measure to prevent private controlled companies adopting the device of making advances or giving loans to their shareholders with the object of evading payment of tax.
The question in the instant case, therefore, is whether the constitutional validity of section 2(6A)(d) of the Act can be supported on the ground that it was enacted to prevent evasion of income tax.
While an entry delineating a legislative field must be widely and liberally construed, there must be a reasonable nexus between the item taxed and the field so delineated.
The said clause deals with the distribution by a company on the reduction of its capital to the extent to which the company possesses accumulated profits.
Accumulated profits of a company may be utilised in the following 3 ways: (1) for increasing the capital stocks; (2) for distributing the same among the shareholders by way of dividends; and (3) for reducing the capital.
Ordinarily a company reduces the capital when there is loss or depreciation of assets; in that event there is no question of distribution of profits to the shareholders but the shares are only devaluated.
But a company may, on the pretext of reducing its capital, utilise its accumulated profits to pay back to the shareholders the whole or part of the paid up amounts on the shares.
A shareholder though in form gets back the whole (1) ; (2) [1962]2 S.C.R. 983.
(3)[1965] 1 S.C.R. 909.
7 or a part of the capital contributed by him, in effect he gets a share of the accumulated profits, which, if a straightforward course was followed, he should have received as dividend.
This is a division of profits under the guise of division of capital; a distribution of profits under the colour of reduction of capital.
If this was permitted, there would be evasion of super tax, the extent of the evasion depending upon the prevalence of the evil.
The Legislature, presumably in the interest of the exchequer, enlarged the definition of "dividend" to catch the said payments within the net of taxation.
By doing so, it is really taxing the profits in the hands of the shareholders, though they are receiving the said profits under the cloak of capital.
Learned counsel for the appellant contends that under the Companies Act a company can lawful1y reduce the share capital with the sanction of the Court, that there is no prohibition thereunder against such a reduction being made by way of distribution of accumulated profits to the shareholders, that the amounts so paid to them would be in law capital receipts and that, therefore, there could not be in law or in fact any evasion of tax on income.
Reliance is placed upon sections 100 to 103 of the Companies Act.
This argument mixes up two aspects the legal and fiscal.
Under Company Law the question of reducing capital is a domestic one for the decision of the majority of shareholders.
The Court comes into the picture only to see that the reduction is fair and equitable and that the interests of the minority and the creditors do not suffer.
It may not also be concerned with the motive of the general body in resolving to reduce the capital; but the Income tax law is concerned with tax evasion.
Tax can be evaded by breaking the law, or avoided in terms of the law.
When there is a factual avoidance of tax in terms of law, the Legislature steps in to amend the Income tax law so that it can catch such an income within the net of taxation.
There is, therefore, no inconsistency between a receipt being a capital one under the Company law, and by fiction being treated as taxable income under the Income tax Act.
Therefore, as section 2(6A)(d) of the Act embodies a law to prevent evasion of tax, it falls within the ken of entry 54 of List I of Schedule Seven to Government of India Act, 1935.
The next question is whether the said dividends were distributed in the year 1953 54, as the appellant contends, or in the accounting year 1954 55, as the respondent argues.
The relevant sections of the Act in this context are section 2(6A)(c1) and section 16(2).
Section 2(6A)(d) has been already extracted.
The relevant part of l 6(2) reads: "For the purposes of inclusion in the total income of an assessee any dividend shall be deemed to be income of the previous year in which it is paid, credited or di i b u t e d . . . . . . . . .
8 "Dividend", with which we are now concerned, is not that which we ordinarily understand by that expression, but dividend by definition.
Under section 2(6A)(d) of the Act it is one of the ingredients of the definition that it shall have been distributed by a company on reduction of the capital to the extent to which the company possesses accumulated profits.
Under section 16(2) of the Act such a dividend shall be deemed to be an income of the previous year in which it is paid, credited or distributed.
Unless such a distribution as is mentioned in cl.
(d) of section 2(6A) of the Act had taken place, it would not be a dividend.
If it was not so distributed, section 16(2) of the Act would not be attracted.
To put it in other words, if the accumulated profits were distributed, it would satisfy not only the definition of "dividend" in cl.
(d) but also would fix the year in which it would be deemed to be income.
What then is the meaning of the expression "distribution"? The dictionary meaning of the expression "distribution" is "to give each a share, to give to several persons".
The expression "distribution" connotes something actual and not notional.
It can be physical; it can also be constructive.
One may distribute amounts between different shareholders either by crediting the amount due to each one of them in their respective accounts or by actually paying to each one of them the amount due to him.
This Court had to construe the scope of the word "paid" in section 16(2) of the Act in J. Dalmia vs Commissioner of I.T. Delhi(1).
Shah, J., speaking for the Court observed: "The expression "paid" in section 16(2), it is true, does not contemplate actual receipt of the dividend by the member.
In general, dividend may be said to be paid within the meaning of section 16(2) when the company discharges its liability and makes the amount of dividend unconditionally available to the member entitled thereto." This Court again reaffirmed the said principle in Mrs. P.R. Saraiya vs Commissioner of Income tax, Bombay City 1, Bombay(2) and held that where dividend was not credited to any separate account of the assessee so that he could, if he wished, draw it, it was not "credited or paid" within the meaning of section 16(2) of the Act.
The same meaning must be given to the word "distribution".
The only difference between the expression "paid" and the expression "distribution" is that the latter necessarily involves the idea of division between several persons which is the same as payment to several persons.
At this stage the anomaly that is alleged to flow from our view may conveniently be noticed.
It is said that there will bedifferent points of time for ascertaining the extent of the accumu lated profits.
With the result section 2(6A)(d) of the .Act becomes un workable in practice or at any rate leads to unnecessary complications.
We do not see any justification for this comment.
9 Distribution is a culmination of a process.
Firstly, there will bea resolution by the General Body of a company for reduction of capital by distribution of the accumulated profits amongst the shareholders; secondly, the company will file an application in the Court for an order confirming the reduction of capital; thirdly, after it is confirmed, it will be registered by the Registrar of Joint Stock Companies; fourthly, after the registration the company issues notices to the shareholders inviting applications for refund of the share capital; and fifthly, on receiving the applications the company will distribute the said profits either by crediting the proportionate share capital to each of the shareholders in their respective, accounts or by paying the said amounts in cash.
Out of the said 5 steps, the first 4 are only necessary preliminary steps which entitle the company to distribute the accumulated profits.
Credits or payments are related to the said declaration; that is to say, distribution is from and out of the accumulated profits resolved to be distributed by the company.
In this view, the accumulated profits to be distributed are fixed by the resolution and the figure does not change with the date of payment or credit.
Indeed, a similar process is to be followed in the case of declaration of ordinary dividends; firstly, there will be a resolution by the General Body of the company declaring the dividends; secondly, thereafter the amounts payable to each of the shareholders are distributed by appropriate credits or payments.
Dividends may be paid or credited to different shareholders during.
different accounting years; and the shareholders may be assessed in respect of the said payments in different years.
Even so, the payments are referable only to the declaration of the dividends out of the profits of a particular year.
This Court, as we have noticed earlier, in the decisions cited supra held that the year of credit or payment to a shareholder was crucial for the purpose of assessment and not the date of declaration.
Let us see whether this view introduces any complication in the matter of reduction of rebate on super tax payable by the company.
The appellant Company set up a claim for a rebate on super tax under el.
(ii) of the first proviso to paragraph D of Part II of the first schedule to the Finance Act, 1956.
The Company based its claim on the contention that the distribution of dividends on reduction of capital took place during the year ending November 30, 1954, and not during the year ending November 30, 1955, and, therefore, el.
(i)(b) of the second proviso to paragraph D of Part II of the first schedule to the Finance Act, 1956, read with Explanation (ii) to paragraph D, which provides for reduction of rebate allowable under cl.
(ii) of the first proviso by an amount computed at certain slab rates on the amount of dividends distributed to the shareholders during the previous year.
could not be invoked.
To put it in other words, the assessee claimed that as the dividents were not distributed in the accounting year, there could not be any reduction of the rebates under 10 cl.
(i)(b) of the said proviso.
If, as we have held, the distribution was made during the year ending November 30, 1955, i.e., the accounting year when the amounts were paid, the Revenue would be entitled to reduce the rebate by the amount computed at the prescribed rates on the amount of dividends.
Some complication may arise only 'if we accept the argument that the date of payment fixes the date for ascertaining the quantum of accumulated profits.
But we have rejected that contention.
In this view, the claim of reduction of rebate on super tax provided by the first schedule to the Finance Act, 1956, can be worked out without any confusion or complication.
We, therefore, hold that the dividends must be deemed to have been paid or distributed in the year when it was actually, whether physically or constructively, paid to the different shareholders, that is to say when the amount was credited to the separate accounts of the shareholders or paid to them.
What are the facts in the present case? The High Court, on August 6, 1954, sanctioned the reduction of the capital from Rs. 25 lakhs to Rs. 15 lakhs.
On November 4, 1954, the Registrar of Companies issued the certificate under section 61(4) of the Companies Act.
On November 5, 1954, the Company issued notices to the shareholders inviting applications for refunds.
In the notice sent to the shareholders they were informed that the share transfer register of the Company would remain dosed from November 16, to November 30, 1954 (both days inclusive) and refund would be made to those shareholders whose names stood on November 15, 1954, in the books of the Company.
After the applications were received, the amounts payable to the shareholders were debited in the accounts and refunds were actually granted during the accounting year, i.e., between December 1, 1954, and November 30, 1955.
It is clear from the said facts that the amounts were distributed only during the accounting year, when the amounts were both debited and paid.
We, therefore, agree with the High Court that the dividends were distributed to the shareholders during the accounting year, i.e., 1954 55.
In the result, the appeal fails and is dismissed with costs.
Bachawat J;.
For the reasons given by brother Subba Rao J, we agree that section 2(6A)(d) of the Indian Income tax Act, 1922 is not ultra vires the Central Legislature, but we are unable to agree with his conclusion with regard to the fourth question of law referred for the opinion of the High Court.
The fourth question arose because of the claim of the appellant company to a rebate of super tax under cl.
(ii) of the first proviso to paragraph D of part II of the first schedule to the Finance Act, 1956 and its contention that the distribution of dividends on reduction of capital contemplated by section 2(6A)(d) of the Indian Income tax Act, 1922 took place during the year ending November 30, 1954, and not during the year ending November 30, 1955, and consequently there could be no reduction of the rebate under cl.
(i)(b) of the second proviso to paragraph D of part II of the first schedule to the Finance Act, 1956 read with explanation (ii) to paragraph D. 11 Now, el.
(i)(b) of the second proviso to paragraph D of part II of the first schedule to the Finance Act, 1956 provides for reduction of the rebate allowable under cl.
(ii) of the preceding proviso by an amount computed at certain slab rates on the amount of dividends "in the case of a company referred to in el.
(ii) of the preceding proviso which has distributed to its shareholders during the previous year dividends in excess of 6 per cent of its paid up capital not being dividends payable at a fixed rate", and the explanation (ii) to paragraph D provides that for purpose of paragraph D "the expression 'dividend ' shall be deemed to include any distribution included in the expression 'dividend ' as defined in el.
(6A) of section 2 of the Indian Income tax Act".
Section 2(6A)(d) of the Indian Income tax Act, 1922 provides that "dividend" includes "any distribution by a company on the reduction of its capital to the extent to which the company possesses accumulated profits which arose after the end of the previous year ending next before the lst day of April, 1933, whether such accumulated profits have been capitalised or not.
" Obviously, section 2(6A)(d) contemplates a distribution on reduction of capital under section 55(1)(c) of the Indian Companies Act, 1913,under which subject to confirmation by the Court, a limited company, if so authorised by its articles, may by special resolution reduce the share capital in any way, and in particular may "either with or without extinguishing or reducing liability on any of its shares, pay off any paid up capital which is in excess of the wants of the company", and may, if and so far as is necessary, alter its memorandum by reducing the amount of its share capital and of its shares accordingly.
Section 56 of the Act enables the company to apply to the Court for an order confirming the reduction, and under section 60 of the Act, the Court may make an order confirming,the reduction on such terms and conditions as it thinks fit.
Upon compliance with certain formalities, the Registrar of Joint Stock Companies is required under section 61 of the Act to register the order and a minute approved by the Court, and on such registration, and not before, the resolution for reducing share capital as confirmed by the order so registered shall take effect.
Under section 62,the minute when registered shall be deemed to be substituted for the corresponding part of the memorandum of the company.
In the instant ease, the issued, subscribed and paid up capital the company was Rs. 25 lakhs, consisting of 5 lakhs shares of Rs. 5 each.
On December 16, 1953, the company passed a special resolution for reducing its share capital from Rs. 25 lakhs to Rs. 15 lakhs and for payment of Rs. 2 per share to the existing share holders under section 55(1)(c) of the Indian Companies Act, 1913.On May 10.
1954, the company applied to the Court for an order confirming the reduction.
On August 6, 1954, the High Court made an order confirming the reduction.
On November 4, 1954,the order and the minute approved by the Court were duly registered with the Registrar, and on the same date, the Registrar 12 issued a certificate of registration.
On November 5, 1954, the notice of registration was duly published.
On the same day, the company issued a circular notice to its shareholders stating that the refund of Rs. 2 per share will be made on receiving confirmation of the registration and requesting the shareholders to send their share certificates to the company at an early date for necessary endorsement and refund of share capital and stating that the refund would be made to the shareholders, whose names stood on November 15, 1954 in the books of the company, the share transfer register would remain closed from November 16 to November 30, 1954, and the refunds would be made to the shareholders whose names stood on November 15, 1954 in the books of the company.
The balance ,sheet for the year ending November 30, 1954 did not show the reduction, and the capital of the company in this balance sheet was shown to be Rs. 25 lakhs.
The necessary book entries and the payments of dividends to the shareholders were not made during the year ending November 30, 1954.
The book entries with regard to the reduction and refund were made, and the refunds were given to the shareholders during the year ending November 30.
1955 and the reduction was shown in the balance sheet for the year ending November 30, 1955.
The point in issue is when does the distribution contemplated by section 2(6A)(d) of the Income tax Act.
1922 take place? Section 2(6A)(d) speaks of dividend in the shape of any distribution by a company amongst its shareholders on reduction on its capital to the extent of accumulated profits possessed by it.
We reject the contention that this distribution takes place when the dividend is paid or credited to the shareholders.
The distribution contemplated section 2(6A)(d) is a distribution by a company "on the reduction of its capital".
The word "on" has no fixed meaning, but in the context of the sub section, it must be given the meaning "at the time of".
as "on entering", "on the 1st of the month".
The distribution contemplated by the sub section is therefore, distribution at the time of the reduction of its capital, that is to say, when the resolution for reduction of its capital under section 55(1)(c) of the Indian Companies Act, 1913 takes effect.
As soon as the resolution for reduction of capital and consequential refund of the surplus capital to the shareholders takes effect, the capital stands reduced, the surplus ceases to be capital and stands allotted to the shareholders, each shareholder obtains a vested right to the refund of his share of the surplus, and a liability arises on the part of the company to make the refund.
This liability arises as soon as the reduction of capital takes effect, and it matters not that the company has not made the necessary book entries showing the reduction of capital and the transfer of the surplus to the account of the shareholders.
The word "distribution" has several dictionary meanings.
In the context of section 2(6A)(d), it means allotment or apportionment of the surplus amongst the shareholders; this allotment takes place and each shareholder gets a vested right to his portion of the surplus as soon as the capital stands reduced.
13 A close scrutiny of section 2(6A)(d) reveals that (a) the distribution takes place on a single date and (b) the expression "accumulated profits" means profits accumulated up to the date of the distribution.
These two basic ideas which are implicit in section 2(6A)(d) are forcibly brought out in the explanation to the corresponding section 2(22) of the Income tax Act, 1961.
We thus find firstly that the entire distribution of the surplus amongst the shareholders takes place on a single date.
Now if the distribution is to have a certain date, that date can only be the date when the reduction of capital becomes effective.
The payments to the shareholders either actual or notional by credit entries in the books of account are made subsequently.
The payments need not be made on one date; they may be and often are made on several dates.
The successive payments cannot be the distribution contemplated by section 2(6A)(d).
We find secondly that the accumulated profits are to be ascertained on the date of the distribution.
But we find independently for reasons mentioned hereafter.
that the accumulated profits must be ascertained on the date of the reduction of capital.
Thus the two events, namely, the distribution and the reduction of capital must synchronise, and the accumulated profits must also be ascertained at the same point of time.
The synchronisation is also obvious on a plain reading of the abridged text "any distribution on the reduction of capital to the extent of accumulated profits".
The artificial dividend under section 2(6A)(d) must be fixed by reference to the accumulated profits on the date of the reduction of capital and not by reference to the accumulated profits on the successive dates of the payments.
If the amount of the dividend were to be fixed by reference to the accumulated profits on the several dates of the payments, the result might well be that some payments would be dividends to their full extent, some would be dividends to a limited extent and some would not be dividends at all.
Take a case where the accounting year of the company ends on November 30, a resolution for the reduction of its capital to the extent of Rs. 10 lakhs and for refund of Rs. 2 for each share of Rs. 5 takes effect on June 30, 1954 and payments of rupees one, six and three lakhs are made respectively on October 30, 1954, October 30, 1955 and October 30, 1956; and assume that the extent of the accumulated profits is rupees ten lakhs on June 30, 1954 and on October 30, 1954, rupees two Iakhs on October 30, 1955 and rupees two lakhs on October 30, 1956.
If the amount of the dividend were ' to be fixed by reference to the accumulated profits on the dates of the payments, the result would be that the payment of rupees one lakh would be dividend to the full extent, the payment of rupees six lakhs would be dividend to the extent of one third and the payment of rupees three lakhs would not be dividend at all.
It is reasonable to think that the legislature did not contemplate such a result.
The character of the distribution is determined by the extent of the accumulated profits on the date when the reduction /B(D)2SCI 3 14 of capital becomes effective and is not altered by any subsequent increase or decrease of the accumulated profits, and all subsequent payment of the capital so distributed share alike the original character of the distribution.
It is argued that in the case of a normal dividend, a comparable distribution takes place, a declaration of dividend out of the profits of a particular year is made, and is followed by payment of the dividend, and decided cases under section 16(2) show that the distribution takes place on payment and not on the declaration of a dividend.
We think this comparison of the normal dividend with the artificial dividend in section 2(6A)(d) in the shape of distribution to the extent of the accumulated profits is misleading, and the assumptions on which this comparison is made are not correct.
The declaration of a normal dividend may be made out of accumulated profits, and need not necessarily be made out of the profits of any particular year.
Section 2(6A)(d) does not contain any definition of a normal dividend.
In the case of a normal dividend, the question of ascertaining the accumulated ' profits to the extent of which the distribution amounts to dividend does not arise.
This problem would have arisen, had section 2(6A) defined normal dividend as "any distribution by a company on the declaration of dividend to the extent to which the company possesses accumulated profits".
On such a definition, the only possible interpretation would have been that the accumulated profits are ascertained and the distribution takes place on the date of the declaration of the dividend.
The argument based upon the decided cases under section 16(2) is misconceived.
Section 16(2) dealt with the question when the dividend shall be deemed to be the income of the shareholders.
By section 16(2) the dividend was deemed to be the income of the shareholders when it was paid, credited or distributed.
An artificial dividend ' under section 2(6A)(d) is either distributed or paid, whereas the normal dividend is either paid or credited, and in the case of J. Dalmia vs Commissioner of Income tax(1) and Padmavati R. Suraiya vs Commissioner of Income tax(2) it was held that the normal dividend is neither paid nor credited by reason of the fact that the dividend is declared.
In this case, we are not concerned with the problem of construction of section 16(2) or the interpretation of the word "paid" or "credited".
The word "distributed" is not synonymous with the word "paid" or "credited".
The three words are used in the Act in different senses.
Moreover, the policy of the legislature on the question of the taxability of the dividend in the hands of the shareholders has varied from time to time.
Subsection (2) of section 16 was repealed and in its place, sub section (IA) of section 12 was introduced by the Finance Act, 1959 with effect from April 1, 1960, and the corresponding provision is to be found in section 8 of the Income tax Act, 1961.
Under section 12(IA) of the Incometax Act, 1922 and section 8 of the Income tax Act the declaration of , 90.
(2) [1965] 1 S.C.R. 307.
15 dividend is crucial even for purposes of assessment of the shareholders.
The legislature thus recognises now that the distribution of the normal dividend takes place on the declaration of the dividend.
In the instant case, the resolution for the reduction of the capital of the company and the consequential refund of the surplus capital to its shareholders took effect on November 4, 1954.
Consequently.
the distribution of the dividend as defined by section 2(6A)(d) took place on November 4.
1954, i.e. during the previous year corresponding to the assessment year 1955 56.
It is true that during the accounting year ending November 30, 1954.
the company did not pay any dividends, nor make any book entries with regard to reduction of capital or with regard to refund or payment of surplus capital.
But the company incurred on November 4, 1954 the legal liability to make the refunds and the distribution must be deemed to have taken place on November 4, 1954, though n0 book entries were made and no payments were made on that date.
In view of the fact that the distribution took effect on November 4, 1954, the company was bound to make necessary entries in their books on November 4, 1954 showing the reduction of capital, and was also bound to show the reduction in its balance sheet for the year ending November 30, 1954.
Irrespective of its method of book keeping, the company incurred on November 4, 1954, the legal liability to make the refunds.
The method of bookkeeping is not relevant, but, were it so, it is pertinent to remember that the accounts of the company were kept on the mercantile basis.
That system of accounting brings into debit an expenditure the amount for which a legal liability has been incurred before it is actually disbursed.
See Keshav Mills Ltd. vs Commissioner of Income tax, Bombay(1).
In conclusion, we must point out that the revenue authorities should have, but in fact have not fixed the amount of the dividend by reference to the accumulated profits on November 4, 1954.
when the resolution for reduction of capital became effective, or by reference to the accumulated profits brought forward on December 1, 1953 at the commencement of the accounting year during which the reduction of capital took effect.
Instead, the revenue authorities took into account the accumulated profits on December 1, 1954, that is to say, the date of the commencement of the subsequent accounting year during which the dividends were paid.
The amount of the accumulated profits as on December 1, 1954 was fixed by the Income tax Officer at Rs. 8,42,337, and was subsequently reduced by the Tribunal to Rs. 4,69,244 13 0.
The revenue authorities rightly assumed that the distribution and the ascertainment of the accumulated profits to the extent of which the distribution is deemed to be dividend under section 2(6A)(d) took place 16 during the same accounting year, but they erred in holding that the accounting year commencing on December 1, 1954 is the relevant year.
In our opinion, the High Court was in error in holding that dividends under section 2(6A)(d) were distributed during the previous year corresponding to the assessment year, 1956 57.
We think that the dividends, if any, under section 2(6A)(d) were distributed in the previous year corresponding to the assessment year 1955 56.
and the fourth question should be answered accordingly.
The appeal is allowed in part to this extent.
In view of the divided success, we direct that the parties will pay and bear their own costs in this Court and in the Court below.
ORDER BY COURT In accordance with the majority Judgment, the appeal fails and is dismissed with costs.
[/INST]The appellants manufacture a medicated syrup "Sharbat Rooh Afza" according to a formula and containing some fruit juices.
Acting under section 3 of the , the Central Government made the Fruit Products order in 1955; as a result of an amendment in September 1956 of the relevant provisions of this Order, the requirement of the minimum percentage of fruit juices in a fruit syrup covered in of the Second Schedule of the Fruit Order was raised from 10% to 25%.
This requirement was duly notified to the Appellants.
Thereafter as a result of an inspection of their factory by the Marketing development Officer, the appellants received an order from him requiring them to stop further manufacture and sale of 'Sharbat Rooh Afza ' forthwith on the ground that it did not contain the minimum percentage of fruit juices prescribed by the relevant provisions of the Fruit Order.
The appellants challenged this order in a Writ Petition on the ground, inter alia, that the Fruit Order did not apply to 'Sharbat Rooh Afza ' and also that the impugned order and the Fruit Order were invalid.
The High Court, however, rejected these grounds, upheld the validity of the Fruit Order and dis missed the petition.
It was contended on behalf of the appellants that the 'Sharbat ' was a medicinal product and not a 'fruit product ' as defined by cl. 2(d) of the Fruit Order; that the Fruit Order was invalid because it could have appropriately been issued only under the , and not the ; and that the impugned order was invalid because it affected the appellant 's Trade mark rigts.
HELD : (i) The Sharbat was a fruit product within the meaning of cl. 2(d) (v) of the Fruit order as the residuary part of that clause took in any beverages containing fruit juices or fruit pulp; as such, its production could be controlled by the relevant provisions of the order.
The High Court was right in rejecting the appellant 's contention that the Sharbat was a medicinal product in view of the fact that the appellants had not claimed exemption from the application of the Fruit Order by complying with Cl. 16(1)(c) thereof.
[200 E G; 201 H; 203 A] (ii)As section 3(1) of the authorised the Central Government to regulate the qualitative and quantitative production of essential commodities, and as the pith and substance of the relevant provisions of the Fruit Order was clearly to regulate the qualitative production of the Fruit Products covered by it, the contention that the regulations imposed by the order were outside the purview of section 3(1), could 193 not be accepted.
The order was not therefore invalid on the ground that it purported to tackle the problem of adulteration and should therefore have been issued under the .
[201 D 202 C] (iii)The Fruit Order and the Act under which it was issued were constitutionally valid as the restrictions imposed by them were reasonable and in the interest of the general public.
What the impugned order purported to do was to require the appellants to comply with reasonable restric tions imposed by the Fruit Order and the fact that, incidentally, compliance with the Fruit Order might tend to affect the trade mark rights, could not render the impugned order invalid.
[203 D E] (iv)The definition of 'synthetic beverage ' in cl. 2(k) of the Fruit Order which indicates that it is a beverage which contains no fruit juice cannot be said to conflict with the requirements of cl.
11(2) that beverages containing less than 25% fruit juices should be sold as 'synthetic ' pro ducts.
Furthermore, cl. 11 contains a positive provision and the validity of the mandatory requirements of cl. 11 could not be impaired by the alleged inconsistency between that provision and the definition of 'synthetic ' beverage prescribed by cl. 2(k).
[203 A B] Amrit Banaspati Co. Ltd. vs The Stale of U.P. Cr.
A. No. 141 of 1959 dated 30 11 60, referred to.
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<s>[INST] Summarize the judgementCivil Appeal No. 157 of 1985 From the Judgment and Order dated 20.1.1984 of the Allahabad High Court in W.P. No. 1404 of 1983.
V.M. Tarkunde and Shakeel Ahmed Syed for the Appellant.
S.C. Maheshwari, R.D. Upadhyay and Manoj Saxena for the Respondents.
The Judgment of the Court was delivered by SINGH, J.
This appeal by special leave is directed against the judgment of the High Court of Allahabad (Lucknow Bench) dt.
January 20, 1984 setting aside order of the Addl.
District Judge, Lucknow dt.
January 18, 1983 and quashing the allotment order made in appellant 's favour and directing the Addl.
District Magistrate (Civil Supplies), Lucknow to reconsider the applications made for allot ment of the premises in dispute after giving notice to the respondent landlord.
129 The dispute relates to 1st floor of House No. 109/16 situate in Model House Colony, Aminabad, Lucknow.
Mauji Ram Gupta the owner of the house was residing in the ground floor of the house while the 1st floor was let out to a tenant.
Vacancy in the first floor arose, several persons including the appellant, H.C. Ghildiyal and Ramakant Srivastava made appli cations for allotment of the same.
Mauji Ram Gupta, the landlord also made an application for the release of the premises to him under sec.
16 of the U.P Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972 (hereinafter referred to as the Act).
The Addl.
District Magistrate, respondent No. 4 by his Order dt.
25.2.76 rejected Mauji Ram Gupta 's application and allotted the premises to H.C. Ghildiyal, but he did not occupy the premises; instead he informed respondent No. 4 that he did not require the premises.
Thereaf ter respondent no.4 allotted the first floor of the house to the appellant by his order dt.
July 23, 1976 and in pursuance to that order she obtained possession of the premises on 25.7.76.
Mauji Ram Gupta, the landlord chal lenged the allotment order by means of revi sion application before the District Judge but the same was rejected.
Mauji Ram Gupta entered into an agreement for the sale of the house with G.L. Pahwa, respondent No. 1 and in part performance of the agreement he permitted G.L. Pahwa to occupy the ground floor of the house in November 1976.
G.L. Pahwa made application for allotment and the respondent No. 4 allot ted the ground floor to him on 31.12.76, this appears to have been done with a view to regularise his possession.
Mauji Ram Gupta executed a registered sale deed in favour of G.L. Pahwa on 18.7.77 transferring the entire house including the premises in dispute to him, as a result of which respondent No. 1 became the owner and the landlord of the premises in dispute.
R.K. Srivastava on unsuc cessful applicant for the allotment of the premises in dispute had challenged the allot ment order dt.
23.7.86 made in appellant 's favour under sec.
18 of the Act.
The District Judge by his order dt.
18.8.77 allowed his revision application set aside the allotment order made in appellant 's favour and directed respondent No. 4 to reconsider the applica tions made for allotment of the premises in accordance with law.
In pursuance of the directions issued by the District Judge re spondent No. 4 considered the applications and by his order dt.
4.1.78 he again allotted the premises to the appellant and rejected the claims of other applicants.
Notice of the allotment proceedings was not given to re spondent No. 1, although by that time he had acquired full rights of a landlord.
It appears that respondent had made an application to the State Govt.
for release of the first floor and that had been forwarded by the Govt.
to re spondent No. 4, which he disposed of by the same order dt. 4.1.78.
Respondent No. 1 filed a 130 revision application under sec.
18 of the Act challenging the allotment order dt. 4.1.78.
He filed a review application also before re spondent No. 4 for recall of the order dt. 4.1.78.
During the pendency of the review application the revision application made by respondent No. 1 was dismissed by the District Judge on 28.2.78 for want of prosecution.
However the review application of respondent No. 1 was allowed by respondent No. 4 by his order dr. 14.12.81 on the finding that since the premises in dispute was a part of land lord 's building which he was occupying, it was mandatory that notice should have been issued to the landlord and since no notice had been issued to him the allotment order was vitiat ed.
On these findings, he recalled his Order dated 4.1.78.
The appellant challenged the order by means of a revision application before the District Judge under sec.
18 of the Act.
The Addl.
District Judge, Lucknow exer cising powers of the District Judge allowed the revision application by his order dt.
18.1.83, and set aside the order of respondent No. 4 dt.
14.12.81, on the findings that review application was not maintainable and respondent No. 4 had no jurisdiction to review his order on the ground of absence of notice to respondent No. 1 who was transferee land lord.
Respondent No. 1 challenged the validity of the order of the Addl.
District Judge dt.
18.1.83 by means of a writ petition under article 226 of the Constitution before the High Court.
A learned Single Judge of the High Court allowed the writ petition by his order dt.
January 20, 1984 and quashed the order of the Addl.
District Judge and directed respondent No. 4 to consider the application for allot ment for giving notice to respondent No. 1.
Aggrieved the appellant challenged the validi ty of the order of the High Court.
Before we consider the submissions made on behalf of the appellant it is necessary to briefly notice the findings recorded by the High Court.
The High Court held that since the District Judge while setting aside the initial order of allotment made in appellant 's favour dt.
23.7.76 directed respondent No. 4 to consider the allotment applications in accord ance with law.
Respondent No. 4 was under a legal duty to issue notice to respondent No. 1 who had by that time acquired rights of land lord.
Since no notice was given to him the allotment proceeding was rendered illegal.
The High Court further held that even though the landlord 's application for release of the premises in dispute had been rejected, the transferee landlord had right to nominate a tenant of his choice in accordance with sec.
17(2) of the Act.
But as no notice was issued to him, he could not exercise his right to nominate a tenant of his choice although the appellant as well as the authority considering the application, for allotment both had ac quired 131 knowledge that respondent No. 1 was the trans feree landlord occupying a portion of the building.
The High Court held that provisions of sec.
17(2) were mandatory and its non compliance rendered the allotment order void.
The High Court held that as the order of allotment dt. 4.1.78 was made without giving notice to the landlord, the alloting authority was competent to recall its order in exercise of its inherent jurisdiction.
On these find ings the High Court set aside the order of the Addl.
District Judge and directed the alloting authority to reconsider the applications for allotment after giving notice to the landlord respondent No. 1.
Shri Tarkundc learned counsel for the appellant urged that the High Court committed error in setting aside the allotment order and directing the District Magistrate to reconsid er the allotment applications at the instance of G.L. Pahwa, respondent No. 1.
He further urged that since Mauji Ram Gupta, the erst while landlord 's application for release of the premises in dispute had been dismissed and revision against that was also dismissed for non prosecution, the erstwhile landlord had exhausted all his rights available to him under the Act.
G.L. Pahwa being the successor in interest of Mauji Ram Gupta, did not and could not acquire any further right either to get the premises in dispute released in his favour or to challenge the validity of the allotment order.
G.L. Pahwa was not entitled to maintain a review application and Addition al District Magistrate had no jurisdiction to recall his order dated 4.1.78 alloting the premises to the appellant and further he was not entitled to any notice either under sec tion 17(2) of the Act or under Rule 9(3), as the requisite notice had already been issued to the erstwhile landlord Mauji Ram Gupta who had contested the allotment proceedings.
Having given our anxious consideration to these submissions and having regard to the facts and circumstance of the case we do not find any merit in the submissions.
When a building or a part of a building falls vacant or is likely to fail vacant, the District Magistrate under section 16(1)(a) of the Act has jurisdiction to issue allotment order requiring the landlord to let the build ing or part thereof to the person specified in the order.
The landlord may apply to the District Magistrate for release of the whole or any part of such building under section 16(1)(b) of the Act, if the release applica tion is allowed, the landlord is permitted to occupy the building or part thereof as the case may be.
But if release application is dismissed the District Magistrate is empowered to issue allotment order in favour of an applicant, and in pursuance thereof the allot tee is entitled to take possession.
Before applications for allotment are con 132 sidered by the District Magistrate it is mandatory for him to serve notice of the vacancy on the landlord informing him the date on which the allotment is to be considered as prescribed by Rule 9 of the U.P. Urban Build ings (Regulation of Letting, Rent and Evic tion) Rules, 1972 (hereinafter referred to as the Rules).
Rule 9(3) requires service of notice and intimation of the date fixed for considering the allotment of the premises which may have fallen vacant or is likely to fall vacant.
This is mandatory as has been held by this Court in Yoginder Tiwari vs District Judge, Gorakhpur and Ors., and in catena of cases the High Court of Allahabad, has taken the same view, it is not necessary to burden the judgment by refer ring to all those decisions.
The object and purpose of the notice to the landlord regard ing the date fixed for allotment proceedings is to enable him to file his objections if any, to the allotment proceedings or to make application for release of the premises as contemplated by section 16(1)(a) of the Act or to nominate a tenant of his choice if he himself is in occupation of a portion of the building.
An allotment order made without giving notice to the landlord as required by Rule 9(3) would be rendered illegal.
We there fore agree with the view taken by the High Court.
At the initial stage of allotment proceed ings for the year 1976, Mauji Ram Gupta, the erstwhile landlord had made application for release of the accommodation and the first floor of the house, but that application was rejected and thereupon the District Magistrate allotted the premises to H.C. Ghildiyal by his order dated 23.7.76 Mauji Ram Gupta 's revision application against the order rejecting his release application was rejected by the Dis trict Judge on 5.8.76.
Meanwhile the District Magistrate allotted the premises to the appel lant by his order dated 23.7.76.
On the dis missal of the revision application of Mauji Ram Gupta, his claim for release of the premises in dispute stood rejected final ly.
As noted earlier Mauji Ram Gupta sold the entire house in dispute to G.L. Pahwa on 18.7.77 and the allotment order in appellant 's favour was set aside by the Additional Dis trict Judge on 8.8.77 at the instance of R.K. Srivastava on unsuccessful applicant for the allotment of the premises in dispute.
It is noteworthy that the appellant took no pro ceedings to challenge the order of Additional District Judge dt. 8.8.77 under which the allotment order was set aside and the District Magistrate was directed to reconsider the allotment applications in accordance with law.
In such a situation G.L. Pahwa who had admittedly became the landlord of the premises in dispute was entitled to exercise fights of the landlord available to him under the Act.
Section 17(2) lays down that where a part of a building is in occu 133 pation of landlord for a residential purpose, the allotment of any other part thereof under section 16(1)(a) shall be made in favour of a person nominated by the landlord.
This provision safeguards interest of the landlord to have a tenant of his choice if he is occupying a portion of the building.
The legislature enacted sec.
17(2) with a view to ensure peaceful living to a landlord and for that purpose it permitted the landlord to have a tenant of his choice.
The. landlord 's valuable right cannot be taken away by the Dis trict Magistrate while exercising his powers of allotment under sec.
16(1)(a) of the Act.
The scope and purpose of sec.
17(2) of the Act was considered by this Court in Babu Singh Chauhan vs Rajkumar Jain & Ors., ; and the Court observed: "A perusal of this statutory provision would clearly dis close that the object of the Act was that where a tenant inducted by the landlord voluntarily vacates the premises, which arc a part of the building occupied by the landlord, and allotment in the vacancy should be made only to a person nominated by the landlord.
The dominant purpose to be sub served by the Act is manifestly the question of removing any inconvenience to the landlord by imposing or thrusting on the premises an unpleasant neighbour or a tenant who invades the right of privacy of the landlord.
It is obvious that if the tenant has vacated the premises by himself and not at the instance of the landlord, there is no question of the landlord occupying the said premises because he has got a separate remedy for evicting the tenant on the grounds of personal necessity.
The statute, however, while empowering the prescribed authority to allot the accommodation, safe guards at least the right of the landlord to have a tenant of his choice.
" In the instant case there is no dispute that when the allotment proceedings were taken in pursuance of the Dis trict Judge 's Order dt. 8.8.77 and when the allotment was made in appellant 's favour on 4.1.78 no notice of the allot ment proceedings was issued to G.L. Pahwa, respondent No. 1, although the appellant as well as the Addl.
District Magis trate both knew that G.L. Pahwa had stepped in the shoes of landlord and that he was occupying ground floor of the building.
The allotment order was made in appellant 's favour on 4.1.78, but the landlord, though residing in a part of the building was denied opportunity of nominating a tenant of his choice as contemplated by sec.
17(2) of the Act.
In these circumstances there can be no doubt that 134 the order of the Addl.
District Magistrate alloting the premises to the appellant was completely without jurisdic tion and against the plain terms of sec.
17(2) of the Act.
The submission of Shri Tarkunde that on dismissal of the revision application of Mauji Ram Gupta the erstwhile land lord, all fights of the landlord stood exhausted and G.L. Pahwa being the transferee landlord could not exercise any further fight of landlord in the matter relating to allot ment of the premises in dispute are untenable.
Mauji Ram Gupta 's application for release of the premises was dis missed and a revision application filed 'by him against the order of the Addl.
District Magistrate refusing to release premises in dispute stood rejected, but if the conditions set out in sec.
16(1)(b) existed we see no reason as to why the transferee landlord could.
not press his case for re lease but we do not think it necessary to consider this question in detail or to express any opinion on this ques tion as admittedly the transferee landlord respondent No. 1 made no application for release of the premises in dispute to the District Magistrate or to the prescribed authority and his application made to the State Government for release of the accommodation which was forwarded to the District Magistrate was rejected and the High Court has upheld that order and no challenge has been made by G.L. Pahwa to that order.
Assuming that the transferee landlord 's fight to get the premises in dispute released stood exhausted, G.L. Pahwa being the landlord had every fight to nominate a tenant of his choice in accordance with sec.
17(2) of the Act.
Admit tedly no notice had been issued to G.L. Pahwa affording any opportunity of nominating a tenant of his choice before the order of allotment dt. 4.1.78 was made.
The landlord has fight to apply for release of the premises on the falling of a vacancy failing which he has another fight under sec.
17(2) to nominate a tenant of his choice if he is occupying a portion of the building.
It is the duty of the authority considering the allotment under sec.
16(1)(a) of the Act, to afford opportunity to the landlord to nominate tenant of his choice and if the landlord nominates a person of his choice the authority is bound to allot the premises in favour of the nominee of the landlord.
Mauji Ram Gupta was not given that opportunity, there was thus no question of his having exhausted his right to nominate a tenant of his choice.
Learned counsel for the appellant urged that the Addl.
District Magistrate had no power to allow the review appli cation made by G.L. Pahwa or to recall his order dt. 4.1.78 alloting the premises in dispute to the appellant.
16(5) provides for review of an order of allotment at the instance of a landlord on an application made within 7 135 days.
In the instant case the Addl.
District Magistrate by his Order dt.
14.12.81 recalled his order dt.
4.1. 78 allot ing the premises in dispute to the appellant on the ground that no notice of the proceeding had been served on the landlord, respondent No. 1 and that there was enough evi dence on record to show that the premises in dispute was a part of the landlord 's accommodation, yet he was not given opportunity to nominate a tenant of his choice.
The Addl.
District Magistrate therefore recalled the order on the ground that the allotment order had been issued in violation of the mandatory provision of sec.
17(2) of the Act.
No exception can be taken to the correctness of the merit of the order of the Addl.
District Magistrate.
As discussed above we have already expressed our opinion that the allot ment order dt. 4.1.78 issued in appellant 's favour was rendered illegal for the non compliance of the mandatory provision of sec.
17(2) of the Act.
In that view even if there was any procedural defect in entertaining the review application, it would not be proper and desirable to inter fere with the order of the Addl.
District Magistrate, more so, when the High Court has already upheld that order.
In view of the above discussion we are of the opinion that the High Court 's order does not suffer from any error of law and the appellant is not entitled to any relief.
We accord ingly dismiss the appeal with costs.
M.L.A. Appeal dis missed.
[/INST]One Hukum Chand Seth, who constituted a HUF with the members of his family, owned extensive properties.
The properties were partitioned between him, his wife and their son in equal shares by a Deed of Partition dated March 31, 1950.
On the same date, Hukum Chand Seth and his wife executed two trust deeds nominating their son and five grandsons as the beneficiaries in respect of their shares in the aforesaid properties.
The trust deeds which contained identical terms inter alia provided (a) that in the event of a beneficiary dying before the time of distribution of the properties between the beneficiaries, the share of the beneficiary so dying would be used to support and maintain his widow and his male issue in such manner as the trustees shall "in their absolute and uncontrolled discretion deem proper" and the surplus, if any, of the share of that beneficiary and the income therefrom would be accumulated and kept in credit to his account and preserved in order to be distributed; (b) that upon the youngest of the beneficiaries attaining the age of 30 years, the trustees would divide and distribute the trust properties together with the accumulated interest and income thereon among the beneficiaries according to their respective rights and shares; and (c) that if at the time of the division and distribution any beneficiary should have died without leaving any son but leaving only a widow, the widow would get half of the share of that beneficiary while the other half would be distributed among the remaining beneficiaries and the heirs of the beneficiaries entitled to distribution.
With the passage of time the beneficiaries came into possession of their respective shares of the properties and the income from those properties was returned by them for the purpose of their income tax 1021 assessment in their individual status, but subsequently they began to assert that the properties were received by them as the Karta of their respective Hindu undivided families and that therefore the income was liable to be assessed in that status.
The Income Tax Officer, during the relevant assessment years assessed the assessees/beneficiaries in their individual status and these assessments were confirmed by the Appellate Assistant Commissioner and the Income Tax Appellate Tribunal.
However, in a reference at the instance of the assessees, the High Court held that the properties had been settled with the assessees in their representative capacity as Kartas of their respective Hindu undivided families.
Allowing the appeals by the Revenue to this Court, ^ HELD 1.1 The High Court has erred in the view taken by it of the two trust deeds.
The question whether the income belongs to the individuals or Hindu undivided families has to be resolved upon the contents of the trust deeds, their terms and conditions being free from ambiguity.
[1028D; 1026F] 1.2 Where the document contains no clear words describing the kind of interest which the donee is to take, the question is one of construction and the court must collect the intention of the donor from the language of the document taken along with the surrounding circumstances.
There is no presumption one way or the other.
Each case must be decided on its own facts and each document calls for its own particular construction.
[1026H; 1027A B] C.N. Arunachala Mudaliar vs C.A. Muruganatha Mudaliar and Another, , referred to.
In the instant case, on the plain terms of the trust deeds, the properties were intended to devolve on the beneficiaries in their individual capacity.
The circustances surrounding the execution of the two documents indicate that a common intention inspired the minds of the two settlors.
This has considerable significance when it is realised that while one trust deed was executed by a male member of the family the other was executed by a female member of the family.
The course of devolution under the Hindu law would be materially different in the two cases and, therefore, the principles of the Hindu law governing the devolution of property in the case of property passing from a father to his son and grandsons cannot be invoked in these appeals.
[1027B C] 1022 2.
The terms and conditions of the trust deeds are wholly inconsistent with the property passing into the hands of the beneficiaries as Kartas of their respective Hindu undivided families.
There is clear indication in the trust deeds which bears this out.
In the first place, had it been intended that the beneficiary should receive the property as Karta of his Hindu undivided family the document would not have empowered the trustees, in clause 1 to exercise an absolute and uncontrolled discretion on the death of a beneficiary to apply his share to the maintenance of his widow and his male issue and to accumulate the surplus to the account of the said beneficiary for distribution.
On the contrary, the trustees would have been under an obligation to entrust the income falling to the share of the deceased beneficiary to the members of his Hindu Undivided family and no discretion would have been permissible in regard to the disposal or otherwise of any part thereof.
Secondly, the document would not have provided that if before the time of division and distribution a beneficiay died leaving only a widow, the widow would get a half of the share belonging to the deceased beneficiary while the other half would be liable to distribution among the remaining beneficiaries.
These two conditions are sufficient in themselves to lead to the conclusion that it was never intended that the properties should pass to the beneficiaries to be held by them for their respective Hindu undivided families.
[1027D H]
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<s>[INST] Summarize the judgementCivil Appeal No. 633 of 1991.
From the Judgment and Order dated 1.8.1989 of the Himachal Pradesh High Court in F.A.0.
(H.M.A.) No. 28 of 1989.
Dhruv Mehta, Aman Vachher and S.K. Mehta for the Appellant.
Subhagmal Jain and H.K. Puri for the Respondent.
The Judgment of the Court was delivered by K. JAGANNATHA SHETTY, J.
Special Leave granted.
This appeal from a decision of the Himachal Pradesh High Court concerns the validity of a decree of dissolution of marriage by mutual consent, and is said, probably rightly, to raise an important issue.
The issue is whether a party to a petition for divorce by mutual consent under Section 13B of the ( 'Act ') can unilaterally withdraw the consent or whether the consent once given is irrevocable.
The appellant is the wife of the respondent.
They were married on 21 November 1968.
They lived together for about six to seven 277 months.
Thereafter, it is said that the wife did not stay with the husband except from 9 December 1984 to 7 January 1985.
That was pursuant to an order of the Court, but it seems that they did not live like husband and wife during that period also.
On 8 January 1985, both of them came to Hamirpur.
The wife was accompanied by her counsel, Shri Madan Rattan.
After about an hour discussion, they moved a petition under Section 13 B for divorce by mutual consent in the District Court at Hamirpur.
On 9 January 1985, the Court recorded statements of the parties and left the matter there.
On 15th January 1985, the wife filed an application in the Court, inter alia, stating that her statement dated 9 January 1985 was obtained under pressure and threat of the husband and she was not even allowed to see or meet her relations to consult them before filing the petition for divorce.
Nor they were permitted to accompany her to the Court.
She said that she would not be party to the petition and prayed for its dismissal.
The District Judge made certain orders which were taken up in appeal before the High Court and the High Court remanded the matter to the District Judge for fresh disposal.
Ultimately, the District Judge dismissed the petition for divorce.
But upon appeal the High Court has reversed the order of the District Judge and granted a decree for dissolution of the marriage by mutual consent.
The High Court has observed that the spouse who has given consent to a petition for divorce cannot unilaterally withdraw the consent and such withdrawal however, would not take away the jurisdiction of the Court to dissolve the marriage by mutual consent, if the consent was otherwise free.
The High Court also recorded a finding that the wife gave her consent to the petition without any force, fraud or undue influence and therefore she was bound by that consent.
Section 13 B was not there in the original .
It was introduced by the Amending 68 of 1976.
Section 13 B provides: 13 B(l) Subject to the provisions of the a petition for dissolution of marriage by a decree of divorce may be presented to the district court by both the parties to a marriage together, whether such marriage was solemnized before or after the commencement of the Marriage Laws (Amendment) Act, 1976, on the ground that they have been living separately for a period of one year or more, that they have not been able to live together and that they have mutually agreed that the marriage should be dissolved.
278 (2) On the motion of both the parties made not earlier than six months after the date of the presentation of the petition referred to in sub section (1) and not later than eighteen months after the said date, if the petition is not withdrawn in the meantime, the Court shall, on being satisfied, after hearing the parties and after making such inquiry as it thinks fit, that a marriage has been solemnized and that the averments in the petition are true, pass a decree of divorce declaring the marriage to be dissolved with effect from the date of the decree.
" It is also necessary to read Section 23(l)(bb): 23(1) In any proceeding under this Act, whether defended or not, if the Court is satisfied that (bb) When a divorce is sought on the ground of mutual consent, such consent has not been obtained by force, fraud or undue influence, and . ." Section 13 B is in pari materia with Section 28 of the .
Sub section (1) of Section 13 B requires that the petition for divorce by mutual consent must be presented to the Court jointly by both the parties.
Similarly, sub section (2) providing for the motion before the Court for hearing of the petition should also be by both the parties.
There are three other requirements in sub section (1).
There are: (i) They have been living separately for a period of one year.
(ii) They have not been able to live together, and (iii) They have mutually agreed that marriage should be dissolved.
The 'living separately ' for a period of one year should be immediately preceding the presentation of the petition.
It is necessary that immediately preceding the presentation of petition, the parties must have been living separately.
The expression 'living separately ', connotes to our mind not living like husband and wife.
It has no reference to the place of living.
The parties may live under the same roof by force of circumstances, and yet they may not be living as 279 husband and wife.
The parties may be living in different houses and yet they could live as husband and wife.
What seems to be necessary is that they have no desire to perform marital obligations and with that attitude they have been living separately for a period of one year immediately preceding the presentation of the petition.
The second requirement that they 'have not been able to live together ' seems to indicate the concept of broken down marriage and it would not be possible to reconcile themselves.
The third requirement is that they have mutually agreed that the marriage should be dissolved.
Under sub section (2) the parties are required to make a joint motion not earlier than six months after the date of presentation of the petition and not later than 18 months after the said date.
This motion enables the Court to proceed with the case in order to satisfy itself about the genuineness of the averments in the petition and also to find out whether the consent was not obtained by force, fraud or undue influence.
The Court may make such inquiry as it thinks fit including the hearing or examination of the parties for the purpose of satisfying itself whether the averments in the petition are true.
If the Court is satisfied that the consent of parties was not obtained by force, fraud or undue influence and they have mutually agreed that the marriage should be dissolved, it must pass a decree of divorce.
The question with which we are concerned is whether it is open to one of the parties at any time till the decree of divorce is passed to withdraw the consent given to the petition.
The need for a detailed study on the question has arisen because of the fact that the High Courts do not speak with one voice on this aspect.
The Bombay High Court in Jayashree Ramesh Londhe vs Ramesh Bhikaji Londhe, AIR 1984 Bom.
302, has expressed the view that the crucial time for the consent for divorce under Section 13 B was the time when the petition was filed.
If the consent was voluntarily given it would not be possible for any party to nullify the petition by withdrawing the consent.
The court has drawn support to this conclusion from the principle underlying Order XXIII Rule 1 of the Code of Civil Procedure which provides that if a suit is filed jointly by one or more plaintiffs, such a suit or a part of a claim cannot be abandoned or withdrawn by one of the plaintiffs or one of the parties to the suit.
The High Court of Delhi adopted similar line of reasoning in Smt.
Chander Kanta vs Hans Kumar and Anr., AIR 1989 Delhi 73 and the Madhya Pradesh High Court in Meena Dutta vs Anirudh Dutta, [1984] 11 DMC 388 also took a similar view 280 But the Kerala High Court in K.L Mohanan vs Jeejabai, AIR 1988 Kerala 28 and the Punjab and Haryana High Court in Harcharan Kaur vs Nachhattar Singh, AIR 1988 Punjab & Haryana 27 and Rajasthan High Court in Santosh Kumari vs Virendra Kumar, AIR have taken a contrary view.
It has been inter alia, held that it is open to one of the spouses to withdraw the consent given to the petition at any time before the Court passes a decree for divorce.
The satisfaction of the Court after holding an inquiry about the genuineness of the consent, necessarily contemplates an opportunity for either of the spouses to withdraw the consent.
The Kerala High Court in particular has ruled out the application of analogy under Order XXIII Rule I of the Code of Civil Procedure since it is dissimilar to the situation arising under Section 13 B of the Act.
From the analysis of the Section, it will be apparent that the filing of the petition with mutual consent does not authorise the court to make a decree for divorce.
There is a period of waiting from 6 to 18 months.
This interregnum was obviously intended to give time and opportunity to the parties to reflect on their move and seek advice from relations and friends.
In this transitional period one of the parties may have a second thought and change the mind not to proceed with the petition.
The spouse may not be party to the joint motion under sub section (2).
There is nothing in the Section which prevents such course.
The Section does not provide that if there is a change of mind it should not be by one party alone, but by both.
The High Courts of Bombay and Delhi have proceeded on the ground that the crucial time for giving mutual consent for divorce is the time of filing the petition and not the time when they subsequently move for divorce decree.
This approach appears to be untenable.
At the time of the petition by mutual consent, the parties are not unaware that their petition does not by itself snap marital ties.
They know that they have to take a further step to snap marital ties.
Sub section (2) of Section 13 B is clear on this point.
It provides that "on the motion of both the parties . if the petition is not withdrawn in the meantime, the Court shall pass a decree of divorce What is significant in this provision is that there should also be mutual consent when they move the court with a request to pass a decree of divorce.
Secondly, the Court shall be satisfied about the bonafides and the consent of the parties.
If there is no mutual consent at the time of the enquiry, the court gets no jurisdiction to make a decree for divorce.
If the view is otherwise, the Court could make an enquiry and pass a divorce decree even at the instance of one of the parties and against the consent of the other.
Such a decree cannot be regarded as decree by mutual consent.
281 Sub section (2) requires the Court to hear the parties which means both the parties.
If one of the parties at that stage says that "I have withdrawn my consent", or "I am not a willing party to the divorce", the Court cannot pass a decree of divorce by mutual consent.
If the Court is held to have the power to make a decree solely based on the initial petition, it negates the whole idea of mutualitly and consent for divorce.
Mutual consent to the divorce is a sine qua non for passing a decree for divorce under Section 13 B. Mutual consent should continue till the divorce decree is passed.
It is a positive requirement for the court to pass a decree of divorce.
"The consent must continue to decree nisi and must be valid subsisting consent when the case is heard".
[See (i) Halsbury Laws of England, Fourth Edition Vol.
13 para 645; (ii) Rayden on Divorce, 12th Ed.
1 p. 291 and (iii) Beales vs Beales, [ at 674].
In our view, the interpretation given to the section by the High Courts of Kerala, Punjab & Haryana and Rajasthan in the aforesaid decisions appears to be correct and we affirm that view.
The decisions of the High Courts of Bombay, Delhi and Madhya Pradesh (supra) cannot be said to have laid down the law correctly and they stand overruled.
In the result, we allow the appeal and set aside the decree for dissolution of the marriage.
In the circumstances of the case, however, we make on order as to costs.
T.N.A. Appeal allowed.
[/INST]The appellant wife and the respondent husband filed a petition under section 13 B of the for divorce by mutual consent in the District Court and their statements were recorded.
Subsequently, the appellant filed an application in the Court for dismissal of the petition stating that she was not willing to be a party to the petition and that her statement was obtained under threat and pressure of husband.
The District Judge dismissed the petition but on appeal the High Court reversed the order of the District Judge and granted a decree of divorce by holding that the consent to a petition for divorce by mutual consent cannot be unilaterally withdrawn and such a withdrawal would not take away the jurisdiction of the Court, if the consent was otherwise free; and since the wife 's consent was without any force, fraud or undue influence she was bound by the consent.
Hence this appeal by the wife.
Allowing the appeal and setting aside the decree of divorce, this Court, HELD: 1.
An analysis of Section 13 B makes it apparent that the filing of the petition under section 13 B(l) with mutual consent does not authorise the Court to make a decree for divorce.
The parties are required to make a joint motion under sub section (2) which should not be earlier than six months after the date of presentation of the petition 275 and not later than 18 months after the said date.
This motion enables the court to proceed with the case in order to satisfy itself about the genuineness of the averments in the petition and also to find out whether the consent was not obtained by force, fraud or undue influence.
The Court may make such inquiry as it thinks fit including the hearing or examination of the parties for the purpose of satisfying itself whether the averments in the petition are true.
If the Court is satisfied that the consent of the parties was not obtained by force, fraud or undue influence and they have mutually agreed that the marriage should be dissolved, it must pass a decree of divorce.
[280D, 279C D] 2.
The period of waiting from 6 to 18 months referred to in section 13 B(2) is intended to give time and opportunity to the parties to reflect on their move and seek advice from relations and friends.
In this transitional period one of the parties may have a second thought and change the mind not to proceed with the petition i.e. it may not be a party to the joint motion under sub section (2).
This sub section requires the court to hear the Parties which means both the parties, But the section does not provide that if there is a change of mind it should not be by one Party alone, but by both.
Therefore, if one of the parties at that stage withdraws its consent the Court cannot pass a decree of divorce by mutual consent.
If the Court is held to have the power to make a decree solely based on the initial petition it negates the whole idea of mutuality and consent for divorce.
Mutua consent to the divorce is a sine qua non for passing a decree for divorce under section 13 B. Mutual consent should continue till the divorce decree is Passed.
it is a positive requirement for the Court to Pass a decree of divorce.
[280D, 281A.B] K.I. Mohanan vs Jeejabai, A.I.R. 1988 Ker. 28; Harcharan Kaur vs Nachhattar Singh, A.I.R. 1988 P & H. 27 and Santosh Kumari vs Virendra Kumar, A.I.R. ; approved.
Jayashree Ramesh Londhe vs Ramesh Bhikaji Londhe, A.I.R. 1984 Bom.
302; Smt.
Chander Kanta vs Hans Kumar and Anr., A.I.R. 1989 De. 4 73; and Meena Dutta vs Anirudh Dutta, 1984 11 DMC 388 (MP); overruled.
Halsbury Laws of England, 4th Edn.
13 para 645; Rayden on Divorce, 12 Edn Vol 1 p. 291 and Beales vs Beales, ; referred to.
Section 13 B of the is in para materia with 276 Section 28 of the .
Sub Section (1) of section 13 B requires that the petition for divorce by mutual consent must be presented to the Court jointly by both the parties.
There are three other requirements in sub section (1).
Firstly, it is necessary that immediately preceding the presentation of the petition the parties must have been living separately for a period of one year or more.
The expression 'living separately ' connotes not living like husband and wife.
It has no reference to the place of living.
The parties may live under the same roof by force of circumstances, and yet they may not be living as husband and wife.
The parties may be living in different houses and yet they could live as husband and wife.
What seems to be necessary is that they have no desire to perform marital obligations and with that mental attitude they have been living separately for a period of one year immediately preceding the presentation of the petition.
The second requirement is that they 'have not been able to live together ' which indicates the concept of broken down marriage and it would not be possible to reconcile themselves.
The third requirement is that they have mutually agreed that the marriage should be dissolved.
[278E H, 279A B]
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<s>[INST] Summarize the judgementAppeals Nos. 29 to 33, 89 and 90 of 1949.
Appeals from the Judgment and Decree dated the 30th October 1945 of the High Court of Judicature at Madras (Lionel Leach C.J. and Rajamannar J.) in Appeals Nos. 230, 300 302, 355, 356 and 413 of 1943.
G.S. Pathak (T. section Santhanam, with him) for the appellant in Civil Appeals Nos. 28 and 29 of 1949, respondent No. 1 in Civil Appeals Nos. 30, 32 and 33 of 1949 and respondent No. 2 in Civil Appeal No. 31 of 1949, for respondent No. 3 in Civil Appeal No. 31 of 1949 and for respondents Nos. 1 and 2 in Civil Appeals Nos. 89 and 90 of 1949.
V.V. Raghavan, for the appellant in Civil Appeals Nos. 31 to 33 of 1949, respondent No. 1 in Civil Appeals Nos. 28 and 29 of 1949 and respondent No. 2 in Civil Appeal No. 30 of 1949.B. Somayya (K. Subramaniam and Alladi Kuppuswami, with him) for the appellant in Civil Appeals Nos. 30, 89 and 90 of 1949, respondent No. 1 in Civil Appeal No. 31 of 1949 and respondent No. 2 in Civil Appeals Nos. 28, 29, 32 and 33 of 1949.
December 14.
The Judgment of the Court was delivered by MAHAJAN J.
244 MAHAJAN J.
These eight appeals arise out of a common judgment of the High Court of Madras dated the 30th October, 1945, given in seven appeals preferred to it against the judgment of the District Judge of Madura in four suits, O.S. Nos. 2, 5, 6 and 7 of 1941, all of which related to the zamindari of Bodinaickanur "in the Madura district and the properties connected therewith.
The appeals were originally before the Privy Council in England, some by leave of the High Court and others by special leave and are now before us for disposal.
The zamindari of Bodinaickanur is an ancient impartible estate in the district of Madura, owned by a Hindu joint family.
The genealogical tree of the family is as follows : 245 Thirumalai Bodi Naicker Faisal Zamindar : : Rajaya Naicker(Died) : : (1) Bangaru Thirumali Bodi Naicker Zamindar 1849 1862(Died) : : : : : : T. B. Kamaraja Pandia Naicker Vadamalai Raja Zamindar1962 1888(Died15 12 1888) Pandia Naicker (Widow) Kamuluammal Zamindarini (Died in 1901) 1888 1921(Died 13 1 1921) : : Meenakshi Ammal (Died) : : : : : : : Peria Thayi Chainnathayi alias Satpur alias Muthumeenakshi Veeralakshmi Ammal Zamindar Veerakamulu Ammal (2nd Deft.) T.V.K. (3rd defendant) Kamaraja pandia Naicker, late Zamindar (2) Viswanatha Naicker (Died before 1888) : : Kandasami Naicker plff in O.S. 16 of 1889(Died 20 2 1901) : : : : : : Viswanatha Kamaraja Pandia T.V.K. Kamaraja (No.II) Naicker (Died on 29 7 1918) Pandiaya Naicker (Died 16 2 1941) Zamindar 1921 1941 Widow Chinnathayi alias Veeralakshmi Ammal (2nd Deft.) (3) Sundara Pandia Naicker (Died in 1893) : : : : : : : : : : : : Viswanathaswami Thirumalai Seelaraja Seela Kamaraja Naicker Muthu Vijaya Naicker Bodi pandia (died) Dalapathi Died on Naicker Naicker Pandia 25 9 1931) Naicker (Died) : : : : : : : T.B.S.S. Rajaya Pandiya Chokkalingaswami Naicker (Plaintiff) Naicker (4) Kulasekara pandia Naicker(No.1) (Died after 10 5 1889 but before 1902) : : : : : : Kulasekara pandiya Muthu Bangaruswami Naicker (No. 2) Naicker (Died) (Died before 1902) : : : : V.Kulasekara pandiya Naicker (1st Deft.) : : : : Vadamalai Muthu Thirumalai Bodaya Kulasekara Sundararaja Pandiya Naicker Pandiya Naicker (5) Chokkalingasami Naicker (Died after 10 5 1889 but before 1902) : : : : : : : : : Tirumalai Bodaya Chhokkalingasami T.B. Kamaraja Sundararau Pandiya Naicker (Died) Pandiya Naicker Naicker (Died) : : : : : : T.B.M.S.K.
Pandiya Pandiya Raja Naicker Naicker 246 The zamindari was last held by Kamaraja II of the second branch.
He died on 16th February, 1941, without male issue, but leaving him surviving a widow Chinnathayi alias Veeralakshmi Ammal, and members of the family belonging to the third, fourth and fifth branches.
Succession to the zamindari is admittedly governed by the rule of lineal primogeniture modified by a family custom according to which the younger son by the senior wife is preferred to an eider son by junior wife.
According to this custom T.B.S.S. Rajaya Pandiya Naicker of the third,branch was entitled to the zamindari after the death of Kamaraja II of the second branch.
His claim was denied by the widow and by Kulasekara Pandiya Naicker of the fourth branch, both of whom claimed the zamindari on different grounds.
It was alleged by the widow that the zamindari was the separate and exclusive property of her husband and that being so, she was entitled to it under the rule of Mitakshara applicable to devolu tion of separate property.
Kulasekara of the fourth branch claimed it on the basis that Sundata Pandiya Naicker of the third branch who died in 1893, had separated from the family and had renounced his and his descendants ' rights of succession to the zamindari and the third 'branch having thus lost all interest in the joint family zamindari, he was the next person entitled to it by survivorship.
On 28th April, 1941, the revenue officer allowed the claim of Kulasekara and held that he was entitled to posses sion of the zamindari and the pannai lands (home farm lands) which were in the possession of Kamaraja II.
As regards one of the villages comprised in the zamindari, viz., Boothipu ram, the title of the widow was recognized.
In pursuance of this order, Kulasekara got into ,possession of the zamindari and the pannai lands after the death of Kamaraja II.
Boot hipuram village remained in the possession of the widow.
Dissatisfied with the order of the revenue officer, the parties have instituted the suits out of which these appeals arise.
247 On the 22nd June, 1941, the widow (Chinnathayi) brought suit No. 5 of 1941 for possession of the zamindari against Kulasekara of the fourth branch, Rajaya and his uncle Seela bodi Naicker of the third branch, T.B.M.S.K. Pandiya Naicker and Kamaraja Pandiya Naicker of the fifth branch, on the allegations set out, above.
On the 4th July, 1941, she and her sister instituted suit No. 2 of 1941 against the same set of defendants for cancellation of the deed of release that had been executed by her and her sister in favour of Kamaraja II on the 9th June, 1934, in respect of the pannai lands that were in the possession of Kulasekara of the fourth branch under the order of the revenue officer.
The third suit, O.S. No. 6 of 1941, was brought by Rajaya of the third branch on 27th August, 1941, for posses sion of the zamindari, Boothipuram village and the pannai lands, against Kulasekara of the fourth branch and the two plaintiffs in suit No. 2 of 1941, on the allegation that under the rule of lineal promogeniture he was the person next entitled to succeed to the zamindari after the death of Kamaraja II.
The last suit, O.S. No. 7 of 1941, was instituted by Kulasekara of the fourth branch on 13th October, 1941, against the widow and Rajaya, his rival claimants to the zamindari for a declaration that he was the rightful heir and successor to the zamindari and was entitled to posses sion of Boothipuram village registered in the name of the widow.
The zamindari of Bodinaickanur orginally consisted of fifteen villages mentioned in schedule (A) to the plaint in O.S. No. 6 of 1941 and of certain pannai (home farm)lands and buildings.
Tirumalai Bodi Naicker was the holder of this impartible raj.
He was succeeded by his son Rajaya Naicker who died in 1849, leaving him surviving five sons, Bangaru Tirumalai Bodi Naicker, Viswanatha Naicker, Sundara Pandiya.
Naicker, Kulasekara Pandiya Naicker and Chokkalin gaswami Naicker, representing the first, second, third, fourth and fifth branches respectively.
Rajaya 248 Naicker was succeeded by his eldest 'son Bangaru Thirumalai Bodi Naicker who died on the 27th October, 1862, and was succeeded by his son.
T.B. Kamaraja Pandiya Naicker (Kamara ja I) who remained as zamindar till his death on 15th Decem ber.
He had no son and on his death his widow Kamulu ammal got into possession of the estate.
Proceedings for transfer were taken in the revenue court for registry of the zamindari and statements of the male members of the family belonging to the second, third, fourth and fifth branches and of the widow were recorded by the Deputy Collector.
On 18th December, 1888, the representatives of these branches stated that they had no objection to Kamuluammal enjoying the zamindari.
On the 19th Kamuluammal asserted that her husband by his will had bequeathed the zamindari to her and had given her permission to make an adoption.
On the same date the representatives of all branches of the family made a joint statement before the Deputy Collector.
The relevant portion of it is in these terms : "We four persons are his heirs to succeed and yet we agree to his widow Kamuluammal taking and enjoying the above said zamin and all other properties save the undermentioned lands set apart for our maintenance.
Remission of the tirwah of the said lands allowed to us and of the tirwah of the lands registered in our names and enjoyed till now, should be granted to us.
" 544 kulies of pannai lands under the Bangaruswami tank and the Marimoor tank were earmarked for the maintenance of the four branches.
The widow made a statement on 20th ac cepting this arrangement.
The Deputy Collector submitted his report on the 5th of January, 1889, to the Collector upholding the will.
The Collector in his turn also recorded the statements of the representatives of the several branch es of the family.
Persons representing the third, fourth and fifth branches adhered to the previous statements made by them but Kandasami of the second branch resiled from his earlier statement and asserted that the 249 family being divided he was the next heir to the zamindari.
No notice was taken in these proceedings of Vadamalai, the half brother of Kamaraja I Sundara Pandiya 's statement before the Collector on the 9th January, 1889, was in these terms : "The wish of the family is that the widow should be in charge of the estate.
I know nothing about the execution of the will.
After the death of the widow, the next heir should succeed.
He is Kandaswami, son of Viswanathaswami Naicker, my eldest brother, deceased. ' ' To the same effect were the statements of Kulasekara of the fourth branch and of Chokkalingaswami of the fifth branch.
Kandaswami 's statement was recorded on the 14th January, 1889, and he said as follows : "I am the next heir to the zamin, the family being undivided.
I must get it." He repudiated his earlier statement on the ground that at that time he was ill and was drowned in sorrow and "some rogue imitated his signature" and put it on his previous statement.
The revenue Officer ordered that the widow 's name be registered as the next person entitled to the zamindari subject to any order that the civil court might make in the case.
On the 1st May, 1889, Kandasami filed O. S No. 16 of 1889 in the court of the Subordinate Judge of Madura im pleading the widow and the Collector as defendants for recovery of the entire zamindari as it then existed, includ ing the villages of Boothipuram and Dombacheri and the pannai lands.
He alleged that he as a member of the undivided Hindu family was entitled to succeed to the zamindari by survivor ship and in accordance with the established rule applicable to the devolution of this zamindari.
Kamuluammal denied this claim and asserted that the zamindari was the separate property of her husband and she was entitled to it in pref erence to her husband 's collaterals.
She also based her claim on the alleged will of her husband.
Sundara Pandiya of the third branch laid a claim to the zamindari and the 33 250 pannai lands on the ground that he as senior in age amongst the family members was entitled to them in preference to Rajaya on the rule of simple primogeniture.
In view of the pending and threatened litigation the contesting parties thought it fit to end their disputes by a mutual settlement beneficial to all of them.
Sundara Pandiya was the first to strike a bargain with the widow.
On the 6th May, 1890, a deed of release (Exhibit P 17) was executed by him in favour of Kamuluammal incorporating the terms of the agreement.
He managed to get from her in consideration of the release the village of Dombacheri absolutely for himself and his heirs.
She bound herself to pay the peishkush and road cess of the said village without any concern about that on the part of Sundara Pandiya.
He was also allowed to enjoy free of rent from generation to generation with power of alienation by way of gift, sale, etc.
the one fourth share in the pannai lands under the irrigation of the Bangaruswami tank and the Marimoor tank and mentioned in the joint state ment made by the several branches of the family before the Deputy Collector in December 1888.
Over and above this, he received a cash payment of Rs. 3,000.
With the exception of Dombacheri village and of the one fourth share in the said pannai lands, all the other properties which belonged to Kamaraja I were to be held and enjoyed with all rights by Kamuluammal and her heirs with the power of alienation thereof by way of gift, sale etc.
absolutely.
The fourth clause of the release is in these terms : "Whatever rights over the said zamin properties and in all the other above mentioned properties, the said Sundara Pandiya Naicker Avargal might possess, he gives up such rights absolutely in favour of the said Kamuluammal Avargal and her heirs enabling them to enjoy them with the power of alienation thereof by way of gift, sale, etc.
and whatever rights the said Kamuluammal might possess over the Dombach eri village and over the lands lying under the irrigation of the Bangarusami tank and the Marimoor tank and specified in the third column of the schedule hereto, 251 which are given up to the aforesaid Sundarn Pandiya Naicker Avargal, the said Kamuluammal Avargal hereby gives up such rights absolutely in favour of the said Pandiya Naicker Avargal and his heirs, enabling them to enjoy them with the power of alienation thereof by way of gift, sale etc.
" Clause 5 runs thus : "The said Kamuluammal and her heirs shall have no claim at all to the properties shown as belonging to Sundara Pandiya Naicker Avargal as aforesaid and the said Sundarn Pandiya Naicker Avargal and his heirs shall have no claim at all to the properties shown as belonging to the said Kamu luammal Avargal.
" This deed was presented for registration on 10th May, 1890.
On the same day O.S. No. 16 of 1889, i.e., Kandasami 's suit, was also compromised Exhibit P 18 contains the terms of that compromise.
The following are its important provi sions : (a) The zamindari shall be enjoyed by Kamuluammal till her lifetime and she shall have no right to mortgage those properties in any way prejudicial to the plaintiff.
(b) Kandasami and his heirs shall after the lifetime of Kamuluammal, enjoy the zamindari excepting Dombacheri vil lage together with such rights if any as the first defendant Kamuluammal may have acquired under the deed of release executed between her and Sundarn Pandiya.
(c) Boothipuram village shall be given to the plaintiff by Kamuluarnmal so that she may enjoy it with absolute rights.
The entire peishkush and the road cess for the entire zamindari inclusive of the said village shall be paid by Kamuluammal.
(d) The one fourth share in pannai lands situated on the irrigation areas of Bangaruswami tank and Marimoor tank shall be enjoyed by Kandaswami and his heirs with powers of alienation and with absolute rights.
(e) Rs. a5,000 shall be paid to Kandasami by Kamuluam mal.
252 (f) All the other pannai lands, buildings and movables which belonged to the deceased Kamaraja Pandiya Naicker shall be held and enjoyed by Kamuluammal and her heirs with powers of alienation etc.
and with absolute rights free from any future claim on the part of Kandaswami and his heirs.
(g) The movable and immovable properties which may be acquired by Kamuluammal from out of the income of the za mindari shall belong to her with power of alienation etc.
and shall go to her own heirs after her lifetime.
(h) Kamuluammal shall not make an adoption.
By the proceedings taken before the Collector and by the arrange ment made under Exhibits P 17 and P 18, the disputes that had then arisen in the family were settled.
Kamuluammal, however, did not with good grace part with the properties which she had agreed to give to others under the arrange ment.
The terms of the compromise had to be enforced against her by a number of suits and actions one by one.
Be that as it may, it is not denied now that the arrangement arrived at was eventually acted upon.
Kandasami and his sons enjoyed the Boothipuram village and one fourth of the pannai lands in the two tanks absolutely.
Sundara Pandiya and his descendants enjoyed Dombacheri and one fourth pan nailands, the fourth and fifth branches obtained possession of one fourth share of the pannai lands under the two tanks.
Kamuluammal secured revenue registration and remained in possession of the property down to the date of her death on lath January, 1921.
On her death the estate became vested in the possession of Kamaraja II, the sole male representative of the second branch, his father Kandasami and his brother Viswanathaswami having predeceased Kamuluam mal.
He had been married to Chinnathayi (Veeralakshmi) one of the grand daughters of Kamuluammal during her lifetime.
In the year 1925, the zamindar of Saptur, the son of Kamulu 's deceased daughter Meenakshi, instituted 253 O.S. No. 7 of 1925 against his sisters, Chinnathayi and Periathayi, and Kamaraja II, for recovery of the pannai lands and buildings which had vested absolutely in Kamulu under the compromise decree, on the allegation that these were held by her as a widow 's estate and that he as the daughter 's son was entitled to succeed to them.
The suit was resisted by the two sisters on the plea that these lands were stridhanam properties of Kamulu and they as stridhanam heirs were entitled to them in preference to their brother.
Kamaraja II contended that he was entitled to these lands and buildings as they formed an integral part of the zamind ari and were treated as such by Kamulu.
This suit was dis missed and the plea of the two sisters was upheld.
On 9th June, 1934, both of them executed a deed of release in favour of Kamaraja II whereby they conceded his claim to the pannai lands and the buildings as being appurtenant to the zamindari in consideration of his agreeing to pay Rs. 300 per mensem for life to each of them.
On the death of Kamaraja II on the 16th February, 1941, as already stated, the second branch of the family became extinct, and disputes arose in regard to the succession to the zamindari, pannai lands, buildings etc.
and the village of Boothipuram.
As above stated, the claimants to the za mindari are three in number, Rajaya of the third branch, Kulasekara of the fourth branch, and Chinnathayi alias Veeralakshmi, the widow of the late zamindar.
The District Court and on appeal the High Court have concurrently held that Rajaya was the person entitled to the zamindari.
The District Court further held that the village of Boothipuram continued to be part of the zamin and decreed the same to the plaintiff Rajaya.
As regards the pannai lands, it was held that these had been conveyed absolutely to Kamulu under Exhibit P 18 and that her daughter 's daughters, Periathayi and Chinnathayi.
succeeded to the same as her stridhanam heirs and that the release deed executed by them on the 9th June, 1934, was invalid and inoperative to convey a valid title to Kamaraja 11.
On appeal the High Court 254 confirmed the findings of the District Court as regards the pannai lands and buildings but reversed its findings as regards succession to Boothipuram.
It held that Kandasami obtained Boothipuram village as his selfacquired property and that Chinnathayi was entitled to succeed to the same on the demise of her husband Kamaraja II.
The various sets of parties have preferred the above appeals against the deci sion of the High Court to the extent it goes against them.
The points for determination in these appeals are the following : 1.
Who out of the three claimants is entitled to the zamindari.
Whether Boothipuram village is still an integral part of the zamindari or did it become the self acquired property of Kandasami by the compromise, Exhibit P 18. 3.
Whether the pannai lands and buildings are part of the zamindari or became the stridhanam of Kamuluammal by the compromise decree and did not merge in the zamindari by the release deed of 1934.
The question relating to the pannai lands and buildings can be shortly disposed of.
Both the courts below have held that under the arrangement arrived at amongst the members of this family in the year 1890 these lands became the stridha nam of Kamuluammal and passed on to her stridhanam heirs, i.e., her granddaughters Chinnathayi and Periathayi, and that the deed of release executed by the two sisters in favour of Kamaraja II was vitiated by fraud and was not binding on Chinnathayi and the other heirs.
This finding could not be seriously disputed by Mr. Somayya appearing for Rajaya or by Mr. Raghavan appearing for Kulasekara.
It was faintly argued that the pannai lands were left with the widow in the same status in which she was allowed to retain the zamindari.
This contention is contrary to the clear recitals of the compromise deed.
Kamuluammal was a forceful personality and it seems clear that she agreed to accept the title of Kandasami as next entitled to the 255 estate and to give up her contention based on the will because she was given the zamindari for her lifetime and these pannai lands and buildings absolutely.
Kandasami in whom the inheritance had vested was competent, in view of the decision in Sartaj Kuari 's case(1), to alienate these lands in her favour and to vest her with absolute interest in them.
It has therefore been rightly held that Kamulu became the absolute owner of the lands which in due course devolved on her grand daughters and ceased to be part of the joint family estate.
Moreover, it does not lie in the mouth of Sundarn Pandiya 's descendants to challenge Kamuluammal 's absolute title to these lands while retaining absolute title in the village of Dombacheri which under the same arrange ment Sundarn Pandiya got absolutely with rights of aliena tion.
It was conceded that to the family arrangement ar rived at in the year 1890 and evidenced by the statements made before the Collector, the recitals contained in the release deed, Exhibit P 17, and those made in the compromise deed, Exhibit P 18, all the members of the family were either parties or they accepted it and acted upon it.
The result is that the widow Chinnathayi is entitled to the possession of those lands and no other person has any right to them whatever.
As regards Boothipuram village, the point is a simple one.
Under the compromise, Exhibit P 18, this village was left with Kandasami, the person next entitled to the zamind ari after the death of Kamaraja I.
It was separated from the zamindari estate which remained m possession and enjoyment of Kamuluammal for her lifetime.
It was said in the compro mise that Kandasami would be the absolute owner of this village.
It was argued by Mr. Somayya, and the same was the view taken by the trial Judge, that Kandasami being the holder of an impartible estate could not by his own unilat eral act enlarge his estate and take a part of this estate in a different right than the right of a holder of an im partible zamindari and that he could not make it separate property by his own act.
(1) (1888) 15 I.A. 51.
256 The High Court did not accept this view but reached the decision that all the branches of the family agreed to Kandasami having this village as his private property and that by common consent it was taken out of the zamindari and given to him absolutely and it was thus impressed with the character of separate property.
On Kandasami 's death it devolved on his son by succession and not by survivorship and Chinnathayi has a widow 's estate in it after the death of her husband.
In the High Court it was conceded that all the members of the family were aware of the terms of the family arrangement and were bound by them.
In view of this concession it seems to us that it is not open to any of the parties to these appeals to deny at this stage the right of the widow to this village as an heir to her husband 's es tate.
The main fight in all these appeals centres round the title and heirship to the zamindari.
The question four determination is, whether the zamindari by some process became the separate property of Kandasami and that of his son Kamaraja II.
If it became the separate property of Kamaraja II, then Chinnathayi, his widow, would succeed to it on his death; on the other hand, if the zamindari re tained its character of joint family property in the hands of Kamaraja II, then the question to decide is whether as a result of the arrangement made in 1890 Sundarn Pandiya relinquished his right to succeed to the family zamindari on the failure of nearest male heirs of Kandasami.
If such relinquishment on his part is held satisfactorily estab lished, then Kulasekara of the fourth branch would be enti tled to succeed to the zamindari; otherwise Rajaya of Sun darn Pandiya 's branch alone is entitled to it under the rule of succession applicable to the devolution of the zamindari.
The claim made by the widow that the zamindari became by the arrangement of 1890 the separate property of Kandasami was disallowed by the High Court on the short ground that the documents, Exhibits P 17 and P 18, read along with the various statements made in 1889 cannot be read as changing the character 257 of the estate from that of an impartible estate belonging to the joint family to an estate owned by Kandasami in his individual right.
In the view of the High Court the only change effected by the arrangement so far as the estate was concerned was to defer the right of Kandasami to its posses sion as the next in succession until after the death of Kamuluammal.
Kandasami could not himself make it his own private property and this was conceded by all.
After hear ing Mr. Pathak at considerable length we are in agreement with the High Court on this point.
Mr. Pathak argued that on the true construction of Exhibits P 17 and P 18 and on the evidence furnished by these two documents and the statements made antecedent to their execution and also in view of the subsequent conduct of the parties, the correct inference to draw was that all the five branches of the family separated in the year 1890 and thus put an end to the joint family character of the zamindari that Kandasami was allotted the zamindary, Boot hipuram village and one fourth pannai lands under the two tanks, Sundara Pandiya was allotted Dombacheri village and one fourth of the pannai lands and that the fourth and fifth branches in lieu of their share were assigned one fourth of the pannai lands irrigated by the two tanks mentioned above and by these allotments the joint family was completely disrupted and the properties allotted to the different branches became their separate properties.
Reference was made to the decisions of the Privy Council in Vadreun Ranganayakamma vs Vadrevu Bulli Ramaiya (1); Sivagnana Tevar vs Periasami(2); Thakurani Tara Kumari vs Chaturbhuj Narayan Singh (3); and it was contended that the present case was analogous to the facts of those cases and should be decided on similar lines.
We are of the opinion that the facts of none of those cases bear any close resem blance to the facts of the present case.
The decision in (1) (3) (1915) 42 I.A. 192, (2) (1877) 5 I.A. 51. 34 258 each one of those cases was given on their own peculiar set of circumstances.
In the first case the owner of an impartible zamindari forming part of family property died leaving four sons and an infant grandson by his eldest son.
During the minority of the grandson the four surviving sons executed a sanad which directed that the zamindari should be held by the grandson and that they should take an equal share of the inam lands and also manage the zamindari during the infancy of the grandson, which on his attaining majority had to be handed over to him, each confining himself to the share of the inam lands allotted to them.
Certain family jewellery was also divided in a similar manner.
This grandson then died leaving a son, who also died without any issue but leaving a widow.
Her title to the zamindari was denied by the descendants of the four sons of the zamindar.
It was held that the sanad amounted to an agreement by which the joint family was divided and that on the death of the last holder his widow was entitled to the zamindari.
It was observed in this case that having partitioned the lands, the parties to the sanad proceeded to partition the jewels and this circumstance was inconsistent with the supposition that the document was executed with the intention of merely providing allotments in lieu of maintenance.
It is clear from the facts of this case that the family owned other coparcenary properties besides the zamindari and the zamind ari in dispute fell to the lot of the grandson as his sepa rate property.
There were other materials in the case indicating that there was complete separation between the members of this family.
In the next case an impartible zamindari had devolved on the eldest of three undivided Hindu brothers.
He exe cuted an instrument appointing his second brother to be zamindar.
The instrument recited that if the widow of the deceased who was pregnant did not give birth to a son but a daughter, he and his offspring would have no interest in the zamindari of 259 which his younger brother would be the sole zamindar who would also allow maintenance to the third brother.
The widow gave birth to a daughter and the second brother took over the zamindari.
The third brother also died without issue.
On the death of the second brother his son succeeded and the zamindari devolved on him who died leaving a widow.
The son of the eldest brother who had renounced the zamind ari sued to recover the estate against the widow.
It was held that the instrument executed by the eldest brother was a renunciation by him for himself and his descendants of all interests in the zamindari either as the head or as a junior member of the joint family and consequently it became the separate property of the second brother and the widow was entitled to succeed to it in preference to the line of the eldest brother.
The document on the interpretation of which this decision was given was in these terms : "I and my offspring shall have no interest in the said palayapat, but you alone shall be the zamindar and rule and enjoy the same, allowing, at the same time, as per former agreement to the younger brother, P. Bodhagurusami Tevar, who in the pedigree is called Chinnasami, the village that had been assigned to him before.
" These words were interpreted as amounting to a renuncia tion of all interest in the palayapat either as the head of or as a junior member of the joint family.
The rights of the youngest brother Chinnasami were expressly reserved.
It was said that the effect of the transaction was to make the particular estate the property of the two instead of the three brothers, with, of course, all its incidents of im partibility and peculiar course of the descent, and to do so as effectually as if in the case of an ordinary partition between the eider brother on the one hand and the two young er brothers on the other, a particular property had fallen to the lot of the other two.
Other clauses in the deed and the attending circumstances fully corroborated the construc tion placed upon it.
260 In the last case the holder of an impartible estate of a joint Hindu family made a mokurari grant to his younger brother for maintenance.
The grantee built a separate house, divided from his brother 's by a wall, established therein a tulsi pinda and thakurbari, and lived there sepa rately from his brother.
He derrayed the marriage expenses of his daughter subsequently to the grant.
Upon these facts it was held that there was a complete separation between the brothers, and that the impartible estate consequently became separate property of the holder whose widow was entitled to succeed and have a widow 's estate in the zamindari.
It was observed that the evidence clearly proved that there had been complete separation between Thakur Ranjit Narayan Singh and his brother Bhupat Narayan Singh in worship, food and estate.
In our opinion, the decision in this case must be limited to the facts therein disclosed and can have no general application to cases of impartible estates where the only right left to the junior members of the family is the right to take the estate by survivorship in case of failure of lineal heirs in the line of the last zamindari.
The junior members can neither demand partition of the estate nor can they claim maintenance as of right except on the strength of custom, nor are they entitled to possession or enjoyment of the estate.
In our opinion, division amongst the members of this family by allotment of properties was not possible as the only property known to belong to the family was the imparti ble zamindari of which partition could not be made or de manded.
To establish that an impartible estate has ceased to be joint family property for purposes of succession it is necessary to prove an intention, express or implied, on the part of the junior members of the family to give up their chance of succeeding to the estate.
In each case, it is incumbent on the plaintiff to adduce satisfactory grounds for holding that the joint ownership of the defendant 's branch in the estate was determined so that it became the separate property of the last holder 's branch.
The test to be applied is whether the 261 facts show a clear intention to renounce or surrender any interest in the impartible estate or a relinquishment of the right of succession and an intention to impress upon the zamindari the character of separate property.
Reference in this connection may be made to the decision of the Privy Council in Konammal vs Annadana (1).
In that case on the death of a holder, his eider son being feeble in mind, his younger son succeeded to the zamindari by an arrangement with the adult members of the family in the year 1922.
The estate then descended from father to son till 1914 when the junior branch became ex tinct and possession was taken by a senior member of the branch who claimed it by survivorship; while the mother of the last holder claimed the estate as an heir to separate property, and it was held that the setting aside of the eider son in 1822 did not deprive his descendants of their rights as members of the family to succeed on failure of the junior branch.
In this case there was complete passing over of one branch of the family to succession vested in the next junior branch; yet when that branch failed, the mem bers of the senior branch were held yet to possess their right to succeed to the zamindari by survivorship.
In Collector of Gorakhpur vs Ram Sundar Mal(1), the claim of a Hindu to succeed by survivorship to an ancestral impartible estate was in issue in the suit.
The family admittedly had been joint.
It appeared that the common ancestor of the deceased holder and of the claimant had lived 200 years before the suit, that for a long period there had been a complete separation in worship, food and social intercourse between the claimant 's branch of the family and that of the deceased holder, and that upon the death of the holder the claimant had not disputed that the widow of the deceased was entitled to succeed.
It was held that there was not to be implied from the circumstances (1) (1928) 55 I.A. 114.
(2) All. 468 (P.C.).
262 stated above a renunuciation of the right to succeed so as to terminate the joint status for the purposes of that right.
In Sri Raja Lakshmi Devi Garu vs Sri Raja Surya Nara yana Dhatrazu Bahadur Garu (1), the last zamindar died without any issue in 1888, and when his widow was in posses sion, the suit was brought for possession by a male collat eral descended from a great grandfather common to him and to the last zamindar.
The plaintiff claimed to establish his right as a member of an undivided family holding joint property against the widow who alleged that her husband had been the sole proprietor.
In proof of this she relied on certain arrangements as having constituted partition, viz., that in 1816, two brothers, then heirs, agreed that the eider should hold possession, and that the younger should accept a village, appropriated to him for maintenance in satisfaction of his claim to inherit; again, that in 1866, the fourth zamindar compromised a suit brought against him by his sister for her inheritance, on payment of a stipend to her having already, in the claim of his brother, granted to him two villages of the estate; and by the compromise, this was made conditional on the sister 's claim being set tled; again, that in 1871, the fourth zamindar having died pending a suit brought against him to establish the fact of an adoption by him, an arrangement was made for the mainte nance of his daughter, and two widows, who survived him, the previous grant for maintenance of his brother holding good, the adoption being admitted, and the suit compromised.
It was held that there was nothing in the arrangement which was inconsistent with the zamindari remaining part of the common family property and that the course of the inheritance had not been altered.
The facts of this case were much stronger than those of the present one.
The mere circumstance that by an arrangement a village out of the zamindari was given to one of the brothers was not inconsistent with the zamindari remaining part of the common family property.
(1) (1897)I.L.R. 263 The document executed by the brother in the reported case was in these terms : "I or my heirs shall not at any time make any claims against you or your heirs in respect of property movable or immovable, or in respect of any transaction.
As our father put you in possession of the Belgam zamindari, I or my heirs shall not make any claim against you or your heirs in respect of the said zamindari.
" It was observed by their Lordships that they did not find any sufficient evidence in the arrangement made by these documents of an intention to take the estate out of the category of joint or common family property so as to make it decendible otherwise than according to the rules of law applicable to such property, that the arrangement was quite consistent with the continuance of that legal charac ter of the property, that the eider brother was to enjoy the possession of the family estate, and the younger brother accepted the appropriated village for maintenance in satis faction of such rights as he conceived he was entitled to and that it was nothing more in substance than an arrange ment for the mode of enjoyment of the family property which did not alter the course of descent.
The evidence in the present case is trivial and incon clusive and from the documents above mentioned no intention can be deduced on the part of the junior members or on the part of any other member of the family of disrupting and dividing the family and renouncing their expectancy of succession.
On the other hand, the statements made in 1880 and 1800 by the members of the family clearly indicate that none of them had any intention of giving up his rights of heirship to the zamindari.
There was no change of this frame of mind at any later stage of the family arrangement.
Sundara Pandiya on the 9th January, 1889, clearly stated that the wish of the family was that the widow should be in charge of the estate and after her the next heir should succeed and that it was Kandasami.
Kandasami said that he was the next 264 heir, the family being undivided.
In the compromise this statement was reiterated.
Their intention was to preserve their rights to take the zamindari if the line of Kandasami became extinct.
Mr. Pathak then put his ease from a different point of view.
He urged that Kandasami had the power to alienate 'the zamindari or any part of it and by an act of alienation he could defeat the right of survivorship vesting in the other members to claim the zamindari on failure of his line.
Similarly he said he could divide the impartible estate amongst the different members of the family and that is what he must be presumed to have done in the present 'case.
The argument, though plausible, is fallacious.
The right to bring about a partition of an impartible estate cannot be inferred from the power of alienation that the holder thereof may possess.
In the case of an impartible estate the power to divide it amongst the members does not exist, though the power in the holder to alienate it is there and from the existence of one power the other cannot be deduced, as it is destructive of the very nature and character of the estate and makes it partible property capable of partition.
It seems to us that Kandasami instead of intending to separate from the family was by his actions consolidating the family unity.
By the family arrangement he no doubt successfully got himself declared as the next person enti tled to hold the joint family zamindari, but he evinced no intention of converting it into his own separate property: He preserved the estate for the family by saving it from the attack of the widow who wanted to take it under the will of her husband and antagonistically to the family.
By the suit which he brought and which was eventually compromised he successfully avoided that attack on the family estate at the sacrifice of his right of enjoying it during the lifetime of the widow.
He also by this arrangement safeguarded himself against the attack of Sundara Pandiya on his title as an heir.
By his act the rule of descent of lineal primogeni ture prevailing in the family with regard to the zamindari was firmly 265 established.
It would be unjust and uncharitable to conclude from the circumstances that the actions of Kandasami in 1890 were in any way hostile to the interests of the family.
As he was throughout acting for the benefit of the family his actions were approved by all the members and they got a provision made for themselves for their maintenance in the arrangement.
In the suit that he filed against Kamuluammal he in unambiguous terms alleged that he was claiming the zamindari as a member of the undivided Hindu family and it was in that status that he made the compromise with her and agreed to obtain possession of the estate after her death.
After Kandasami 's death ' when the zamindari came by descent to Kamaraja II, he also followed in the footsteps of his ancestor.
During the period of his stewardship of the estate he tried to implement it by recovering the pannai lands which under the compromise had gone out of the estate to Kamulu absolutely.
He was successful in his efforts though as a result of the decision in the present case his labours in this direction have proved futile as the release deed has been held to be vitiated by fraud.
For the reasons given above we hold that there exist no satisfactory grounds for holding that the arrangement made in 1890 evidences a partition amongst the members of the joint family or proves an intention on the part of the junior members of the family to renounce their expectancy of succession by survivorship on failure of male lineal de scendants in the second branch of the family.
The question whether there was separation among the members of the family is primarily a question of fact and the courts below having held that it is not proved, there are no valid grounds for disturbing that finding.
Chinnathayi 's claim therefore to the zamindari must be held to have been rightly disallowed.
As regards the claim of Kulasekara to the zamindari, it has been disallowed in the two courts below on the ground that the deed of release, Exhibit P 17, 35 266 does not extinguish the right of survivorship of the third branch to take the estate on the second branch becoming extinct and that the document could not be read as evidenc ing an intention on the part of Sundara Pandiva to surrender the right of succession of his branch.
It has been further held that the release was not executed in favour of the head of the family or in "favour of all the members of the family in order to be operative as a valid relinquishment.
There can be no doubt that a member of a joint family owning an impartible estate can on behalf of himself and his heirs renounce his right of succession; but any such relinquish ment must operate for the benefit of all the members and the surrender must be in favour of all the branches of the family, or in favour of the head of the family as represent ing all its members.
Here the deed was executed in favour of the widow of a deceased copgrcener who as such was a stranger to the coparcenary, the family being admittedly joint at the death of Kamaraja I.
It was contended that in view of the attitude taken by the parties before the High Court that the deed of release and the compromise evidenced only one arrangement to which all the members were in reali ty parties it should be held that the surrender of his rights by Sundara Pandiya was made in favour of Kandasami, the head of the family, and it extinguished the rights of the third branch in the family zamindari.
We think, howev er, that Kandasami in dealing with Sundara Pandiya was safeguarding his own right of succession against the attack personally directed against him and was successful in buying him off by agreeing to hand over to him a village.
Both of them were claiming headship of the family on different grounds and both were asserting that the zamindari belonged to the joint family.
In the compromise Kandasami was acting for his own benefit and was not making any bargain with Sundara Pandiya on behalf of the family.
The family as such could not have been prejudiced in any way by the circum stance that succession went to one or the other.
Be that as it may, we think the decision 267 of this case can be made to rest on a more solid foundation than furnished by the considerations set out above.
The whole emphasis of Mr. Raghavan who represented Kulasekara was on the words of the deed contained in clause 5 set out above.
Sundara Pandiya by this clause stipulated that he will have no right to the property shown as belonging to the widow.
Sundara Pandiya was then agreeing that the widow should retain the zamindari absolutely, his mind being affected by the will.
Later on by the compromise made in Kandasami 's suit what had been given absolutely to the widow was converted into a life estate with the excep tion of the pannai lands and Kandasami was acknowledged as the rightful heir.
The recitals in the release deed there fore have to be read in the light of the terms and condi tions of the deed of compromise and the proper inference from these is that Sundara Pandiya relinquished his rights to succeed to the zamindari immediately as the seniormost member of the family but that he did not renounce his con tingent right of succeeding to it by survivorship if and when the occasion arose.
It is well settled that general words of a release do not mean release of rights other than those then put up and have to be limited to the circum stances which were in the contemplation of the parties when it was executed: vide Directors etc.
of L. & S.W. Ry.
Co. vs Richard Doddridge Blackmore (1).
In that case it was said that general words in a release are limited to those things which were specially in the contemplation of the parties when the release was executed.
This rule is good law in India as in England.
The same rule has been stated in Norton on Deeds at page 206 (2nd Ed.) thus : "The general words of a release are limited always to that thing or those things which were specially in con templation of the parties at the time when the release was given, though they were not mentioned in the recitals." (1) 268 In Hailsham 's Edition of Halsbury 's Laws of England, Vol. 7, at para 345 the rule has been stated in these terms : "General words of release will be construed with refer ence to the surrounding circumstances and as being con trolled by recitals and context so as to give effect to the object and purpose of the document.
A release will not be construed as applying to facts of which the creditor had no knowledge at the time when it was given." In Chowdhry Chintaman Singh vs Mst.
Nowlukho Kunwari(1), where the document was drafted in almost the same terms as Exhibit P 17, it was said that though the words of the petition of compromise were capable of being read as if the executants were giving up all rights whatever in the taluka of Gungore, yet in the opinion of their Lord ships the transaction amounted to no more than an agreement to waive the claim to a share in and to the consequent right to a partition of the taluka and there was no intention to change the character of the estate or the mode in which it was to descend.
The parties in the year 1890 were not thinking of their future rights of survivorship at all.
What Sundara Pandiya must be taken to have said by this release was "I am giving up my present rights as a senior member in favour of Kandasami whom I recognize as the right ful heir to the zamindari as a member of the joint Hindu family." Kandasami agreed to give him the village of Domb acheri in lieu of recognition of his title by him.
It was not within the ken of the parties then as to what was to happen to the zamindari in case Kandasami 's line died out.
For the reasons given we are of the opinion that by the release Sundara Pandiya did not renounce his rights or the rights of his branch to succeed to the zamindari by survi vorship in case the line of Kandasami became extinct.
We hold therefore that (1) (1874) 2 I.A. 263.
269 Kulasekara 's claim was rightly negatived in the courts below and that of Rajaya was rightly decreed.
In the result all these appeals fail and are dismissed with costs.
Appeals dismissed.
Agent for the appellant in Civil Appeals Nos.
28 & 29 of 1949, respondent No. 1 in Civil Appeals Nos. 30, 32 & 33 of 1949 and respondent No. 2 in Civil Appeal No. 31 of 1949 and for Respondent No. 3 m Civil Appeal No. 31 of 1949: M.S.K. Sastri.
Agent for the appellant in Civil Appeals Nos. 31 to 33 of 1949, respondent No. 1 in Civil Appeals Nos. 28, 29 of 1949 and respondent No. 2 in Civil Appeal No. 30 of 1949: M.S.K. Aiyangar.
Agent for the appellant in Civil Appeals Nos. 30, 89 and 90 of 1949, respondent No. 1 in Civil Appeal No. 31 of 1949 and respondent No. 2 in Civil Appeals Nos.
28, 29, 32 & 33 of 1949: section Subrahmanyam.
Agent for the respondents Nos. 1 and 2 in Civil Appeals Nos. 89 and 90 of 1949: V.P.K. Nambiyar.
[/INST]On 13th November 1951, the respondent agreed to sell to the appellants a stock of 415 tons of newsprint in sheets then lying in the respondent 's godown.
On 26th November, the parties varied the contract by agreeing that the appellants would buy only 300 tons out of the.
stock of 415 tons.
After taking delivery of a part of the newsprint, the appellants refused to take delivery of the balance and repudiated the contract on 29th March 1952.
On 21st April the respondent, after notice to the appellants.
resold the balance at a lesser rate.
The suit flied by the respondent claiming from the appellants the deficiency on resale was decreed.
In appeal to this Court, Held: (1) The claim was unsustainable.
(a) As the respondent was not a pledge of the newsprint, the respondent had no right to sell the goods under section 176 of the .
[242H] (b) A seller can claim as damages the difference between the contract price and the amount realised on resale of the goods where he has the right of resale under section 54 (2) of the Indian .
But this statutory power of resale arises only if the property in the goods has passed to the buyer subject to the lien of the unpaid seller.
Under section 18 of the Sale of Goods Act.
it is a condition precedent to the passing of property under a contract of sale that the goods are ascertained.
In the present case, when the contract was originally entered into for the sale of 415 tons there was an unconditional contract for the sale of specific goods in a deliverable state and the property in those goods then passed to the appellants.
But the effect of the variation was not to make the appellants and respondent joint owners of the stock of 415 tons.
Nor was it merely to relieve the appellants from their liability to take 115 tons.
The effect was to annul the passing of the property.
so that.
as from 26th November the property in the entire stock of 415 tons belonged to the respondent.
The result was that in place of the original contract for sale of specific goods a contract for sale of unascertained goods was substituted.
No portion of the stock of 415 tons was appropriated to the contract by the respondent with the appellants ' consent before the resale.
Therefore, on the date of resale.
the property in the goods had not passed to the buyer (appellants) and the respondent had no right to resell.1243A. E. F H; 244A B] Gillett vs
Hill; ,, ; , applied.
(2) As no time was fixed under the contract of sale for acceptance of the goods, under section 73 of the Indian Contract Act, the respondent was entitled to the difference between the contract price and the market price on 29th March 1952, the date of repudiation, as damages.
[244E C] 240
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<s>[INST] Summarize the judgementivil Appeal No. 1045 of 1972.
From the Judgment and Order dated 7.2.1972 of the Madras High Court in Appeal No. 549 of 1963.
K. Ramkumar for the Appellants.
K. Raj Choudhary, B.R. Agarwal and Ms. Sushma Manchanda for the Respondents.
The Judgment of the Court was delivered by KANIA, J.
This is an appeal by Special Leave against a judgment of a Division Bench of the Madras High Court deliv ered on February 7, 1972.
Respondents Nos.
1 to 5 along with one other person filed a representative suit on behalf of themselves and other members of the Thousand Yadhava Community residing in Ramayanachavadi Street and the other adjoining lanes in North Masi Street, Madurai Town and adjoining villages against original appellant No. 1 herein, for an order 3 directing him to render true and proper accounts of the management of the properties of the Thousand Yadhava Commu nity including the Sri Ramasami Sri Navaneetha Krishnasami Devasthanam Temples and their properties and to pay to the plaintiffs the amount ascertained as payable on such rendi tion of accounts with interest and other reliefs.
Original appellant No. 1 herein was the trustee of the said temples.
He died during the pendency of the appeal before us and his two sons have been joined as appellants Nos. 1(i) to 1(ii) in this appeal.
We propose to refer to the parties by their descriptions in the suit for the sake of convenience.
Very briefly stated, according to the plaintiffs, the said temples were private religious trusts and the defendant had committed several acts of mismanagement in respect of the properties of the said trusts.
The defendant denied these allegations.
He, inter alia, contended that the suit as framed was not maintainable in law, in view of the provi sions of the Tamil Nadu Hindu Religious and Charitable Endowments Act, 1959 (hereinafter referred to as "the said Act.").
The Trial Court dismissed the suit on the ground that it was barred by the provisions of the said Act.
The Trial Court held that the said temples were not private temples belonging to the aforesaid community, namely, Thou sand Yadhava Community.
The Trial Court took the view that the Thousand Yadhava Community must be regarded as a section of the Hindu Community and in that case both the temples would be covered by the provisions of section 6(20) of the said Act.
Sub section (20) of section 6 defines the meaning of the word 'temple ' for the purpose of the said Act and, very briefly stated, lays down that it is a place used as a place of public religious worship and dedicated to or for the benefit of the Hindu Community or any section thereof, as a place of public religious worship.
The Trial Court took the view that, although this question could be decided primarily only by the Endowment Board and Civil Court has no jurisdiction to go into it, it could go into that question incidentally as was done by the Trial Court.
As a conse quence of this conclusion, the Trial Court held that the suit was barred by the provisions of the said Act and was not maintainable at law.
The plaintiffs preferred an appeal against this decision to the Madras High Court.
A Division Bench of the Madras High Court after examining the provi sions of the said Act held that the Trial Court was not right in dismissing the suit in toto even with regard to the relief of accounting.
The High Court held that defendant No. 1 (original appellant before us) admitted that he was elect ed in 1949 as the trustee of the said temples at a meeting of the members of the community.
The 4 said Act does not contain any provision for rendition of accounts.
A party seeking relief of accounting cannot ap proach the Deputy Commissioner or any other authority under the said Act and hence, the Civil Court is not barred either expressly or by necessary implication from entertaining a suit in so far as it was for the relief of accounting.
Following upon this reasoning, the court allowed the appeal and passed a preliminary decree against defendant No. 1 for rendition of accounts while dismissing the suit in all other respects.
The High Court did not decide as to whether the said temples were private temples or could be regarded as public religious endowments falling within the definition of the term 'temple ' as defined in sub section (20) of section 6 of the said Act.
Defendant No. 1 along with some others filed a petition for Special Leave before this Court and by an order dated April 24, 1972.
Special Leave was granted by this Court but was confined to the question whether it was within the power of the Civil Court to direct accounts to be taken without deciding the question whether the temple is a public temple or a private temple.
At the hearing of the appeal before us, Mr. Ram Kumar, learned Counsel for the appellants conceded that if the said temples were private temples as contended by the plaintiffs in the said suit, the defendant as the trustee was liable to render accounts of his management of the said trust to them as beneficiaries.
It was, however, submitted by him that in case the said temples were not private temples but were temples as defined in sub section (20) of section 6 of the said Act to which we have already referred earlier, the suit for rendition of accounts was not maintainable in view of the provisions of the said Act and hence, it was not open to the High Court to have passed a decree for rendition of accounts without deciding whether the said temples were public temples or private temples.
He drew our attention to sub section (20) of section 6 of the said Act which defines the term 'temple ' for the purpose of the said Act.
We have already referred to that definition of the said term 'tem ple ' earlier.
Suffice it to state here that under that definition only public temples of the nature stated earlier could be regarded as temples.
Sub section (17) of section 6 defines the term 'religious endowment ' or 'endowment ' and it is sufficient for the purpose of this appeal to note that it means property belonging to or given or endowed for the support of maths or temples for the purposes set out there in.
Section 108 of the said Act runs as follows.
5 "108.
Bar of suits in respect of administra tion or management of religious institutions etc.
No suit or other legal proceeding in respect of the administration or management of a religious institution or any other matter or dispute for determining or deciding which provision is made in this Act shall be insti tuted in any.
Court of law, except under, and in confirmity with, the provisions of this Act.
" Section 63 of the said Act deals with the power of the Deputy Commissioner to hold inquiries into and decide the disputes and matters set out therein.
It inter alia confers on him the power to hold inquiries in connection with the property and funds of the temples within the meaning of the said Act.
Against the order of the Deputy Commissioner, an appeal is provided under section 69 to the Commissioner and section 70 lays down that a person aggrieved by an order passed by the Commissioner under the provisions set out in clauses (i) and (ii) of sub section (1) thereof can file a suit in a Civil Court.
Sub section (2) of section 70 pro vides that an appeal shall lie to the High Court against the decree of the Civil Court under sub section (1) of section 70.
Chapter VIII of the said Act deals with the topic of Budgets, Accounts and Audit.
Section 87 of the said Act provides that the trustee of every religious institution shall keep regular accounts of all receipts and disburse ments and provides that these accounts have to be audited by the auditors appointed in a prescribed manner.
After the audit is completed, the auditor is required under section 88 to send a report to the Commissioner or the Deputy Commis sioner or the Assistant Commissioner as provided therein.
Section 90 deals with the rectification of defects disclosed in the audit and order of surcharge against trustee etc.
It is.interesting to note that sub section (6) of section 90 provides that an order of surcharge under this section against a trustee shall not bar a suit for accounts against him except in respect of the matters finally dealt with by such order.
In the appeal before us a perusal of the plaint shows that the suit was filed not on behalf of any particular beneficiary or group of beneficiaries but by a certain persons claiming to belong to the beneficiary community, namely, the Thousand Yadhava Community, and the suit was a representative suit instituted on behalf of themselves and other members of the community.
There is no doubt that in respect of a public trust, beneficiaries as a class can file a suit against the trustee for rendition of accounts, sub ject to the bar imposed by.
6 section 92 of the Code of Civil Procedure, 1908.
It was with a view to prevent ' reckless and harassing suits being brought against the trustees of public trusts that section 92 was enacted requiring that two or more persons having interest in the suit could institute such a suit only with the consent in writing of the Advocate General.
However, we find that in view of the provisions of section 5 of the said Act, sections 92 and 93 of tile Code of Civil Procedure have ceased to apply to the Hindu Religious and Charitable Endow ments in the concerned State.
Hence the ' bar, if any, to .the institution of a suit like this has to be found only in the provisions of the Act.
We have already set out earli er the provisions of section 108 of the said Act which is analogous to section 93 of the Madras Hindu Religious and Charitable Endowments Act, 1951 (hereinafter referred to as "the said Act of 1951") which was repealed by the said Act.
Many of the powers of the Deputy Commissioner under the said Act to which we have already referred earlier are similar to the powers conferred by section 57 of the said Act of 1951.
Sections 63 and 64 of the said Act which deal with the powers of the Deputy Commissioner are in pari materia with the provisions of sections 57 and 58 of the said Act of 1951.
Section 90(6) of the said Act provides that an order of surcharge under this section made against the trustee shall not bar a suit for accounts against him and we find a similar provision in sub section (7) of section 74 of the said Act of 1951.
The schemes of the two Acts are largely similar.
In Sri Vedagiri Laxmi Narasimha Swami Temple vs Induru Pattabhirami Reddy; , a question arose before this Court as to whether a suit by the present trus tee against the previous trustee of a temple was barred by reason of the provisions of the said Act of 1951.
It was argued in that case that the Act in question provides a complete machinery for deciding disputes in regard to ac counts and, therefore, no suit for accounting against an ex trustee can be filed at all in a Civil Court.
After analysing the scheme of the said Act of 1951, and the provi sions of the relevant sections of that Act, which we have referred to earlier that argument was rejected by a Division Bench of this Court.
It was pointed out by Subba Rao, C.J., who delivered the judgment of this Court that the scope of the auditor 's investigation is limited.
It is only an effec tive substitute for the trustee himself furnishing an audit ed account.
It was held that Chapter VII of the said Act of 1951 only provides for a strict supervision of the financial side of the administration.
Chapter VII does not provide for determining a dispute in respect of rendition of account and does not bar a suit for that relief.
Section 74(7) of the said Act of 1951 was not a bar to the maintainability of such a suit.
The same reasoning applies to the case before us.
In our opinion, Chapter VIII of the said Act has no bearing on the ques 7 tion of the liability of a trustee to render accounts to the beneficiaries as a group or class and it does not provide for determining or deciding a dispute in respect of such rendition of accounts and hence, section 108 of the said Act does not bar a suit like the one filed by respondent No. 1 before us.
We are of the view that the High Court did not commit any error in passing a decree for rendition of ac counts without deciding the question whether a temple was a public or private trust.
In the result, the appeal fails and is dismissed with costs fixed at Rs.2,000 to be divided between the respond ents equally.
Y. Lal Appeal dis missed.
[/INST]The appellant was a manufacturer of agarbatis, dhoop sticks, dhoop coil and dhoop powder failing under Tariff Item No. 68 of the Central Excise Tariff.
It claimed exemp tion from duty of excise on the ground that these items being handicrafts were fully exempt from such payment under notification No. 55/75.
The appellant 's further case was that under Notification No. 111/78 all goods which were exempt from the whole of duty of excise leviable thereon unconditionally were exempted from the operation of Rule 174 of the Central Excise Rules, which required a manufacturer to take out a licence.
The Collector rejected the claim of the appellant and held that these items were not handicrafts.
It was contended before the Tribunal that dhoop sticks, coil and power were agarbaties and agarbaties were accepted as handicrafts by various authorities including the Central Government; mere use of power in the manufacture of these items did not bar them from being called handicrafts; and, in any event, there was no warrant in invoking longer time limit for five years for raising the demand.
The Tribunal rejected the contentions of the appellant.
It was found by the Tribunal that the main part of the manufacture of agarbaties, etc. was done with the aid of power; only a very small part of the required work was done by hand; and that it was difficult to accept that these were handicrafts merely because some authorities had chosen to treat agarbaties as handicrafts.
The Tribunal held that the Revenue was entitled to levy tax for a period of five years prior to the issue of show cause notice and not six months pursuant to rule 9(2) of the Central Excise Rules.
874 Before this court, it was contended on behalf of the appellant that in order to sustain the order of the Tribunal beyond a period of six months and upto a period of 5 years under section 11 A it had to be established that the duty of excise had not been levied or paid by reason of either fraud or collusion or wilful mis statement or suppression of facts or contravention of any provision of the Act or Rules made thereunder, with intent to evade payment, as provided in the proviso to sub section (1) of section 11 A.
In this context, it was urged that there was scope for believing that agar baties were entitled to exemption and if that was so, then there was enough scope for believing that there was not need of taking out a licence under rule 174 of the Central Excise Rules, 1944.
On the other hand, the Revenue contended that the failure to take out the licence and thereafter to take the goods out of the factory gate without payment of duty was itself sufficient to infer that the appellant came within the mischief of section 11 A of the Act.
While partly allowing the appeal, and remanding the case to the Tribunal to modify the demand, this Court, HELD: (1) In view of the evidence examined by the Tribu nal and in the light of the well settled principle and the background of the definition of handicrafts, the Tribunal was right in holding that agarbaties were not handicrafts.
[881D E] M.S. Company Private Limited vs Union of India, SC, referred to.
(2) Failure to pay duty or take out a licence is not necessarily due to fraud or collusion or wilful mis state ment or suppression of facts or contravention of any provi sion of the Act.
Suppression of facts is not failure to disclose the legal consequences of a certain provision.
[884B] Collector of Central Excise, Hyderabad vs M/s. Chemphar Drugs and Liniments, Hyderabad, [1989] 2 SCC 127, referred to.
(3) Mere failure or negligence on the part of the pro ducer or manufacturer either not to take out a licence in case where there was scope for doubt whether goods were dutiable or not, would not attract section 11 A of the Act.
[884D] (4) In the facts and circumstances of the case, there were materials to suggest that there was scope for confusion and the 875 appellants believing that the goods came within the purview of the concept of handicrafts and as such were exempt.
If there was scope for such a belief or opinion, then failure either to take out a licence or to pay duty on that belief, when there was no contrary evidence that the producer or the manufacturer knew that these were excisable or required to be licenced, would not attract the penal provisions of section 11 A of the Act.
If the facts were otherwise, then the position would be different.
[884E F]
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<s>[INST] Summarize the judgementCivil Appeal Nos. 416 of 1973 and 572 of 1974.
(From the Judgment and Decree dated 22 12 1972 of the Allahabad High Court in F.A. No. 465/54 connected with F.A. 65/55).
A. K. Kirty, Yogeshwar Prasad, S.K. Bagga, Mrs. section Bagga Miss Rani Arora for the Appellant (in CA.Facts No. 416/73 and Respondent No. 1 in CA. No. 572/_74).
G.B. Pal, R.K. Mehta, Pramod Swarup and Miss Uma Mehta for the Appellants (in CA 572/74 and Respondents 1 3 in CA.No. 415/73).
B. Sen, S.M. Jain, Indra Makwana and Sushil Kumar Jain for Respondents 5/2, 5/3 and 6 (in CA.No. 416/73).
S.T. Desai, Rajinder Singh and S.K. Dhingra for Respond ents 7 & 8 (in CA.No. 416/73).
The Judgment of the Court was delivered by JASWANT SINGH, J.
These two appeals by certificates granted under Article 133 of the Constitution which are directed against the common judgment and decree dated Decem ber 22, 1972 of the High Court at Allahabad in two connected Civil First Appeals Nos. 465 of 1954 and 65 of 1955 pre ferred against the judgment and preliminary decree of the Second Additional Civil & Sessions Judge, Agra, dated April 5, 1954, in suit No. 76 of 1949 shah be disposed of by this judgment.
The facts material for the purpose of these appeals are: The appellant in Appeal No. 416 of 1973 and respondent No. 1 in appeal No. 572 of 1974, Seth Loonkaran Sethiya, (hereinafter referred to for convenience as 'the plain tiff ') is a financier living and carrying on business in Agra.
Respondents Nos. 1 to 3 in the first appeal and appellants Nos. 1 to 3 in the second appeal viz. Ivan E. John, Maurice L. John and Doris Marzano, grandsons and grand daughter of one A John, are partners of the regis tered, firm called 'John & Co. '.
There are three spinning mills and one flour mill at Jeoni Mandi, Agra, which are compendiously described as 'John Mills '.
Originally, the members of the John family were the exclu sive owners of all these mills which have been in existence since the beginning of the current century.
In course of time, some strangers acquired interest therein and by the time the present lis commenced, the following became the joint owners thereof to the extent noted against their names : 1.Ivan E. John, Maurice L. John and Doris Marzano, appellants Nos. 1 to 3 in Appeal No. 572 of 1974 and respondents Nos. 1 to 3 in .Appeal No. 416 of 1973 Partners of the firm 'John & Co. ', appellant No. 4 in Appeal No.572 of 1974 and respondent No. 4 in Appeal No. 416 of 1973:11/40th share.
2. Seth .Munilal Mehrs (respondent No. 6 in appeal No. 416 of 1973 and respondent No. 9 in Appeal No, 572 of 1974).and Hiralal Patni (respondent No. 5 in Appeal No. 416 of 197.
3, 'deceased 'and now represented by respondents Nos, 5/1 to 5/7 i3 the 'said appeal and represented by respondents Nos. 2 to 8 in Appeal No. 572 of 1974):19/40th share 3.Gambhirmal Pandya (P) Ltd. part ner in M/s. John Jain Mehra & Co,: 8/40th share .
4.Ivan E. John: 2/40th share Having run into financial difficulties, M/s John & Co. were driven to tap various sources for raising loans for their business and other requirements.
By virtue of the deed of agreement (Exn. 1321 ) dated June 14, 1947, they entered into a financial agreement with Sethira & Co., a partnership firm of the plaintiff and Seth Suganchand.
Under this agreement which was originally meant to last for five months but which was allowed to remain in force even after 'the expiry of that period Sethiya & Co. undertook to advance to M/s John & Co. funds to the extent of Rs. 8,00,000/ on the security of yarn and to act as sole selling agents of the latter.
On January 29, 1948, the Collector, Agra, attached moveable and immoveable properties of the mills pursuant to a certificate issued for reali zation of income tax dues for the years 1943 to 1945 out standing against M/s John &Co. which exceeded Rs. 20 lakhs.
On February 5, 1948, the Collector, Agra, appoint ed Ivan E. John, Maurice L. John and Doris Marzano as custo dians for running the mills.
On February 9, 1948, the aforesaid agreement (Exh. 1321) dated June 14, 1947, with Sethiya & Co. which continued to remain in operation beyond its original term was renewed upto the end of April, 1948, by agreement (Exh. 1320).
This agreement gave an option to the partners of Sethiya & Co. to allow it to continue in force until their dues were 857 paid in full by M/s John & Co. These financial agreements with Sethiya & Co. did not prove adequate to meet the mone tary requirements of M/s John & Co. Accordingly on the same day i.e. on February 9, 1948, they entered into another agreement (Exh. 1319) with the proprietory concern of the plaintiff carrying on business under the name and style of 'M/s. Tejkaran Sidkaran ' whereby the latter agreed to advance certain amounts to them against mortgage of cotton, its products and bye products which might be in their stock from time to time during the continuance of the agreement.
By this agreement, M/s John & Co. also undertook to pay to M/s Tejkaran Sidkaran a sum of Rs. 2,09,245 9 10 which, on going into the accounts, was found to be due to the latter in respect of the supply of cotton.
Nearly five months thereafter i.e. on July 6, 1948 the aforesaid partners of M/S. John & Co. succeeded in obtaining another financial accommodation from Sethiya & Co. vide agreement Exhibit 168: Exhibit A 1.
By this deed, the financiers agreed, for the efficient working of the mills, to advance loan, as and when required, upto the limit of Rs. 25 1/2 lakhs to the partners of M/s John & Co. on condition that they i.e. the financiers would have a floating and prior charge for all monies due to them for the time being including the amount due to them on the date of the agreement and all monies which they might choose to advance under the agreement, on all business assets including stores, coal, oil process etc of the aforesaid three spinning mills.
Describing himself as the sole proprietor of the firm 'Sethiya & Co.; and 'M/s. Tejkaran Sidkaran '.
Seth Loonkaran Sethiya flied in the Court of the Civil Judge, Agra on April 18, 1949 an original suit, being suit No. 76 of 1949 against M/s. John & Co. ' and its aforesaid partners (hereinafter referred to as 'the defendants first set ') as also against Munnilal Mehra, Hiralal Patm and Gambhirmal Pandya and M/s John.
Jain Mehra & Co., (hereinafter referred to as 'the defendants second set ') for recovery of Rs. 21,11,500/ with costs and pendente lite and future interest by sale o.f .the assets of M/s John & Co. and for permanent injunction re straining the defendants first set from committing any branch of the aforesaid agreement dated July 6, 1948 as also for declaration that he had a prior and floating charge on all the business assets of M/s John.& Co.
The suit was later on amended by the plaintiff with the permission of the trial Court.
By his amended petition of plaint, the plain tiff sought a decree against the defendants first set as also against the defendants second set.
The case of the plaintiff was that Mr. Ivan E. John, Mr. Maurice L. John and Doris Marzano who were part owners of the aforesaid three spinning mills and a flour mill as also certain other properties and had been carrying on their business and running the mills under the name and style of John & Co. being heavily indebted and in urgent need of money to pay arrears of income tax as well as other dues and to carry on day to day business of the milks approached him time and again for finances, loans etc.for the aforesaid purposes, that he 'lent considerable sums of money under various agreements executed by the defendants first set in his favour and in favour of the firm 'M/s Tejkaran Sidkaran of which he was the sole owner and in that of Sethiya & Co.; that on or about July 6, 1948 all accounts between his 858 firm 'Sethiya & Co. ' and defendants first set were gone into and after a full scrutiny thereof, a settled amount of Rs. 12,72,000/ was found to be due to Sethla & Co. from the defendants first set upto June 30, 1948; that this amount as admitted and accepted by the defendants first set and was as such debited in their account books and was also acknowl edged by them in the subsequent agreement entered into by them with him; that the aforesaid settlement, the de fendants first set solicited further financial help from him to run the mills and to meet their pressing liabilities which was acceded to by him on the terms and conditions set out in the agreement dated July 6, 1948 (Exh. 168); that by this agreement, he agreed inter alia to advance requisite funds to the defendants first set (for carrying on the business of the mills 'and payment of the claims of Raja Ram Bhawani Das and to meet other liabilities) up to the limit of Rs. 20 lakhs inclusive of the aforesaid amount admittedly found due to him from the defendants first set on the date of the agreement and to make a further advance of a sum of Rs. 5,50,000/ on the security of business assets and stocks other than bales of yarn and cotton; that it was also stipu lated that he would have a floating and prior charge for the entire amount due to him on the date of the agreement on all the business assets including stores, coal, oil process etc of all the three spinning mills of the defendants first set and that he would be paid interest at the rate 6 per cent per annum from date of including liability in respect of each individual item besides commission at the raw of 1 per cent on all sales of products of the three spinning mills whether sold directly or otherwise during the currency of the agreement and a luther commission at the rate of 12 per cent on value of all the purchases of cotton required for consumption of the three spinning mills and godown rent as might be agreed.
The plaintiff further averred that it was specifically agreed between him and the defendants first set that the agreement would be in operation for the minimum period of one year and would also continue to be in force thereafter until the entire amount due to him from the defendants first set was fully paid up.
The plaintiff further averred that the accounts of business done by him under the name of M/s Tejkaran Sidkaran with the defendants first set were gone into and finally the defendants first set admitted that a sum of Rs. 17,79,100/ was due from them to his firm 'M/s Tejkaran Sidkaran ' and that under their written authority, he transferred the above liability to his firm 'Sethiya & Co. ' and thus all accounts of the defendants first set with him were amalgamated in one account i.e. of Sethiya & Co. and the account of his firm 'M/s Tejkaran Sidkaran ' with the defendants first set was squared up and closed.
The plaintiff further averred that the defendants second set including Hiralal Patni, the ex financier of the John Mills who had not despite best efforts succeeded in securing possession of the mills as co proprietor thereof entered into partnership with the defendants first set under the name and style of M/s John Jain Mehra & Co. and mali ciously induced them to commit breaches of the agreement dated July 6, 1948 by forcibly turning out his representa tives who used to remain incharge of the stocks, stores, coal, waste etc of the mills and making them enter into a finance agreement contrary to the terms of the agreement with his firm.
The plaintiff also alleged that the defendants first set had at the instigation of the defendants second set unjustifiably closed the business of John & Co. 859 and were colluding with the latter who were guilty of misap propriation and conversion of the goods over which he had a prior and floating charge.
The plaintiff also averred that on April 4, 1949, accounts were again gone into between him and the defendants first set and a sum of Rs. 47,23,738/4/9 were found due to him from them; that agreement dated July 6, 1948 between him and the defendants first set still subsisted and would continue to subsist till July 6, 1949 and thereafter at his option till all his dues were paid up; and that a sum of Rs. 21,11,500/ was due to him from the defendants first set as per Schedule A of the plaint which both sets of the defendants were liable to pay.
The statement of account as contained in Schedule A annexed to the plaint was as follows: Rs. a. p. "1.
Settled balance on 4th April, 1949 according to accounts books of the def endants.
(The accounts upto 4th April, 1949 were fully gone through and se ttled by both the parties and confirmed by the defendants by making nec essary entries in their books 45,74,980 10 1 2.
Plaintiff 's charges of commission, interest, godown rent etc., according to the terms of the agreement and duly checked by the defendant 's accountant and chief Account officer as detailed below: From 13th October to 31st October, 1948 14,516 13 6 From 1st November to 12th December 33,783 4 3 From 13th December to 12th January 1949 34,100 3 3 From 13th January to 12th February, 1949 38,716 12 3 From 13th February to 12th March, 1949 27,632 9 2 Total 1,48,749 10 8 9th April, 1949 paid to Mahalaxmi Oil Mills through Kirpa Narayan advocate and others .
8,708 5 0 10th April 1949 paid to Bishambar Nath & Co. (for Cotton supplied to John & Co.) 1,57,005 3 0 Charges from 13th March to 12th April, 1949 62,804 12 3 Total 49,52,2489 0 9th April, 1949: Proceeds by sale of 5731 bales of yarn sold by defendants as per their authorities 28,40,748 9 0 Balance 21,11,500 0 0 Twenty one lacs, eleven thousand five hundred only.
5 /338SCI/76 860 The suit was contested by both sets of defendants on various grounds.
Defendants first set inter alia pleaded that there was no 'settlement of accounts between them and the plaintiff as alleged by the latter; that 'the accounts were liable to be reopened as they were tainted with fraud, obvious mistakes etc., and that on a true and correct ac counting a large sum of money would be found due to them; that though the plaintiff and Seth Sugan Chand (who owned Indra Spinning and Weaving Mills and had a covetous eye on John Mills) had obtained various documents, agreements, vouchers, receipts etc.at various times from them, the same were of no legal value as they were secured by the former by practising undue influence, fraud, coercion and misrepresentation.
It was further pleaded by the defendants that :the plaintiff had illegally and contrary to the agreement dated July 6, 1948 debited them with huge amounts which were not really due to them.
It was further pleaded by the said defendants that the cotton supplied to them by the aforesaid financiers was of inferior quality and the amounts charged by them in respect thereof were exorbitant and far in excess of the prevailing market rates.
The said defendants further pleaded that though under the terms of the agreement dated February 9, 1948 no commission on sales and purchases had been agreed to be paid by them to the financiers still they had been debited with huge amounts on that account and likewise though simple interest had been stipulated in the said agreement compound interest with monthly rests had been debited to their account which was not at all justified.
The said defendants also disputed their liability to pay certain items of expenditure like demurrage, wharfage etc.which had been debited to their account.
It was also pleaded by the said defendants that the plaintiff had no floating or prior charge on any of their stocks, stores etc.nor could any such charge be claimed by him in law; that the suit was barred by the provisions of Section 69 of the Part nershlp Act and that the agreement dated July 6, 1948 which was insufficiently stamped could not form the basis of the suit.
In the written statement filed by them the defendants second set denied the allegations and insinuations made against them by the plaintiff and raised a number of techni cal and other pleas.
They also pleaded that the plaintiff alone .was not entitled to file the suit concerning the firm M/s. Sethiya as it did not belong to his joint Hindu family but was a partnership firm.
The trial court framed as many as 21 issues and on a consideration of the evidence adduced by the parties it held inter alia that the suit as brought by the plaintiff was maintainable; that though the plaintiff had failed to prove that the dissolution of the partnership between him and Seth Sugan Chand took place on June 30, 1948, and no alternate date of dissolution subsequent to June, 30, 1948, had been set up by him, it was evident from the record that the dissolution took place some time after July 30, 1948, and before the institution of the suit; that the suit being one for recovery of the assets due to a dissolved partnership firm from a third party was not barred by Section 69 of the Partnership Act; that Seth Sugan Chand was not a necessary party to the suit; that agreement dated July 6, 1948, was duly stamped and that no undue influence etc.was exercised by the 861 plaintiff on the defendants first set in relation to the execution of the agreements between Sethiya & Company and the defendants first set.
The ,trial court also held that there was no accounting on April 4, 1949, as alleged by the plaintiff and that both the plaintiff and the defendants first set committed a breach .of agreement dated July 6, 1948.
The breach committed by the defendants first set according to the trial court lay in their unjustifiably handing over possession to M/s. John Jain Mehra & Co. of the goods on which the plaintiff held a charge thereby furnish ing him with a cause of action against both sets of defend ants.
The trial court also held that under clause 13 of the agreement dated July 6, 1948, a charge in favour of the plaintiff was created in respect of the entire business assets including stock in trade, stores, coal, oil etc.lying inside the three spinning mills which were being run by John & Company; that defendants first set utilised con sumed and otherwise dealt with the goods which were burdened with the floating charge from July 6, 1948, to April 13, 1949, when John & Co. ceased to be a going concern and there was a final rupture between the plaintiff and the defendants I st set and the plaintiff 's floating charge got fixed or crystalised.
It also found that defendants second set were not entitled to prior charge on the properties of John & Co. existing on April 13, 1948, and were liable to satisfy the plaintiff 's claim as despite notice of his floating charge they consumed, converted and misappropriated stocks and stores and other business assets of the defendants first set.
Finally, the trial court held the plaintiff to be entitled to a decree for Rs. 18,00,152/ against both sets of defendants but rejected his claim for specific perform ance and injunction.
It accordingly passed a preliminary decree against both the sets of defendants on April 5, 1954 directing them to deposit the said amount in Court within the prescribed time and in default, gave the plaintiff a right to apply for a final decree for the sale of all the business assets, goods, stocks, stores etc.of the three spinning mills as mentioned in the operative portion of its judgment.
The decree also gave a right to the plaintiff to apply for a personal decree against the defendants first set and the defendants second set for the balance of his claim in case the net sale proceeds of the said property were found insufficient to discharge his claim.
Aggrieved by the said judgment and decree of the trial court, the plain tiff preferred an appeal, 'being first appeal No. 465 of 1954, before the High Court at Allahabad claiming the following reliefs : "(a) A decree for a further sum of Rs. 64,082/3/5 by which amount his claim was reduced by the trial (b) Such rate of interest as he might be entitled to on the aforesaid sum of Rs. 64,082/3/5 under the agreement dated July 6, 1948; (c) Interest on the sum already decreed at the rate agreed to under the agreement dated July 6, 1948; (d) Injunction in terms of para 47(b) of the plaint and specific performance of the agreement dated July 6, 1948; 862 (e) Costs of the appeal and costs which the lower court wrongly disallowed or deducted and also interest on the costs already award ed; (f) A decree for sale of the shares of the defendants in the machinery over which he had a charge.
" M/s John Jain Mehra & Co., of which the defendants first set too were partners, also preferred an appeal against the aforesaid judgment and decree of the trial court, being first appeal No. 65 of1955, praying that the decree passed by the trial court in favour of the plaintiff be set aside and the suit dismissed with costs throughout.
The High Court allowed both the appeals No. 465 of 1954 and No. 65 of 1955 partially by its aforesaid judgment dated December 22,1972, holding inter alia that no fraud, undue influence, coercion or misrepresentation was prac tised by the plaintiff on the defendants first set in con nection with the execution of agreement dated February 9,1948, or agreement dated July 6,1948 (which is the basis of the suit); that the agreement dated July 6,1948, was neither insufficiently stamped nor did it require registra tion; that though it appeared that the deed of dissolution dated July 22, 1948, was prepared for the purpose of the case, there was sufficient evidence on the record to indi cate that Seth Suganchand had withdrawn from the partnership carried on under the name of Sethiya & Co. with effect from June 30, 1948, and had nothing to do with the transaction evidenced by the agreement dated July 6,1948, which was entered into by the plaintiff as the sole proprietor of Sethiya & Co., that the entire rights and liabilities flowing from the agreement dated July 6, 1948 having become the rights and liabilities of the plaintiff alone and the suit not being one for recovery of dues of a dissolved partnership firm arising out of a cause of action which accrued before the dissolution of the firm, neither Seth Suganchand was a necessary party to the suit, nor was the suit barred under section 69 of the Partnership Act; that the alterations in the deed of agreement dated July 6, 1948 pointed out by the defendants were not material alterations and did not render the agreement void; that the plaintiff had a floating charge over the business assets of John & Co., that it was the defendants first .set and not the plaintiff who committed breach of the agreement by wrongful ly delivering possession of the charged goods on or after April 13, 1949 i.e. after ceasing to be a going concern to M/s. John Jain Mehra & Co. a partnership firm of which the defendants first set became a constituent part by virtue of agreement dated April 11, 1949 that despite the knowledge of the aforesaid prior charge, M/s John Jain Mehra & Co. illegally intermeddled with the charge goods and used them for their own business; that the plaintiff 's floating charge on the assets of the defendants first set valuing Rs. 13,25,000/ became crystallised on April 13,1949 when on default of the defendants first set, he intervened by bring ing the suit to recover all his out standings by sale of the charged properties; that the charge of the plaintiff having become crystallised, as indicated above, the defendants first and second set held the properties as trustees and were liable to make them 863 available to the plaintiff for recovery of his dues; that keeping in view the legal position as well as the nature of the transactions involved, the practice of courts and the fact that the litigation between the parties had been suffi ciently protracted, it would be reasonable to award pendente lite as well as future simple interest from the date of the decree to the date of actual payment or realization at the rate of 4 per cent per annum on the principal sum adjudged; that though keeping in view the facts that no balance was struck on April 4, 1949 in the Rokar (Exh. 179) of Sethiya & Co. and the auditor 's report which showed that no specific figure was mutually agreed upon on accounting on that date, it could not be said that accounts were finally settled between the parties on April 4, 1949, the defendants first set had failed to point out which entry in the charts (Exh. 6103 to 6112) produced by the plaintiff was wrong; that Rs. 49,35,925/5/7 were advanced by Sethiya & Co. to the defend ants first set under the agreement dated July 6, 1948, from the date of its execution to the date of the suit; that a sum of Rs. 11,17,000/ was due to old Sethiya & Co. from the defendants first set upto June 30, 1948 under the agreements dated June 14, 1947 and February 9, 1948; that Rs. 1,55,000/were advanced by Sethiya & Co. on July 3, 1948 to the defendants first set for purchase of the share of Beni Madho; that in accordance with the obligation undertaken by it under para 1 (8) of the agreement dated July 6, 1948, Sethiya & Co. paid, on the basis of transfer voucher (Exh. 3039) dated February 28, 1949, drawn by the defendants first set, a sum of Rs. 17,79,100/ to Tejkaran Sidkaran in full satisfaction of the amount due to the latter under the agreement dated February 9, 1948; that whereas the aggregate of the debit items came to Rs. 82,47,380/15/4, the aggre gate of the credit items came to Rs. 71,13, 712/6/6 leaving a balance of Rs. 11,33,668 and paise 55 which the defend ants first set were liable to pay to the plaintiff; that since the receivers appointed by the court at the instance of the plaintiff after the institution of the suit were able to secure possession of the charged properties that existed prior to April .11, 1949 and it had not been estab lished that there was a removal from the mills ' premises of the said properties or dissipation thereof because of the aforesaid conversion and detention, the plaintiff was not entitled to the decree for money against the defendants second set; that the plaintiff could, no doubt, proceed against the charged goods which were in the custody of the receivers for recovery of his dues but as No. property on which he held a charge or on which his floating charge crystallised had remained in the custody of the defendants second set after the appointment of the receivers, no li ability for his dues could be fastened on them nor could he obtain a decree for specific performance against them.
In the result, in modification of the decree passed by the trial Court, the High Court passed a preliminary decree for Rs. 11,33,668.55 with proportionate costs and pendente lite and future interest from the date of the decree to the date of the actual payment or realisation at the rate of 4 per cent per annum on the principal sum of Rs. 10,87,674.05 in favour Of the plaintiff and against the defendants first set but dismissed the suit with costs as against the defendants second set.
The High Court made it obligatory for the defendants 864 first set to pay or deposit in Court the aforesaid sum of Rs. 11,33,668.55 together with interest within six mouths of the passing of the decree failing which it held the plaintiff entitled to apply for a final decree for sale of all the business assets, goods, movables, stocks, stores etc.mentioned in the inventory of Shri P.N. Raina, Commissioner, and the receivers ' inventories.
The High Court further directed that if the net sale proceeds of the said property were found insufficient to satisfy the plaintiff 's aforesaid amount, he would get a personal decree against defendants 1 to 3 for the balance of his claim remaining due after scale.
The High Court also directed that a sum of Rs. 28, 662/9/ . the sale proceeds of cotton waste over which the plaintiff had charge and which was in deposit with the Bank in the Court 's ac count would also be utilised towards the satisfaction of the aforesaid amount decreed in the plaintiff 's favour.
It is against this judgment and preliminary decree that the present appeals are directed.
We have heard counsel for the parties at length and gone through the entire record relevant for the purpose of the appeals before us.
As per contentions of the counsel, the following main questions arise for our determination : (1) Whether the first 'sethiya & Co. ' (of which the plaintiff and Seth Suganchand were partners) was dissolved with effect from June 30, 1948, as claimed by the plaintiff ?
(2) Whether the agreement dated July 6, 1948, was entered into by the plaintiff with the defendants first set as a sole proprietor of Sethiya & Co. or was it entered into by his as a partner of Sethiya & Co. '?
(3) Whether the suit is barred by section 69 of the Partnership Act ?
(4) Whether Seth Suganehand was a necessary party to the suit ?
(5) Whether any material alterations were made in the aforesaid agreement dated July 6, 1948, which rendered it void ?
(6) Whether the suit which was based upon accounts stated or settled could be dealt with in the manner in which it has been done ?
(7) Whether in addition to the imposition of burden on the charged business assets etc.of John & Co. for satisfaction of the decretal amount, the defendants second set could be saddled with any liability in that behalf ?
We shall take up these question seriatim.
Questions Nos. 1 & 2.
: As these two questions are inextricably linked up, they have to be dealt with together.
865 According to the plaintiff, the firm Sethiya & CO., which was formed by him in partnership with Seth Sugan chand for the specific purpose of providing money against pledge of goods to the defendants first set and to act as their sole selling agents and which consequently entered into financial agreements with the said defendants vide exhibits 1321 and 1320 on June 14, 1947, and February 9, 1948, respectively was dissolved with effect from June 30, 1948, and thereafter he alone carried on dealings with the said defendants in the name: of Sethiya & Co. and M/s Tejkaran Sidkaran as their sole proprietor and as such, the agreement (Exh. 168) dated July 6, 1948, was entered into by him with the said defendants as the sole proprietor of Sathiya & Co. On the contrary, the defendants assert that the firm 'Sethiya & Co. ' was in existence on July 6, 1948, and thereafter as well.
Let us examine the material on the record and see which of these contentions is correct.
While the plaintiff relied in support of his contention upon the deed of agreement (Exh. 168) dated July 6, 1948 and the deed of dissolution dated July 22, 1948 produced by him, the defendants strongly relied upon Exhibit A 1 and cer tain other documents.
A close scrutiny of these documents and other evidence adduced in the case clearly negatives the contention of the plaintiff and goes a long way to support the assertion of the defendants.
It would be noted that in the preamble of Exh.A 1 which is admittedly a counter part of Exh. 168, the word 'partner ' occurs after the word 'Sethiya ' and before the word 'of ' and in conso nance with its preamble, Exh.A 1 has been signed by the plaintiff, Seth Loonkaran Sethiya, as a partner of M/s Sethiya & Co. Now though the word 'partner ' occurring in the preamble of Exh.has been scored out, it has not been initialled either by the plaintiff or by any one of the partners of John & Co. It is also significant that while affixing his signatures on Exh. 168 and its counterpart Exh.A 1 the plaintiff described himself as a partner of M/s Sethiya & Co, The contention of the plaintiff that his partnership with Seth Suganchand came to an end with effect from June 30, 1948, and the agreement dated July 6, 1948 was entered into by him with the defendants first set as the sole proprietor of Sethiya & Co. is further falsified by the dissolution deed dated July 22, 1948, itself produced by him before the trial Court on December 13, 1949 which would have passed muster if the defendants had not been vigilant.
It seems that on seeing this deed written partly on an impressed stamp paper of Rs. 10/ which was not in use in July, 1948, the suspicion of the defendants about the spurious character of the deed was aroused and they hastened to make an application requesting the trial court that in view of the fact that the deed appeared to have been 'anti dated and manufactured for the purpose of the case ', the stamp papers on which it was written be sent to the officer in charge, India Security Press, Nasik, for examina tion and report as to when the said stamp papers were issued for sale from the press.
The reaction of the plaintiff to this application and his subsequent conduct in relation to the investigation sought to be made to get at the truth regarding the date of issue of the aforesaid impressed stamp Paper and consequently regarding the alleged dissolution of the firm 'Sethiya & Co. ' is revealing.
It is amazing that the 866 simple request made by the defendants which should have been readily agreed to by the plaintiff if he had been innocent was stoutly opposed by him.
The circumstances in which the so called deed of dissolution of partnership dated July 22, 1948, and the report dated February 27, 1950, of the Assistant Master, India Security Press, Nasik disclosing that 'the first high value (Rs. 10/ ) impressed stamp in the type of water marked paper as used in the document dated July 22, 1948,was printed in his Press on November 23, 1948, and as such couldnot have been, existence on July 22, 1948 the alleged date of execution of the document disap peared is very intriguing It is also remarkable that when during the cross examination of the plaintiff on March 29, 1950, in connection with the issue relating to the bar of section 69 of the Partnership Act the defendants wanted to make use of the aforesaid report from the India Security Press, Nasik, and it came to light that the report and the original deed of dissolution set up by the plaintiff were missing, the plaintiff came forward with an amusing applica tion stating therein that "in the interest of the early disposal of the case, he undertakes not to rely on that document in the suit and to argue the case without that.
The manner in which the plaintiff behaved when the defend ants attempted to have the duplicate copy of the aforesaid report of the Assistant Master,India Security Press obtained by the Court proved is no less interesting.
A reference to the minutes of proceedings of the trial Court shows that after the Court had, at the request of the de fendants and with the consent of the plaintiff 's counsel, passed the order on May 21, 1950, for issuing a commission to Nasik for examination of the said officer of the Press in respect of the aforesaid report about the impressed stamp paper, the plaintiff made an application for stay of that order and on Jully 4, 1950, his counsel, Shri Walter Dutt, made the following statement : ,lm15 "The court may for the purpose of deciding the issue under section 69, Partnership Act take into consideration the fact that the "document purporting to be a dissolution deed executed between the partners of Sethiya & Co. is not genuine although this fact is not admitted by the plaintiff and the court may therefore, discard such portions of the oral evidence of both plaintiff and Seth Suganchand as it considers would be rendered unreliable if the view be taken that the document in question was a fabricated one and the court may presume that the document was not executed on the date on which it purports to be executed.
" On a consideration therefore of the totality of the tell tale facts and circumstances especially the aforesaid description of the plaintiff as partner of Sethiya & Co. in the preamble and at the food of Exh.A 1 and Exh. 168, the clumsy attempt made to obliterate the aforesaid description in the preamble of Exh. 168.the execution of a part of the so called deed of dissolution of partnership dated July 22, 1948 on the aforesaid non judicial impressed stamp Paper of the denomination of Rs. 10/ which was not in existence on July 22, 1948, the 867 resistence offered by the plaintiff to the defendants ' application requesting the Court to call for a report from the India Security Press, Nasik, about the data of issue of the said stamp Paper, the aforesaid report No. 780/26 dated February 27, 1950 of the India Security Press, Nasik, that Rs. 10/ non judicial impressed stamp paper which had been used for part execution of the aforesaid deed of dissolution had not been printed before November 23, 1948, the disappearance of the said deed of dissolution of partnership of Sethiya & Co. set up by the plaintiff and the report of the Assistant Master of the India Security Press, Nasik, the defendants ' endeavour to ' have the dupli cate copy of the aforesaid report of the India Security Press, Nasik about the impressed stamp paper of the denomi nation of Rs. 10/obtained by the Court proved and the plain tiff 's frentic efforts to thwart the attempt firstly by making an application stating therein that he would not rely on the aforesaid deed of dissolution dated July 22, 1948, secondly, by making an application for stay of the order passed by the trial Court regarding issue of a commission to Nasik for formally proving the report of the India Security Press and thirdly, by asking his counsel, Shri Waiter Dutt to make the above quoted statement strongly incline us to think in agreement with the subdued findings of the trial Court that the aforesaid deed of dissolution was fabricated by the plaintiff with the dishonest intention of playing a fraud on the Court and gaining an undue advantage over the defendants.
In addition to the facts and circumstances set out above, the debit of items of Rs. 1,55,000/ and Rs. 1, 68, 552/12/6 to the account of the partnership firm 'Sethiya & Co. ' on July 3, 1948, and July 10, 1949, respectively and issue by the plaintiff of cheques No. BL 003628 dated July 16, 1948 (Exh.B 11)for Rs. 1,55,000/ , No. BL 003634 dated July 16, 1948 (Exh. B 12) for Rs. 25,000/, No. BL 004636 dated July 20, 1948 (Exh. B 13) for Rs. 73,000/, No. BL 003630 dated July 9, 1948 (Exh. B 14) for Rs. 10,000/ , No. BL 003635 dated July 17, 1948 (Exh. B 15) for Rs. 16,500/ , No. 'BL 003632 dated July 10, 1948 (Exh. B 16) for Rs. 1,30,000/ , and No. BL 003633 dated July 10, 1948 (Exh. B 17) for Rs. 1,68,552.14/6 as partner of Sethiya & Co. also go to demolish the theory of dissolution of the firm ' 'S ethiya & Co. ' on June 30, 1948 which the plaintiff sought to build up on sandy foundations and furnish as eloquent proof of the fact that the firm was very much in existence when the agreement (Exh. 168) dated July 6, 1948, came into being.
It has also to be borne in mind that service by post or advertisement in some paper of notice about the retire ment of a partner from a partnership firm on persons who are in know of the existence of the firm and have been carrying on dealings with it is of utmost importance to prevent them from assuming that the partnership continues.
In the in stant case, it is manifest from the evidence educed by the plaintiff himself that neither he nor Seth Suganchand gave notice in writing to the defendants first set that the latter had retired from Sethiya & Co. with effect from June 30, 1948.
The evidence also makes it clear that the con cerned persons and the general public were 868 not informed about the retirement of seth Suganchand from the partnership firm 'Sethiya & Co. ' by publication of a notice in some paper.
The absence of these notices further belie the plea of the plaintiff regarding dissolution of the partnership firm 'Sethiya & Co. ' on June 30, 1948.
That the plaintiff 's story regarding dissolution of the firm 'Sethiya & Co. ' is a complete myth also receives strong support from the fact that although approximately Rs.1,1 0,000/ are admitted by Seth Suganchand to be due to him from the partnership not a farthing appears to have been paid to him nor any document acknowledging the liability appears to have been passed on to him.
The letter (Exh. 21) addressed to the Manger, Bank of Bikaner Ltd., Agra, intimating to him that Seth Suganchand had withdrawn from the partnership of Sethiya & Co. on which strong reliance is placed on behalf of the plaintiff is not helpful to him as it was not sent to the Bank before July 20, 1948.
The alleged dissolution of the partnership between Seth Suganchand and the plaintiff not having been established, it can be safely presumed in view of the above circumstances that the partnership between them continued to subsist at least upto July 20, 1948.
We are accordingly of the opin ion that the firm 'Sethiya & Co. ' was not dissolved with effect from June 30, 1948, as claimed by the plaintiff, and that the agreement dated July 6, 1948, was entered into by the plaintiff with the defendants first set not as the sole surviving proprietor of Sethiya & Co. but as a partner of the firm 'Sethiya & Co. ' Question No. 3: For a proper determination of this question, it is necessary to refer to section 69 of the Partnership Act, 1932, the relevant portion whereof is reproduced below for ready reference : "69."(1) No suit to enforce a right arising from a contract or conferred by this Act shall be instituted in any Court by or on behalf of any person suing as a partner in a firm against the firm or any person alleged to be or to have been a partner in the firm unless the firm is registered and the person suing is or has been shown in the Register of Firms as a partner in the firm.
(2) No suit to enforce a right arising from a contract shall be instituted in any Court by or on behalf of a firm against any third party unless the firm is registered and the persons suing are or have been shown in the Register of of Firms as partners in the firm.
(3) The provisions of sub sectiOns (1) and (2) shall apply also to a claim of set off or other proceeding to enforce a right arising from a contract, but shall not effect (a) the enforcement of any fight to sue for dissolution of a firm or for accounts of a dissolved firm, or any right or power to realise the property of a dissolved firm, or . " 869 A bare glance at the section is enough to show that it mandatory in character and its effect is to render a suit by a plaintiff in respect of a right vested in him or acquired by him under a contract which he entered into as a partner of an unregistered firm whether existing or dissolved, void.
In other words, a partner of a erstwhile unregistered part nership firm cannot bring a suit to enforce a right arising out of a contract falling within the ambit of section 69 of the Partnership Act.
In the instant case, Seth Suganchand had to admit in unmistakable terms that the firm 'Sethiya & Co. ' was not registered under the Indian Partnership Act.
It cannot also be denied that the suit out of which the appeals have arisen was for enforcement of the agreement entered into by the plaintiff as partner of Sethiya & Co. which was an unregistered firm.
That being so, the suit is undoubtedly a suit for the benefit and interest of the firm and consequently a suit on behalf of the firm.
It is also to be borne in mind that it was never pleaded by the plain tiff, not even in the replication, that he was suing to recover the outstandings of a dissolved firm.
Thus the suit was clearly hit by section 69 of the Partnership Act and was not maintainable.
Question No. 4: It would be noticed that the present suit has been brought by the plaintiff alone and in spite of the objection raised on behalf of the defendants, he did not care to implead Seth Suganchand who was a necessary party to the suit.
Assuming without holding therefore, that section 69 of the Partnership Act did not apply to the present case, the plaintiff could not in any event maintain the suit for recovery of the aforesaid amount (which was made up of items, some of which were admittedly due to the old Sethiya & Co.) without impleading Seth Suganchand.
Question No. 5 : Before proceeding to determine this question it would be well to advert to the legal position bearing on the matter As aptly stated in paragraph 1378 of Volume 12 of Halsbury 's Law: of England (Fourth ' Edition) "if an alteration (by erasure, interli neation, or other wise) is made in a material part of a deed, after it execu tion, by or with the consent of any party to or person entitle, under it, but without the consent of the party or parties liable under it, but without the consent of the party or parties liable under it, the deed is rendered void from the time of the alteration so as to prefer the person who ' has made or authorised the alteration, and those claim ing under him, from putting the deed in suit to enforce against an party bound by it, who did not consent to the alteration, any obligation, covenant, or promise thereby undertaken or made.
A material alteration, according to this authoritative work, is on which varies the rights, liabilities, or legal position of the parties a ascertained by the deed in its original state, or otherwise varies the legal effect of the instrument as originally expressed, or reduces to certainty some provision which was originally unascertained and a such void, or which may otherwise prejudice the party bound by the deed as originally executed.
870 The effect of making such an alteration without the consent of the party bound is exactly the same as that of cancelling the deed.
" To the same effect are the observations made by the Privy Council on Nahtu Lal & Ors.vs Musarnat Gomti and Ors.(1).
Now a comparison of Exh.A I (produced by the defendants first et) with Exh. 168 (produced by the plaintiff)would show that besides the obliteration of the word 'partner ' from the preamble as stated above, the plaintiff made two other alterations in Exh.
Originally, the second proviso to sub clause (8) of clause 1 of the agreement stood as given in Exh.A 1 ran thus: "The payment for purchase of cotton will be made on the first (underlining is ours) day of its receipt in the mills of the partners.
" In Exh 168, however, the word 'first ' has been changed into 'tenth ' thus making it read as "the payment for pur chase of cotton will be made on the tenth (underlining is ours) day of its receipt in the mills of the partners.
" The third alteration is no less important.
As would be evident from Exh.A 1, sub clause (3) of clause 12 of the agreement as actually drawn up between the parties read as follows : "A commission of Rupee one percent on value of all sales of products of the above three spinning mills, viz. yarn, and newar, whether sold directly by the partners or otherwise but delivered and produced during the currency of this agreement." After the alteration, the clause has been made to read as follows on Exh.168 : "A commission of Rupee one percent on value of all sales of products of the above three spinning mills, viz. yarn, and newar, whether sold directly by the partners or otherwise but delivered or produced during the currency of this agreement.
" As a result of the last change, the word 'and ' has been substituted by the word 'or '.
As the above mentioned alterations sub stantially vary the rights and liabilities as also the legal position of the parties, they cannot be held to be anything but material alterations and since they have been made without the consent of the defendants first set, they have the effect of cancelling the deed.
Question No. 5 is, therefore, answered in the affirmative.
(1) A.I.R. 1940 P.C. 160.
871 Question No. 6 The plaintiff 's suit, as already indi cated, was for a specific and ascertained sum of money on the basis of settled account.
The courts below have con currently found that there was no settlement of account on April 4, 1949, as alleged by the plaintiff.
After this finding, it was not open to them to make out a new case for the plaintiff which he never pleaded and go into the ac counts and pass a decree for the amount which they consid ered was due from the defendants first set to the plaintiff.
They should have, in the: circumstances, either dismissed the suit or passed a preliminary decree fox accounts di recting that the books of account be examined item by item and an opportunity allowed to the defendants first set to impeach and falsify either wholly or in part the accounts on the ground of fraud; mistakes, inaccuracies or omissions for it is well settled that in case of fraud or mistake, the whole account is affected and in surcharging and satisfying the accounts, errors of law as well as errors of fact can be set right.
By adopting the latter course indicated by us, the defendants first set would have got a fair and adequate opportunity of scrutinizing the accounts and showing whether they were tained with fraud, mistake, inaccuracy or omission or of showing that any item claimed by the plaintiff was in fact not due to him.
Question No. 7 : The High Court has for cogent reasons held that the goods on which the burden of charge lay being available for the satisfaction of the liabilities, if any, under the agreement dated July 6, 1948, the defendants second set could not be held personally liable for payment of the decretal amount.
The opinion expressed by the High Court is correct and we see no warrant or justification to interfere with the same.
In view of the foregoing, we have no hesitation in holding that as material alterations have been made by the plaintiff in the agreement dated July 6, 1948 (which is the basis of the suit) rendering it void and as the bar of section 69 of the Partnership Act clearly applies to the case, the suit is clearly untenable and has to be dismissed.
the result, Appeal No. 572 of 1974 is allowed and the suit out of which it arose is dismissed.
Consequently, Appeal No. 416 of 1973 fails and is dismissed.
In the circumstances of the case, parties are left to Pay and bear their own costs of these appeals.
C.A. 572/74 allowed.
P.H.P. C.A. 416/73 dismissed.
[/INST]Messrs.John & Co. were in financial difficulties and, therefore, entered into a financial agreement with Sethia & Co. a partnership firm of the plaintiff and Seth Sugan Chand.
On 6th July, 1948 Messrs. John & Co. obtained anoth er financial accommodation from Sethia & Co. Messrs. Tejka ran Sidhkaran had also given some advances to Messrs. John & Co. The liability to the firm of Messrs. Tejkaran Sidhkaran was transferred to Sethia & Co. Seth Loonkaran Serbia filed a suit against John & Co. and his partners (defendants first set) as well as Messrs. John, Jain, Mehra & Co. and its partners.
(defendants second set) for recovery of Rs. 21,11,500/ with costs and future interest and for a declaration that the plaintiff had a prior and floating charge on all the business assets of Messrs. John & Co. It was alleged by the plaintiff that the defendants (second set) entered into partnership with the defendants (first set ) under the name and style of Messrs. John Jain, Mehra & Co and maliciously induced them to commit breach of the agreement dated 6 7 1948 by forcibly turning out his representatives who used to remain in charge of the stocks, stores.
coal, waste, etc., of the mills and making them enter into a financial agreement contrary to the terms of the agreement with his firm.
The plaintiff also alleged that accounts were again settled on 4 4 1949 and a sum of Rs. 47,23,738/ was found due to him from the defend ants.
The defendants (first set) contended that there was no settlement of accounts; that the accounts were tainted with fraud and obvious mistakes and that on a true and correct accounting a large sum of money would be found due to them; that the plaintiff and said Sugan Chand obtained various documents, agreements, vouchers, receipts etc., and that the same were of no legal value as they were secured by the former by practising undue influence, fraud, coercion and misrepresentation; that the plaintiff had illegally and contrary to the agreement dated 6 7 1948 debited them with huge amounts which were not really due to them; that the cotton supplied by the plaintiff was of inferior quality and that the rates charged were exorbitant.
It was also denied that the plaintiff had floating or prior charge on any of their stocks, stores, etc; that the suit was barred by the provisions Of section 69 of the Partnership Act and that the agreement dated 6 71948 which was insufficiently stamped could not form the basis of the suit.
The defendants.
(second set) also denied the claim of the plaintiff.
The Trial Court held that the suit was maintainable; that the firm of Messrs. Sethia & Co. was dissolved before the institution of the suit; that the suit being one for the recovery of the assets due to a. dissolved partnership firm from a third party, was not barred by section 69 of the Partnership Act: that Seth Sugan Chand was not a necessary party to the suit; that the agreement dated 6 7 1948 was duly stamped and that no undue influence etc., was exercised by the plaintiff on the defendants; that there was no ac counting on 4 4 1949 as alleged by the plaintiff and that both the plaintiff and the defendants (first set) committed a breach of the agreement dated 6 7 1948.
The Trial Court also held that a charge was created in favour of the plain tiff in respect of the entire business assets and that the defendants (second set) were liable to satisfy the plain tiff 's claim.
The Trial Court decreed the plaintiff 's suit to the extent of Rs. 18,00,152 but rejected his claim for specific performance and injunction.
The Trial Court accord ingly passed a preliminary decree against both the sets of defendants directing them to deposit 854 the said amount in the court within the prescribed time and in default gave the plaintiff a right to apply for a final decree for the sale of all the business assets, goods, stocks, stores, etc.
The decree also gave a right to the plaintiff to apply for a personal decree against the defend ants for the balance of his claim in case the net sale proceeds of the property of the firm were found insufficient to discharge his claim.
The plaintiff filed an appeal in the High Court of Allahabad and the defendants also filed an appeal against the judgment of the Trial Court.
The High Court allowed both the appeals partially holding that no fraud, undue influence, coercion or misrepresentation was practised by the plaintiff; that the agreement dated 6 7 1948 was neither insufficiently stamped nor did it require registration; that the deed of dissolution dated 22 7 1948 was prepared for the purpose of the case but there was sufficient evidence on the record to indicate that said Sugan Chand had withdrawn from the partnership carried on in the name of Serbia & Co. with effect from 30 6 1948; that Seth Sugan Chand was not a necessary party to the suit; that the suit was not barred.
by section 69 of the Partnership Act; that the alterations in the deed dated 6 7 1948 were not material alterations and did not render the agreement void; that the plaintiff had a floating charge over the business assets of John & Co.; that it was defendants (first set) and not the plaintiff who committed breach of the ' agreement.
The High Court, there fore, passed a preliminary decree for Rs. 11,33,668/ in favour of the plaintiff and against the defendants (first set) but dismissed the suit with costs as against the de fendants (second set).
The High Court granted certificate under Article 133 in both the appeals.
Dismissing the plaintiff 's appeal and allowing the appeal of the defendants (first set) held: (1) Section 69 of the Partnership Act is mandatory in character and its effect is to render a suit by a plaintiff in respect of a right vested in him or acquired by him under a contract which he entered into as a partner of an unregistered firm, whether existing or dissolved, void.
[869 A] (2) A partner of an erstwhile unregistered partnership firm cannot bring a suit to enforce a right arising out of a contract failing within the ambit of section 69 of the Partnership Act.
The suit out of which the appeals arise was for enforcement of the agreement entered into by the plaintiff as partner of Serbia & Co. It was never pleaded by the plaintiff not even in his replication that he was suing to recover the outstanding of a dissolved firm.
Thus the suit was clearly hit by section 69 ' and was not main tainable.
[869 B C] (3) A close scrutiny of the document and other evidence clearly negatives the plaintiff 's claim that the firm was dissolved with effect from 30th June 1948.
[865 C] (a) The agreement dated 6th July 1948 itself is signed by the plaintiff as a partner and the, expression partner also appears in the body of the agreement.
[865 D] (b) The alleged deed of dissolution dated 22nd July 1948 between the plaintiff and Seth Sugan Chand was prepared on a stamp paper printed in the Government Press in November, 1948.
The said Dissolution Deed was, therefore, clearly fabricated by the plaintiff.
The plaintiff signed various cheques in July, 1948 as the partner of Sethia & Co. [865 F H; 866 A C; 867 F] (c) No service by post or advertisement in the newspaper about the dissolution was given either by the plaintiff or by Seth Sugan Chand.
[867 F] (4) Seth Sugan Chand was a necessary party to the suit and in spite of the objections raised on behalf of the defendants the plaintiff did not care to implead ' Seth Sugan Chand.
The suit was bound to fail on that ground also.
[869 D E] (5) A material alteration in a document without the consent of a party to, it has the effect of cancelling the deed.
[870 A] Volume 12 of Halsburys Laws of England (Fourth Edition) referred to.
855 Nathu Lal & Ors.
vs Musammat Gomti & Ors.
(A.I.R. relied on.
In the present case there were many material alterations of the document.
The material alterations, therefore have the effect of cancelling the deed in question.
[870 B D] (6) The plaintiff 's suit was for a specific and ascer tained sum of money on the basis of settled account.
The Courts below found concurrently that there was no settlement of account as alleged by the plaintiff on 4th April 1949.
After that it was not open to the courts below to make out a new case for the plaintiff which he never pleaded.
The courts be.low could have either dismissed the suit or passed a preliminary decree for accounts directing that the books of account be examined item by item and an opportunity allowed to defendants to impeach and falsify the accounts.
[871 A C]
</s>
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<s>[INST] Summarize the judgementivil Appeal No. 2992 of 1986.
From the Judgement and Order dated 22.7.1986 of the Madras High Court in W.P No 815 of 1985.
T.S. Krishnamurthy Iyer, Miss Purnima Bhat, Atul Sharma, A.V. Pillai and E.C. Agrawala for the Appellant.
P. Chidambaram, R. Ayyam Perumal, K.C. Dua, V. Krishnamurthy and R. Mohan for the Respondents.
The Judgement of the Court was delivered by S.C. AGRAWAL, J.
This appeal and the connected petitions for special leave to appeal are directed against the common judgment of the Division Bench of the Madras High Court dated July 22; 1986 whereby the judgement of the learned Single Judge has been set aside and the writ petitions filed by the appellant as well as the petitioners in the special leave petitions (referred to as 'the petitioners ' for the sake of convenience) have been dismissed.
The petitioners joined the Indian Army as Emergency Commissioned Officers (ECOs) in 1963 after the Chinese aggression.
They were discharged from the Army during the years 1967 to 1970.
After their discharge from the Army, they joined the Commercial Tax Service of the State of Tamil Nadu on being selected by the Tamil Nadu Public Service Commission through a competitive examination.
For rehabilitation of ECOs/Short Service Regular Commissioned Officers (SSRCOs) on their release from the Armed Forces, the Government of Tamil Nadu had by G.O. ms. No. 84 dated January 1, 1967, reserved 25% of the vacancies to be filled by direct recruitment during the four years 1967 1970 in respect of certain categories of posts in the State services.
By Order, G.O. Ms. No. 686 dated March 24, 1970, the Government of Tamil Nadu, in modification of the said order reserved 25% of the vacancies in non technical posts under various groups (both Gazetted and non Gazetted) to be filled by direct recruitment during five years commencing from 1969 for rehabilitation of ECOs/SSRCOs on their release from the Armed Forces.
The said order made provision for relaxation of age in case of such officers for 849 the purpose of recruitment to be reserved vacancies.
As regards seniority provision was made in paragraph 8 of the said order which prescribed as under: Inter se seniority among the candidates selected for the reserved vacancies will be determined by the Commission.
So far as the seniority in the department is concerned, the officers will take their seniority with reference to the order of preference indicated by the Commission and not with reference to the service with the "Armed Forces".
It appears that in respect of doctors who had joined the defence forces in connection with the emergency declared in 1962 and who were subsequently appointed in the cadre of Assistant Surgeons in the State of Tamil Nadu, the Government had issued an Order G.O. Ms. No. 2020 dated September 23, 1965, whereby seniority of such an incumbent was to be fixed by allotting them the year in which he would have been appointed to the post at his first possible attempt after the date of joining military service/training.
The Tamil Nadu Public Service Commission, in their letter dated February 6, 1973 addressed to the Chief Secretary to the Government of Tamil Nadu, made a reference to G.O. Ms No. 2020 Health dated September 23, 1965 with regard to fixation of seniority of candidates appointed to the post of Assistant Surgeon against vacancies reserved for ECOs/SSRCOs and expressed the view that allowing one of released persons like Doctors to enjoy the concession of their seniority being reckoned with reference to their date of appointment in the Army and at the same time denying such a concession to ECOs/SSRCOs selected to a non technical post will not be fair and such differential treatment will not also be in the interests of rehabilitating released Army personnel.
The Public Service Commission, therefore, commended that the principle followed in the matter of determining seniority in respect of released Army Doctor with reference to the date of their joining duty in the Armed Forces be extended to all services as recruitment to all the sevices are made on the basis of the competitive examinations comprising either of a written test or an oral test or a combination of both.
In the said letter, it was requested that orders in paragraph 8 of G.O.Ms. 686 may be suitably modified.
Keeping in view the aforesaid view expressed by the State Public Service Commission, the Government of Tamil Nadu passed an order G.O.Ms No. 25 dated November 16, 1976 whereby, in supersession of the earlier procedure prescribed for determining the seniority of the ECOs/SRRCOs recruited for non technical posts (both Gazetted and non Gazetted) against reserved 850 vacancies in G.O.Ms No. 686 dated March 24, 1970, the following procedure was prescribed: "(i) the seniority of the Emergency Commissioned/Short Service Regular Commissioned Officers recruited to the State Civil Services (both Ghazetted and Non Gazetted) between 24.3.1970 to 4.10.73 against reserved vacancies shall be fixed treating them as belonging to the year in which they would have been appointed to the posts in their first possible attempt after the date of joining military service/training." After the issuance of the aforesaid order dated November 16, 1976, it was represented to the State Government that the concession granted to the ECOs/SSRCOs recruited to the Civil Services of the State instead of confirming it only to those recruited between 1970 and 1973.
The State Government decided to accede to that request and issued a fresh G.O.ms No. 734 dated June 15, 1977 whereby the orders in para 1(i) of the Order dated November 16, 1976 were thus modified: "1.
(i) The seniority of Emergency Commissioned Officers/Short Service Regular Commissioned Officers recruited to the non technical posts against reserved vacancies shall be fixed treating them as belonging to the year in which they would have been appointed to the posts in their first possible attempt after the date of joining military duty.
In the case of candidates who joined Military service on or before 30th June of a year, the year of allotment would be the same; while in the case of those who joined the Military services on or after Ist July of a year, the year of allotment would be the next year.
" By the said order, it was also directed that the appointing authority should take steps to refix the seniority of the ECOs/SSRCOs recruited to the Civil Services with reference to instructions after issuing notices to all affected parties.
In accordance with the aforesaid directions, notices were issued to the other officers whose seniority was likely to be disturbed in view of the concession extended to ECOs/SRRCOs under Order dated June 15, 1977.
After taking into consideration the representations received in pursuance of the said notice 851 the State Government issued an Order G.O.Ms.
No. 233 dated March 3, 1980 whereby the orders dated November 16, 1976 and June 15, 1977 were cancelled.
In the said order, it was stated that: "The Government have carefully examined the above representations with reference to the legal position.
They consider that the vested seniority rights already accused to individuals by virtue of the rules in force cannot be divested by issuing fresh rules and giving retrospective effect to them.
The Government have therefore decided not to implement those orders by amending the special Rules governing these non technical posts.
" The petitioners as well as some other ECOs/SSRCOs filed writ petitions in the Madras High Court challenging the validity of the said order dated March 3, 1980.
The writ petitions were heard by a learned Single Judge of the High Court who allowed the same by his judgement dated December 4, 1984.
The learned Single Judge was of the view that under orders dated November 16, 1976 and June 15, 1977, which were passed on the recommendations of the Tamil Nadu public Service Commission, the petitioners had acquired certain rights in the matter of seniority and promotion and since the impugned Government order takes away the said rights of the petitioners, the petitioners should have been afforded an opportunity of a hearing before passing the impugned order which had not been done in this case.
Appeals were filed by the State Government as well as by private respondents against the said decision of the learned Single Judge.
The said appeals were decided by a Division Bench of the High Court by its judgment dated July 22, 1976, whereby it was held that the provision with regard to fixation of seniority in the cadre of Commercial Tax Officer (CTOs) in which the petitioners were appointed in governed by Rule 35 of the General Rules which are contained in Part II of the Tamil Nadu State and Subordinate Service Rules made under proviso to Article 309 of the Constitution and under the said rule, seniority is to be fixed on the basis of date of appointment to the service.
the learned Judges found that the said Rules had not been amended and in the absence of an amendment in rule 35, the orders with regard to fixation of seniority of ECOs/SSRCOs contained in Orders dated November 16, 1976 and June 15, 1977 were invalid and no rights could accure to the petitioners on the basis of the said orders which may require affording an opportunity to them.
With regard to Doctors and Engineers, the learned Judges have pointed out that suitable amendments had been made in the relevant statutory rules relating to both 852 the services.
The learned Judges, therefore, while setting aside the order of the learned Single Judge, dismissed the Writ Petitions of the petitioners but observed that the judgment would not prevent the State Government from amending the Rules made under Article 309 of the Constitution and if and when rules are made and if any persons are affected, they are entitled to challenge the said Rules.
Feeling aggrieved by the said decision of the division Bench of the High Court, the petitioners have approached this Court.
The first contention that has been urged by the learned counsel for the petitioners is that the concessions contained in the orders dated November 16, 1976 and June 15, 1977 were not invalid inasmuch as it was permissible for the State Government to issue administrative instructions with regard to determination of the seniority of the ECOs/SSRCOs and by the said orders which were issued on the recommendations of the State Public Service Commission the lacuna which was found in the existing rules was sought to be removed and that it w as permissible for the State Government to issue administrative instructions to remove such a lacuna.
In support of the said submission, reliance has been placed on the decisions of this Court in Sant Ram Sharma vs State of Rajasthan & Anr., ; ; Union of India vs H.R. Patankar 7 Ors., [[1985] 1 SCR 400 and State of Gujarat vs Akhilesh C. Bhargav & Ors. ; In the above mentioned decisions, it has been laid down that although the Government cannot amend the statutory rules by administrative instructions, but if the rules are silent on any particular point, the Government can fill up the gaps and supplement the rules and issue instructions not inconsistent with the rules already framed.
in the instant case, it cannot be said that on the date of issue of orders dated November 16, 1976 and June 15, 1977, the rules were silent on the matter of fixation of seniority of persons recruited to the Tamil Nadu Commercial Tax Service.
Appointment to the said service was governed by General Rules contained in Part Ii of the Tamil Nadu State and Subordinate Rules.
Clauses (a) and (aa) of rule 35 of the said General Rules provide as under "(a) The seniority of a person in a service, class or category or grade shall unless he has been reduced to lower rank as a punishment, be determined by the rank obtained by him in the list of approved candidates drawn up by the Tamil Nadu Public Service Commission or other appointing authority, as the case may be, subject to the rule of reservation 853 where it applies.
The date of commencement of his probation shall be the date on which he joins duty irrespective of his seniority.
(aa) The seniority of a person in a service, class or category or grade shall, where the normal method or recruitment to that service, class, category or grade is by more than one method of recruitment, unless the individual has been reduced to a lower rank as a punishment, be determined with reference to the date on which he is appointed to the service, class, category or grade".
This shows that thee was an express provision in the statutory rules providing that seniority shall be fixed on the basis of the date of appointment.
By orders dated November 16, 1976 and June 15, 1977, the said principle for fixation of seniority contained in rule 35 was sought to be altered in respect of ECOs/SSRCOs and the seniority was sought to be fixed on the basis of a different criterion, namely, by treating them as belonging to the year in which they would have been appointed to the posts in their first possible attempt after the date of joining military duty.
This was inconsistent with the principle for fixing the seniority contained in rule 35 of the General Rules and this could onlybe done by suitably amending the said rules and it could not be done by issuing administrative instructions.
The High Court has, in our opinion, rightly held that the directions contained in orders dated November 16, 1976 and June 15,1977 were invalid being contrary to the provisions contained in rule 35 of the General Rules.
Since the said orders were invalid, the petioners could not claim any right on the basis of the said orders and there was, therefore, no question of affording them an opportunity of a hearing before passing the order dated March 3, 1980.
In so far as appointments to medical and engineering services are concerned, the High Court has pointed out that suitable amendments were made in the relevant Services Rules relating to those services whereby the benefit of the Army Service was given in the matter of fixation of seniority of ECOs/SSRCOs.
who had joined the medical and engineering services.
No similar amendment has been made in the rules governing the non technical services, e.g., Commercial Tax Service to which the petitioners were appointed.
The learned counsel for the petitioners have next contended that the petitioners have been subjected to arbitrary discrimination i n the matter of fixation of their seniority inasmuch as ECOs/SSRCOs who have joined the medical and engineering service of the Government of 854 Tamil Nadu have been given the benefit of their service in the Army in the matter of fixation of seniority whereas similar benefit has been denied to the petitioners even though the petitioners as well as other ECOs/SSRCOs who have joined medical and engineering service were all similarly situate.
In this connection, reliance has been placed on the decision of this Court in Union of India & Ors.
vs Dr. section Krishna Murthy & Ors. etc., [1989] Supp.
(1) SR 275.
This contention, in our view, is misconceived.
ECOs/SSRCOs who have joined medical and engineering services of the State of Tamil Nadu were technically qualified in their fields and they had worked in the Army in the same field in which they are now employed in the State service.
The benefit of the experience gained by them during the period of their service in the Army on the posts viz. medical/engineering held by them was available to the State they joined the medical/engineering services of the State of Tamil Nadu.
The same cannot be said for the petitioners because the nature of the duties discharged by them in the Army were different from the duties they are now required to perform at CTOs in the State service.
It cannot, therefore, be said that the ECOs/SSRCOs who have joined the medical and engineering services of the State of Tamil Nadu and the petitioners who have joined the Commercial Tax Department of the State are persons similarly situate in the matter of determination of seniority and for counting the earlier Army service for that purpose.
In Union of India vs Dr. section Krishna Murthy, case (supra), the ECOs/SSRCOs on discharge from the Army had joined the Indian Forest Service and the Indian Police Service and provision was made in the Regulation of Seniority Rules governing these Services whereby it w as provided that year of allotment of an officer appointed to the said Service shall be deemed to be the year in which he would have been so appointed at his first or second attempt after the date of joining pre commission training or the date of their commission where there was only post commission training.
The validity of the said rules was challenged by other direct recruits to those Services on the ground that the ECOs/SSRCOs could not be classified into a separate category.
The said contention was rejected by this Court and it was held that ECOs/SSRCOs formed a definite class, distinct from other officers of the Indian Forest Service and Indian Police Service, and that the said classification was founded on an intelligible differentia which distinguishes them from other officers and that the classification has rational relation to the objects sought to be achieved by the Rules inasmuch as it has been made for the purpose of compensating the ECOs/SSRCOs for the lost opportunity because of their joining the Army service.
855 The said decision may have a bearing in the event of rules being framed making provision for giving the benefit of Army service in the matter of fixation of seniority of the petitioners and other persons who have joined the Commercial Tax Service of the State of Tamil Nadu.
Since there is no such rule, the petitioners cannot derive any assistance from this decision.
In the circumstances, we find no ground to interfere with the decision of the High Court.
The appeal as well as the special leave petitions are, therefore, dismissed but with no orders as to costs.
[/INST]The appellant Board conducted secondary examinations in the month of March 1990.
During recounting of the marks obtained by the candidates it was found that moderators mark sheets relating to 283 examinees, which included the 53 respondents, had been tampered with.
The declaration of their results was withheld pending enquiry.
Several writ petitions were filed against non declaration of the results and the High Court directed the appellant to the expeditious action to declare the results.
The Board appointed seven enquiry officers to conduct the enquiry.
Show cause notices were issued to the students informing them of the nature of tampering, the subjects in which the marks were found tampered with, the marks initially obtained and the marks increased due to tampering, and also indicated the proposed punishment, if in the enquiry it would be found that marks were tampered with the knowledge or connivance or at the instance of the candidates or parents or guardians.
They were also informed that they would be at liberty to inspect the documents at the Divisional Board at Bombay; they were entitled to adduce documentary and oral evidence at the hearing; they would also be permitted to cross examine the witnesses of the Board, if any; they would not be entitled to appear through an advocate, and the parents or guardians would be permitted to accompany the students at the time of enquiry, but they would not be entitled to take part in the enquiry.
All the candidates admitted that the marks initially awarded by 773 the examiners had been tampered with in the moderators mark sheets; and due to tampering the marks were increased and the increase was to their advantage.
However, they denied that either they or their parents or guardians were privy to the tampering.
The Enquiry Officers submitted their reports holding that the moderators mark sheets had been fabricated and submitted the reports to the Board.
The Standing Committee constituted in this regard considered the records and the reports and resolved to withhold, as a measure of punishment, the declaration of the results of their examinations and to debar the students to appear in the supplementary examination.
The notification to that effect was published on 31.8.1990 and the report submitted to the High Court.
The High Court allowed the writ petitions.
One Hon 'ble Judge held that the Standing Committee was devoid of power, and because it did not obtain the approval of the Divisional Board, the impugned notification was without authority of law.
On merits, the learned Judge held that the Standing Committee did not apply its mind in the proper perspective to the material facts, and therefore, the finding that tampering was done at the instance of the examinees/parents/guardians was perverse.
The other Hon 'ble Judge held that the examinees were not guilty of the mal practices and their guilt had not been established.
Before this Court, it was contended on behalf of the respondents that the Act empowered that Divisional Board to deal with the use of unfair means at the final examination, and the Standing Committee was an alien body to the divisional Board; the students were minors and neither the parents nor anybody like an advocate was permitted to assist the students; answers to the questionnaire were extracted from the students to confess their guilt: no adequate opportunity was given to the students at the enquiry; the evidence without subjecting it to cross examination was of no value; the Standing Committee did not apply its mind to the facts, nor recorded reasons in support of its conclusion that the examinee/parents/guardians were parties to the fabrication; the Board should establish the guilt of the examinees beyond all reasonable doubts; the standard of proof ought to be of a high degree akin to trial in a criminal case; the test of benefit to an examinee was preposterous; no evidence was placed on record, nor was it proved and hence the findings of the Standing Committee were clearly based on no evidence; the Enquiry Report contained only conclusions bereft of the statement of facts and reasons in support thereof; and the order ought to have been a speaking order preceded by a fair enquiry and the report must 774 be based on cogent evidence.
On behalf of the Board, it was inter alia contended that all the examinees admitted in answers to the questionnaire that tampering was done and it was to their advantage, and that in view of the admission, the need to examine any person from the concerned section was obviated.
Allowing the appeals, upholding the notification subject to modifications, this Court, HELD: (1) there is no manner of doubt that unfair means were used at the final Secondary Examination by fabricating the Moderators ' mark sheet of the examinees, in concerted manner, admittedly to benefit the students.
[782C] (2) The State Board is empowered to constitute the Divisional Boards and the Standing Committees.
The State Board is also empowered to make regulations to conduct examinations and also to deal with the use of unfair means at the final examination conducted by the Board.
The Divisional Board is empowered to conduct within its area the final examination on behalf of the State Board.
The Divisional Board is also empowered to deal with the cases of unfair means according to the procedure laid down by the State Board.
[783F G] (3) The Standing Committee is an executive arm of the Divisional Board for the efficient and expeditious functioning of the Board as adumberated under the Act itself.
It is not a foreign body.
When the Standing Education Committee takes the decision its decision is on behalf of the Divisional Board, and the decision of the Divisional Board in turn is on behalf of the State Board.
[786E F] (4) On a fair and harmonious reading of the relevant provisions of the Act and the Maharashtra Secondary and Higher Secondary Education Board, Regulation, 1977 the Examination Committee of the Divisional Board is itself a statutory body which acted on behalf of the Divisional Board and is not a delegate of the Divisional Board.
[786H] State of U.P. vs Batuk Deo Pati Tripathi & Anr., ; Kargram Panchayat Samiti & Anr.
vs State of West Bengal & Ors., [1987] 3 S.C.C. 82; Baradakanta Misra vs High Court of Orissa & Anr., and Tej Pal Singh (dead) through L.rs.
vs State of U.P. & Anr., , referred to.
775 (5) The Standing Committee is an integral part of the Divisional Board and its acts are for and no behalf of the Divisional Board.
Accordingly, the Board must be deemed to have passed the impugned notification as per the scheme of the provisions of the Act and the Regulations.
Therefore, the finding of the learned Judge that the Standing Committee had no power to take the impugned decision, etc.
without approval of the Divisional Board is clearly illegal and cannot be sustained.
[789B C,F] (6) While exercising the powers under Article 226 or Article 136 of the Constitution, the High Court or this Court, is not sitting as a Court of Appeal on the findings of facts recorded by the Standing Committee (Domestic Enquiry Board) nor have power to evaluate the evidence as an appellate Court and to come to its own conclusions.
If the conclusions reached by the Board can be fairly supported by the evidence on record then the High Court or this Court has to uphold the decision, though as appellate Court of facts, it may be inclined to take a different view.
[789C] (7) Fabrication cannot be done except to benefit the examinees.
The fabricator had done it for reward in concert with outside agencies.
Therefore, the inference from these facts drawn by the Standing Committee that the examinees/parents/guardians were responsible to fabricate the moderators ' mark sheets is based on evidence.
[790G] (8) It is not open to the High Court to evaluate the evidence to come to its own conclusions.
Thereby the High Court has committed manifest error of law warranting interference by this Court.
[791A] (9) The Writ Court would not interfere with an order of educational institution.
Therefore, what the writ Court needs to do is to find whether fair and reasonable opportunity has been given to the students in the given facts.
[792F] D.M.K. Public School vs Regional Joint Director of Hyderabad, A.I.R. 1986 A.P. 204; G.B.S. Omkar vs Shri Venkateswara University, A.I.R. 1981 A.P. 163.
(10) Assistance of an Advocate to the delinquent at a domestic enquiry is not a part of the principles of natural justice.
It depends on the nature of the inquiry and the peculiar circumstances and facts of a particular case.[792H] 776 (11) The regulations and the rules of enquiry specifically excluded the assistance of an advocate at the inquiry.
Therefore, the omission to provide the assistance of a counsel at the inquiry is not violative of the principles of natural justice.
[793A] (12) The procedure adopted at the inquiry was fair and just and it was not vitiated by any procedural irregularity nor was violative of the principles of natural justice.
The absence of opportunity to the parents or guardians, in this background, did not vitiate the legality or validity of the inquiry conducted or decision of the Committee.
[793G H] (13) Unless the rule expressly or by necessary implications, excluded recording of reasons, it is implicit that the principles of natural justice or fair play does require recording of reasons as a part of fair procedure.
In an administrative decision, its order/decision itself may not contain reasons.
It may not be the requirement of the rules, but at the least, the record should disclose reasons.
It may not be like a judgement.
But the reasons may be precise.
[794F] Union of India vs Mohan Lal Capoor & Ors. ; Gurdial Singh Fiji vs State of Punjab & Ors. ; and S.N. Mukherjee vs Union of India, J.T. , referred to.
(14) The omnipresence and omniscience of the principle of natural justice acts as deterrence to arrive at arbitrary decision in flagrant infraction of fair play.
But the applicability of the principles of natural justice is not a rule of thumb or a straight jacket formula as an abstract proposition of law.
It depends on the facts of the case, nature of the inquiry and the effect of the order decision on the rights of the person and attendant circumstances.
[795F] (15) In the instant case, since the facts are admitted, the need to their reiteration was obviated and so only conclusions have been stated in the reports.
The omission to record reasons is neither illegal, nor is violative of the principles of natural justice.
[795H 796A] Khardah Co. Ltd. vs Their Workmen, ; ; A.K. Roy etc.
vs Union of India & Ors.
[1982] 1 S.C.C. 271; Pett vs Grehound Racing Association Ltd., [1968] 2 ALL Eng.
Reports 545; Union of India vs H.C. Goel, ; ; M/s. Bareilly Electricity Supply Co. Ltd. vs The Workmen & Ors. ; ; Shanti Prasad Jain vs The Director of Enforcement, ; Merla Ramanna vs Nallaparaju & Ors., ; 777 Kashinath Dikshita vs Union of India & Ors., [1986] 3 S.C.C. 229; Government Medical Store Depot, Karnal vs State of Haryana & Anr.
, ; ; M/s. Kesoram Cotton Mills Ltd. vs Gangadhar & Ors., ; ; State of Punjab vs Bhagat Ram, ; Gujarat Steel Tubesl Ltd. vs Gujarat Steel Tubes Mazdoor Sabha,, ; ; Union of India & Ors.
vs Mohd. Ramzan Khan, J.T. ; Vishwa Nath vs State of Jammu & Kashmir, ; Olga Tellis & Ors.
vs Bombay Municipal Corporation, etc.; , , referred to.
(16) Court should be slow to interfere with the decisions of domestic tribunals appointed by the education bodies like universities.
[799F] (17) In dealing with the validity of the impugned order passed by a University under Article 226 the High Court is not sitting in an appeal over the decision on this question.
Its jurisdiction is limited and though it is true that if the impugned order is not supported by any evidence the High Court may be justified to quash the order but the conclusion that the impugned order is not supported by any evidence must be reached after considering the question as to whether the probabilities and circumstantial evidence do not justify the said conclusion.
The enquiry held by domestic tribunals in such cases must no doubt be fair and the students must be given adequate opportunity to defend themselves and holding such enquiries, the tribunal must follow the rules of natural justice.
[799F G] Board of High School and Intermediate Education U.P. vs Sagleshar Persad & Ors., and Bihar School Examination Board vs Subhas Chandra Sinha & Ors. ; referred to.
(18) The examination committee has jurisdiction to take decision in the matter of use of unfair means not only on direct evidence but also on probabilities and circumstantial evidence.
There is no scope for importing the principles of criminal trial while considering the probative value of probabilities and circumstantial evidence.
The Examination committed is not bound by technical rules of evidence and procedure as are applicable to Courts.
[801E F] Seth Gulabchand vs Seth Kudilal & Ors., [1966] 3 S.C.R. 623; Ghazanfer Rashid vs Board H.S. & I. Edn.
U.P., A.I.R. 1970 Allahabad 209; Miller vs Minister of Pensions, [1947] All.
E.L.R. 372; State of Uttar Pradesh vs Chet Ram & Ors., , referred to.
778 (19) There is an unmistakable subjective element in the evaluation of the degree of probability and the quantum of proof.
Forensic probability must, in the last analysis, rest on the robust common sense and, ultimately, on the trained institutions of the Judge.
[802D] (20) Strict rules of the Evidence Act, and the standard of proof envisaged therein do not apply to departmental proceedings of domestic tribunals.
It is open to the authorities to receive and place on record all the necessary, relevant, cogent and acceptable material facts though not proved strictly in conformity with the Evidence Act, the material must be germane and relevant to the facts in issue.
In grave cases like forgery, fraud, conspiracy, misappropriation, etc.
seldom direct evidence would be available.
Only the circumstantial evidence would furnish the proof.
Inference from the evidence and circumstances must be carefully distinguished from conjectures or speculation.
[805D E] State of U.P. vs Krishna Gopal & Anr.,, ; ; Hanumant vs The State of Madhya Pradesh, [1952] S.C.R. 1091; Reg.
vs Hodge, ; Bank of India vs J.A.H. Chinoy, A.I.R. 1950 P.C. 90; Khwaja vs Secretary of State, [1983] 1 All E.L.R. 765 (H.L.); Sodhi Transport Co. & Anr.
vs State of U.P. & Anr.
etc., [1986] 1 S.C.R. 939; Bhandari vs Advocates Committee, [1956] A.E.L.R. 742 (P.C.); Glynn vs Keale University & Anr.
; In Re: An Advocate; , ; Shri Krishan vs The Kurukshetra University, Kurukshetra, A.I.R. and Shivajirao Nilangekar Patil vs Dr. Mahesh Madhav Gosavi & Ors. & Vice Versa, ; , referred to.
(21) The standard of proof is not beyond reasonable doubt "but" the preponderance of probabilities tending to draw and inference that the fact must be more probably.
Standard of proof cannot be put in a straight jacket formula.
No mathematical formula could be laid on degree of proof.
The probative value could be gauged on facts and circumstances in a given case.
The Standard of proof is the same both in civil cases and domestic enquiries.
[805H 806B] (22) The conclusion reached by the Education Standing Committee that the fabrication was done at the instance of either the examinees or their parents or guardians is amply borne out from the record.
The High Court over stepped its supervisory jurisdiction and trenched into the arena of appreciation of evidence to arrive its own conclusion on the specious plea of satisfying 'conscience of the Court '.
[806G]
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<s>[INST] Summarize the judgementivil Appeal No. 8295 of 1983.
From the Judgment and Order dated 29.7.
1982 of the Calcutta High Court in Appellate Decree No. 385 of 1979.
D.N. Mukherjee and N.R. Choudhary for the Appellant.
Dr. Shankar Ghosh, P.R. Seetharaman and M.T. George for the Respondent.
The Judgment of the Court was delivered by OZA, J.
This is an appeal preferred by the appellant after getting leave from this court against the judgment and decree passed by the High Court of Calcutta wherein the High Court allowed the appeal of the respondent tenant and set aside the decree for eviction granted by the courts below in favour of the appellant.
The appellant landlord filed a suit for recovery of posses sion of 1167 the 2nd floor rear portion of the premises 248, C.I.T. Road, Calcutta which was let out to the respondent defendant as a monthly tenant on the ground that the landlord reasonably required the suit premises for his own occupation and had no other reasonably suitable accommodation in the town.
The decree was also sought on other grounds which is not rele vant for the purposes of this appeal.
Both the courts the Trial Court and the First Appellate Court found that the suit premises were reasonably required for the personal use and occupation of the appellant land lord and his family which consisted of his wife one son one daughter and therefore the decree was granted in accordance with West Bengal Premises Tenancy Act, 1956.
What was urged by the appellant plaintiff in support of genuine requirement was that he is a Medical practitioner and was appointed as a Physician in Ghana (Africa in 1964) where he has been residing temporarily.
In Ghana after some time his family could not stay and his wife and children have come back and are residing in Calcutta.
His service in Ghana was terminable by giving a notice of 3 months and the plaintiff landlord desires to come back to India and settle down in medical practice in this locality where the house is situated.
It was also alleged in the plaint that he could not come back as the accommodation was not available, and that after taking retirement from Ghana they will settle down in Calcutta in this house in dispute.
The requirement of the family also was alleged on the ground that the son and the daughter of the appellant have also grown and they also need rooms for their use.
It was also alleged that apart from the residential portion he also needs one room for his medical practice.
The trial court and the first Appellate Court accepting this contention of the plaintiff appellant granted decree for eviction.
It appears that during the pendency of this litigation the present appellant also had entered into an agreement with some construction company for a flat in South Calcutta and ultimately in October 1978 he got possession of that flat.
The First Appellate Court i.e. the Court of Additional District Judge maintained the decree in favour of the appel lant by its judgment dated 29th September 1978 and against this judgment the respondent tenant preferred a second appeal before the High Court.
During the pendency of this appeal in the High Court the respondent tenant submitted an application for consideration of subsequent events i.e. the acquisition of the flat in South 1168 Calcutta suggesting that the need of the appellant landlord has been satisfied and therefore the decree of eviction should be set aside.
The High Court permitted this applica tion for amendment and permitted parties to lead additional evidence and in consequence the appellant landlord also was examined once again and it is not disputed that apart from his statement which was recorded earlier additional evidence was recorded and it is on this evidence that the High Court came to the conclusion that as now alternative accommodation i.e. a flat in South Calcutta which was acquired in 1978 available the decree of eviction was set aside and it is against this judgment of the High Court that the present appeal has been preferred.
Learned counsel appearing for the appellant contended that while in service in Ghana since 1975 the appellant wanted to come back but could not because the premises were not available and therefore the suit was filed.
During this period out of some savings from the earnings that the appel lant made in Ghana, he booked a flat and ultimately a flat was practically ready in 1978.
It was contended that after the judgment of the power Appellate Court where the decree was confirmed the appellant felt secured that he will now get the premises in suit where he wanted to settle down in practice and where in fact in part of the premises his family was staying and as the appellant had no sufficient funds he let out this flat in South Calcutta and it is the tenant who invested some money and got it completed.
Accord ing to learned counsel the alternative accommodation should be reasonably suitable and available and it is only then it could be said that as the alternative accommodation which is reasonably suitable is available that the decree for evic tion could be refused when the two courts the court of facts have found it in favour of the appellant that he required the premises in question for his bona fide use.
Learned counsel contended that admittedly the flat which was allotted was a flat on the 13th floor in South Calcutta which is a posh locality.
For the appellant who is a M.B.B.S. and who bad been living and practising in C.I.T. Road in the suit premises for him at this stage in life it was not possible to start practice in South Calcutta on 13th floor.
It was also contended that the wife .of the appellant is also working as a teacher in one of the schools in the locality and it would not be convenient and possible for her to live in South Calcutta and come to this area for dis charge of her duties.
According to learned counsel although the flat was acquired but it was not at all suitable and therefore the High Court was not right on this basis to interfere with 1169 the concurrent findings of facts arrived at by the courts below.
Learned counsel by reference to certain decisions of this court contended that mere fact that the landlord had purchased or acquired an accommodation is not sufficient to negative the genuine requirements but it has further to be found that the premises so acquired are reasonably conven ient and in this regard it was contended that the learned Judge of the High Court omitted to consider these circum stances.
It was also contended that the learned Judge omit ted to consider the positive evidence and drove inference from the fact that the flat was acquired on the basis of agreement that it is being acquired for residential purposes and further averment made to indicate that the appellant landlord intended to start some laboratory in the fiat in South Calcutta.
Learned counsel for the respondent contended that after the additional facts came to the knowledge of the respondent tenant it was pleaded an additional evidence produced.
The respondent produced evidence that in fact all other purchas ers of the flats got possession of the flats in 1977 whereas the present appellant got it in October 1978 when the judg ment in lower appellate court was pronounced on 29th Septem ber 1978.
It was contended that the present appellant de layed taking of possession just to wait till the decree for eviction was affirmed by the Appellate Court.
He further contended that there is no evidence to indicate that this alternative accommodation acquired is not reasonably suit able.
According to the learned counsel South Calcutta where this flat is situated is one of the posh localities of Calcutta and after having acquired a flat almost of the same area which is in possession of the respondent in the suit premises, the High Court was right in coming to the conclu sion that the alternative accommodation satisfies the need of the landlord appellant.
Learned counsel further contended that the fact that the appellant 's wife is in service and for her it will not be convenient if they stay in South Calcutta and the fact that for practice of the appellant it will not be convenient are facts which have not been stated by the appellant.
When after the amendment fresh evidence was recorded and the appellant was given an opportunity and he in fact examined himself and gave additional evidence but only fact that he stated in the additional evidence is that the flat is not suitable for his purpose.
It was therefore contended that the High Court was ,right in coming to the conclusion that the need of the appellant landlord is satisfied.
Learned counsel also referred to some decisions for their above stated preposition.
1170 So far as the law on the question is concerned it is well settled that the alternative accommodation must be reasonably suitable and if it is not so then more availabil ity of alternative accommodation will not be a ground to refuse a decree for eviction if otherwise the courts are satisfied about the genuine requirement of the landlord and to this counsel for both the parties also agreed but the main contention was that on the facts appearing in evidence in this case whether the inference could be drawn that the flat on the 13th floor in South Calcutta was reasonably suitable to satisfy the need of the appellant landlord.
As regards evidence it is no doubt true that after these facts were pleaded in the statement of the appellant the only statement in regard to suitability is that "the flat is not suitable for my purpose".
It is not disputed that this is a flat on the 13th floor in South Calcutta and learned counsel for parties conceded that from C.I.T. Road where premises in question are situated this place where the flat is situated in South Calcutta will be a distant place.
Although learned counsel for the respondent emphasised that the above quoted statement is the only statement made by the appellant in additional evidence.
It is true that this is the only statement when he was examined afresh after these facts were brought in the pleading by way of addition al evidence.
But it could not be doubted that whatever was in evidence earlier could not be brushed aside and it is also clear that on the basis of evidence which was recorded earlier the 2 courts of facts came to the conclusion that plaintiff has established his genuine requirement.
Before these facts were introduced by amendment it was clearly stated that the appellant wanted to start his prac tice after taking retirement from his service in Ghana.
It was also stated that he intended to start private practice as a medical practitioner in Calcutta.
It is also clear that before going to Ghana the appellant was living in the said premises and was practising.
It had also come in evidence that his wife was also serving in some nearby institution.
On this basis his genuine requirement was held to have been proved and the learned Judge of the High Court also accepted this concurrent finding of fact.
The only consideration which weighed with the High Court was the acquisition of this flat on the 13th floor in South Calcutta.
It could not be disputed that if the medical practition er is an old resident of a particular locality and had practised in that locality it will not be easy for him at a stage in life after retirement to start afresh practice in some new area and that too on 13th floor in a modern flat.
1171 What has weighed with the learned Judge of the High Court was the statement made by the appellant that he intended to start a laboratory after retirement in the flat which he acquired and the other fact which weighed was the agreement which stated that the flat was required for residence.
Apparently not much could be drawn from these facts as starting a laboratory admittedly is much different from starting private practice as the medical practitioner and signing an agreement which talks of residence is nothing but a mere formality if he at all intended to acquire a flat.
It is clear that there is nothing else in the evidence on the basis of which it could be said that this flat is reasonably suitable.
Learned counsel for the respondent contended that the appellant said nothing else except the statement that this flat is not suitable for his purpose but it is very significant that this statement made by the appellant when he was examined additionally after the plead ings were amended.
This statement is not challenged by way of cross examination at all and it clearly states that for the purpose for which the appellant needs the premises and he sought eviction this flat is not at all suitable for that purpose which also is apparent from the situation and the circumstances discussed above.
Both the learned counsel emphasised the date of the judgment of the Lower Appellate Court and the date of acqui sition of the flat as it is apparent that the judgment of the Lower Appellate Court was delivered on 29th September, 1978 and the possession of the flat was given on 5th Octo ber, 1978.
On the one hand the counsel for the appellant contended that the Appellate Court having affirmed the decree of eviction the appellant knew that now there is no problem and this additional flat which he acquired out of the savings of his service in Ghana he could utilise to have some earning which may help the family at this stage in life and therefore he let it out so that he may earn Something out of it whereas learned counsel for the respondent con tended that all others got the possession of the flat in 1977 but this appellant waited till he secured a decree of eviction affirmed by the Appellate Court and it is only then that he took possession of the flat so that a reasonable explanation is possible for having let it out because the decree for eviction was already passed.
The circumstances discussed above and the suitability and the requirement of the appellant the age and nature of practice possible for a retired doctor with only an MBBS degree establish that the premises in question are suitable and so far as this is concerned there is no dispute but in the context of the facts and circumstances discussed above it could not be 1172 held that flat in South Calcutta on 13th floor could be said to be a reasonably suitable accommodation for the require ment of the appellant landlord and in the context of these facts and circumstances not much could be made out from the two dates i.e. the judgment of the Lower Appellate Court and the date on which the appellant got possession of the flat.
It is therefore clear that the learned Judge of the High Court was not justified in second appeal under Sec. 100 to interfere with the finding of fact unless there were facts established to hold that this alternative accommodation acquired after the decree of eviction in favour of the appellant was reasonably suitable.
Learned Judge of the High Court only drew inference from the fact that the appellant wanted to start a laboratory and the fact that he signed the agreement for acquiring the fiat which was meant for residence and in drawing inferences from these two facts, the learned Judge omitted to consider the positive evidence and a positive statement not challenged that this flat was not suitable for the purpose of the appellant landlord.
The judgment of the High Court can not be maintained.
The appeal is therefore allowed.
The judgment of the High Court is set aside and the decree of eviction passed by the two courts below is maintained.
In the circum stances of the case the decree for eviction shall not be executed against the respondent upto 31.3.88 on respondent filing an undertaking in the usual form and also paying rents and mesns profits upto date within four weeks.
If respondent fails to deliver possession on or before 31.3.88 the appellant shall be entitled to execute the decree for eviction.
In the circumstances of the case no order as to costs.
S.L. Appeal allowed.
[/INST]The appellant landlord.
a medical practitioner, filed a suit for recovery of possession of the 2nd floor.
rear portion of premises, 248, C.I.T. Road, Calcutta, let out to the respondent defendant, on the ground of the reasonable requirement of the landlord for his own occupation as he had no other reasonably suitable accommodation in the town.
The appellant contended that he had been residing in Ghana, Africa, where he had been temporarily appointed as a Physi cian, and he wanted to come back to India after retirement and settle down in medical practice in the locality where his house was situated.
The trial court granted the decree for eviction in accordance with the West Bengal Premises Tenancy Act, 1956.
The first appellate court the Court of the Additional District Judge maintained the decree in favour of the appellant by its judgment dated September 29, 1978.
During the pendency of this litigation, the appellant had entered into an agreement with some construction company for a flat in South Calcutta, and got the flat in October, 1978.
This flat was on the 13th floor in South Calcutta, a posh locality.
The respondent tenant preferred a second appeal before the High Court against the judgment of the first appellate court. 'During the pendency of this appeal, the respondent tenant submitted an application for consideration of the subsequent events, i.e. the acquisition of a flat by the landlord suggesting that the need of the appellant landlord had been satisfied, etc.
The High Court permitted this application for amendment and permitted the parties to lead additional evidence, and in consequence, the appellant landlord also was examined once again.
On consideration of the evidence, the High Court came to the conclu 1165 sion that now as alternative accommodation The flat in South Calcutta was available, and, therefore, it set aside the decree of eviction.
Aggrieved by the decision of the High Court, the appellant landlord appealed to this Court for relief by special leave.
Allowing the appeal, the Court, HELD: It is well settled that the alternative accommoda tion must be reasonably suitable and if it is not so, then, the mere availability of the alternative accommodation will not be a ground to refuse a decree for eviction, if other wise, the courts are satisfied about the genuine requirement of the landlord, and to this, counsel for both the parties also agreed, but the main contention was whether on the facts appearing in evidence in the case, the inference could be drawn that the flat on the 13th floor in South Calcutta was reasonably suitable to satisfy the need of the appellant landlord.
Counsel for the appellant had contended inter alia that for the appellant, who had lived and practised (as a doctor) in the suit premises in the C.I.T. Road, it was not possible at that stage in life to start practice in South Calcutta on the 13th floor.
Counsel for the parties conceded that from C.I.T. Road where the premises in question were situated, the place where the flat was situated in South Calcutta, would be a distant place.
As regards evidence it was no doubt true that after these facts were pleaded in the statement of the appellant, the only statement in regard to suitability was "the flat is not suitable for my purpose.
" Counsel for the respondent emphasised that the above quoted statement was the only statement made by the appellant in the additional evidence.
It was no doubt true that this was the only statement made by the appellant when he was exam ined afresh after these facts were brought in the pleading by way of additional evidence, but it could not be doubted that whatever was in evidence earlier could not be brushed aside and it was also clear that on the basis of evidence recorded earlier, the two courts of facts came to the con clusion that the appellant plaintiff had established his genuine requirement.
On the basis of the facts, the genuine requirement of the appellant plaintiff was held to have been proved and the High Court also had accepted this concurrent finding of fact.
The only consideration which weighed with the High Court was the acquisition of the flat on the 13th floor in South Calcutta.
[1170A G] It could not be disputed that if a medical practitioner is an old resident of a particular locality and had prac tised in that locality, it would not be easy for him at a stage in life after retirement to start practice afresh in some new area and that too on 13th floor in a modern 1166 flat.
There was nothing in the evidence on the basis of which it could be said that the flat in South Calcutta was reasonably suitable for the appellant.
In the context of the facts and circumstances of the case, it could not be held that the flat in South Calcutta on the 13th floor could be said to be a reasonably suitable accommodation for the requirement of the appellant landlord.
[1170H; 1171A C] The High Court was not justified in the second appeal to interfere with the finding of fact unless there were facts established to hold that alternative accommodation acquired after the decree of eviction in favour of the appellant was reasonably suitable.
The High Court omitted to consider the positive evidence and a positive statement, not challenged, that this fiat (in South Calcutta) was not suitable for the purpose of the appellant landlord.
[1172B C] Judgment of the High Court was set aside.
Decree of eviction passed by the two courts below was maintained.
The court directed in the circumstances of the case that the decree for eviction would not be executed against the re spondent upto 31.3.88 on the respondent 's filing an under taking in the usual form and also paying the rents and mesne profits upto date within four weeks, and that if the re spondent failed to deliver possession on or before 31.3.88, the appellant would be entitled to execute the decree for eviction.
[1172D E]
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<s>[INST] Summarize the judgementAppeals by special leave against an Award dated 31st July, 1950, 383 of the All India Industrial Tribunal (Bank Disputes): Civil Appeals Nos.
35 to 50 of 1951.
The facts of the case and the arguments of Counsel appear in the judgment.
C.K. Daphtary (R. J. Kolah, with him)for the appellants in Civil Appeals Nos. 35, 36 and 37.
Jamshedji Kanga (R. J. Kolah with him) for the appel lant in Civil Appeal No. 38.
section Chaudhuri (G. C. Mathur, with him) for the appellants in Civil Appeals Nos. 41, 43, 44, 45, 46 and 49.
section Chaudhuri (S.N. Mukherjee, with him) for the appel lants in Civil Appeals Nos. 48 and 50.
R.J. Kolah, for the appellants in Civil Appeals Nos. 39, 40 and 42.
Ram Lal Anand (Charan Das Puri, with him) for the appel lant in Civil Appeal No. 47.
A.C. Gupta (M.M. Sen and R.K. Banerji, with him) for the respondents in Civil Appeals Nos. 35, 36, 40, 41, 42, 43 and 44, M.M. Sen for the respondents in Civil Appeals Nos. 37, 39, 45 and 46.
Niren De (B.K. Chaudhary with him) for the respondents in Civil Appeals Nos. 38 and 50.
T.R. Bhasin for the respondents in Civil Appeals Nos. 48 and 49.
M.C. Setalvad, Attorney General for India.
Sikri, with him) for the Intervener (Union of India) in Civil Appeal No. as.
April 9.
The judgment of Kania C.J, Mehr Chand Mahajan, S.R. Das and Vivian Bose JJ.
was delivered by Kania C.J., Fazl Ali, Patanjali Sastri and Mukherjea JJ.
delivered separate judgment s, KANIA C.J.
In these appeals the question whether the Industrial Tribunal (Bank Disputes) had jurisdiction to make the awards has been directed by the Court to be tried as a preliminary issue. 'the decision depends on the true con struction of sections 7, 8, 15 and 16 of the .
On 384 this question, the agreed statement of facts shows that by a notification of the Government of India dated the 13th June, 1949, the Central Government constituted an Industrial Tribunal 'for the adjudication of industrial disputes in banking companies consisting of Mr. K.C. Sen, chairman, Mr. S.P. Varma and Mr. J.N. Mazumdar.
A second notification dated the 24th August, 1949, was thereafter issued as follows :"In exercise of the powers conferred by sub section (1) of section 8 of the , the Central Government was pleased to appoint Mr. N. Chandrasekhara Aiyar as a member of the Industrial Tribunal constituted by the notifications of the Government of India in the Ministry of Labour dated the lath June, 1949, in the place of Mr. S.P. Varma whose services have ceased to be available.
" The Tribunal commenced its regular sittings at Bombay from the 12th to the 16th of September, 1949.
It thereafter sat at Delhi and Patna between the 19th September, 1949, and 3rd April, 1950.
Further sittings were held, at some of which Mr. Mazumdar was absent on various dates and Mr. Chandrasek hara Aiyar was absent from the 23rd November, 1949, to the 20th of February, 1950, as his services were placed at the disposal of the Ministry of External Affairs as a member of the Indo Pakistan Boundary Disputes Tribunal.
Between the 23rd November, 1949, and 20th February 1950, Mr. Sen and Mr. Mazumdar together sat at several places and made certain awards.
Those awards have been accepted by the Government under section 15 of the Act and published in the Gazette as the awards of the Tribunal.
The Tribunal held its sittings in Bombay to hear general issues from the 16th January, 1950, and concluded them on the 3rd April, 1950.
In the agreed statement of facts, it is stated that the services of Mr. Chandrasekhara Aiyar were not available to the Tribunal from the afternoon of 23rd November, 1949, to the forenoon of 20th February, 1950.
From the 16th January, 1950, up to 20th February, 1950, several matters, particularly including 15 items covering, inter alia, Issues 1, 2, 3, 4, 15, 23, 27, 28, 33, 34, 37 385 and dealing with the question of the jurisdiction of the Tribunal in respect of officers regarding banks having branches in more than one Province and banks in liquidation, question of retrospective effect to be given to the award, question relating to provident and guarantee fund and allow ances to special categories of workmen, were dealt with by the Tribunal.
From the notes of the proceedings of the Tribunal it appears that as numerous banks and workmen were parties to the proceedings, some workmen who had not found it convenient to attend throughout appeared and put forth their views in respect of the aforesaid issues and questions after Mr. Chandrasekhara Aiyar started his work from the afternoon of the 20th February, 1950, again by sitting with Mr. Sen and Mr. Mazumdar.
The jurisdiction of the Tribunal of the aforesaid three persons to make the award is disputed on two grounds: (1) That when Mr. Chandrasekhara Aiyar 's services ceased to be available, as mentioned in the agreed statement of facts, the remaining two members had to be re appointed to consti tute a Tribunal.
(2) That when Mr. Chandrasekhara Aiyar began to sit again with Mr. Sen and Mr. Mazumdar from the forenoon of 20th February, 1950, it was imperative to issue a notification constituting a Tribunal under section 7 of the .
The argument is that in the absence of Mr. Chandrasekhara Aiyar the two members had no jurisdiction to hear anything at all without the appropriate notification and that Mr. Chandrasekhara Aiyar 's services having ceased to be available on the 23rd of November, 1949.
he cannot sit again with the other two members to form the Tribunal in the absence of a notification under section 7.
In order to appreciate the correct position, it is necessary to consider the scheme of the .
It envisages the establishment of a Conciliation Board, a Court of Inquiry and a Tribunal for adjudication.
Rele vant portions of sections 5, 6, 7, 8, 15 and 16 of the Act which only are material for the present discussion run as follows: 50 386 5.
(1) "The appropriate Government may as occasion arises by notification in the official Gazette constitute a Board of Conciliation for promoting the settlement of an industrial dispute.
(2) A Board shall consist of a chairman and two or four other members, as the appropriate Government thinks fit.
(3) The chairman shall be an independent person and the other members shall be persons appointed in equal numbers to represent the parties to the dispute and any person appoint ed to represent a party shall be appointed on the recommen dation of that party: * * * (4) A Board, having the prescribed quorum, may act notwithstanding the absence of the chairman or any of its members or any vacancy in ifs number.
Provided that if the appropriate Government notifies the Board that the services of the chairman or any other member have ceased to be available, the Board shall not act until a new chairman or member, as the case may be, has been ap pointed.
(1) "The appropriate Government may as occasion arises by notification in the official Gazette constitute a Court of Inquiry for inquiring into any matter appearing to be connected with or relevant to an industrial dispute.
(2) A Court may consist of one independent person or of such number of independent persons as the appropriate Government may think fit and where a Court consists of two or more members, one of them shall be appointed as the chairman.
(3) A Court, having the prescribed quorum, may act notwithstanding the absence of the chairman or any of its members or any vacancy in its number.
Provided that, if the appropriate Government noti fies the Court that the services of the chairman have ceased to be available, the Court shall not act until a new chair man has been appointed.
(1) "The appropriate Government may constitute one or more Industrial Tribunals for the 387 adjudication of industrial disputes in accordance with the provisions of this Act.
(2) A Tribunal shall consist of such number of members as the appropriate Government thinks fit.
Where the Tribunal consists of two or more members, one of them shall be ap pointed as the chairman.
(3) Every member of the Tribunal shall be an independent person, (a) who is or has been a Judge of a High Court or a District Judge, or (b) is qualified for appointment as a Judge of a High Court: Provided that the appointment to a Tribunal of any person not qualified under part (a) shall be made in consul tation with the High Court of the Province in which the Tribunal has, or is intended to have, its usual place of sitting.
(1) "If the services of the chairman of a Board or the chairman or other member of a Court or Tribunal cease to be available at any time, the appropriate Government shall in the case of a chairman, and may in the case of any other member, appoint another independent person to fill the vacancy, and the proceedings shall be continued before the Board, Court or Tribunal so reconstituted.
(2) Where a Court or Tribunal consists of one person only and his services cease to be available the appropriate Government shall appoint another independent person in his place, and the proceedings shall be continued before the person so appointed.
(3) Where the services of any member of a Board other than the chairman have ceased to be available, the appropri ate Government shall appoint in the manner specified in sub section (3) of section 5 another person to take his place, and the proceedings shall be continued before the Board so reconstituted.
(1) "Where an industrial dispute has been referred to a Tribunal for adjudication, it shall hold its proceed ings expeditiously and shall, as soon as 388 practicable on the conclusion thereof, submit its award to the appropriate Government.
(2) On receipt of such award, the appropriate Government shall by order in writing declare the award to be binding: * * * (4) Save as provided in the proviso to sub section (3) of section 19, an award declared to be binding under this section shah not be called in question in any manner.
"The report of a Board or Court and the award of a Tribunal shall be in writing and shall be signed by all the members of the Board, Court or Tribunal, as the case may be: Provided that nothing in this section shall be deemed to prevent any member of the Board, Court or Tribunal from recording a minute of dissent from a report or award from any recommendation made therein.
" Confining our attention to the aspect of absence of members at the sittings of the different bodies and what results follow therefrom, it is clear that under section 5 (4) when a member of a Board of Conciliation is absent or there is a vacancy, the Board is permitted to act, notwith standing such absence, provided there is the prescribed quorum.
Such quorum is fixed by the rules framed under the Act.
According to the proviso to this sub section however, if the appropriate Government notifies the Board that the services of the chairman or any other member have ceased to be available, the Board shall not act until a new chairman or a member, as the case may be, has been appointed.
Read ing these two parts together, it is therefore clear that a distinction is drawn between the situation arising from the absence of the chairman or any of its members and a vacancy in the Board, and the position when the Government has intimated that the services of a chairman or member have ceased to be available.
The words "having the prescribed quorum" put a further limitation on the right of the 389 remaining members of the Board to act, when all of them are not acting together.
The proviso thus makes it clear that when the services of a chairman or member have ceased to be available and that fact has been notified to the Board by the appropriate Government, the remaining members have no jurisdiction to act in the name of the Board.
Thus all the contingencies of temporary or casual absence, as well as permanent vacancy, and the contingency of the chairman or a member 's services having ceased to be available are con templated and provided for.
In the same way and in the same terms, provision is made in respect of the Court of In quiry in section 6 (3).
The provisions as regards the Tribunal are found in section 7.
No other section deals with the establishment of the Tribunal.
The first clause empowers the appropriate Government to constitute one or more industrial tribunals having the functions allotted to it under the Act.
Sub clause (2) provides that a Tribunal shall consist of such number of members as the appropriate Government thinks fit.
This clause therefore authorizes the appropriate Government to fix the number of members which will constitute the Tribunal.
Sub clause (3) and the proviso deal with the qualifications of individuals to be members with which we are not concerned.
Although in this section there is no provision like sections 5 (1) and 6 (1) requiring a notification of the constitution of the Tribunal in the official Gazette, the deficiency is made up by rule 5 of the Industrial Disputes Rules; 1949, framed by the Gov ernment under section 38 of the Act.
The rule provides that the appointment of a Board, Court or Tribunal "together with the names of the persons constituting the Board, Court or Tribunal ' shall be notified in the official Gazette.
It is therefore obligatory on the appropriate Government to notify the composition of the Tribunal and also the names of the persons constituting the same.
In respect of a Tribunal which is entrusted with the work of adjudicating upon dis putes between employers and employees which have not been settled otherwise, this provision 390 s absolutely essential.
It cannot be left in doubt to the employers or the employees as to who are the persons authorized to adjudicate upon their disputes.
This is also in accordance with notifications of appointments of public servants discharging judicial or quasijudicial functions.
The important thing therefore to note is that the number forming the Tribunal and the hames of the members have both to be notified in the official Gazette for the proper and valid constitution of the Tribunal.
It is significant that there is no provision correspond ing to section 5 (4) or 6 (3) in section 7.
Section 15 of the Act provides that when an industrial dispute has been referred to a Tribunal for adjudication, it shall hold its proceedings expeditiously and as soon as practicable and at the conclusion thereof submit its award to the appropriate Government.
It is thus clear and indeed it is not disputed that the tribunal as body should sit together and the award has to be he result of the joint deliberations of all mem bers of he Tribunal acting in a joint capacity.
Section 16 requires that all members of the Tribunal shall sign he award.
This again emphasizes that the function of the Tribunal is joint and it is not open to any member to re frain from signing the award.
If the award is not signed by all members it will be invalid is it will not be the award of the Tribunal.
In the light of the provisions of section 7 the question arising for consideration is, what was the duty of the Government when the services of Mr. Chandrashekhara Aiyar ceased to be available.
The two telegrams exchanged between Mr. Sen and the Government show that the Government took the view that a vacancy had occurred and they did not think of filling it up at the time.
In the first place, on the true construction of the Act, was it not obligatory on the Gov ernment to notify to the contesting parties that it had decided not to fill up the vacancy ? Is it open to them to leave the parties in doubt in respect of a Tribunal entrust ed with the work of adjudicating upon very important dis putes between parties ? In our opinion, the whole 391 scheme of the Act leads to the conclusion that the Govern ment must notify its decision as to what it desired to do, i.e., whether it intended to fill up the vacancy or not and thereupon notify what members were going to constitute the Tribunal.
We are led to that conclusion because a Tribunal of three consisting of Mr. Sen, Mr. Mazumdar and Mr. Chan drasekhara Aiyar is a different tribunal from one consisting of two, viz., of Mr. Sen and Mr. Mazumdar only.
In this setting, it is next necessary to consider the words of section 8 on which strong reliance is placed on behalf of the respondents.
The marginal note of that sec tion is "filling of vacancies ".
The section deals with the Board, the Court and the Tribunal in its clauses.
Under sub section (1), the Legislature clearly contemplates that when the services of a member cease to be available at any time there will arise a vacancy.
This sub section deals with the situation in three stages.
The first question is, have the services of a member (and this includes, for the present discussion,.
a chairman)ceased to be available ? If so, the vacancy having thus arisen, the next question is, what can be done by the appropriate Government ? If the vacancy is filled up by making the appointment, the final question is, how the proceedings shall go on before the Board, Court or Tribunal so reconstituted ? It was argued on behalf of the respondents that it was for the appropriate Government alone to pronounce whether the services of a member had ceased to be available at any time and that was not a matter for the decision of the Court.
In our opinion, what is left to the option of the Government is, in case of the services of a member ceasing to be available, to appoint or not to appoint.
Those stages having passed, the appro priate Government, under the section, is obliged to appoint another person to fill the vacancy, if the vacancy is creat ed in respect of a chairman.
In respect of the vacancy of a member 's post, the Government is given the option to appoint or not to appoint another person.
The concluding words of the sub section "so reconstituted" clearly relate only to the contingency of 392 the Government making the appointment of another independent person in the vacancy.
The concluding part of that sub section provides for the continuance of the proceedings before the body so reconstituted.
Subsection (2) also pro vides that where a court or tribunal consists only of one person and his services have ceased to be available, on the appointment of another independent person the proceedings shall be continued before the person so appointed and it will not be necessary to start the proceedings from the beginning before that person.
Section 8 (3) provides for the contingency of the services of a member of a Board not being available.
It requires the appropriate Government to make the appointment as provided in section 5 (3) and fur ther provides that notwithstanding the inclusion of a total ly new man in that vacancy, the proceedings shall be contin ued before the Board so reconstituted.
Reading the three clauses together, therefore, it is quite clear that the object of section 8 is to make specific provisions in re spect of situations when the Government must or does fill up vacancies in the event of the services of a member or chair man not being available and the consequences of a totally new man filling up the vacancy.
As we read the Act, that is the total object and intention of this section.
It does not contemplate the consequences of the Government not making an appointment where it has the option not to do so.
The emphasis on the words "so reconstituted ' ' in sub sections (1) and (3) and the concluding words of each of those clauses clearly bear out this intention of the legislature.
It was argued that although no provision is made in section 8 (1) about what is to happen if the Government did not fill up the vacancy, it is implied that in that event the remaining members can continue the work.
We are unable to accept that argument.
In the first place, as pointed out above, the object of section 8 is to provide in what cases vacancies must be filled up and how the proceedings should continue on the vacancy being filled up.
It does not deal at all with the situation arising from the not filling up of the 393 vacancy by the Government.
In this connection the provi sions of sections 5 (4) and 6 (a) have been already noted.
When the legislature wanted to provide that in spite of the temporary absence or permanent vacancy the remaining members should be authorised to proceed with the work they have made express provision to that effect.
If in the case of a Board or Court of Inquiry, neither of which is adjudicating any disputes, such a provision was considered necessary to enable the remaining members to act as a body, we think that the absence of such provision in respect of the Tribunal, which adjudicates on the disputes and whose quasi judicial work is admittedly of a joint character and responsibility leads to the irresistible conclusion that in the absence of one or more members the rest are not competent to act as a Tribunal at all.
Again the provisos to sections 5 (4) and 6 (3) are important.
Under those provisos when the Government intimates to the remaining members that the services of one "have ceased to be available" the rest have no right to act as the Board or Court.
It appears under the circumstances proper to hold that in respect of a Tribunal when the serv ices of a member have ceased to be available, the rest by themselves have no right to act as the Tribunal.
The question which we have got to consider can be divid ed in two stages.
On the appointment of Mr. Chandrasekhara Aiyar as a member of the Boundary Tribunal, did his services cease to be available within the meaning of section 8, and thereby was a vacancy created? The parties have put before us only two telegrams exchanged between the chairman and Mr. Mazumdar on the one hand and the Central Government on the other, to reach our conclusion about the situation arising from Mr. Chandrasekhara Aiyar joining the Boundary Tribunal.
Certain Government notifications published 'in May and June, 1950, i.e., over three or four months after Mr. Chandrasek hara Aiyar finished his work on the Boundary Tribunal, have been put before us, but in our opinion these 394 ex post facto notifications cannot help us in deciding the important question under section 8.
It is obvious that, on the date the appointment of Mr. Chandrasekhara Aiyar as a member of the Boundary Tribunal was made, it could not have been known how long that Tribunal would take to complete its work.
In any event, the evidence put before us as of that date does not show that the appointment was for a short time.
The Boundary Tribunal 's work may have lasted for a month or a year.
Having regard to the urgency and the necessity of quick disposal of industrial disputes recog nised in section 15, the deputation of a member of such a Tribunal to another Tribunal, whose work may be of an indef inite duration, obviously makes the services of the member cease to be available to the Industrial Tribunal within the meaning of section 8 so as to bring about a vacancy.
The later statement in the Government notification of May, 1950, that Mr. Chandrasekhara Aiyar 's services were lent to the External Affairs Ministry "from the 23rd of November, 1949, to the 20th of February, 1950, " appears to be more a noti fication for the purpose of the Accountant General and the Audit departments of the Government than a disclosure of the mind of the Government when the appointment was made on the 23rd of November.
When Mr. Sen, as chairman, and Mr. Mazum dar held their first sitting in the absence of Mr. Chandra sekhara Aiyar, an objection was raised about the constitu tion of the Tribunal.
Thereupon Mr. Sen and Mr. Mazumdar conveyed to the Government what had happened at the meeting.
The Government was therefore clearly faced with the problem as to what it wanted to do.
The reply telegram from the Government asked Mr. Sen and Mr. Mazumdar to go on with the proceedings.
It further stated that the Government might fill up the vacancy later on.
The question for considera tion is, what is the effect of this telegram of the Govern ment ? In the light of the provisions of section 8 that telegram can only mean that the Government had decided not to fill up the vacancy.
If a vacancy had occurred they had to make the appointment or state that they will 395 not do so.
They cannot defer their decision on the question of filling up the vacancy and in the interval direct the remaining members to go on with the reference.
That seems to us to be the correct position because the fundamental basis on which the Tribunal has to do its work is that all members must sit and take part in its proceedings jointly.
If a member was casually or temporarily absent owing to illness, the remaining members cannot have the power to proceed with the reference in the name of the Tribunal, having regard to the absence of any provision like section 5 (4) or 6 (3) in respect of the tribunal.
The Government had notified the constitution of this Tribunal by the two notifications summarized in the earlier part of the judg ment and thereby had constituted the Tribunal to consist of three members and those three were Mr. Sen, Chairman, Mr. Mazumdar and Mr. Chandrasekhara Aiyar.
Proceeding with the adjudication in the absence of one, undermines the basic principle of the joint work and responsibility of the Tribu nal and of all its members to make the award.
Moreover, in their telegram the Government had not suggested that no vacancy had occurred.
Indeed, they recognised the fact of a vacancy having occurred but stated that they might make the appointment later on.
If those words are properly construed, without any outside considerations, it is clear that the Government intended that the remaining two members of the Tribunal should proceed with the adjudication as a Tribunal.
This direction in fact was accepted and the two members proceeded with the reference and made certain awards.
Those awards were sent to the Government under section 15 (2) and the Government by its order declared the awards to be bind ing, and published them in the official Gazette.
Those awards are signed only by Mr. Sen and Mr. Mazumdar.
Reading those awards with the notifications and the provisions of sections 15 and 16 it is therefore clear that between 23rd November, 1949, and 20th February, 1950, the Government ' 'intended" the tribunal to consist only of Mr. Sen and Mr. Mazumdar.
It was not and 396 cannot be seriously disputed that in the event of the Gov ernment deciding to fill up the vacancy, a notification had to be issued.
The question is, why and under what rule ? The answer clearly is that they had to do it because of rule 5.
The reason why intimation of a new man forming a member of the Tribunal has to be publicly given, in our opinion, applies with equal force when a tribunal initially consti tuted of three persons, viz., Mr. Sen, Mr. Mazumdar and Mr. Chandrasekhara Aiyar, is, by the Government decision, as from a certain date, to be a tribunal of Mr. Sen and Mr. Mazumdar only.
The word "reconstituted" is properly used in section 8 because when a new member is introduced in the panel so far performing its duties, it is a reconstitution, but the words of section 8 do not exclude the obligation on the Government to issue a notification under rule 5 when there is not a reconstitution, but a new constitution of the Tribunal.
The Government, however, did not give effect to its intention by issuing a fresh notification under section 7.
Therefore, when the services of Mr. Chandrasekhara Aiyar ceased to be available and they decided that another inde pendent person was not to be appointed to fill the vacancy, there arose the situation when only two members constituted the Tribunal and for the constitution of such Tribunal no notification under section 7 of the Act was issued.
To enable such a Tribunal of two persons to function, under the provisions of the Act, a notification under section 7 of the Act, in our opinion, was absolutely essential.
The work of the two members in the absence of such a notification cannot be treated as the work of a Tribunal established under the Act and all their actions are without jurisdiction.
It was argued on behalf of the respondents that when Mr. Chandrasekhara Aiyar left for the Boundary Tribunal, there arose a temporary absence which it w, as not necessary to fill up and the remaining two members had jurisdiction under the Act to proceed with the adjudication.
In our opinion, this contention cannot be accepted.
In the first place, in the agreed statement of facts, it is not stated that there was any temporary 397 absence.
Again, as we have pointed out the Government by its telegram of the 29th of November accepted the position that a vacancy had occurred and no question of temporary absence therefore arises for our consideration.
An analogy sought to be drawn between the temporary absence on leave or on depu tation of a Judge is misleading having regard to the fact that under section 7 the Government has to decide at the initial stage how many members and who will constitute the Tribunal and have to notify the same.
That step having been taken, it is not within the power or competence of the Government to direct a few members only of such Tribunal to proceed with the adjudication for however short or long time it be.
In our opinion, section 8 has no application to that situation.
In this connection, it may be useful to notice that under rule 12 it was provided that "when a Tribunal consists of two or more members, the tribunal may, with the consent of the parties, act notwithstanding any casual vacancy in its number . "This rule clearly shows that even when there was a casual vacancy and the remaining members desired to proceed with the work they could do so only with the consent of the parties.
This rule framed under section 38 of the Act strongly supports the contention that if the Act impliedly gave power under section 8 to the remaining two members of the Tribunal to act, as contended on behalf of the respondents, there was no necessity at all for making this rule.
Although this rule was repealed on the 3rd of December, it was in operation when the services of Mr. Chandrasekhara Aiyar ceased to be available to the Tribunal as from the 23rd of November.
If in the case of temporary absence, the consent of the parties was essential to enable the remaining members to act, it certainly follows that the objection to their working as a 'tribunal when there is no consent and the absence is not casual, but is due to the services of one of the members having ceased to be available, is fatal.
It follows therefore that all awards made by Mr. Sen and Mr. Mazumdar, after the services of Mr. Chandrasekhara Aiyar ceased to be available, were 398 not made by a tribunal duly constituted under section 7 and those awards are therefore void.
It was contended that by directing Mr. Chandrasekhara Aiyar to work again as a member of the Banks Tribunal in February, 1950, the Government had filled up the vacancy under section 8.
In our opinion this position cannot be supported on the admitted facts.
As regards filling up of a vacancy under section 8, we have already noticed that by directing the remaining two members to proceed with the work and by notifying their awards as the awards of the Tribunal the Government must be considered to have intended not to fill up the vacancy.
Again, the later notification pub lished in June, 1950, does not even state that Mr. Chandra sekhara Aiyar was appointed a member of the Tribunal "in any vacancy.
" The word used there is "resumed" suggesting there by that he had gone out for the time being but had started the work again.
Under the circumstances and in the absence of any other evidence, we are unable to consider the fact of Mr. Chandrasekhara Aiyar sitting along with the two members from and after the 20th February, 1950, as an appointment by the Government in the vacancy created by his appointment to the Boundary Tribunal in November, 1949.
At one stage it was suggested that the members of the Tribunal could delegate their work to a few members only and the award can be supported in that way.
Apart from the question what work could be so delegated, it was ascertained that the Rule permitting delegation was first published on 3rd December, 1949, and as Mr. Chandrasekhara Aiyar had gone to his work on the Boundary Tribunal on 23rd November, no delegation in that manner was possible.
Moreover, the state ment of facts nor the award of the three persons suggests that there was any delegation of work by the Tribunal in the matter of the general issues to some members only.
Nor was any report made to or considered by the full Tribunal as required by the rule.
The next question to be considered is the effect of Mr. Chandrasekhara Aiyar sitting with the two 399 members of the Tribunal after 20th February, 1950.
The record shows that the two members considered most of the general issues raised in respect of the banks at many meet ings.
The nature and volume of the work done by them during this interval has been summarized in the earlier part of the judgment.
It is not contended that on Mr. Chandrasekhara Aiyar commencing to sit again with the other two members on and from the 20th February what had happened in his absence was re done or re heard.
Mr. Chandrasekhara Aiyar along with the other two members continued to work from the point work had proceeded up to 19th February, 1950, and the award which is put before us is signed by all the three of them, i.e., on the footing that all the three of them were members of the Tribunal.
It was suggested that Mr. Chandrasekhara Aiyar should be treated as having remained throughout a member of the Tribunal of three and that he resumed work after a temporary absence between November, 1949, and Febru ary, 1950.
In our opinion, this position is quite unsupport able.
When the services of Mr. Chandrasekhara Aiyar ceased to be available to the Tribunal in November, 1949, and the Government accepted the position that a vacancy had oc curred, Mr. Chandrasekhara Aiyar ceased to be a member of the Tribunal of three as constituted under the Government notification of June, 1949.
Thereafter Mr. Chandrasekhara Aiyar never became a member of the Tribunal as he was never appointed a member before he signed the award.
No notifica tion making such an appointment under section 7 read ' with section 8 of the Act has been even suggested to exist.
In the circumstances, the position in law was that Mr. Chandra sekhara Aiyar ceased to be a member of the Tribunal of three as originally constituted, that no new Tribunal of two was legally constituted and that, having ceased to be a member of the tribunal of three, Mr. Chandrasekhara Aiyar could not resume duties as a member of the Tribunal of three without a fresh constitution of a Tribunal of three.
The result is that all the interim awards purported to be made by Mr. Sen and Mr. Mazurndar as 400 well as the final awards made by the three must all be held to have been made without jurisdiction.
It seems to us that the only way in which the Government could have put matters right was by a notification issued in February, 1950, con stituting the tribunal as a fresh Tribunal of three members (and not by proceeding as if a vacancy had been filled up on 20th February, 1980, under section 8) and the three members proceeding with the adjudication de novo.
Even if the con tention of the respondents that Mr. Chandrasekhara Aiyar continued throughout a member of the tribunal were accepted, in our opinion, the appellants ' objection to the jurisdic tion of the three persons to sign the award must be upheld.
Section 16 which authorizes them to sign is preceded by section 15.
Unless they have complied with the provisions of section 15, i.e., unless all the three have heard the matter together, they have no jurisdiction to make the award in terms of section 18 and have therefore also no jurisdic tion to sign the award under section 16.
In any view of the matter the awards are therefore without jurisdiction.
It was suggested that his signature on the award could be treated as surplus.
In our opinion, this argument re quires only to be stated to be rejected.
It is not and cannot be disputed that Mr. Chandrasekhara Aiyar took active part in the deliberations and in the proceedings after 20th February, 1950, and naturally discussed and influenced the decision of the other two members of the Tribunal by such discussions.
This is not a case where an outsider was con sulted by the members of a Tribunal and thereafter the members came to their own independent decision.
It is obvious that for making the award all the three persons worked together and were jointly responsible for the result ant award.
The argument of surplusage therefore must fail.
In this view of the matter, the final award put before the Court is clearly without jurisdiction and the appellants ' contention must be upheld.
The final contention that the sittings in the interval constituted only an irregularity in the proceedings 401 cannot again be accepted because, in the first place, an objection was raised about the sitting of the two members as the Tribunal.
That objection, whether it was raised by the appellants or the other party, is immaterial.
The objection having been overruled, no question of acquiescence or estop pel arises, Nor can consent give a court jurisdiction if a condition which goes to the root of the jurisdiction has not been performed or fulfilled.
No acquiescence or consent can give a jurisdiction to a court of limited jurisdiction which it does not possess.
In our opinion, the position here clearly is that the responsibility to work and decide being the joint responsibility of all the three members, if pro ceedings are conducted and discussions on several general issues took place in the presence of only two, followed by an award made by three, the question goes to the root of the jurisdiction of the Tribunal and is not a matter of irregu larity in the conduct of those proceedings.
The absence of a condition necessary to found the jurisdiction to make the award or give a decision deprives the award or decision of any conclusive effect.
The distinction clearly is between the jurisdiction to decide matters and the ambit of the matters to be heard by a Tribunal having jurisdiction to deal with the same.
In the second case, the question of acquiescence or irregularity may be considered and over looked.
When however the question is of the jurisdiction of the Tribunal to make the award under the circumstances summarized above, no question of acquiescence or consent can affect the decision.
It was contended that under section 8 the contingency of the Government not filling up a vacancy is clearly visual ized.
It is also provided in the section that in the event of a vacancy the Government may fill it up by appointing a new man and in such a case the proceedings need not start afresh.
It was argued that nothing more had happened in the present case and therefore no question of invalidity of the awards arises.
We are unable to accept these contentions.
In the first place, when Government decides not to fill up 402 a vacancy its decision has to be notified.
It is not a matter of the Government 's internal administration where the officers can work under departmental orders.
Moreover it should be noticed that when the services of a member cease to be available and that fact is conveyed to the rest of the members under sections 5 (4) and 6 (3), the rest have no right to act as a Body at all.
The wording of section 7 or 8, in our opinion, does not permit the remaining members of a Tribunal to have a higher right in the absence of a proper new notification issued under section ? of the Act.
As regards the second Contention, it should be noticed that the Government is given the option to make an appointment when a vacancy occurs, and section 8 provides that if a new man is appointed in the vacancy the proceedings need not start de novo.
That however does not mean that the Government must appoint a man in every case of vacancy and the proceedings must go on without commencing the same afresh.
It appears that the option is left to Government having regard to the stage to which the proceedings may have reached.
Suppose only after some preliminary work of a data finding nature is done a vacancy occurs, the Government may well think of appointing a new man as it may not be considered necessary to start the proceedings afresh.
On the other hand, if the work has progressed considerably the Government may not think it just and proper to fill up a vacancy by bringing in a new man, as by doing so they will in effect permit the work of the Body being done in two parts, viz., the first with two men and the second with three men.
These considerations emphasize the importance of the Government making up its mind to fill up or not to fill up a vacancy when it occurs.
It cannot keep its decision in abeyance and at one stage intend to proceed on the, footing that the vacancy is not filled up and later on after considerable work is done by the remaining members change its mind and proceed to act on the footing that a vacancy has continued and fill up the same after some months.
403 On the admitted principle that the work of the Tribunal, which is of a quasi judicial nature, is one of joint respon sibility of all its members, section 8 provides exceptions.
The Legislature having thus fixed in that section the limits of the exceptions, the limits have to be strictly observed and it is not within the competence either of the Tribunal or the Government to extend the limits of those exceptions.
In our opinion, the incidents in respect of the sittings and work of this Banking Tribunal, as mentioned above, do not fall within the limits of the exceptions and therefore the awards must be considered as made without jurisdiction.
In our opinion, therefore, the awards made and signed by Messrs. Sen and Mazumdar and by all the three persons are without jurisdiction and the contention of the appellants on this issue must be accepted.
FAZL ALI J.
The questions which this Bench is called upon to decide arise upon the following facts.
By a Notification dated the 13th June, 1949, the Govern ment of India constituted a Tribunal for the adjudication of industrial disputes in Banking Companies, consisting of Mr. K.C. Sen (Chairman), Mr. S.P. Varma and Mr. Majumdar (Mem bers).
Subsequently, Mr. Chandrasekhara Aiyar was appointed a member of the Tribunal in the place of Mr. Varma, whose services had ceased to be available.
On the 13th June, 1949, the Government referred to the Tribunal the disputes between a number of Banking Companies and their employees, and the Tribunal consisting of the chairman and 2 members commenced hearing them on the 12th September, 1949.
In November, 1949, the services of Mr. Aiyar were placed at the disposal of the Department of External Affairs of the Government of India, and he was appointed a member of the Indo Pakistan Boundary Disputes Tribunal, with the result that during his absence which covered ' a period of nearly 3 months beginning from the 23rd 404 November, 1949, and ending on the 20th February, 1950, the proceedings were continued before the chairman and the remaining member, and certain interim awards were also made during this period.
Mr. Aiyar rejoined the Tribunal on the 20th February, 1950, and ultimately all the 3 members made and signed an award on the 31st July, 1950, which was pub lished in the Gazette of India on the 12th August, 1950.
The main point raised in these appeals is that this award is without jurisdiction.
In some of the appeals, it is also contended that some of the interim awards, namely those given by the chairman of the Tribunal and Mr. Majumdar on the 5th January, 25th January, 20th February and 22nd Febru ary, 1950, in the case of the Imperial Bank of India, the Lloyds Bank and the Punjab National Bank, were also without jurisdiction.
Briefly, the argument advanced on behalf of the appellants is that the , did not permit either of the following courses, firstly, that 2 members of the Tribunal, which originally consisted of 3 members, should deal with any of the controversies between the parties in connection with the disputes referred to the Tribunal, and secondly, that a member who had left the Tribunal in the midst of the hearing should rejoin and influence the decision of the other members in regard to the matters which he had not heard.
These contentions, however plausible they may appear at the first sight, especially when we consider them in the light of our notions of judicial procedure to be followed in courts of law, will, in my opinion, be found to be without much substance, on close examination, once we realize that the Industrial Tribunal, though it has all the trappings of a court of law, is not such a court and has to follow its own procedure which has to be determined by the provisions of the industrial Disputes Act and the rules framed by the Government thereunder.
The determination of the questions raised before us will depend mainly upon the proper con struction of section 8 (1)of the Act, which runs as follows : 405 "8 (1) If the services of the chairman of a Board or of the chairman or other member of a Court or Tribunal cease to be available at any time, the appropriate Government shall, in the case of a chairman, and may in the case of any other member, appoint another independent person to fill the vacancy, and the proceedings shall be continued before the Board, Court or Tribunal so reconstituted .
" One of the questions to be decided in construing this section is, as to the exact meaning of the words "services cease to be available.
" Ordinarily, the word "cease" con veys a sense of permanency, and therefore the expression would certainly cover cases where the services of a person have ceased to be available permanently or for all time.
But that word is also sometimes applied to "intermission of a state or condition of being, doing or suffering" (see Oxford Dictionary), and, among several instances of its being used in this narrower sense, we were referred to The Queen vs Evans(1) which is a case dealing with an English statute in which the expression "cease to reside" was used so as to include a case where the person concerned was away from England for a period and then returned there.
It seems to me that the words "services cease to be available" include cases where the services are not available for a defined or undefined period, provided that during that period they are completely unavailable.
These words should, I think, be read with the marginal note of section 8, which indicates that they were intended to cover every situation necessitat ing the filling of a vacancy.
As we are aware, a vacancy may be permanent or temporary, and therefore if the services of a member of a Tribunal are temporarily placed at the disposal of another department of the Government for performing special work, such a case will be covered by the section.
This must necessarily be so, if the nature of the duties which the member is called upon to discharge is such as to necessitate that particular member severing himself completely from the Tribunal during the (1) 406 period in which he holds his new office.
I find it diffi cult to hold that the section was meant to apply only to a permanent vacancy, and that no provision whatsoever was made for a temporary vacancy, which is by no means a matter of uncommon occurrence.
It should be noted that in sections 5 and 6 of the Act, the Legislature has been careful to use the words "vacancy in number" which are wide enough to include cases where, though there is a vacancy, the member ship does not cease.
It is common ground that in the present case, the services of Mr. Aiyar were not available to the Tribunal, while he was employed as a member of the Indo Pakistan Boundary Disputes Tribunal.
It is also not disputed that at the time his services were transferred, it was not known for what period his new duties would keep him away from the work of the Industrial Tribunal.
There can be no doubt therefore that there was a vacancy, which provided an occasion for the Government to exercise the discretion vested in it under section 8 of the Act.
At this stage it will be relevant to quote certain correspondence which passed between the chairman of the Tribunal and the Government soon after Mr. Aiyar ' left the Tribunal.
We find that on the 28th November, 1949, the chairman sent an express telegram to the Labour Ministry stating that in the absence of Mr. Aiyar objections had been raised to the remaining two members of the Tribunal continu ing the proceedings and urging the Ministry either to ap point a substitute or to intimate that the Tribunal could proceed with two members during Mr. Aiyar 's absence.
To this, the Government sent the following reply: "Reference your telegram twenty eighth stop Govern ment advised that rule twelve is inconsistent with section eight stop rule twelve being deleted through notification stop Government advised Tribunal can continue proceedings with remaining two members stop no formal order or notifica tion necessary stop Government may fill vacancy later date.
" 407 These two telegrams indicate that both the chairman of the Tribunal and the Government took the view that in the circumstances of the case, there was a vacancy within the terms of section 8, that under that section it was open to the Government either to make an appointment to fill the vacancy or not to make an appointment, and that the proceed ings before the Tribunal could continue even if the vacancy was not filled.
This is quite clear from the concluding words (which I have underlined) of the telegram sent by the Government to the chairman of the Tribunal.
In my judgment, the view taken by the chairman of the Tribunal and the Government was perfectly correct.
The question involved here is twofold, namely, (1) whether section 8 applies to a temporary vacancy; and (2) whether, in case the Government decides not to fill such a vacancy, the proceedings can continue before the chairman and the remaining member.
I have already dealt with the first point, and the second point may also be now dealt with briefly.
In substance, what section 8 provides is that if the chairman goes out, the vacancy must be filled, but, if a member goes out, the Government may or may not fill the vacancy.
It seems to me to follow from this by necessary implication, that if there is a member 's vacancy and the Government decide not to fill it, the Tribunal will not become an imperfectly constituted Tribunal.
In other words, the proceedings can be continued before the Tribunal in spite of the vacancy.
The argument put forward before us on behalf on the appellants was that in the event of a member 's vacancy, either the Government should make an appointment at once or the work of the Tribu nal should be suspended until an appointment is made.
These inferences however do not appear to me to be war ranted by the words of the section, firstly because 'if the section says that the Government may or may not appoint a new member, how can we say that the Government must appoint him, and secondly because there is nothing in the section to show that the work of the Tribunal should remain suspended indefinitely in the situation with 408 which we have to deal.
A reference to the corresponding Acts in England and America will show that suspension of work is generally ruled out in cases of industrial disputes since they need expeditious settlement.
(See section 3 (b) of the National Labour Relations Act of America and section 3 of the Industrial Courts Act, 1919, of England).
The scheme of our appears to me to be the same, and I think that it will be entirely foreign to that scheme to suggest that the proceedings of the Tribunal should remain suspended indefinitely.
The principle that the pro ceedings may continue in spite of there being a vacancy in number, is expressly laid down in sections 5 and 6 of the Act which govern Boards of Conciliation and Courts of En quiry, and is in my opinion recognized by necessary implica tion in section 8 with reference to proceedings before an Industrial Tribunal.
It was strenuously argued before us that if the intention of the Legislature had been that the proceedings before the Tribunal should continue in spite of a vacancy, an express provision would have been made in section 8 in the same terms as it has been made in sections 5 and 6.
This argument however will not bear close examina tion.
Sections 5 and 6 have been reproduced from the Trade Disputes Act, 1929, without any verbal change whatsoever, and it is quite understandable that a provision dealing with the subject of a prescribed quorum should expressly state what would be the effect of the absence of the chairman or a member when the quorum is complete.
Section 8, on the other hand, has not been borrowed from the old Act, but is a completely new section in which its draftsman has used his own language and proceeded on the footing that if it was possible to convey the meaning intended to be conveyed in fewer words, there was no necessity for reproducing the entire phraseology used in sections 5 and 6.
Besides, in the context in which the provision occurs, there is no room for surmising that the intention of the framer of the section might have been to suspend the work of the Tribunal.
The words "the proceedings shall be continued 409 before the Board, Court or Tribunal so reconstituted", obviously refer to a situation which arises when anew chair man or a new member is appointed, but they also show that the framer of the section must have assumed that the pro ceedings before the Tribunal shall continue when there is a vacancy in number and the Government decides not to fill it.
The position we have now arrived at is this.
There was a vacancy of an indefinite duration and the Government decid ed, as it was competent for it to decide, not to fill it for the time being but to let the Tribunal continue the work.
In my judgment, in such circumstances, the proceedings before the chairman and the remaining member cannot be said to have been without jurisdiction.
The further question which now arises is, "what would be the legal effect of Mr. Aiyar rejoining the Tribunal on the 20th February, 1950?" It is contended on behalf of the appellants that the whole award is vitiated by Mr. Aiyar being brought into the Tribunal at a late stage, and the argument is put in the following way.
" The Government had originally appointed a Tribunal consisting of a members.
Granting that a Tribunal of a members can, under section 8 of the Act, become a Tribunal of 2, how can it again become a Tribunal of 3, without the Government acting in strict compliance with the procedure laid down in the section and without making a fresh appointment.
" The same argument was put a little more rhetorically by likening the proceedings before the Tribunal to a running train and enquiring whether it was permissible for one to "jump into and jump off" the train as one chose.
I must confess that though I have very carefully considered this argument I have not been able to appreciate its force.
In answering the argument, we have to bear in mind that the Legislature has conferred very large powers on the Government, and the entire constitution of the Tribunal as well as the appointment of its members have been left to its discretion.
Section 7 (2) provides that the Tribunal shall consist of such 410 number of members as the appropriate Government thinks fit.
Again, section 8 (1) provides that the Government may or may not appoint a member to fill a vacancy.
Under section 9, no order of the appropriate Government appointing any person as a member of a Tribunal shall be called in question in any manner.
Under section 38, for the purpose of giving effect to the provisions of the Act, the Government may make rules, and, as far as I can see, there is nothing to prevent the Government from making a rule fixing the minimum strength of the Tribunal for hearing any of the matters before it.
Thus, in a way, the Government is empowered to constitute as well as reconstitute the Tribunal, and though it is not expected to use the power arbitrarily, or unfairly the power is there.
Therefore looking at the substance of the matter, as opposed to mere technicalities and legal refinements, it appears to me to be a sufficient answer to the question posed on behalf of the appellants to say that, if the going out and coming in of Mr. Aiyar was under the orders of the Government, the proceedings cannot be held to be invalid.
Apart from this general answer, I shall now try to deal with the question a little more closely.
As I have already pointed out, under section 8, the Government is empowered not to fill a member 's vacancy at all.
Now, there appear to me at least two obvious reasons, which may induce the Gov ernment not to fill the vacancy, namely, (1) because it considers that the chairman and the remaining member or members are sufficient to carry on the work of the Tribunal, and (2) because the vacancy being a temporary one, it con siders it unnecessary to introduce a new member and prefers to await the return of the old member.
It seems to me that it was the latter alternative that commended itself to the Government in the present case.
Here, the vacancy being a temporary one, Mr. Aiyar had not ceased to be a member of the Tribunal, and could therefore rejoin it as soon as he was free from the duties of his new office.
In such an event, it was not necessary for the Government to 411 make any order reappointing him to the Tribunal.
He was still a member of the Tribunal and resumed his duties as such under the orders of the Government.
It will, therefore, be entirely wrong to describe him as an intermeddler and to argue that the proceeding was vitiated by his return to the Tribunal.
There is indeed no difficulty in the present case in holding that Mr. Aiyar joined the Tribunal under the orders of the Government, and we find that the Government ultimately declared the award, to which he was a party, to be binding under section 15 of the Act.
He was allowed to resume his duties as member of the Tribunal, and drew his salary as such from the 20th February, 1950, till the termination of the proceedings.
Such being the facts, it would be far too abrupt a conclusion to hold that the entire proceedings are void and the award is bad.
One of the arguments which has been advanced before us against the validity of the award is that Mr. Aiyar, though he did not participate in the proceedings which took place in his absence, was at least theoretically able to influence the decision of the remaining members who had participated in them.
But I do not see any basis for this argument in law, unless we allow our minds to be influenced by any precon ceived notions of strict judicial procedure followed in a regular court of law.
A perusal of section 8 (2) will show that the Act does not contemplate a ale novo hearing in those cases where a new member is appointed by the Govern ment in the place of a member whose services had ceased to be available.
The new member may join at any stage of the proceedings, and no party will be heard to say that a member who has not taken part in the earlier proceedings is able to influence the views of those who had participated in them.
How then can such an objection be raised in the case of Mr. Aiyar, who was familiar with the proceedings and had taken part in them in the earlier stages.
When we therefore examine the facts closely, we find that in substance nothing has happened in this case which could not have legitimately happened 412 under section 8 of the Act.
Even if we assume that it was necessary for the Government to make an appointment under sub section (1) of section 8, the requirements of the provi sion appear to me to have been substantially fulfilled in this case, because Mr. Aiyar could not have joined the Tribunal without giving notice to the Government and without obtaining its orders.
There can be no doubt that the Gov ernment permitted Mr. Aiyar to join the Tribunal, and I do not find any substantial difference between its directing a person to participate in the work of ?the Tribunal and appointing him as a member of that Tribunal.
Once therefore it is clearly understood that under the Act, the Government has been empowered not only to consti tute the Tribunal but also to reconstitute it under certain circumstances, the problem which is supposed to arise from the numerical changes in the composition of the Tribunal in question should not present any difficulty.
I think that the answer to that problem is to be found within the four corners of section 8.
If there is a vacancy within the terms of that section and the Government does not fill it the Tribunal of 3 members will evidently become a Tribunal of 2 members.
But the power of filling the vacancy being vested in the Government, the Tribunal may again become a Tribunal of a members, as soon as the vacancy is filled.
I think that the Government can take its own time in filling the vacancy and may allow the work of the Tribunal to go on in the meantime.
Sometimes, the filling of the vacancy may be delayed, because a suitable person is not at once available, and it may also be delayed for other conceivable reasons.
I do not see anything in the Act or in section 8 to restrict the powers of the Government in such a manner as to compel it either to fill the vacancy, at once or to let the vacancy remain unfilled for ever.
To import such a condition would be placing an undue restriction on the power of the Govern ment, which neither the provisions nor the scheme of the Act justify.
The section, as it stands, will also in my opinion cover 413 a case where the vacancy being a temporary one, the Govern ment chooses not to fill it but awaits the return of the old incumbent.
It was contended that there was no formal notification made at the proper time to furnish evidence of the decision arrived at by the Government.
In fact, however, a Notifica tion was issued by the Government on the 20th May, 1950, to the following effect: "After relinquishing charge of membership of the Indo Pakistan Boundary Dispute Tribunal, Sri N. Chandrasekhara Aiyar resumed charge of his duties as Member of the All India Industrial Tribunal (Bank Disputes) on the 20th Febru ary 1950 (forenoon).
" It is argued that this ex post facto notification cannot legalize an illegality which had already been committed.
I do not however appreciate this argument.
In the first place, there was no illegality committed; secondly, the section does not require any notification; and thirdly, it is not correct to say that the Notification was issued ex post facto, as the proceedings had not terminated but were still going on.
The Government can take its own time for issuing a Notification, and I am unable to hold that the Government did not act bona fide in making the Notification to which I have referred.
As I have already stated, the fact that Mr. Aiyar joined the Tribunal with the concurrence of the Government and the Government wanted him to continue to participate in the work of the Tribunal and paid him his salary on that basis, is sufficient compliance with the requirements of the Act.
How the absence of a formal order or delay in the Notification can have such a far reaching effect on the proceedings before the Tribunal as to make the whole award void as having been made without jurisdiction, is a matter which I find considerable difficulty in appreci ating.
It seems to me that the objections raised on behalf of the appellants are of the most unsubstantial character, and in the absence of any cogent if not compelling reason to do so, I cannot pursuade myself to hold that the work which has been 414 accomplished by the Tribunal after nearly a year 's delibera tions and peregrinations all over the country at considera ble cost to the public exchequer is so much money and labour thrown away.
In the course of the arguments, we were asked to read section 8 with sections 7 and 16.
I do not find anything in either of these sections which militates against the view which I have ventured to express, and I do not think that the provision contained in section 16 that the report of the Tribunal shall be signed by all the members of the Tribunal, means that it should be signed even by those members who had not taken part in the proceedings.
It really means that the award shall be signed by such members as have taken part in the proceedings and could have taken part in them under the Act.
It should be remembered that the provision is general and applies to the awards made by the Tribunals as well as the Boards and Courts, and it should be read with the provi sions contained in sections 5 and 6 which state that a Board or Court having the prescribed quorum may act notwithstand ing the absence of the chairman or any of its members or any vacancy in its number.
It may be that the Tribunal and the Government could have acted in this case with more care so as to avoid the criticisms directed against the proceedings of the Tribunal, but I find no sufficient ground for holding that the proceedings were without jurisdiction.
Reference was made in the course of the arguments to rules Nos. 5 and 12 framed by the Government under section 38 of the Act, which run as follows : "5.
The appointment of a Board, Court or Tribunal together with the names of persons constituting the Board, Court or Tribunal shall be notified in the official Gazette.
Where a Tribunal consists of two or more members, the Tribunal may, with the consent of the parties, act notwithstanding any casual vacancy in its number and no act, proceeding or determination of the Tribunal shall be called in question or invalidated by reason of any such vacancy.
" 415 These rules however have in my opinion no bearing on the point in dispute.
Rule 5, dealing as it does with the appointment of a Board, Court or Tribunal together with the names of persons constituting them, refers to a Notification which the Government has to make when a Board, Court or Tribunal is initially constituted under the Act.
This was done in this case, as will appear from the award itself.
The rule has no reference to the appointments made under section 8 of the Act to fill vacancies.
I take it that the Government will, as a matter of practice, issue a notifica tion in regard to the appointments made under section 8, but the notification will not be under rule 5, and section 8 itself does not expressly provide for issuing any notifica tion.
Nor is a notification necessary under section8 in cases where the Government decides not to fill a vacancy.
The mere fact that the word 'reconstituted ' occurs in sec tion 8, is not in my opinion enough to attract rule 5.
Rule 12 which was in force till the 5th December, 1950, dealt with a casual vacancy, and provided that on the occurrence of such a vacancy, the Tribunal may act with the consent of the parties.
This rule had nothing to do with the vacancy caused by the services of a chairman or a member ceasing to be available, which is dealt with in section 8.
At the first sight, it may appear that if the consent of parties was necessary in the case of a casual vacancy for continu ing the proceedings, it may also be necessary for continuing the proceedings under section 8 of the Act when no appoint ment is made.
In my opinion, however, no such inference can be drawn from rule 12.
Under that rule, the proceedings could go on without the Government being informed, but as to vacancies which occur under section 8, the matter passes into the hands of the Government and its action alone, one way or the other, legalizes the proceedings, and no question of consent of parties arises.
On the other hand, rule 12 lends support to the respondents ' contentions in two ways.
Firstly, it shows that a "vacancy" for the purposes of the proceedings before the Tribunal can be casual and 416 need not always be a permanent one, as suggested on behalf of the appellants; and secondly, what is more important, that a "vacancy" does not affect the jurisdiction of the remaining members to continue the proceedings, for it is settled law that consent cannot give jurisdiction in respect of a subject matter though it might cure a mere irregulari ty.
It was said that rule 12 was ultra vires, but it appears to me to be unnecessary to inquire into this side issue.
For the reasons I have set out, I respectfully differ from the conclusion arrived at by my Lord the Chief Justice and the majority of my colleagues, and hold that the objec tions raised on behalf of the appellants should be over ruled.
PATANJALI SASTRI J.
I agree with the reasoning and conclusion of my learned brother Fazl Ali whose judgment I have had the advantage of reading.
He has said all I wished to say and has said it so well that I have nothing to add.
MUKHERJEA, J. I concur in the decision of my learned brother Fazl Ali, J. that the award of the All India Indus trial Tribunal (Bank Disputes) dated the 31st July, 1950, could not be held to be illegal and inoperative by reason of any lack of jurisdiction in the Tribunal which made it.
However, as the line of reasoning by which I have reached my conclusion is not the same as that adopted by my learned brother and as I have not been able to agree with him as regards the validity of certain earlier awards which the Tribunal purported to make in the months of January and February 1950, I deem it necessary and proper to express my own views on the subject matter of controversy in these appeals as succinctly as possible in a separate judgment.
The only point that has been canvassed before us at this stage of the hearing of the appeals relates to the question of jurisdiction, and the substantial ground upon which the legality of the awards has been assailed by the learned Counsel appearing for the several 417 Banks is that the awards were not made by a Tribunal proper ly constituted and competent to adjudicate upon industrial disputes under the terms of the .
To appreciate the arguments that have been raised by the re spective parties on this point, it would be necessary to state a few facts.
By a notification dated the 13th of June, 1949, the Central Government in exercise of the powers conferred upon it by section 7 of the , con stituted an Industrial Tribunal consisting of three members to wit: (1) Mr. K.C. Sen, (who was appointed chairman of the Tribunal), (2) Mr. S.P. Verma and (3)
J.N. Mazumdar.
By a further Notification dated August 24, 1949, Mr. N. Chan drasekhara Aiyar was appointed a member of the Tribunal in place of Mr. S.P. Verma whose services ceased to be avail able and the Tribunal so reconstituted was designated "The All India Industrial Tribunal (Bank Disputes) .
" The Tribu nal consisting of the chairman and the two members mentioned aforesaid commenced their sittings at Bombay on September 12, 1949, and continued to sit as so constituted at Bombay and various other places since then.
From the afternoon of 23rd September, 1949, the services of Mr. N. Chandrasekhara Aiyar were placed temporarily at the disposal of the Minis try of External Affairs, he being appointed a member of the Indo Pakistan Boundary Tribunal.
Mr. Aiyar 's work in connec tion with the Indo Pakistan Boundary Tribunal ended on 27th or January, 1950, and a Government Notification shows that he was absent on leave from 28th January, 1950, until the 19th of February following and it is on the 20th February, 1950, that he actually resumed his duties as a member of the Industrial Tribunal.
During the entire period of his ab sence there were various sittings of the Industrial Tribunal in which the two remaining members took part and a number of awards were also made and signed by these two members adjudicating upon several items of dispute concerning cer tain Banks.
It may be mentioned here that in exercise of the powers 418 conferred by section 38 of the , certain rules were framed by the Central Government which came into force on 3rd December, 1949, and under which the Tribunal, as constituted by the Notification of 13th June, 1949, was authorised to entrust such cases or matters re ferred to it, as it deemed fit, to one or more members for enquiry and report.
In case of such entrustment, the report of the enquiring member was to be placed before the chairman of the Tribunal and the Tribunal after considering the report and making such further enquiry as it deemed proper could deliver the award.
Purporting to act in pursuance of these rules a large number of matters pending before the Tribunal were divided amongst the members for enquiry and report and the members of the Tribunal did sit separately at different places from the 3rd of December, 1949.
After Mr. Aiyar joined the Tribunal, the proceedings continued as before.
The hearing of the general issues, which began at Bombay, was concluded on 3rd April, 1950.
The Tribunal made and signed the main, award on gist July, 1950, which was published in the Gazette of India (Extraordinary) on August 12, 1950.
The point that has been pressed for our consideration on behalf of the appellants Banks is that on the services of Mr. Aiyar having ceased to be available by reason of his being appointed a member of the Indo Pakistan Boundary Tribunal, the remaining two members could not, in law, constitute an Industrial Tribunal without its being reconstituted as such in, the manner contemplated by the provisions of the .
The proceedings after the 23rd of November, 1949, became, therefore, void and inoperative and the subsequent rejoining of the Tribunal by Mr. Aiyar was of no avail, as a vacancy having once occurred, a fresh appointment of a member and a fresh con stitution of the Tribunal were imperative in law.
We have been asked to declare the award made on 31st of July, 1950, as well as the earlier awards void and inoperative on these grounds.
419 These contentions have been sought to be repelled on behalf of the respondents employees as well as by the learned Attorney General who appeared for the Central Gov ernment as intervener, on a variety of grounds and though the grounds are not quite uniform or consistent, they have all been invoked in support of the position that even in the absence of Mr. Aiyar it was quite competent to the two other members to continue to function legally as a Tribunal under the provisions and the general scheme of the Industri al Disputes Act, 1947.
There was nothing irregular, it is said, in Mr. Aiyar 's subsequently taking part in the Tribu nal and signing the award on 31st July, 1949.
I will notice these arguments in detail as I proceed with my judgment.
It will be convenient first of all to advert to such of the provisions of the , as have a bearing on the questions raised in this case.
The object of the , as set out in the preamble is "to make provisions for investigation and settlement of industrial disputes and for certain other purposes hereinafter appearing.
" There are three classes of authorities provided for by the Act ' which are entrusted with the powers and duties of investigation and settlement of industrial disputes.
First of all, there are Conciliation Officers or Boards of Conciliation, whose duties mainly are to induce the parties to come to a fair and amicable settle ment of the disputes amongst themselves.
Secondly, there are Courts of Enquiry and though they are described as courts, their duties end with investigation into the matters referred to them and submitting reports thereon to the appropriate Government.
Lastly, there are Industrial Tribu nals composed of independent persons who either are or had been Judges of the High Court or District Judges, or are qualified for appointment as High Court Judges.
Sub section (2) of section 5 provides for the constitu tion of a Board of Conciliation.
A Board of Conciliation shall consist of a chairman and two or four other members as the appropriate Government thinks 420 fit, and sub section (8) provides that the chairman shall be an independent person, while the members shall be persons appointed in equal numbers by the parties to the dispute.
Sub section (4) makes an important provision, namely, that a Board can function despite the absence of the chairman or any of the members if it has the prescribed quorum as laid down in the rules, provided however that if the Government notifies the Board that the services of the chairman or of any other member have ceased to be available, the Board shall not act unless a new chairman or member, as the case may be, has been appointed.
Section 6 of the Act relates to Courts of Enquiry and such court may consist of one independent person or such number of independent persons as the appropriate Government may think fit.
Where a Court of Enquiry consists of two or more members, one of them has got to be appointed as a chairman.
The Court like the Board of Conciliation can function in the absence of the chairman or any of its mem bers or in the case of any vacancy in its number, provided it has the prescribed quorum; but it cannot function if the appropriate Government notifies it that the services of the chairman have ceased to be available, so long as a new chairman is not appointed.
There is no provision in section 6 relating to notification by Government in case the serv ices of a member of a Court cease to be available as there is in the case of a member of the Conciliation Board under section 5.
Section 7 deals with Industrial Tribunals.
Sub section (1) lays down that the appropriate Government may constitute one or more Industrial Tribunals for the adjudication of industrial disputes in accordance with the provisions of this Act.
Sub section (2) provides that a Tribunal shall consist of such number of members as the appropriate Govern ment thinks fit.
Where the Tribunal consists of two or more members, one of them shall be appointed a chairman.
There is no provision in section 7 similar to that appearing in sections 5 and 6 empowering a Tribunal to continue its proceedings in the absence of the chairman 421 or any of its members, provided there is a requisite quorum; in fact, no quorum has been prescribed in the rules in regard to an Industrial Tribunal at all.
It is clear, there fore, from the provisions of section 7 of the referred to above and this position has not been disputed by Mr. De who appeared for the employees of some of the Barks that if a Tribunal has been constituted as consisting of three members as in the present case, then subject to any exception that may be created by any other provision of the Act all the three members of the Tribunal must act together.
On behalf of the respondents very great stress has been laid upon section 8 of the , and it is contended that in the circumstances which have happened in the present case, the provision of section 8 would fur nish a clear authority to the two remaining members to continue as a legally constituted Tribunal during the period that the services of Mr. Aiyar ceased to be available, even though there was neither a fresh appointment in his place nor a fresh constitution of the Tribunal.
Section 8 is in the following terms: "(1) If the services of the chairman of a Board or of the chairman or other member of a Court or Tribunal cease to be available at any time, the appropriate Government shall, in the case of a chairman, and may in the case of any other member, appoint another independent person to fill the vacancy, and the proceedings shall be continued before the Board, Court or Tribunal so reconstituted.
(2) Where a Court or Tribunal consists of one person only and his services cease to be available, the appropriate Government shall appoint another independent person in his place, and the proceedings shall be continued before the person so appointed.
(3) Where the services of any member of a Board other than the chairman have ceased to be available, the appropri ate Government shall appoint in the manner specified in sub section (3) of section 5 another 422 person to take his place, and the proceedings shall be continued before the Board so reconstituted.
" The section purports to provide for filling up vacan cies.
Sub section (2) is not material for our present purpose.
Taking sub sections (1) and (3) together we find that if the services of the chairman of a Board, a Court or a Tribunal cease to be available at any time, it is incum bent upon the appropriate Government in each case to fill the vacancy by the appointment of another independent person as chairman and the proceedings shall be continued before the authorities so reconstituted and they would not have to be commenced de novo.
In case the services of a member of either a Court or a Tribunal cease to be available, it is discretionary with the appropriate Government to fill the vacancy or not as it chooses.
If it chooses to appoint a new member in place of the old, the same provision will apply as in the case of appointment of a new chairman.
The section does not say, at least in express terms, as to what would happen if the Government does not think it proper to appoint a new member.
So far as a Board of Conciliation is con cerned, a different provision is made even when the services of a member cease to be available.
In such a case, re ap pointment has got to be made as provided for in subsection (a) of section 5 and the reasons are obvious; because the essential thing in a Board of Conciliation is the equal representation of both parties to the dispute and the par ties would be unequally represented if the vacancy of a member is not filled up.
In the present case one of the members of the Tribunal namely, Mr. Aiyar, was admittedly absent for a period of above three months and as he was appointed to do duties in another capacity, his services could not possibly be avail able during the period that he was engaged elsewhere.
This fact, it appears, was brought to the notice of the appropri ate Government by the other two members, but the Government decided not to make any new appointment in his place.
The question is, what exactly became the legal position of the other two members ? Could they function 423 as a Tribunal in the absence of the third member and without the Government reconstituting the Tribunal as a Tribunal of two ? The contention of the respondents is that as section 8 of the gives an option to the appropriate Government to fill the vacancy or not, as it chooses, when the services of a member cease to be available and as it provides for reconstitution only when a new member is appointed by the Government, it is implicit in the provi sion of the section itself that in case the Government does not decide to appoint a new member, the remaining members would automatically constitute the Tribunal and would proceed as such.
It is said that the Industrial Tribunals are really administrative bodies and as the very object of establishing such Tribunals is to settle industrial disputes as quickly and as expeditiously as possible with a view to secure industrial peace, certain amount of laxity in the procedure cannot but be allowed to these Tribunals as ap pears from the various provisions of the Act and it would defeat the very object of the enactment if the normal rules of law and procedure are made applicable to them.
It is suggested further that what section 7 (1) contemplates is the constitution of a Tribunal irrespective of its members for adjudication of industrial disputes.
What number of persons the Tribunal shall consist of can be determined by the Government at different times and in different manner and no question of fresh constitution of a Tribunal would arise in case the number is subsequently altered.
So far as an Industrial Tribunal is concerned, section 8 (1) of the comes into operation when the services of the chairman of the Tribunal or of any member thereof cease to be available at any time.
This non availability of services may be permanent or temporary and may be occasioned by any cause or circumstance.
When the services of a member cease to be available, the appropriate Government has got to make up its mind whether it would fill the vacancy or not; and in case it chooses to appoint a new member, the Tribunal must be deemed 424 to be reconstituted within the meaning of section 8, the primary object of which is to provide that the proceedings shall be continued before such reconstituted Tribunal from the stage at which they were left and they would not have to be started afresh.
Thus it follows from the language of section 8 that the reconstitution spoken of or contemplated by the section is reconstitution by reason of the appoint ment of a new member in place of the old.
There is no question so far as section 8 is concerned of reconstitution of the Tribunal when the Government chooses not to fill the vacancy.
The point that is stressed on behalf of the respondents is that as section 8 does not provide for reconstitution of the Tribunal when no new appointment of a member is made, the implication must necessarily be that the remaining members would continue to act as a Tribunal and no further order or notification by the Government is necessary.
The argument seems plausible at first sight but an examination of the material provisions of the Act reveals the difficul ties, and those of a formidable character, in the way of accepting this contention as sound.
As has been pointed out already, there is a marked distinction between the provisions of sections 5 and 6 of the on the one hand and those of section 7 on the other.
Sections 5 and 6 expressly empower a Board of Conciliation and a Court of Enquiry to exercise their functions in the absence of any of the members, pro vided the prescribed quorum is present; but such provision has been deliberately omitted from section 7 and nothing has been prescribed either in the Act or in the rules in regard to any quorum for the members of the Tribunal.
It cannot be argued that no quorum has been laid down in the case of a Tribunal, as it can consist of one member only.
The position of a Court of Enquiry, it seems, is precisely the same so far as this point is concerned and yet there is a rule prescribing a quorum for members of a Court.
Having regard to the language of section 7 which admittedly contemplates that the members of 425 a Tribunal must act all together, it would, in my opinion, be a perfectly legitimate view to take that if the legisla ture did intend to make an exception to this rule, it would have done so in clear terms instead of leaving it to be gathered inferentially from the provision of another section which itself is not couched ' in unambiguous lan guage.
An Industrial Tribunal can be constituted only in ac cordance with the provisions of section 7 of the and unless a Tribunal is properly constituted, it cannot be invested with jurisdiction to adjudicate on industrial disputes.
Under sub section (2) of section 7, the number of members constituting the Tribunal has got to be determined by appropriate Government and that is an integral part of the Tribunal itself.
A change in the number of members of a Tribunal could be made therefore only in pursu ance of the provision contained in sub section (2) of sec tion 7.
As section 8 does not lay down that in case the services of a member of the Tribunal cease to be available and the Government does not choose to make a new appointment in his place, the remaining members should continue to form the Tribunal, the constitution or 'reconstitution of the remaining members as a Tribunal should, in my opinion, be made only under section 7 of the Act.
I am not impressed by the argument of Mr. De that a Tribunal is to be conceived of as an entity different from the members of which it is composed and whatever changes might occur in the composition of the Tribunal, the identity of the Tribunal remains intact.
A distinction undoubtedly exists between the court and the judge who presides over it but if the constitution of the court requires that it is to be composed of a certain number of judges, obviously a lesser number could not perform the functions of the court.
Mr. De also argued that the very object of the Industri al Disputes Act is to ensure a speedy and quick determina tion of industrial disputes and section 426 15 of the Act expressly lays down that the Tribunal shall hold its proceedings expeditiously and shall, as soon as practicable, on the conclusion thereof, submit its award to the appropriate Government.
This object, it is said, would be frustrated if the strict rules of ordinary law are ex tended to the proceedings of an Industrial Tribunal.
It is quite true that a quasi judicial tribunal enjoys greater flexibility and freedom from the strict rules of law and procedure than an ordinary court of law, but however much informality and celerity might be considered to be desirable in regard to the proceedings of an Industrial Tribunal, it is absolutely necessary that the Tribunal must be properly constituted in accordance with requirements of law before it is allowed to function at all.
I fail to see further how the issuing of a formal notification under section 7 of the Act could delay the proceedings of the Tribunal or hamper expeditious settlement of the disputes.
Section 16 of the makes the impera tive provision that the award of a Tribunal shall be in writing and shall be signed by all the members.
So long as there is no change or alteration in the original notifica tion which constituted the Tribunal, the expression "all the members" must mean and refer to all the members whose names appear in this notification and, unless all of them sign the award, it would not be a valid or operative award in law.
Our attention was drawn in course of the arguments to rule 12 of the rules framed by the Central Government in exercise of its powers under section 38 of the .
This rule, it is to be noted, was deleted with effect from 6th of December 1949.
As it stood originally, it was worded as follows : "Where a Tribunal consists of two or more members the Tribunal may with the consent of the parties act notwith standing any casual vacancy in its number and no act, proceeding or determination of the Tribunal shall be called in question or invalidated by reason of any such vacancy.
" 427 It has been contended on behalf of the appellants that this rule was ultra vires of the authority which passed it.
It is not necessary for us for purposes of the present case to discuss this matter.
Assuming the rule to be valid, it certainly does not assist the respondents in any way, as there is no suggestion in this case that during the absence of Mr. Chandrasekhara Aiyar the proceedings continued before the remaining two members with the consent of both parties.
On the other hand, the provision in the rule certainly goes against the broad contention that the respondents wanted to raise upon the language of section 8.
In my opinion, as there was no notification by the appropriate Government under section 7 of the constituting the two members a Tribunal under the Act during the absence of Mr. Chandrasekhara Aiyar, the proceedings before these two members were void and inoperative and the award made and signed by them only during this period must be held to be void.
I do not think however that it should be held that the Tribunal was not a properly constituted authority or lacked jurisdiction to exercise its function when Mr. Aiyar re sumed his duties on 20th of February, 1950.
As I have said already, what is necessary for due constitution of an Indus trial Tribunal is a notification or order by the appropriate Government under section 7 of the and the number and names of the members as given in the notification form an essential or integral part of the Tribunal thus constituted.
If the services of one of the members cease to be available at any time as is contemplated by section 8 and the appropriate Government does not choose to appoint another member in his place, one or other of two consequences may follow.
The Government may, by afresh notification under section 7, constitute a Tribunal with the remaining members or in any other way it likes or it may not take any steps at all and allow the original notification to remain.
It can certainly be assumed that the Government will choose the latter alternative only 428 when it thinks that the vacancy is only for a short period and is not likely to continue long.
In such circumstances, as I have already indicated, the true position is that the remaining members cannot function as a Tribunal and all the proceedings must be held to remain in abeyance till the absent member rejoins his duties.
But I do not see any reason why there should be a fresh notification and a fresh constitution of the Tribunal when the absent member returns.
The original notification is still there unaltered and unamended and not affected in any way by any subsequent notification; and by virtue of this notification alone, the three members would be competent to sit as a Tribunal and discharge its duties.
The fact that the services of one of them were not available at a time would not make the origi nal notification null and void.
The only effect of the absence of a member would be that the remaining members would not be competent to continue the proceedings;but this disability would cease as soon as the services of the absent member become available and a Tribunal as constituted by the notification is ready and able to function.
The appellant 's contention seems to be that once a vacancy has occurred, the Tribunal becomes imperfectly constituted and a fresh constitution is necessary.
I do not think that this position is sound.
As I have said already, the non availability of the services of a member may be permanent or purely temporary and may be due to various causes.
The word "vacancy" has no technical meaning.
As will appear from a reference to the Oxford Dictionary, the word "vacancy" is ordinarily used in the sense of a "temporary freedom or cessation from a business or occupation" If the absence of a member was merely tempo rary, the vacancy would mean nothing else but an interval or period during which a particular office remained unoccu pied.
The question of a fresh appointment might arise if the vacancy was actually filled up; but, as has happened in the present case, if the vacancy is not filled up but is allowed to remain, it would automatically come to an end 429 as soon as the member whose absence caused the vacancy comes back and rejoins the office.
It may be desirable in the interests of the public to issue a notice or make some announcement in regard to the resumption of duties by the absent member, but in my opinion no reconstitution of the Tribunal with the self same members is called for or neces sary under the provisions of the .
It is pointed out that cases may be conceived of where the non availability of the services of a member is due to death, lunacy or some such circumstance; but in such cases there could be no question of the man 's coming back and joining his office, and as I have said already under section 16 of the no award would be valid unless all the members whose names appeared in the notifica tion signed it.
This would be impossible in the case of death, lunacy or some other disablement of that character.
It will be seen that in the Government Notification No. LR 60 (47) dated 20th March, 1950, it was expressly stated that the services of Shri N. Chandrasekhara Aiyar, Member of the All India Industrial Tribunal (Bank Disputes), were temporarily placed at the disposal of the Ministry of Exter nal Affairs with effect from 23rd November, 1949, (after noon).
Mr. Aiyar 's new duties continued till 27th January, 1950.
As soon as this work was over, he was regarded as coming back to his office as a member of the All India Industrial Tribunal and he was allowed leave in that capaci ty by the Ministry of Labour from 28th January, 1950.
to 19th February, 1950, (vide Notification No. LR 60 (73) dated 16th September, 1950.) By another Government notification (being Notification No. LR 60 (47) dated 29th May, 1950), it was declared that Shri Chandrasekhara Aiyar resumed charge of his duties as member of the All India Industrial Tribunal on the 20th, February, 1950, (forenoon).
It is true that these notifications were issued much after the time when Mr. Aiyar actually resumed his duties, but as they are not notifications under section 7 of the , and cannot constitute 480 a condition precedent to investing the Tribunal with juris diction under the law, the delay in the actual publication of the notices is really immaterial.
They are relevant only for the purpose of showing what the state of affairs really was.
In my opinion, therefore, the Tribunal was a properly constituted authority on and from the 20th February, 1950, and as the award dated 31st July, 1950, was signed by all the three members appointed under the notification dated 24th August, 1949, no objection is legally sustainable that the award was made without any jurisdiction.
A question may be raised that as the hearing of the general issues before the Tribunal commenced at a time when Mr. Aiyar was absent and he had not the opportunity of being present all through the proceedings when arguments of both sides were advanced, there has been an irregularity or illegality in the procedure which vitiates the whole award.
A decision on this point would require investigation of various matters which have not been placed before us at the present stage by the learned Counsel appearing for the appellants Banks; and I would refrain from expressing any opinion upon it.
My conclusion is that the award dated the 31st of July is not void by reason of any lack of jurisdic tion in the Tribunal which made it.
I am, however, of the opinion that the other awards which were made during the absence of Mr. Chandrasekhara Aiyar or which were not signed by him must be held to be without jurisdiction.
Awards declared void.
Agent for the appellants in Civil Appeals Nos, 35, 36, 37, 38, 39, 40, 41, 42, 43, 44, 45, 46 & 49: Rajender Na rain.
Agent for the appellants in Civil Appeals Nos. 48 and 50; Ranbir Sawhney.
Agent for the appellant in Civil Appeal No. 47: Ganpat Rai.
Agent for the Inter vener P.A. Mehta.
[/INST]Rules 2 and 6 of the Rules framed under section 59 of the Indian Income Tax Act provide that an application for registration of a firm under section 26 A of the Act and for renewal of registration certificate "shall be signed personally by all the parties".
Held that the word 'personally ' in the Income Tax Rules, as framed under section 59 of the Income Tax Act would exclude a duly authorised agent of a partner of a firm signing an application on behalf of the partner under section 26 A of the Income Tax Act.
(2) That Rules 2 and 6 are not ultra vires the rule making authority.
To decide the question whether on its true interpretation the Indian Income Tax Act intended that an application under section 26 A should be signed by the partner personally, or whether it could be signed by his agent on his behalf the Court must have regard not only to the language of section 26 A but also Lo the character of the legislation, the scheme of the Act and the nature of the right conferred by the section.
The Indian Income Tax Act is a self contained code exhaustive of the matters dealt with therein, and its provisions show an intention to depart from the common rule, qui facit per alium tacit per se.
Its intention again is that a firm should be given benefit of section 23(5)(a), only if it is registered.
under section 26 A in accordance with the conditions laid down in that section and the rules framed thereunder.
And as those rules require the application to be signed by the partner in person, the signature by an agent on his behalf is invalid.
Commissioner of Agricultural Income tax vs Keshab Chandra Mandal, ([1950] S.C.R. 435), relied upon.
commissioner of Income tax vs Subba Rao, ([1947] I.L.R. Mad.
167) approved.
Other case law referred to.
75 578
</s>
|
<s>[INST] Summarize the judgementivil Appeal No. 88 of 1953.
Appeal under article 132(1) of the Constitution of India from the Judgment and Order dated the II th September, 1951, of the High Court of, Judicature for the State of Rajasthan at Jodhpur in D. B. Civil Appeal,(Ijlas i Kbas) No. 6 of 1950.
H. J. Umrigar, Narain Andley and Rajinder Narain for the appellants.
Radhey Lal Aggarwal and B. P. Maheswari, for the respondent.
May 12.
The Judgment of the Court was delivered by MUKHERJEA J.
This appeal is on behalf of the plaintiffs and has come before us on a certificate granted by the High Court of Rajasthan, under article 132(1) of the Constitution, on the ground that the case involves a substantial question of law as to the interpretation of the Constitution.
The appellant has also put in a petition praying for leave to urge other, grounds on the merits of the case.
The suit, out of which this appeal arises, was brought by the appellants, as plaintiffs, on the 16th August, 1946, in the District Court I at Jodhpur in Rajasthan against the defendant respondent, claiming to recover from the latter a sum of Rs. 10,342 annas odd together with interest and costs.
The plaintiffs, at all material times, carried on the business of commission agents both at Indore and Jodhpur under the name and style 441 of " Kanmal Kishenmal " and I" Kanmal Surajmal " respectively and their case is that between September and December, 1945, the defendant entered into several forward contracts for the purchase and sale of bullion through the plaintiffs ' firm at Indore.
These transactions proved unprofitable to the defendant and except a small profit of Rs. 103 annas odd which one of these transactions fetched, every one of the rest ended in loss and the loss aggregated to a sum of Rs. 21,423 1 6 pies.
It is averred in the plaint that this entire amount was paid to third parties at Indore by the plaintiffs on behalf of the defendant and that the plaintiffs received, in all, a sum of Rs. 11,457 8 0, which the defendant paid from time to time, towards these losses, to the plaintiffs ' firm at Jodhpur.
The plaintiffs were therefore entitled to the balance of Rs. 9,861 which together with interest came up to Rs. 10,342 and this was the claim laid in the plaint.
The suit was transferred from the District Court to the Original Side of the High Court of jodhpur and the defendant filed his written statement in the High Court on the 27th October, 1947.
The defence was a complete denial of the plaintiffs ' claim and it was contended inter alia that the transactions in suit amounted to wagering contracts and according to the law prevalent in Marwar, as contained in the notification of the Marwar Government dated the 3rd June, 1943, all forward business contracts in bullion, in which the date fixed for delivery exceeded 12 days, were illegal and were punishable as criminal offences.
No suit was therefore maintainable on the basis of these transactions.
On these pleadings a number of issues were raised of which issue No. 5 stood thus: " Are the transactions in dispute in the suit illegal and the present suit in respect of these transactions is not maintainable on account of the notification dated 3rd June, 1943 ? " The suit came up for hearing before a single Judge of the Jodhpur High Court sitting on the Original Side.
No evidence was adduced by the parties and the case 57 442 was heard only on issue No. 5 which was treated as an issue on a pure question of law.
It was held by the learned Judge that, as it was admitted by the plaintiffs that the contracts to which the suit related covered a period exceeding 12 days, they came within the prohibition of the notification referred to above and a suit based upon them was not maintainable in law.
The judgment shows that a contention was raised on behalf of the plaintiffs that the notification was confined only to contracts made in Marwar or intended to be performed in that place, and as the contracts in suit were all entered into at Indore, they could not be hit by the notification.
This argument was repelled by the learned trial judge on a two fold ground.
It was said in the first place that as the suit was actually brought in the Jodhpur Court, the plaintiffs could not avoid facing the notification and the Jodhpur Court could not give them a relief in violation of its own laws.
The other reason assigned was based upon section 13 of the Civil Pro cedure Code and it was said that if the plaintiffs could and did get a decree on the basis of these transactions in the Indore Court and wanted to enforce the same as a foreign judgment in the Court of Jodhpur, the latter would be justified in refusing to give effect to such judgment under section 13 of the Marwar Civil Procedure Code, on the ground that such judgment was founded on a breach of law in force in Marwar.
In this view the learned Judge, by his judgment dated the 2nd March, 1948, dismissed the plaintiffs ' suit.
The plaintiffs thereupon took an appeal, against this judgment, to the Appeal Bench of the Jodhpur High Court and the appeal was heard by a Division Bench consisting of Nawal Kishore C. J. and Kanwar Amar Singh J.
The learned Judges accepted the legal position taken up by the plaintiffs, that the contracts could be void only if they were entered into at Marwar or were intended to be performed, either wholly or partly, at Marwar.
Admittedly they were entered into at Indore outside Marwar, but the learned Judges held that from the fact that certain payments were made by the defendant and accepted by the plaintiffs towards these contracts at Marwar, it could be inferred that it 443 was a term of the contracts that they would be performed at Marwar.
Another point raised on behalf of the plaintiffs, that as the notification of 3rd June, 1943, itself came to an end by efflux of time on the 30th September, 1946, there, was no obstacle in the way of the plaintiffs ' obtaining a decree at any time after that, was repelled by the learned Judges on the ground that as the contracts themselves were illegal, at the time when they were entered into, by reason of their violating the provisions of the notification, the fact that the notification subsequently ceased to be operative could not make the illegal contracts lawful.
The result was that by its judgment dated the 24th September, 1948, the appellate bench of the High Court dismissed the appeal.
The plaintiffs thereupon with the leave of the Court took an appeal against this decision to the Ijlas i Khas of the State of Jodhpur as it then existed.
While the appeal of the plaintiffs was pending before the Ijlas i Khas of the Jodhpur State, the integration of the various States of Rajasthan took place and the United States of Rajasthan was formed on the 7th of April, 1949.
The Rajasthan High Court Ordinance was promulgated by the Rajpramukh of Rajasthan on the 21st June, 1949, and on the 29th of August following, the High Court of Rajasthan was constituted.
Another Ordinance known as the 'Rajasthan Appeals and Petitions (Discontinuance) Ordinance, 1949 ' provided, by section 4, that pending appeals before the Ijlas i Khas of any of the covenanting States if they related to judicial matters were to be heard by a special Court to be constituted by the Rajpramukh.
This section was amended by an amending Ordinance dated the 24th of January, 1950, and all these pending appeals were directed to be heard and disposed of by the Rajasthan High Court established under ' the Rajasthan High Court Ordinance of 1949.
In accordance with this provision the appeal of the plaintiffs was transferred to the High Court of Rajasthan for disposal.
The Constitution of India came into force on the 26th of January, 1950, and when the appeal came up for hearing before the Rajasthan High Court a preliminary point was raised as to whether the 444 appeal should not be transferred to the Supreme Court for disposal under article 374(4) of the Constitution.
The matter was referred for consideration by a Full Bench, and the Full Bench decided that article 374(4) of the Constitution had no application to the present case and the appeal was to be heard by the High Court of Rajasthan.
The appeal was then placed for hearing before a Division Bench of the Rajasthan High Court and by their judgment dated the 11th of September, 1951, the learned Judges dismissed the appeal and affirmed the decision of the Courts below.
Against this judgment the plaintiffs got leave to file an appeal to this Court under article 132(1) of the Constitution and that is how the matter has come before us.
The only constitutional point involved in the appeal is whether article 374(4) of the Constitution is attracted to the facts of the present case and whether the appeal should therefore have been transferred to this Court for disposal instead of being heard and disposed of by the Rajasthan High Court.
In view of the fact that we have ' acceded to the prayer of the appellants and have granted them leave to urge other grounds relating to the merits of the case in support of the appeal, this constitutional point has nothing but an academic importance and is not pressed by the appellants.
We would therefore proceed to consider the points upon which the learned counsel for the appellants has attempted to assail the propriety of the decision of Rajasthan High Court on its merits.
The learned Judges of the Rajasthan High Court took the view, and it seems to us quite properly, that the Courts below were not right in treating issue No. 5 as raising a pure question of law where no investigation of facts was necessary.
The High Court has pointed out that the defendant while raising the plea of illegality of the contracts in his written statement, nowhere alleged that the contracts were entered into at Marwar or were intended to be performed there.
On the other hand the plaintiffs expressly averred that the contracts were made at Indore.
The one fact from which the appeal bench of the Jodhpur High Court drew the conclusion that the contracts were intended to be 445 performed, partly at least, at Marwar, was that certain payments towards the losses resulting from the transactions were made by the defendant to the plaintiffs ' firm at Marwar.
This, as the Rajasthan High Court points out, does not necessarily lead to the inference that it was a ' part of the original agreement entered into by the parties, that the performance was to be made at Marwar.
The payments might have been made, as a matter of convenience, upon express instructions from the Indore firm.
It is also pointed out that if the general principle of law is that it is the debtor who has to seek the creditor, as the defendant ranked here as a debtor by reason of the losses suffered in the business, it was for him to seek the plaintiffs at Indore and not for the plaintiffs to seek him at Jodhpur.
The ,suit, it is to be further noted, was brought at Jodhpur only on the allegation that the defendant resided within its jurisdiction.
There was no averment in the plaint that any part of the cause of action arose within its jurisdiction.
On all these grounds the Rajasthan High Court was of opinion that the Courts below should have either framed a specific issue on facts or if they thought that issue No. 5 was sufficiently wide to cover the question of fact as well, they should have given an opportunity to the parties to lead evidence for arriving at a finding whether the contracts were to be performed in whole or in part in Marwar.
The learned Judges themselves were inclined to send the case back, on remand, in order that evidence might be adduced on this point.
But they did not take this step as they were told that the contracts were entered into by telegrams and no terms of any sort were settled between the parties, it being understood that the business was to be conducted according to the custom and usage of the market.
The learned Judges further discussed a question of Private International Law, apparently raised on behalf of the defendant, that even if the contract was made outside Marwar and not intended to be performed there.
, still the Court of Marwar should refuse to enforce the contract as it was illegal according to the lex fori, that is to say the law of the place where the suit was brought.
446 This contention of the defendant was not accepted and it was held that if the contract was enforceable by the law of the place where it was made or where it was to be performed, it could not be held unenforceable in Jodhpur on the ground of its being opposed to public policy as the prohibition in the notification was not general in its nature and the contract in question cannot be said to be opposed to any basic ideas of morality or public policy.
After saying all these however, the learned Judges of the Rajasthan High Court dismissed the suit on the short point that even if the sale or purchase under the contracts might have taken place outside Marwar Yet the notification not only hit the contracts of sale and purchase but the contract of agency itself relating to such transactions.
It is said then that in the case of Pakki Adat, primarily the place of payment of profit is the place where the constituent resides and in the present case the plaintiffs had alleged themselves to be Pakka Adatias.
Consequently the agency contract would be hit by the notification as it was to be performed at Jodhpur where the defendant lives.
We do not think that the learned Judges ' approach to the case has been a proper one or that the reasoning adopted by them can be accepted as sound.
By the notice of 3rd June, 1943, an additional rule, namely, rule No. 90(c) was added to the Defence of India Rules as applied to Marwar.
Sub rule (2) of rule 90(c) laid down that no person shall enter into forward contract or option in bullion.
In sub rule (1) " forward contract " was defined to mean 'a contract for delivery of bullion.
at a future date, such date being later than 12 days from the date of the contract '; and a " contract " was defined to mean ' a contract made or to be made or to be performed in whole or in part in Marwar relating to the sale or purchase of bullion. ' The present suit is really not one to enforce any contract relating to purchase or sale of bullion which comes within the prohibition of this notification.
It is a suit by an agent claiming indemnity against the principal, for the loss, which the agent had suffered, in carrying out the directions of the principal.
The right to such indemnity is founded on the statutory provision 447 contained in section 222 of the Indian Contract Act which stands as follows: The employer of an agent is bound to indemnify him against the consequences of all lawful acts done by such agent in exercise of the authority conferred upon him." Here the plaintiffs paid the losses resulting from the transactions to third parties, on behalf of the defend.
ant, in exercise of the authority conferred upon them by the latter.
These acts of payment were certainly lawful acts if we assume, as indeed we must, that all these transactions took place and the payments were made outside Marwar.
It is the statutory right which flows from the contract of agency that the plaintiffs are seeking to enforce against the defendant and the suit has been brought in the Jodhpur Court as the defendant resides within that jurisdiction.
The fact that in case of Pakki Adat the place of payment is normally where the constituent resides is immaterial for our present purpose.
A contract for sale or purchase of bullion may be entered into by and between the parties directly or it may be made through agents.
In either case if such contract is not entered into at Marwar, nor is it agreed to be performed wholly or in part in Marwar, it would be outside the notification and cannot be held to be illegal.
The fallacy in the reasoning of the learned Judges lies in the fact that the contract between principal and agent, which is entirely collateral to the contract of purchase and sale, has been held by them as coming within the prohibition of the notification merely on the ground that payment, by the agent to the principal, of the profits of the transaction could be made or demanded at the place where the principal resides.
In our opinion the right to indemnity, which is an incident of the contract of agency, is not hit by the notification at all and is a matter which is entirely collateral to a forward contract of purchase and sale of bullion which the notification aims at prohibiting.
We hold therefore that the Courts were not right in dismissing the plaintiffs ' suit on the ground that the contracts upon which the suit was based were illegal by reason of their contravening the provisions 448 of the notification.
The result is that we set aside the judgments of the Courts below and send the case back to the Original Court of Jodhpur in order that it may be tried 'on all the other issues raised in the suit after giving opportunity to the parties to adduce such evidence as they want to adduce.
The plaintiffs appellants will have their costs up to this stage.
Further costs will abide the result.
Order accordingly.
[/INST]The respondent as principal entered into several forward contracts for the purchase and sale of bullion through the appellant 's firm at Indore who worked as commission agents for the respondent.
The transactions resulted in a loss and the appellants who had to pay the amount of loss to third parties on behalf of the respondent as the agents brought the suit for recovery of the amount in the Court in Jodhpur where the respondent resided.
It was pleaded by the respondent that according to.
the law prevalent there as contained in the notification of the Marwar Government dated the 3rd June, 1943, all forward business contract in bullion in which the date fixed for delivery exceeded 12 days were 440 illegal and therefore a suit on the basis of these transactions was not maintainable.
Held, that, the suit was really not one to enforce any contract relating to the purchase or sale of bullion which comes within the prohibition of the notification but was one by an agent claiming indemnity against the principal for the loss which the agent had suffered in carrying out the directions of the principal.
The right to such indemnity was founded on the statutory provision contained in section 222 of the Indian Contract Act and the acts of payment made by the plaintiffs on behalf of the defendant were lawful acts as all the transactions took place and the payments were made outside Marwar and therefore the suit was not hit by the notification.
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<s>[INST] Summarize the judgementiminal Appeal No. 84 Of 1968.
Appeal by special leave from the judgment and order dated Febru`ary 9, 12, 1968 of the Bombay High Court in Criminal Appeal No. 541 of 1966.
A.S.R. Chari, T.H. Sardar and M. 1.
Khowaja, for the appellant.
B.D. Sharma, for the respondent.
The Judgment of the Court was delivered by Mitter, J.
The appellant along with two other persons were prosecuted on a charge under section 379/34 of the Indian Penal Code committing theft .of a valuable parcel of diamonds from the person of one Wadilal C. Mehta in a railway train between Masjid Bander and Byculla railway stations on November 9, 1965 in furtherance of their common intention.
One of these two other persons (hereinafter described as accused No. 2) was acquitted by the Chief Presidency Magistrate but the appellant and accused No. 3 were each sentenced to undergo rigorous 'imprisonment for l 2 months.
In appeal to the High Court the conviction of the appellant.
was altered to one under section 411 and the sentence was reduced to one of nine months ' rigorous imprisonment.
The appellant has come up to this Court by special leave his main contention being that a statement ascribed to him as having been made to the police was artificial and false and in any event there was no discovery of any fact made as a result of that statement to render it admissible in evidence against him under section 27 of the .
The case for the prosecution was as follows.
Mehta who had about 215 pieces of diamonds in paper packets wrapped in a silk handkerchief in the inside breast pocket of his garment got into a local train at Masjid Bander along with a companion at about 8 p.m. on 9th November 1965.
As the compartment which they wanted to board was already full of passengers, he and his 334 companion had to stand in the passage outside the compartment where there were many other persons already standing including .accused 2 and 3.
Taking exception to the posture of accused No. 2 who was in close contact Mehta asked him to stand erect and at the same time happened to notice a piece of his silk handkerchief lying on the floor of the compartment.
Feeling his garment the realised that his pocket had been picked and the packet of diamonds had disappeared.
Mehta and his companion caught hold of accused 2 and 3 and searched their persons but to no purpose.
At Byculla railway station they were dragged out of the train on to the platform by Mehta and his companion but the former managed to get free and slip, back into the train.
On shouts being raised the train was brought to a halt but the two accused could not be found.
Mehta went on to Victoria Terminus Railway station and lodged a complaint there about the happening.
He was shown a number of photographs kept at the police station and he pointed out therefrom three of the persons resembling the suspects concerned in the theft of his diamonds.
The police immediately got busy and on the basis of some information received started looking for the appellant but were not able to trace him that night.
The next morning (10 11 1965 the complainant went to the V.T. Railway station once more and identified the photographs of accused No. 2.
The appellant was arrested at 12.30 p.m. on November 10, 1965 and accused No. 2 was apprehended very shortly thereafter.
Both the them were brought to the C.I.D. office for interrogation.
Apparently being familiar with the modus operandi of pick pockets the police went round the offices of several newspapers in Bombay and at the office of Bombay Samachar Press S.I. Guad was told by Pawri, the advertisement manager of the Bombay Samachar, that two persons had come to their office on that day at about 11 a.m. for 'the purpose of putting in an advertisement about the recovery of a packet of diamonds.
S.I. Guad learnt from Pawri the name and address of one D.S. Parekh as one of the two persons who had earlier interviewed Pawri for the insertion of the advertisement.
Attempts to contact Parekh by S.I. Gaud were however unsuccessful.
On the morning of 11th November 1965 the appellant made a statement before Inspector Mokasi and S.I. Graud and this was recorded in the presence of panchas.
The portion of the statement with which we are concerned reads: "It will point out one Gaddi alias Ramsingh of Delhi at Bombay Central Railway station at/II Class Waiting Hall to whom I have given a packet containing diamonds of different sizes more than 200 in number.
" The appellant thereafter led the police and the panchas to the Said waiting hall and there from among a crowd of people the 335 appellant pointed out accused No. 3 to the police.
D.S. Parekh was also there.
The appellant is alleged to have repeated there the same statement which he had made earlier at the police station.
Accused No. 3 produced a handkerchief containing a packet in which 211 diamonds were found.
Both accused No. 3 and D.S. Parekh were put under arrest.
The diamonds were identified by Mehta as a portion of those which he had lost on the night of 9th November.
An identification parade was held by a Justice of the Peace at 4.15 p.m. at which Mehta and his companion identified the appellant as also accused 2 and 3 as being persons who were standing in the passage outside the first class compartment of the local train when Mehta 's pocket was picked.
The High Court came to the conclusion that the complicity of the appellant with the crime alleged rested only on two pieces of evidence brought forward at the trial.
The first was his identification by Mehta and his companion at the identification parade to the effect that he was present in the train on the material date and at the material hour.
By itself this means nothing because there were a number of other persons who were standing in the passage at the same time and there is no suggestion and indeed there could be none that any of these persons were connected with the crime.
To fasten the guilt on the appellant the prosecution had to rely on the evidence furnished by the statement alleged to have been made by the appellant to the police and the panchas in consequence whereof he was said to have led the police party to the Bombay Central railway station waiting hail and to the discovery of the diamonds from accused No. 3.
As the statement of the accused recorded above was in the nature of a confession it would come under the embargo of section 26 of the Evidence Act unless it can be brought within the ambit of section 27 of the Evidence Act.
which reads: "Provided that, when any fact is deposed to as discovered in consequence of information received from a person accused of any offence, in the custody of a police officer, so much of such information, whether it amounts to a confession or not, as relates distinctly to the fact thereby discovered, may be proved." In order that the section may apply the prosecution must establish that the information given by the appellant led to the discovery of some fact deposed to by him.
It is evident that the discovery must be of some fact which the police had not previously learnt from other sources and that the knowledge of the fact was first d.erived from information given by the accused.
If the police had no information before of the complicity of accused No. 3 with the crime and had no idea as to whether the diamonds would 336 be found ' with him and the appellant had made a statement to the police that he knew where the diamonds were and would lead t,hem to the person who had them, it can be said that the discovery of the diamonds with the third accused was a fact deposed to be the appellant and .admissible in evidence under section 27.
However, if it be shown that the police already knew that accused No. 3 had got the diamonds but did not know where the said accused was to be found, it cannot be said that the information given by the appellant that accused No. 3 had the diamonds and could be pointed out in a large crowed at the waiting hall led to the discovery of a fact proving his complicity with any crime within the meaning of section 27.
The ,fact deposed to him would at best lead to the discovery of the whereabouts of accused No. 3.
Under section 25 of the Evidence Act no confession made by an accused to a police officer can be admitted in evidence against him.
An exception to this is however provided by section 26 which makes a confessional statement made before a Magistrate admissible in evidence against an accused notwithstanding the fact that he was in the custody of the police when he made the incriminating statement.
Section 27 is a proviso to section 26 and makes admissible so much of the statement of the accused which leads to the discovery of a fact deposed to by him and connected with the: crime, irrespective of the question whether it is confessional or otherwise.
The essential ingredient of the section is that the information given by the accused must lead to the discovery of the, fact which is the direct outcome of such/nformation.
Secondly, only such portion of the/nformation given as is distinctly connected with the said recovery is admissible against the accused.
Thirdly, the discovery of the fact must relate to the commission of some offence.
The embargo, on statements of the accused before the police will not apply if all the above conditions are fulfilled.
If an accused charged with a theft of articles or receiving stolen articles, within the meaning of section 411 I.P.C. states to the police, 'I will show you the articles at the place where I have kept them ' and the articles are actually found there, there can be no doubt that the information given by him led to the discovery of a fact i.e. keeping of the articles by the accused at the place mentioned.
The discovery of the fact deposed to in such a ease is not the discovery of the articles but the discovery of the fact that the articles were kept by the accused at a particular place.
In principle there is no difference between the above statement and that made by the appellant in this ease which in effect is that 'I will show you the person to whom I have given the diamonds exeeding 200 in number".
The only difference between the two statements is that a "named person" is substituted for the place ' where the article is kept.
In neither case are the articles or the diamonds the fact discovered.
337 The section was considered by the Judicial Committee of the Privy Council in Pulukuri Kotayya vs King Emperor(1).
A question there arose as to what ' part of a statement of the accused leading to the recovery of a knife in a murder case was admissible in evidence.
The statement read: "About 14 days ago.
, I Kotayya and people of my party lay in wait for Sivayya and others at about sunset time at the corner of Pulipad tank.
We all beat Boddupati China Sivayya and Subbayya to.
death.
The re maining persons Pullayya, Kotayya and Narayana ran away.
Dondapati Ramayya who was in our party received blows on his hands.
He had a spear in his hands.
He gave it to me then.
I hid it and my stick in the rick of Venkatanarasu in the village.
I will show if you come.
We did all this at the instigation of Pulukuri Kotayya.
" The Board held that the whole of the statement except the passage "I hid it (a spear) and my stick in the rick of Venkatanasrasu in the village.
I will show if you come" was inadmissible.
Holding that the extent of the information admissible must depend on the exact nature of the fact discovered to.
which such information was required to relate the Judicial Committee pointed out that "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 distinctly to the fact.
" The Board was careful to observe that "information as to past user, or the past history of the object produced was not related to its discovery in the setting in which it was discovered.
" This Court had to consider the scope of section 27 of the Evidence Act in K. Chinnaswamy Reddy vs State of Andhra Pradesh(2).
There the appellant was convicted under section 411 I.P.C. by an Assistant Sessions Judge.
He was tried along with another person who was convicted under sections 457 and 380 I.P.C. A house had been burgled and valuable articles stolen.
During the course of investigation the police recovered 17 ornaments on the information given by the appellant.
The other accused had also given information on the basis of which another stolen ornament was recovered.
The Assistant Sessions Judge came to the conclusion that the other accused had actually committed house breaking and had removed the ornaments from the house burgled and had handed over 17 of them to the appellant.
He also came to the conclusion that the l 7 ornaments recovered at the instance of the appellant were in his possession and he therefore found him guilty under section 411 I.P.C. On appeal the Sessions Judge held that the appellant had not been proved to be in possession of the 17 orna (1) 76 I.A. 65.
(2) ; 338 ments which were recovered at his instance from a garden.
According to the Sessions Judge the full statement of the appellant that "he would show the place where he had hidden them (the ornaments)" was not admissible against him.
The Sessions judge held that the part of the statement of the appellant which related to his having hidden the ornaments was inadmissible.
There was a criminal revision to the High Court and re trial was ordered and it was against that order that the appeal to this Court was directed.
Overruling the interpretation of the Sessions Judge, this Court held that the whole of the statement related distinctly to the discovery of the ornaments and was admissible under section 27 of the Evidence Act.
It was said: "These words (namely, where he had hidden them) having nothing to.
do with the past history of the crime and are distinctly related to the actual discovery that took place by virtue of that statement.
" The contention that in a case where the offence consisted of possession even the words "where he had hidden them" would be inadmissible as it amounted to an admission by the accused that he was in possession of them was rejected on the ground that if the statement related distinctly to the fact thereby discovered it would be admissible in evidence irrespective of the question as to.
whether it amounted to a confession or not.
There can be no doubt that the portion of the alleged statement of the appellant extracted by us would be admissible in evidence.
The question still remains as to whether the said statement was really a discovery of a fact disposed to or weather there was no discovery within the meaning of section 27 of the Evidence Act because the police was already in possession of the fact that the accused No. 3 was a person who had the diamonds.
In order to find out the extent of the knowledge of the police as to the whereabouts of the diamonds it is necessary to look at the testimony of section 1.
Gaud and Pawri, the advertisement manager, of the Bombay Samachar.
Gaud stated at the trial that he had taken up the investigation at about 11 p.m. on the night of 9th November 1965 and after going to V.T. Railway station he had gone to Kamathipura 6th lane to trace the appellant on the basis of some information received at the railway station.
He learnt the next day about the identification of the photograph of the second accused by the complainant and arrested the appellant at 12.30 p.m. and the second accused at 1 p.m. on the same day.
The same afternoon he visited different newspaper establishments including that of Bombay Samachar Press and received information from the advertisement manager, Pawri in consequence whereof he went to find D.S. Parekh.
He did not succeed in tracing him and continuing the interrogation of the appellant and the second 339 accused he called panchas on the morning of 11th November to, have the statement of the appellant recorded.
Thereafter he went to the Bombay Central railway station and there found the diamonds with the accused No. 3 pointed out to him by the appellant.
In cross examination he said that he had contacted Pawri.
at 3 p.m. on loth November but he had not asked Pawri to produce the advertisement material nor was the same shown to him.
His testimony was that he had only asked for the name and address of the person who had given him the advertisement material and Pawri had done so from memory.
He denied having ' seen any letter or any advertisement material at Pawri 's office.
He also denied that he had told Pawri not to publish the advertisement.
It is to be noted that Police Inspector Mokashi examined before S.I. Gaud at the trial had stated in his examination inchief that at 2.30 p.m. on 10 11 1965 he had asked Gaud to visit different newspaper establishments including Bombay Samachar to find out whether the appellant had sent anyone there to surrender the diamonds as unclaimed.
Pawri 's evidence was that two persons had come to see him on November 10, 1965 for the purpose of putting in an advertisement relating to the finding of a packet of diamonds.
According to Pawri the two persons had given him a text of an advertisement to b.e published along with a covering letter signed by one and counter signed by the other and that the third accused was one of the persons who had met him at his office and that the covering letter as well as the advertisement material had been ' signed by both the persons who had met him.
The charges for advertisement amounting to Rs. 40 had been paid by one of them and a receipt taken.
One of the two persons had also produced a card of Dawood Suleman attached to the covering letter in response to a request for identification.
The letter dated 10 11 1965 shows that it was addressed to the manager, Bombay Samachar signed by Ramsingh Santram and Dawood Suleman Ghanchi and the text of it: "We have found diamond packets on (platform) No. 3 of Masjid Bunder station at eight o 'clock at night on the date 9 11 1965.
A public notice in respect thereof is sent herewith.
Please publish the same on the first page of the issue dated 11 11 1965, Thursday.
" The text of the statement meant for insertion in the newspaper ran: "A diamond packet has been found at Bombay Central Railway station on 9 11 65.
Please contact Bombay Samachar by proving identity and paying the charges for the public notice.
" 340 Below the above were the words: 'Care of ' Anand Savarorup Samma, Market, West Malad.
Ramsingh Santram Dawood Suleman Ghanchi Ghoghari Mohalla 136, Niaz Building Ground Floor, Bombay 3.
Pawri stated that Bombay Central railway station had been written by him after scoring out Masjid Bunder.
In cross examination he said that the two persons had brought the diamonds and wanted to leave the same at the newspaper office but this was declined.
They had come to the office at about 11 a.m. and seen a director before meeting the witness.
The advertisement was to.
be published on the morning of 11th but this was not done because the police had given instructions to the contrary.
The police had gone to their office in the afternoon when he had to1d them what had taken place in the morning.
In view of the evidence of Pawri and Mokashi it is not possible to accept the testimony of Gaud.
It is incredible that Guad who had gone to the newspaper office specially for the purpose of finding out whether anybody had approached the newspaper people to surrender the diamonds would not ask Pawri in detail about the persons who had met him or what they had told him or what they had done about the publication of the finding of the diamonds.
Pawri 's definite statement was that he had told the police all that had happened in the morning.
In our view, Pawri must have shown Gaud the advertisement material, the covering letter with the card and the names of the two persons and the address of one of them.
He could not possibly have failed to tell Gaud that the two persons who had come to him had even offered to hand over the diamonds.
There is no positive evidence as to whether Gaud had asked the Bombay Samachar people not to insert the advertisement on the morning of the 11th.
nothing turns on that.
It was 11.0 'clock in the morning when Parekh and accused No. 3 had gone to the newspaper office and it was about 3 in the afternoon that Gaud met Pawri for the purpose of making enquiries.
Gaud 's statement that Pawri had given him Parekh 's address from memory cannot be accepted.
Besides it is absurd to suggest that Gaud would not have asked Pawri to show him the documents made over by Parekh and accused No. 3 or that there would have been any reluctance on the part of Pawri to tell Gaud about it when he knew that the police were making investigations about a packet of diamonds picked from the pocket of someone who had lodged a complaint with the police.
341 In our view Gaud must have learnt that Parekh and or accused No. 3 had the custody of the diamonds.
Therefore the statement of the appellant that accused No. 3 had the custody of the diamonds would not be something unknown to the police so as to constitute "a fact deposed to as discovered in consequence of the information received" from the appellant.
The discovery, if any, merely related to the whereabouts of accused No. 3.
There was no discovery of any fact deposed to by the appellant within the meaning of section 27.
If the police had not gone to the office of the Bombay Samachar and had not learnt of the complicity of the third accused with the crime, the statement of the appellant would amount to information received from him relating to the discovery of the diamonds in the custody of accused No. 3.
the result although the statement.
might otherwise have been admissible in evidence, that there was no discovery of a fact connecting the appellant with the receipt of the diamonds which were stolen within the meaning of section 27 of the Evidence Act because the police already knew that the third and or the fourth accused had the diamonds.
The appeal must be allowed and the appellant directed to be set at liberty.
Y.P. Appeal allowed.
[/INST]The appellant was charged under section 379/34 I.P.C. for committing theft of a parcel containing diamonds along with the, two other persons.
ln the course of investigation the police went to a newspaper office where they learnt that one of the.
co accused had come to put in advertisement respecting the recovery of the diamonds, stating that it was in his possession, and left 'an address with the newspaper.
The police could not trace that co accused, but later, as a result of information furnished by the appellant to the police and the panchas the police were taken to a place where the diamonds were discovered from that other co accused.
On the question whether the statement of the appellant was admissible in evidence against him under section 27 of the , HELD: The statement was not admissible.
Under section 25 of the Evidence Act no confession made by an accused to a police officer can be admitted in evidence against him.
An exception to this is however provided by section 26 which makes a confessional statement made before a Magistrate admissible in evidence against an accused notwithstanding the fact that he was in custody of the police when he made the incriminating statement.
Section 27 is a proviso to s, 26 and makes admissible so much of the statement of the accused which leads to the discovery of a fact deposed to by him and connected with the crime, irrespective of the question whether it is confessional or otherwise.
The essential ingredient of the section is that the information given by the accused must lead to the discovery of the fact 'which is the direct outcome of such information.
Secondly, only such portion of the information given as is distinctly connected with the said recovery is admissible against the accused.
Thirdly, the discovery of the fact must relate to the commission of some offence.
The embargo.
on statements of the accused before the police will not apply if all the above conditions are fulfilled.
If an accused ' charged with a theft of articles or receiving stolen articles, within the meaning of section 411 I.P.C. states to the police. 'I will show you the articles at the place where 1 have kept them ' and the.
articles are actually found there, there can be no doubt that the information given by him led to the discovery of a fact i.e. keeping of the articles by the accused at the place mentioned.
The discovery of the fact deposed to in such a case is not the discovery of the articles but the discovery of the fact that the articles were kept by the accused at a particular place.
In principle there is no difference between the above statement and that made by the appellant in this case which in effect is that 'I will show you the.
person to whom 1 have given the diamonds exceeding 200 in number '.
The only difference between the two statements is that a 'named person ' is substituted for 'the place ' where the article is kept.
In neither case are the articles or the diamonds the fact discovered.
[338 C H] In the present case, the police had learnt earlier that the other accused had the custody of the diamonds.
Therefore, the statement of the appel 333 lant that the other accused had the custody of the diamonds would not be something unknown to the police so as to constitute 'a fact deposed to as discovered in consequence of information received ' from the appellant.
The discovery, if any, merely related to the whereabouts of the other accused.
There was no discovery of any fact deposed to by the appellant within the meaning of section 27.
If the police had not gone to the office of the newspaper and had not learnt of the complicity of the other accused with the crime, the statement of the appellant would amount to information received from him relating to the discovery of the diamonds in the custody of that other accused.
[343 B] Pulukuri Katayya vs King Emperor, 76 I.A, 65 and K. Chinnaswamy Reddy vs State of Andhra Pradesh, ; , referred to.
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<s>[INST] Summarize the judgementCivil Appeal No. 325/61.
Appeal from the judgment and decree dated March 6.
1961, of the Allahabad High Court in Writ No. 3116 of 1960.
WITH Petitions Nos. 180, 181 and 205 of 1961.
Petitions Under article 32 of the Constitution of India for enforcement of Fundamental Rights.
section N. Kacker and J. P. Goyal, for the appellant (In C.A. No. 325/61) and the petitioner (In Petn.
No. 205/61).
H.N. Sanyal, Additional Solicitor General of India, K.L. Misra, Advocate General, U. P. H. N. Seth, J. K. Srivastva and C. P. Lal, for the respondents (in C.A. No. 325/61 and Petn.
No. 205 of 1961).
J. P. Goyal, for the petitioners (In petitions Nos. 180 and 181 of 1961).
C. P. Lal, for the respondents (In Petitions Nos. 180 and 181 of 1961).
December II.
The Judgment of the Court was delivered by SHAH, J.
The appeal and the writ petitions practically raise the same points and may be 78 disposed of together.
At the outset we shall briefly state the facts relevant to each of the said proceedings.
The appellant in Civil Appeal No. 325 of 1961 held a permit for plying stage carriage on the Kanpur Bela Bidhuna route via Chaubepur, in the State of Uttar Pradesh.
The entire route is 68 miles long, and a part of the route 16 miles in length i.e., Kanpur to Chaubepur, is a notified route.
This part was common between the said route and the Kanpur Chaubepur Sarai Miran route, which was a nationalised route.
A condition was, therefore, attached to the appellant 's permit that he would not be entitled to pick up passengers or drop them between Kanpur and Chaubepur.
His permit was to expire on June 10, 1960.
Before the said date, he applied for renewal of his permit, and on May 20, 1960 it was published in the U.P. Govt.
Gazette calling for objections.
On the same day, the State Government published a notification in the Gazette proposing to nationalise the said route.
As the application for renewal could not be disposed of before the expiry of the period fixed in the permit a temporary permit for the route was granted to the appellant.
On July 19, 1960 the application for renewal of the appellant 's permit was considered by the Regional Transport Authority, Kanpur, and his permit was renewed for three years with effect from July 23, 1966, only in respect of a part of the old route, namely, Chaubepur Bela Bidhuna; but under the directions of the Transport Commissioner, the Regional Transport Authority made an endorsement on the renewed permit authorizing the appellant to ply his vehicle between Kanpur and Chaubepur for a period of four months commencing from July 23, 1960.
As regards the proposed scheme of nationalization, on June 22, 1960 the appellant filed his objections thereto.
The said objections were heard by the Joint Secretary, Judicial 79 Department, who approved the scheme with some modifications.
The approved scheme was published in the Gazette on October 8, 1960.
Under the notification the scheme was to be put into operation from October 5, 1960 or thereafter.
On November 12, 1960, a notification dated November 4, 1960 was published in the Gazette under section 68F of the cancelling the appellant 's renewed permit with effect from November 27, 1960.
Under the nationalization scheme the stage carriages belonging to the State Transport Undertaking could ply on the said route without obtaining permits.
The appellant filed a petition under Art, 226 of the Constitution in the High Court of Judicature at Allahabad praying for the following reliefs: (a) That a writ in the nature of mandamus may issue to command the respondents not to interfere with the Petitioner 's right to ply on Kanpur Bela Bidhuna Via Chaubepur route under the permit duly renewed in his favour till the entire duration of the permit viz., till July 22, 1963.
(b) That a Writ in the nature of certiorari may issue to quash so much of the Resolution dated July 19, 1960 passed by the Regional Transport Authority, Kanpur, as directs imposition of illegal conditions to the renewed permit of the petitioner.
(c) That a Writ in the nature of mandamus may issue to command respondents No. 2 and 3 not to give effect to the illegal endorsements made on the petitioner 's permit on July 23, 1960 and to treat the petitioner 's permit as having been renewed without the illegal conditions attached thereto by the two endorsements dated July 23, 1960, reproduced in paragraph 15 of the affidavit.
80 (d) That a Writ in the nature of certiorari may issue to quash the notifications dated May 18, 1960 under section 68C of the Act, so also the subsequent notifications under section 68D(2) of the Act dated September 26, 1960 and the notification dated November 4, 1960 under section 68F (2) of the Act in regard to Kanpur Bela Bidhuna route.
(e) That a Writ in the nature of mandamus may issue directing the respondents Nos. 1 to 3 not to give effect to the notifications dated May 18, 1960, September 26, 1960 and November 4, 1960 in regard to Kanpur Bela Bidhuna route.
(f) That an interim direction may issue to the respondents Nos. 2 and 3 not to interfere with the Petitioner 's right to ply on the entire Kanpur Bela Bidhuna route under the renewed permit irrespective of the illegal conditions attached thereto or of the illegal scheme for the nationalization of the said route.
(g) That costs of this petition may be awarded to the Petitioners as against the opposite parties.
On December 2, 1960 the High Court made an interim order directing the State of Uttar Pradesh not to interfere with the petitioner operating his vehicle on Kanpur Bela Bidhuna route in accordance with the terms of his permit.
To that writ petition, the State of Uttar Pradesh, the Regional Transport Authority, and the Secretary to Regional Transport Authority, were made respondents.
The respondents opposed the petition.
On March 6, 1961 a Division Bench of the High Court, accepting the contentions raised by the respondents, dismissed the petition.
Hence the appeal.
81 Writ Petition No. 205 of 1961 is filed in this Court by another operator under article 32 of the Constitution.
He was plying his stage carriage on the Jaunpur Shahganj route in Uttar Pradesh under Permit No. 430, which was valid upto March 15, The State Government published in the Gazette dated July 23, 1960 a notification dated July 15, 1960 under section 68C of the Act proposing to nationalize the said route along with another route.
The petitioner and others filed objections against the scheme within the time prescribed.
The objections were heard by the Joint Secretary, Judicial Department, who approved the scheme.
The approved scheme was published in the U. P. Official Gazette dated February 25, 1961.
Thereafter, the Secretary to the Regional Transport Authority, Allahabad, issued a notification dated July 29, 1961 wherein it was stated that the permits of the operators on the said routes including that of the petitioner would stand cancelled and that the notification would come into force upon the expiry of 15 days from the date of publication of the said notification.
The petitioner has filed the present writ petition asking for the following reliefs: (a) A writ in the nature of certiorari quashing the notification (Annexures A, B and C to this writ petition).
(b) A writ in the nature of mandamus directing the respondents not to give effect to the notifications.
(c) A writ in the nature of mandamus commanding the respondents not to interfere with the rights of the petitioner to ply his stage carriage on the aforesaid route (Jaunpur Shahganj route), due to the aforesaid scheme.
(d) Award the costs of this petition to the petitioner.
82 Writ Petitions Nos.
180 and 181 of 1961 relate to the route Robertasgunj Dudhi Mamhani.
The State Government issued a notification dated July 13. 1960, proposing to nationalize the said route and published the same in the Gazette on July 23, 1960.
The petitioners filed objections against the scheme and the said objections were heard by the Joint Secretary, Judicial Department, and the scheme was finally approved by him.
The approved scheme was notified in the Gazette on May 20, 1961.
Under the said notification, the State Transport Undertaking would commence to operate its stage carriage service on the said route from July 15, 1961 or thereabout.
Aggrieved by the said scheme, the petitioners filed the said petition for writs in this Court for reliefs similar to those in the other petition.
Mr. Kacker, learned counsel for the petitioner in Writ Petition No. 205 of 1961, raised the following points: (1) Under section 68C of the , the State Transport Undertaking has to form its opinion and prepare a scheme for nationalisation and publish it in the manner prescribed thereunder, but in the present cases the State Government initiated the schemes and, therefore, the schemes were not validly made; (2) As neither the objection to the proposed scheme were heard nor were they approved by the State Government as they should be under section 68D of the , the schemes were invalid; (3) The Regional Transport Authority acted illegally in curtailing the period of renewal this question arises only in the appeal; (4) The Regional Transport Authority had not applied its mind in dealing with the renewal application but mechanically followed the provisions in the proposed schemes and, therefore, its order was bad; (5) Even after the approval of the nationalisation schemes, the State owned buses were required to apply for and get permits under the Act and plying of buses 83 by the State without permits was illegal; and (6) The Secretary to the Regional Transport Authority had no jurisdiction to issue an order under section 68F (2) of the , since under the said section only the Regional Transport Authority had the power to do so this question arises only in Writ Petition No. 205 of 1961.
To appreciate the first argument it is necessary to notice briefly the relevant provisions of Ch.
IVA of the (IV of 1939) hereinafter called the Act.
Section 68A(b) defines "State transport undertaking" to mean "any undertaking providing road transport service, where such undertaking is carried on by (i) the Central Government or a State Government.
Section 68C reads: "Where any State transport undertaking is of opinion that for the purpose of providing an efficient, adequate, economical and properly coordinated road transport service, it is necessary in the public interest that road transport services in general or any particular class of such service in relation to any area or route or portion thereof should be run and operated by the State transport undertaking, whether to the exclusion, complete or partial, of other persons or otherwise, the State transport undertaking may prepare a scheme giving particulars of the nature of the services proposed to be rendered, the area or route proposed to be covered and such other particulars respecting thereto as may be prescribed and shall cause every such scheme to be published in the Official Gazette and also in such other manner as the State Government may direct".
Section 68D reads: "(1) Any person affected by the scheme published under section 68C may, within 84 thirty days from the date of the publication of the scheme in the Official Gazette, file objections thereto before the State Government.
(2) The State Government may, after considering the objections and after giving an opportunity to the objector or his representatives and the representatives of the State Transport undertaking to be heard in the matter, if they so desire, approve or modify the scheme." Section 68E provides for the cancellation or modification of the scheme by the State transport undertaking and in that event the same procedure prescribed for framing a scheme is to be followed.
The effect of the said provisions, in so far as they are relevant to the present inquiry, may be stated thus: The State transport undertaking is an undertaking providing road transport service which is carried on by the State or any other corporation or authority mentioned in section 68A.
The definition creates a statutory authority distinct from authorities which run it.
This is made clear by section 68C whereunder it is the State transport undertaking that will have to form the requisite opinion.
This is further elucidated by the fact that under section 68C of the Act the state transport undertaking is required to publish the proposed scheme in the Official Gazette and also in such other manner as the State Government may direct.
This distinction between the two entities is further made clear by section 68D(2) whereunder the State Government has to hear the representatives of the State Transport undertaking.
Briefly stated, under the said provisions, a statutory authority called the State transport undertaking is created it is authorised to initiate a scheme of nationlisation of road transport, the aggrieved parties are given opportunity to file objections thereto, and 85 the State Government is empowered to hear both the parties and approve or modify the scheme, as the case may be.
Counsel for the appellant contends that the underlying scheme of the Act cannot be worked out unless a clear distinction is maintained between the State transport undertaking and the State Government, for, if one is equated with the other, the State Government would become a judge of its own cause, and that, therefore, it was incumbent upon the Government to form a separate and distinct, authority to enable it to initiate a scheme in accordance with law.
Counsel for the State contends that a transport undertaking run by a State Government is a State transport undertaking and, therefore, the scheme initiated by the State Government which runs the State undertaking is a scheme initiated by the said undertaking.
It is true that the provisions maintain a distinction between a State transport undertaking and the State Government.
It is also true that the State Government has to hear the objections of the aggrieved parties and also the representatives of the State transport undertaking before approving or modifying the scheme, indicating thereby that the State Government has to decide the dispute that may arise between the two contestants.
Though the functions of the different bodies are clearly demarcated in the case of undertakings run by corporations, there is overlapping in the case of an undertaking run by a State Government.
This may lead to anomalous position, but in practice it can be avoided, if the State Government creates a department to be in charge of the undertaking and hears the objections and approves or modifies the scheme in a manner without violating the principles of natural justice.
86 A State transport undertaking means, inter alia, an undertaking run by a State.
The statutory authority created is an undertaking run by a State.
The State can only run an undertaking through its officers; it may entrust the conduct of the transport service to a particular officer or to a department of the State; in either event, it is the State Government that runs the undertaking.
The statutory authority, namely, the State transport undertaking, has to form an opinion within the meaning of section 68C of the Act, and the opinion must necessarily be that of the State Government which runs it.
If the State Government running an undertaking forms an opinion, it can legitimately be said that the statutory authority i. e., the State transport undertaking, has formed the opinion.
In Gullapalli Nageswara Rao vs Andhra Pradesh State Road Transport Corporation (1) before the State of Andhra was formed in November, 1956, the Motor Vehicles (Hyderabad Amendment) Act, 1956 was in force in Telengana area.
Under the said Act the State transport undertaking was defined to mean the road transport department of the State providing road service.
After the Andhra Pradesh State was formed, that department initiated the scheme and this Court held that the said department clearly fell within the definition of state transport undertaking.
This Court observed in that case: "The State Government maintained the department for providing road transport service and therefore the department clearly falls within the definition of State Transport Undertaking.
" If a state directly runs an undertaking, it can only be through a department.
In law there cannot be any difference between an undertaking run by a department of a State Government and that run 87 by the State Government.
In either undertaking is run by the State and that undertaking is a State transport undertaking within the meaning of section 68C of the Act.
The opinion must necessarily be formed by somebody to whom, under the rules of business, the conduct of the business is entrusted and that opinion, in law, will be the opinion of the State Government.
It is stated in the counter affidavit that all the concerned officials in the Department of Transport considered the draft scheme and the said scheme was finally approved by the Secretary of the Transport Department before the notification was issued.
It is not denied that the Secretary of the said Department has power under the rules of business to act for the State Government in that behalf.
We, therefore, hold that in the present case the opinion was formed by the State transport undertaking within the meaning of section 68C of the Act, and that there was nothing illegal in the manner of initiation of the said scheme.
The second ground urged by counsel for the appellant that the scheme was invalid because the objections to the scheme were heard and the scheme was approved by the Joint Secretary, Judicial Department, who was not lawfully invested with authority in that behalf is for reasons to be presently stated not open to the appellant.
By the first sub section of section 68D which we have already set out persons affected by a transport scheme are entitled to file objections thereto.
By sub section (2), the State Government is authorised to approve or modify, the scheme after considering the objections, if any, and after giving an opportunity of being heard in the matter to the objector or his representatives and the representatives of the State transport undertaking.
Sub section (3) provides for the publication of the 88 approved or modified scheme in the Official Gazette by the State Government and on such publication the scheme becomes final.
It must at once be observed that neither in the petition under article 226 of the Constitution to the High Court, out of which Civil Appeal No. 325 of 1961 arises, nor in the Writ Petition under article 32 (No. 205 of 1961) presented to this Court, was the plea raised that the Joint Secretary to the Judicial Department was not authorised to hear the objection and to approve the scheme.
In the petition (No. 205 of 1961) under article 32 of the Constitution it was averred by the petitioner in para 10 that "the petitioner filed objections under section 68D(1) of the Act, against the scheme of the State Government, and it also heard its own representatives in opposition to the petition" and again it was averred in the same paragraph "at the time of hearing of the petitioner 's objections under section 68 D, Before the State Government it was argued on behalf of the petitioner that the aforesaid scheme was bad. " In the petition under article 226 of the Constitution it was averred in paragraph 25 "That no State Transport Undertaking having been constituted the State Government initiated the scheme and heard its own representatives on 13.8.1960.
The petitioner has bonafide belief that the Joint Secretary to the Government of Uttar Pradesh (Judicial Department) who heard the objections acted with bias against the petitioner.
" Even in the petition for special leave to appeal to this Court, no such objection was raised.
There is also no reference to any such contention in the judgment of the High Court.
The validity of the scheme on this ground is sought to be raised for the first time in this Court, and, according to the settled practice of this Court the appellant except in exceptional circumstances and there are none such in this case is not entitled to raise this argument for the first time at the hearing in this Court.
It was urged in the course of the 89 argument that by Rule 7 of the State Land Transport Services Development Rules 1958, which at the material time read as follows: "(1) The objections received shall be considered by the judicial Secretary to Government of U.P. or an officer of his department, not below the rank of Joint Secretary nominated by the former for the purpose.
x x x x x x x x x x (5) After hearing of such parties as appear, the officer shall give a decision whether the scheme be approved or modified as he may deem proper", no authority was lawfully conferred upon the Joint Secretary, and the proceedings of the Joint Secretary in purported exercise of powers under section 68D (2) were without jurisdiction.
But this is another facet of the same argument, and it is clear from a perusal of the petitions before the High Court and this Court and the judgment of the High Court that it was never raised.
There is no doubt that the scheme has been duly published under section 68D(3) and if the objection to the invalidity of the scheme on the ground that the objection were not heard by an authority competent in that behalf cannot be permitted to be raised in this Court for the first time during the course of the arguments, the statutory consequences prescribed by section 68F must ensue.
It is necessary to bear certain facts and considerations in mind in dealing with the remaining contentions.
By the scheme (cl. 7) the permit of the appellant was cancelled.
The scheme as approved was published in the U.P. Gazette on October 8, 1960, and was to come into operation on October 15, 1960, or thereafter.
A notification was published on November 4, 1960, under section 68F(2) 90 of the Act cancelling the appellant 's permit with effect from November 27, 1960.
The appellant therefore ceased to have any right to ply his vehicles on the route and he had no right to object to the vehicles of the State transport undertaking plying on that route.
If the scheme was validly promulgated and became final within the meaning of section 68D(3), it had the effect of extinguishing all rights of the appellant to ply his vehicles under his permit.
After cancellation of his permit, he could not maintain a petition for writ under article 226 because a right to maintain such a petition postulates a subsisting personal right in the claim which the petitioner makes and in the protection of which he is personally interested.
It is true that the appellant did at the date of the petition filed in the High Court hold a permit which was to enure till the 27th November, 1960.
But if the permit was validly terminated from the date specified, he will not be entitled to relief even if he had on the date of the petition a subsisting right.
Ground No. 2 must therefore fail.
Grounds 3 and 4 of the appellant that the Regional Transport Authority acted illegally in curtailing the period of renewal and that, in any event, it did not apply its mind in dealing with the renewal application but mechanically followed the provisions of the scheme may now be considered.
The Regional Transport Authority was by the terms of the scheme left no discretion in the matter.
It was by the scheme that the right of the appellant was restricted and if the scheme became final and binding the Regional Transport Authority had no authority to permit the appellant to ply his vehicles.
The order passed by the Regional Transport Authority was purely consequential on the scheme, and if the scheme is not open to challenge, orders consequential thereon will not 91 also be open to challenge.
We are supported in this view by the observations of this Court in Abdul Gafoor: Proprietor, Shaheen Motor Service vs The State of Mysore (1) that: "It appears to us that when deciding what action to take under section 68F(1) the authority is tied down by the terms and conditions of the approved scheme and his duty is merely to do what is necessary to give effect to the provisions of the schemes.
The refusal to entertain applications for renewal of permits or cancellation of permits or modification of terms of existing permits really flow from the scheme.
The duty is therefore merely mechanical and it will be incorrect to say that there is in these matters any lie between the existing operators and the State Transport Authority.
There is no justification therefore for saying that when taking action under section 68F(2) is really independent of the issue of the permits under section 68F(1).
Once the scheme has been approved, action under section 68F(1) flows from it and at the same time action under section 68F(2) flows from the same scheme".
We are bound by the decision.
We are not called upon to consider whether the State owned buses are being validly plied without obtaining permits under section 68F(1) of the Act.
If the right of the appellant to ply his buses is lawfully extinguished, he is not entitled to maintain an appeal challenging the right of the State Transport undertaking to ply their buses with or without permits.
Nor is any fundamental right of the appellant infringed by the State Transport undertaking plying its buses without permits, and a petition under article 32 of the Constitution cannot be maintained unless a fundamental right of the applicant is infringed.
92 Nor is there any substance in the last contention.
The orders passed under.
sections 68F(2)(a) and (b) flow from the publication of the scheme duly approved and the issue of an order, which is not quasi judicial but administrative, by the Secretary on behalf of the Regional Transport Authority is not open to challenge.
It is not the case of the Petitioner in W. P. 209/61 in which alone this contention is raised that the order unauthorised.
what is contended above this contention is raised that the order is being quasi judicial, power to make it cannot be delegated.
But for reasons already set out the order is not quasi judicial; it is purely administrative.
In our view, therefore, the appeal and the petitions must fail, and are dismissed with costs.
[/INST]The appellant, whose permit for plying stage carriage was shortly to expire, applied for its renewal.
The renewal application was published in the Gazette calling for objections.
The State Government published a notification proposing to nationalise the route.
The permit was renewed for three years for a part of the route but an endorsement was made thereon authorising the appellant to ply on the remaining part of the route for four months.
The appellants filed objections to the proposed scheme for nationalisation.
The objections were heard by the Joint Secretary, Judicial Department, who approved the scheme with certain modifications.
The scheme was published in the Gazette.
Thereafter, a notification was issued under section 68F of the cancelling the appellant 's renewed permit.
Under the Scheme the stage carriages of the State Transport Undertaking could ply on the route without obtaining permits.
The appellant challenged the validity of the scheme and the cancellation of his licence.
^ Held, that the scheme was valid and the appellant 's licence was properly cancelled.
Section 68C of the required the scheme to be initiated by the State Transport Undertaking.
Even though the scheme in the present case was actually initiated by the State Government there was no non compliance with the provisions of section 68C.
There was no difference between an undertaking run by a department of the State Government and that run by the State Government.
In either case the undertaking was run by the State and it was a State transport undertaking within the meaning of section 68C. Initiation of the scheme by the State Government running an undertaking was initiation by the statutory authority i.e., the State Transport undertaking.
The appellant could not be allowed to challenge the validity of the scheme on the ground that the Joint Secretary was not lawfully invested with the authority to hear objections and to approve the scheme as the point was not raised at the proper stage.
77 Gullapalli Nageswara Rao vs Andhra Pradesh State Road Transport Corporation, [1959] Supp. 1 S.C.R. 319, applied.
The scheme having been validly promulgated and having become final under section 68D(3) it had the effect of extinguishing all rights of the appellant to ply his stage carriage under his permit and he could not maintain a petition under article 226 of the Constitution.
The order passed by the Regional Transport Authority cancelling the appellant 's permit was purely consequential on the scheme and could not be challenged if the scheme was valid.
Once the right of the appellant to ply his stage carriage was validly extinguished he could not question the right of the State transport authority to ply their stage carriages with or without permits.
Abdul Gafoor, Proprietor, Shaheen Motor Service vs State of Mysore, ; , applied.
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<s>[INST] Summarize the judgementAppeal No. 80 of 1962.
Appeal from the judgment and decree dated December 19, 1957, of the Madras High Court in C.M. Appeal No. 303 of 1956.
A. V. Viswanatha Sastri, V. Ratnam and R. Ganapathy Iyer, for the appellant.
G.S. Pathak and R. Thiagarajan, for the respondent.
July 24, 1964.
The Judgment of the Court was delivered by SUBBA RAO, J.
This appeal by certificate raises the question whether a decree obtained in a suit to enforce a debt incurred after the Madras Agriculturists Relief Act, 1938 (Act 4 of 1938), hereinafter called the Parent Act.
came into force could be scaled down under section 13 of the Parent Act.
The facts are as follows: On February 15, 1964, the appellant and 4 others executed a mortgage deed in favour of Kaverlal Chordia for a sum of Rs. 2,00,000 payable after three years with interest at 9 per cent.
per annum.
On January 24, 1946, the mortgagee assigned the said mortgage 308 in favour of the respondent.
Certain payments towards principal and interest were made thereunder.
On February 28, 1950, the assignee mortgagee i.e., the respondent, filed a suit, O.S. No. 55 of 1950, in the Court of the Subordinate Judge, Nilgiris, Ootacamund, for the recovery of Rs. 1,98,487 8 0, made up of Rs. 1,50,000 for the balance of the principal and Rs. 48,487 8 0 for interest due on tile mortgage.
The suit ended in a compromise dated December 21, 1950, under which a decree was passed for Rs. 1,50,000 on account of principal, with interest and further interest at 9 per cent.
per annum and costs, subject to some concessions being shown in the event of payments, being made in certain specified instalments.
Thereafter, certain payments were made towards the decree.
In due course the respondent filed I.A. No. 382 of 1953 for the passing of a final decree.
On June 24, 1955, the appellant filed O.P. No. 24 of 1955 for scaling down the debt.
The respondent, inter alia, contended in his objections filed against the said application that as the debt sought to be scaled down was incurred subsequent to March 22, 1938, which is the date of the commencement of the Parent Act.
the decree could not be scaled down under section 19(2) of the Parent Act.
The learned Subordinate Judge overruled the objection and held by his order dated August 10, 1956.
that the decree was liable to be scaled down in terms of section 13 of the Parent Act.
He accordingly scaled down the decree debt.
On appeal, a Division Bench of the Madras High Court held that as the statutory right to have the interest scaled down was not put forward before the consent decree was passed, the decree could not be scaled down at the stage of the final decree proceedings.
It further held that section 19(2) of the Parent Act only applied to debts payable at the commencement of the &aid Act and therefore, the application for scaling down the decree was not maintainable.
In the result it set aside the order of the Subordinate Judge and dismissed the petition for scaling down the debt.
Hence the present appeal.
Mr. A. V. Viswanatha Sastri, learned counsel for the appellant, did not press the appellant 's claim under section 19(2) of the Parent Act, but put it under section 13 of the said Act.
309 He took us through the relevant provisions of the Parent Act, which according to him disclose the legislative policy undermining the sacrosanctity of decrees and pressed on us to hold, on a scrutiny of the provisions of section 13 of the Parent Act in the light of the said policy, that the decree made in respect of a debt incurred after the Parent Act came into force was liable to be scaled down thereunder.
Mr. Pathak, learned counsel for the respondent, makes a distinction between the substantive and procedural pro visions and contends that the Parent Act does not make any provision for scaling down decrees made in respect of debts incurred after the said Act came into force.
The general scheme of the Parent Act gathered therefrom may be briefly stated thus.
The main object of the Parent Act was to give relief to agriculturists.
"Debt" has been defined in section 3 (iii) of the Parent Act as any liability in cash or kind, whether secured or unsecured, due from an agriculturist, whether payable under a decree or order of a civil or revenue court or otherwise.
This definition is rather com prehensive; it takes in secured, unsecured and decree debts due from an agriculturist.
Section 7 of the Parent Act declares that a debt so defined has to be scaled down in the manner prescribed by the said Act.
Section 8 provides the mode of scaling down debts incurred before, 1932 and section 9, the debts incurred after 1932 but before March 22, 1938; and section 13 deals with the scaling down of debts incurred after the commencement of the Parent Act.
The relief granted under the said Act varies with the date of the debt depending upon whether it falls under one or other of the said three periods.
While sections 7, 8, 9 and 13 give the principles for scaling down a debt, section 19 provides the machinery for scaling down.
Section 19 of the Parent Act.
as amended in 1948, reads: "(1) Where before the commencement of this Act a court has passed a decree for the repayment of a debt, it shall, on the application of any judgment debtor who is an agriculturist. apply the provisions of this Act to such decree 310 and shall, notwithstanding anything contained in the Code of Civil Procedure, 1908, amena the decree accordingly or enter satisfaction.
as the case may be: (2) The provisions of subsection (1).
shall also apply to cases where, after the commencement of this Act, a Court has passed a decree for the repayment of a debt payable at such commencement.
It may be mentioned that the second clause was inserted by the Amending Act of 1948.
Before the amendment there was a conflict of view on the question whether section 19(1) could be invoked in amending a decree passed after the commencement of the Parent Act in respect of a debt incurred before the said Act.
Sub section (2) made the position clear and declared that it could be done.
The position, therefore, is that in the case of debts other than decree debts, the scaling down process will have to be resorted to in an appropriate proceeding taken in respect of the debt and in the case of decrees in respect of debts incurred before the Parent Act whether made before or after the said Act, by filing an application under section 19(1) or (2) of the Board Act, as the case may be But section 19 on its express terms does not permit the filing of an application for amending a decree by scaling down a debt incurred after the Parent Act came into force.
Doubtless, as Mr. Viswanatha Sastri contents, the Parent Act, to some extent, undermines the sanctity of decrees, but that is to implement the policy of the Legislature to give relief to agriculturists over burdened with debts.
But a Court, particularly in the case of an expropriatory measure like the Act, cannot rely upon the supposed policy of the Legislature and extend the scope of the relief given to agiculturists by analogy.
The scope of the relief shall necessarily be confined to that given by the Act expressly or by necessary implication.
A fair reading of sub sections (1) and (2) of section 19 of the Parent Act disclose beyond any reasonable doubt that the Legislature does not provide thereunder any machinery for reopening a decree made in respect of a debt incurred after the Act came into force.
311 Realizing this difficulty ' Mr. Viswanatha Sastri relied upon the provisions of section 13 itself and contends that the said section provides, in the case of debts incurred after the Parent Act came into force, both for the substantive relief as well as for the machinery to give the said relief.
The said section reads: "In any proceeding for recovery of a debt, the Court shall scale down all interest due on any debt incurred by an agriculturist after the commencement of this Act, so as not to exceed a sum calculated at 6 1/4 per cent.
per annum, simple interest. . . " The Government by notification reduced the rates of interest to 5 1/2 per cent per annum with effect from July 29, 1947.
Let us scrutinize the provisions of the section in the light of the arguments advanced.
Learned counsel asks us to read the words "decree debt" instead of "debt" in section 13 of the Parent Act, for "debt" is defined to take in a decree debt, and by so reading, he contends, in any proceeding, which, according to him, includes, a final decree application, the court shall scale down all interest in the manner prescribed thereunder.
It is further argued that final decree proceedings are only proceedings in a suit and, therefore, the word "recovery" in the sub section is appropriate in the context of a decree debt.
This argument, if accepted, disturbs the entire scheme of the Parent Act.
Section 13 is one of the group of sections viz., sections 8, 9 and 13, dealing with the principles of scaling down in a proceeding for the recovery of a debt.
But where a decree is to be amended, the Act has taken care to provide expressly for the amendment of the decree.
If the Legislature intended to provide for the amendment of decrees even in cases falling 'under section 13, it would have added another appropriate clause in section 19.
The absence of any such clause indicates an intention that in cases of debts comprehended by section 13, the Legislature gives only a limited relief expressly thereunder.
It is said, so far as the reopening of decrees after the Parent Act came into force is concerned, whether in respect of 312 debts incurred before or after the said Act, there cannot possibly be a justification for a difference in the manner of their treatment.
A plausible reason can be discerned for this legislative distinction between debts incurred before the Act and those incurred after the Act; for, in the former when the debts were incurred the Act was not in existence and, as the debtors could not have anticipated the provisions of the Act, they were given the summary remedy, but the agriculturists who incurred debts after the Parent Act with open eyes were denied the same; while in the former, they were allowed to reopen decrees made in respect of the said debts before or after the Act, in the latter they could claim relief only in an appropriate proceeding before the decree was made and that too was confined to the limited relief in regard to the rate of interest provided thereunder.
The difference in the treatment of the two categories of decrees was brought about by sub section (2) of section 19 added by a later amendment.
Whatever may be the reason for the difference, we cannot extend the scope of section 13 by analogy or by stretching the meaning of the words "proceeding" and "recovery".
Reliance is placed upon section 13 A of the Parent Act which reads: "Where a debt is incurred by a reason who would be an agriculturist as defined in section 3(ii) but for the operation of proviso (B) or proviso (C) to that section the rate of interest applicable to the debt shall be the rate applicable to it under the law custom, contract or decree of Court under which the debt arises or the rate applicable to an agriculturist under section 13, whichever rate 'is less." On the basis of this section a contention is raised that sections 13 and 13A relate to the same subject matter with the difference that while section 13 applies to agriculturists who incurred debts after the Parent Act came into force, section 13A applies to persons who would be agriculturists but for the provisos (B) and (C) of section 1 (ii) in respect of debts in curred after the Act, and as a fair reading of section 13 A indi cates that it applies to decrees made in regard to debts in 313 curred after the Act, it must be interpreted reasonably that section 13 also applies to such decrees.
Mr. Pathak, learned ,counsel for the respondent, on the other hand, contends that section 13 A only applies to pre Act debts, as section 7 which declares the scheme of scaling down of debts applies only to pre Act debts and the only exception to it is section 13 A. Be that as it may, we cannot construe section 13 with the aid of section 13 A which was introduced by the Amending Act 23 of 1948.
This appeal does not call for an interpretation of section 13 A of the Act and we shall not express any opinion thereon.
The legal position may be briefly stated thus.
Section 7, 8, 9 and 13 form a group of sections providing the principles of scaling down of debts incurred by agricul turists under different situations.
A debt can be scaled down in an appropriate proceeding taken in respect of the same.
But in the case of debts that have ripened into decrees, section 19(1) and (2) prescribe a special procedure for reopening the decree only in respect of debts incurred before the Parent Act.
The Parent Act does not provide for the reopening of decrees made in respect of debts incurred after it came into force, and for understandable reasons the relief in respect of such decrees is specifically confined only to a concession in the rate of interest.
For the foregoing reasons, we hold that the order of the High Court is correct .
In the result, the appeal fails and is dismissed with costs.
[/INST]The respondent, who was the assignee mortgagee of a mortgage deed executed on February 15, 1945 by the appellant for a certain sum payable with interest, filed a suit for the recovery of the sum with Interest.
The suit ended in a compromise under which a decree was passed and certain payments were made towards the decree.
In due course the respondent moved for the passing of a final decree.
The appellant applied for scaling down of the debt under the Madras Agriculturists Relief Act.
The respondent, inter alia, contended in his objections filed against this application that as the debt sought to be scaled down was incurred subsequent to the date of commencement of the Act, the decree could not be scaled down under section 19(2) of the 307 Act.
The Subordinate Judge overruled the objection and held that the debt was liable to be scaled down in terms of section 13 of the Act.
On appeal, the High Court held that as the statutory right to have the interest scaled down was not put forward before the consent decree was passed, the decree could not be scaled down at the stage of the final decree R proceedings.
It further held that section 19(2) of the Act only applied to debts payable at the commencement of the Act and, therefore, the application for scaling down the decree was not maintainable.
On appeal by certificate, Held: Sections 7, 8, 9 and 13 form a group of sections providing the principles of scaling down of debts incurred by agriculturists under different situations.
A debt can be scaled down in an appropriate proceeding taken in respect of the same.
But in case of debts that have ripened into decrees, section 19(1) and (2) prescribe a special procedure for reopening the decree only in respect of debts incurred before the Act.
The Madras Agriculturists Relief Act does not provide for the reopening of decrees made in respect of debts incurred after it came into force, and for understandable reasons the relief in respect of such decrees is specifically confined only to a concession in the rate of interest.
</s>
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<s>[INST] Summarize the judgementAppeal No. 49 of 1965.
Appeal by special leave from the order dated January 14, 1964 of the Punjab High Court in Letters Patent No. 11 of 1964.
section Y. Gupte, Solicitor General and Naunit Lal, for the appellant.
Hardev Singh, section P. Nayar for R. N. Sachthey, for the res pondents.
The Judgment of the Court was delivered by Shah, J.
The appellant Vidya Vati who is the owner of 56.10 1/4 standard acres of agricultural land in the village Bishanpura, tahsil Jind, District Sangrur, in the State of Punjab, was ousted from the land sometime in 1954 by certain persons who had no tide to the land.
A civil suit filed by her for it declaration of titleand for possession of the land from the trespassers was decreed and she was restored to possession of the land on October 15, 1960.
The Pepsu Tenancy and Agricultural Lands Act 13 of 1955 was brought into force during the pendency of the civil suit with effect from March 4, 1955.
Under section 5 of the Pepsu Act 13 of 1955 every landowner owning land exceeding thirty standard acres was entitled to select for personal cultivation from the land held by him in the State as a landowner any parcel or parcels of land not exceeding in aggregate area the permissible limit and reserve such land for personal cultivation by intimating his selection in the prescribed form and manner to the Collector.
Since the land was in the occupation of the trespassers, the appellant 648 did not make any selection of land for personal cultivation.
The, Act was amended with effect from October 30, 1956 by the Pepsu Tenancy and Agricultural Lands (Second Amendment) Act 15 of 1956 and thereby, amongst other provisions, Ch.
IV A was added.
The provisions contained in that Chapter were designed to impose a ceiling on the holding of owners and tenants of agricultural land held for personal cultivation within the State and for imposing restrictions on acquisition of land and disposal of surplus ' area.
In respect of the land owned by her the appellant submitted a return in Form VII A prescribed under the Rules framed under the Act.
The Collector of the District after considering the objections of the appellant, declared that she held 21.14 3/4 standard acres in excess of the ceiling prescribed by the Act.
The order of the Collector was confirmed in appeal to the Commissioner, Patiala Division.
A petition moved by the appellant under articles 226 & 227 of the Constitution for the issue of a writ quashing that order was rejected by Gurdev Singh, J., and an appeal against the order was summarily dismissed by a Division Bench of the High Court.
The appellant appeals to this Court with special leave.
Counsel for the appellant contends that the provisions of Ch.
IV A have no application to the case of the appellant, since she was not in "cultivatory possessions of the land on the appointed date i.e. October 30, 1956; that the appellant has not acquired the land by transfer, exchange, lease, agreement or settlement, or by inheritance, bequest or gift front a person to whom she is an heir, and on that account sections 32 L & 32 M of the Act have no application to her case and that in any event the appellant should have been permitted to reserve out of her holding ten acres of land for an orchard under section 32 K of the Act.
Before considering the merit of these contentions it is necessary to notice the relevant provisions in Ch.
IV A of the Act which imposed a ceiling on holding of agricultural land under personal cultivation.
Section 32 A(1) of the Act provides: "Notwithstanding anything to the contrary in any law custom, usage or agreement, no person shall be entitled to own or hold as landowner or tenant land under his presonal cultivation within the State which exceeds in the aggregate the permissible limit.
" Counsel for the appellant contends that section 32 A(1) operates only at the point of time when the Act comes into force i.e. October 30, 1956, and not thereafter.
If on that date, says counsel, a person owns or holds within the State land under his personal cultivation as landowner or tenant in excess ' of the permissible limit, the State is entitled to take away the surplus land, and that if the holder or tenant after the commencement of Act 15 of 1956 acquires or possesses land by transfer, exchange, lease, agreement 649 or settlement, or acquires it by inheritance, bequest or gift from a person to whom he is an heir, and his total holding exceeds the permissible limit, by express provisions contained in sections 32 L and 32 M the ceiling on holding will be enforced, but where an owner of land for whatever reasons brings under cultivation land of his ownership.
after the commencement of the Act, the provision imposing a ceiling does not operate.
The entire argument is raised on an assumption that section 32A(1) operates only at the date on which the Act was brought into operation; that argument, in our judgment, is contrary to the plain terms of section 32 A(1).
It is true that sections 32 L and 32 M expressly deal with certain classes of acquisitions after the date of the commencement of the Act, but on that account no restriction may be imposed upon the connotation of the expression "no person shall be entitled to own or hold" occurring in section 32 A, that it is limited in its operation to the point of commencement and has no operation in the future.
It may be noticed that section 32 L renders all subsequent acquisitions as a result of which the holding of a person of land under his personal cultivation exceeds thirty acres "null and void", and section 32 M which deals substantially with involuntary acquisitions (such as acquisitions by inheritance or bequest) sets out the machinery for making declarations and the manner in which the land in personal cultivation in excess of the ceiling will be dealt with.
By an appropriate drafting device, it may have been possible to dovetail these provisions into the other sections, but if in the interest of clarity certain specific cases are separately dealt with, an intention to restrict the operation of the general provision contained in section 32 A(1) cannot be implied.
The scheme of Act 13 of 1955 as originally enacted was that by section 5 every landowner owning land exceeding thirty standard acres was required to select for personal cultivation from the land held by him as a landowner any parcel or parcels of land not exceeding in aggregate area the permissible limit and reserve such land for personal cultivation.
The selection could be made in respect of land under personal occupation as well as in respect of land in the occupation of tenants.
After making the selection, the landowner could take appropriate steps to evict the tenants from that land.
But in the land in the possession of the tenants and not included in the land selected and reserved under section 5 for personal cultivation, the tenant of the land could acquire proprietary rights in the manner and subject to the conditions provided under section 22.
This right was exercisable by the tenant in respect of land which was not selected for personal cultivation by the owner and in respect of which he was not liable to be evicted.
The scheme of the Act, therefore, was that the landowner was entitled to select for personal cultivation from the land held by him within the State any parcel or parcels of land not exceeding in the aggregate the permissible limit.
If the land so 650 selected was in the possession of a tenant he could.
subject to the. restrictions contained in section 7 A, evict the tenant.
The lands which were not selected for personal cultivation by the landowner could be purchased by the tenant in the manner and subject to the conditions provided in section 22.
The Legislature thereafter modified the scheme of the Act and, incorporated Ch.
IV A under which no person could own or hold land either as landowner or, as tenant in excess of the permissible limit.
The excess was to be treated as surplus land and appropriated to the State.
Whereas under the scheme of Chapters 11, III and IV as they originally stood the tenants were given the right to purchase the lands not selected by the landowner for personal cultivation, but the landowner was otherwise subject to no further restrictions; by Ch.
, V A it was intended to place a ceiling upon the owning or holding of land for personal cultivation by a landowner or a tenant in excess of the permissible limit.
Viewed in the light of that scheme, also, it is impossible to construe section 32 A as being operative only at the point of time at which the Amending Act incorporating Ch.
IV A was brought into force, for the words of the section contain no limitation, and the scheme of the Act indicates no such implication.
It is true that under section 32 B every person who owns or holds as landowner or tenant land under his personal cultivation exceeding the permissible limit at the commencement of the Act is required to make a return in respect of his holding.
But that is enacted with a view to provide machinery for effectuating the provisions imposing the ceiling on land held at the date of commencement: it does not even indirectly suggest that section 32 A is limited in its operation to the point of time at which the Act is brought into force and is spent thereafter.
Failure on the part of the Legislature to deal with cases in which it the date on which the Act was brought into force, the owner or holder of land was not cultivating the land because he was not in cultivatory possession thereof but was restored to his possession during the subsistence of the Act, cannot also be used to limit the operation of section 32 A(1) only to the point of time at which the Act was brought into force.
In our judgment the ban imposed by section 32 A operates whenever he is found to own or told land in personal cultivation exceeding the permissible limit.
Section 32 K provides for exemption of lands used or intend ed to be used for certain specified purposes to the extent indicated from the ceiling imposed by section 32 A(1).
By cl.
(vi) of section 32 K(1) it is provided that the provisions of section 32 A shall not apply where a landowner gives an undertaking in writing to the, Collector that he shall, within a period of two years from the commencement of the Pepsu Tenancy and Agricultural Lands (Second Amendment) Act, 1956, plant an orchard in any area of his land not exceeding ten standard acres, such area of land.
651 Sub section (2) of section 32 K provides that where a landowner has, by an undertaking given to the Collector, retained any area of land with him for planting an orchard, and fails to plant the orchard within a period of two years referred to in cl.
(iv) of sub section
(1), the land so retained by him shall on the expiry of that period vest in the State Government under section 32 E.
It is also provided by sub section
(3) which was added by Punjab Act 27 of 1962 with retrospective effect from October 30, 1956, that notwithstanding anything contained in the Act, the exemption specified in cl.
(vi) of sub section
(1) shall not be allowed unless the land planted within the period specified therein is found to be an orchard also at the time of granting the exemption.
In order to qualify for exemption from the ceiling to the extent of ten acres for the purpose of planting an orchard, the landowner has to give an undertaking that he will bring the land within two years from the commencement of the Amending Act under an orchard, and has to plant the orchard within that period and to maintain it as an orchard till the date of the grant of exemption.
A person who is not in possession of the land at the date when the Amending Act is brought into force may not ordinarily be in a position to give an undertaking under cl.
(vi) of section 32 K(1) to bring the land under an orchard, since such a person may not be able to say whether he will be able to obtain possession of the land so as to carry out the undertaking.
The Legislature has failed to make a provision enabling reservation to be made by persons belonging to the ex ceptional class to which the appellant belongs.
But on that account the Court is not competent to refuse to give effect to the plain words of the Act.
A lacuna undoubtedly exists in the Act, but it is for the Legislature to rectify it and not for the Courts to give a strained meaning to the words used by the Legislature which they do not bear.
The expression "within a period of two years from the commencement of the Pepsu Tenancy and Agricultural Lands (Second Amendment) Act, 1956" cannot be read as "within two years from the date on which the holder or tenant is restored to possession".
The Legislature has not made any provision for extending the time in respect of certain special cases like the one before us, or extending the time for planting an orchard.
The High Court was, therefore, right in holding that the appellant could not claim an additional area of ten acres of land for planting an orchard.
The appeal therefore fails.
There will be no order as to costs.
[/INST]A property was conveyed to the respondent Municipality by a deed "for the purpose of Sarvajanik Kam (public purpose) as it has been utilised uptodate for shelter of Atit, Abhyaqat, Sadhu, Sant, etc.".
It was also recited in the deed that in the property conveyed there was "a Samadhi (grave) of Nagabawa.
" The Municipality entered possession and made certain constructions which were used for its offices and for shops.
Thereafter, the Municipality sued for a decree for delivering possession of a part of the property against a Sadhu who had unlawfully.
occupied it and the suit was decreed.
Later, in survey proceedings members of the Johari Panch claimed that they had entrusted their temple to the Municipality for administering it for the community, but the compound belonged to them and that the Municipality was merely a trustee thereof.
The Secretary of the Municipality admitted that in the property there existed a temple of the Joharis and that the members of that community had the right to visit the temple at fixed times but that they had no other right.
The Survey Officer declared the Municipality to be the owner of the property and not a trustee for the Johari Panch.
Thereupon, an application under section 19 of the Bombay Public Trusts Act was filed for a declaration that the property was settled in favour of the Municipality for the benefit of the Johari Panch and that the property be registered as property of a public trust under the Act.
The Charity Commissioner declared that there was a public trust, that the Municipality was the trustee thereof, and that the property was transferred in the Municipality for the benefit of members of the public interested in the Samadhi of Nagabawa; but he held that there was no such institution known as Johari Panch and that the property had not been used for the benefit of that community.
In appeal, the District Court set aside the order of, the Charity Commissioner.
The Charity Commissioner appealed to the High Court, which reversed the order of the District Court and restored the order of the Charity Commissioner.
In appeal, this Court, Held: The appeal must fail.
(i) The property was entrusted to the Municipality for providing shelter to sadhus, saints and religious mendicants.
the purpose was religious and charitable within the meaning of section 2 (13) of the 653 Bombay Public Trusts Act.
The trust was not limited to the buildings standing on the land; but extended to the entire property.
Sadhus, religious mendicants and visitors to the Samadhi of Nagabawa are a section of the public.
They have a common bond of veneration for the Samadhi.
The beneficiaries of the trust are an uncertain and fluctuating body of persons forming a considerable section of the public and answering a particular description, and the fact that they belong to a religious faith or a sect of persons of a certain religious faith or a sect of persons of a certain religious persuasion does not make any difference in the matter.
[660 A C].
Mahant Ram Saroop Dasji vs section P. Sahi [1959] Suppl.
2 S.C.R. 583 followed.
(ii) After the transfer of the property was accepted by the Municipality for the purpose mentioned in the deed it was not open to the Municipality to divert the use of that property for its own purposes.
There is nothing in Act 6 of 1873 or in the general law which prevents a Municipality from accepting a trust in favour of a section of the general public in respect of property transferred to it.
Nor does the Act authorise a Municipality, after accepting a trust, to utilise it for its own purpose in breach of the trust.
[657 B C; 658 C].
(iii) The contention, that once it was found that the property was not for the benefit of Johari Panches, the application should have been dismissed, had no force.
The proceedings were commenced under section 19 of the Bombay Public Trusts Act, and it was open to the Charity Commissioner to determine whether a public trust existed, and if the Charity Commissioner was satisfied that there existed a public trust, whatever may be the claim made by the applicants, the Charity Commissioner was bound to declare the existence of the public trust and register it.
Under s.19 an enquiry may be started by the Deputy or Assistant Charity Commissioner on tin application made under s.18 or on an application made by any person having interest in a public trust or on his own motion.
[660 G, H].
(iv) The Sadhu who had unlawfully possessed himself of a part of the property in dispute was not sued in a representative capacity on behalf of the beneficiaries of the trust; he was sued as a trespasser.
Therefore, the judgment did not operate as resjudicata, and the Charity Commissioner was not prevented from determining in an appropriate proceeding whether the property was the property of a public trust of a religious or charitable nature.
[658 F].
(v) The argument, that the decision of the Survey Officer, operates by virtue of section 50 A of the Bombay District Municipal Act, 1901 to destroy the rights of the public, is without substance.
By sub section
(2) of section 50A, if the Collector had passed an order, a suit in a civil court shall be dismissed if the suit was brought to set aside the order of the Collector or if the relief claimed was inconsistent with such order In the present case, the property was entered in the Survey record as that of the Municipality.
But the legal ownership of the Municipality was not challenged in the proceedings before the Charity Commissioner.
The proceeding under section 19 of the Bombay Public Trusts Act was for a declaration that the property was the property of a public trust and therefore was not a suit to set aside the order of the Collector.
nor was it a suit in which the relief claimed was inconsistent with the order of the Survey Officer.
[658 G 659 B].
(vi) A person interested as the Charity Commissioner is in the due administration of property, cannot be denied a right to appeal 654 against an adverse decision in a proceeding to which he is a party, on the ground that he is pleading for acceptance of the view which he had declared as a quasi judicial authority at an earlier stage of that proceeding.
[661 E F].
</s>
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<s>[INST] Summarize the judgementCivil Appeal No. 2419 of 1968.
From the Judgment and Order dated 25 9 67 of the Punjab and Haryana High Court in Civil Writ No. 1630/62.
1280 section K. Mehta, P. N. Puri, K. R. Nagaraja and G. Lal for the Appellants.
K. L. Narula, District Attorney, Haryana, R. B. Datar and Girish Chandra for Respondent No.1.
E. C. Agarwala for Respondent No. 14 (Rest of the Respondents Ex parte) The Judgment of the Court was delivered by JASWANT SINGH, J.
The litigation culminating in the present appeal (by certificate under Article 133(1)(b) of the Constitution) which is directed against the judgment and order dated September 25, 1967, of the Punjab and Haryana High Court in C.W.N. 1630 of 1962 setting aside the allotment dated May 23, 1960 made by Naib Tehsildar cum Managing Officer, Fatehabad, District Hissar in favour of Madan Mohan and others, and orders dated April 18, 1962 and July 21, 1962 of the Assistant Settlement Commissioner and Chief Settlement Commissioner respectively on the finding that "no part of the holding which formed part of the land allotted to respondent No. 14, Mehta Lal Chand, (hereinafter referred to as 'the respondent ') could, during the subsistence of such allotment and without its cancellation, be allotted to any one else" has had a very chequered career extending over well nigh two decades.
It appears that the respondent who is a displaced person from Pakistan was found entitled to an allotment of 113 standard acres and 3 units of land in lieu of 120 acres of land held by him as owner in Bhawalpur (Pakistan).
Against the aforesaid entitlement, the respondent was allotted 90 standard acres and 6 units of evacuee land between 1953 and 1958 in different villages of Tehsil Fatehabad, District Hissar including two areas measuring (1) 13 standard acres and 3 1/2 units and (2) 13 standard acres and 13 1/2 units in village Bahmniwala allotment of which was made on March 1, 1957 and October 10, 1958 respectively.
Pursuant to the above allotment of 13 standard acres and 3 1/2 units made in his favour in village Bahmniwala vide Sanad dated March 6, 1957 (Annexure 'C ' to the writ petition), the respondent was given possession of the plots of land comprised in khasra Nos.
1411 min, 1412 min, 1472 min, 1241 min, 1242, 1243, 1244, 1245, 1246, 1247, 1621, 1622 to 1635 (14 khasras), 1642, 1644, 1645 on June 17, 1957.
The respondent continued to remain in possession of the aforesaid plots of land till Rabi 1960 when consolidation of holdings were undertaken in village Bahmniwala.
Without caring to look into the revenue record, the Consolidation Officer instead of showing the aforesaid allotted area in Bahmniwala in the name 1281 of the respondent included the same in the kurrah (area) of the Custodian.
On coming to know about this irregularity, the respondent filed objections before the Consolidation Officer and requested him to rectify the mistake.
The Consolidation Officer by his order dated March 23, 1960 consigned the objection petition of the respondent to the record room observing that in the absence of the relevant record which, as per the report of the Wasal Baqi Nawis is has been despatched to Jullundur for checking purposes, the factum of allotment cannot be verified and as it is necessary to take proceedings under section 21(2) of the Consolidation of Holdings Act in village Bahmniwala in this very month, the record cannot be awaied any further.
The Consolidation Officer further observed that since it appeared from a perusal of the copy of the Sanad (allotment) that the entire kurrah consisted of almost evacuee land bearing khasra numbers mentioned in the Sanad of allotment, the respondent could, on the receipt of the record, get the area at the place where, according to him, the evacuee land mentioned by him in his application was situate.
By his order dated May 23, 1960, the Naib Tehsildar cum Managing Officer, Fatehabad, however, made the following allotments out of an area of 58 standard acres and 7 units situate in Bahmniwala which included the khasra numbers already allotted to the respondent but which according to the Fard Fazla (statement of surplus area) prepared by the concerned Patwari appeared to be available for allotment: In favour of Bagga Singh, S/o Pokhar Singh: 5 1/2 units " " " Inder Singh, S/o Mit Singh : 7 Standard acres 1 1/2unit " " " M. dan Mohan Singh, S/o Puran Singh, " " " Odin Singh and Harduman Singh, 20 Standerd acres 2 units Sons of Madan Mohan Singh, Predecessor in interest of the appellants Aggrieved by this order of the Naib Tehsildar cum Managing Officer which adversely affected the allotment already made in his favour, the respondent preferred an appeal to the Assistant Settlement Commissioner (with powers of Settlement Commissioner), Punjab, Jullundur contending that 13 standard acres and 3 1/2 units of land in Bahmniwala allotted to him in 1957 had been erroneously included in the 'kurrah ' of the Custodian at the time of the Consolidation operations and that the same had now been erroneously allotted without his knowledge to Bagga Singh, Inder Singh, Madan 1282 Mohan Singh and his sons.
Curiously enough, the Assistant Settlement Commissioner (with powers of Settlement Commissioner) while conceding that the aforesaid 13 standard acres and 3 1/2 units and 13 standard acres and 13 1/2 units in village Bahmniwala were allotted in favour of the respondent on June 17, 1957 and October 10, 1958 respectively and that there was no cancellation order in respect thereof and that the consolidation authorities should not have withdrawn the area from the name of the respondent who had through no fault of his been put to a lot of difficulty and that it was just and proper that the matter of allotment to which he was entitled be settled once for all in such a way that whole of the area is given to him permanently in one village, rejected the appeal by his order dated April 18, 1962 observing that there was no good ground for interfering with the allotment of the appellants and that it would be open to the respondent to apply to the Naib Tehsildar cum Managing Officer to make up the shortfall in his area by allotment of some other land which may be available in that village.
Dissatisfied with the order of the Assistant Settlement Commissioner, the respondent took the matter in revision to the Deputy Secretary (Rehabilitation) exercising the powers of the Chief Settlement Commissioner who also after paying lip sympathy dismissed the revision on the ground that it was time barred.
Aggieved by these orders, the respondent moved the High Court of Punjab and Haryana by means of the aforesaid petition under Articles 226 and 227 of the Constitution.
The High Court by its judgment and order dated September 25, 1962 set side the aforesaid thee impugned orders holding that they were wholly without jurisdiction and the Tehsildar cum Managing Officer was not authorised to allot to the appellants the land which was already comprised in a subsisting valid allotment of the respondent.
It is against this judgment and order of the High Court that the present appeal is directed.
On the appeal coming up before us on July 19, 1978, we heard counsel for the parties at considerable length and felt it necessary for clarification of certain points which had been left vague the courts below to have before us the entire record relating to the allotment made in favour of the respondent.
Accordingly, with the consent of counsel for the parties, we adjourned the hearing of the case and directed the Union of Indian to instruct the Chief settlement Commissioner, State of Haryana, either to appear himself before us with all the relevant record relating not only to the allotment originally made in favour of the respondent vide Sanad No. HS4/ 1957/11202 dated March 1, 1957 but also with the record pertaining to all the subsequent allotments made in his favour upto date or 1283 cause the appearance of a responsible officer with the aforesaid record.
To obviate delay in disposal of the case, we also directed the Chief Settlement Commissioner to have in readiness a factual statement showing the net area in terms of standard acres to which the respondent was entitled as a displaced person, the particulars of the field initially allotted in his favour including the survey numbers and the extent of the area thereof, particulars of the survey numbers of the fields taken out of the respondent 's allotment vide Naib Tehsildar cum Managing Officer, Tehsil Fatehabad 's order dated May 23, 1960 and particulars of all the subsequent allotments made upto date in the respondent 's favour in different villages of District Hissar including village Bahmniwala as also the extent of the allotted area which is at present held by him.
Accordingly, the Chief Settlement Commissioner has caused the attendance of K. L. Narula, Deputy District Attorney, Rehabilitation Department, Haryana, Chandigarh who has also filed an affidavit relating to the points on which information was required by us.
We have perused the entire material and have again heard counsel for all the sides.
Two questions arise for determination in this case (1) whether the respondent acquired any enforceable right as a result of the allotment made in his favour on March 1, 1957 and delivery in pursuance thereof to him of possession of the aforesaid khasra numbers on June 17, 1957 and (2) whether the parcels of land which already stood allotted in favour of the respondent vide allotment order dated March 1, 1957 could be allotted by the Naib Tehsildar cum Managing Officer, Fatehabad in favour of Madan Mohan Singh and others without notice to the respondent and without affording him in opportunity of being heard.
The first question has to be considered in the light of the judgment of this Court in Amar Singh vs Custodian Evacuee Property, Punjab where the whole history of the legislative measures devised from time to time in the erstwhile State of Punjab to combat the gigantic problems created as a result of the mass migration of non Muslim land holders to East Punjab is traced.
A perusal of the judgment reveals that in exercise of the rule making power vested in it under clauses (f) and (ff) of sub section (2) of section 22 of the East Punjab Evacuees ' (Administration of Property) Act, 1947 (E. P. Act No. XIV of 1947) as amended in 1948, the Punjab Government issued Notification Nos. 4891 S and 4892 S on July 8, 1949 1284 setting out the conditions regulating allotment by the Custodian of the land which vested in him.
The first incident of allotment deducible from the notification is hereditability of the rights of the allottee which constitute quasi permanent allotment.
The statement of conditions published under Notification Nos.
4891 S and 4892 S of July 8, 1949 was continued in force as the Administration of Evacuee Property (Rural) Rules framed by the Provincial Government under sub section (2) of section 53 of the Central Ordinance No. XXVII of 1949 under delegation from the Central Government under Notification No. 3094 A/Cus/49 dated December 2, 1949 subject to certain modifications and amendments.
On repeal of the Central Ordinance by Central Act XXXI of 1950, the aforesaid rules were continued by virtue of section 58 of the Act as though made under that Act.
Later in exercise of the delegated rule making power vested in the Provincial Government under section 55 of the Central Act, the Punjab Government framed rules dated August 29, 1951 entitled "Instructions for review and revision of land allotment" which affected the rules of July 8, 1949 only to the extent that they were inconsistent with the earlier rules.
A reference to the earlier and subsequent rules would show that the later rules do not concern any of the matters provided by the earlier rules of 1949 (and 1950) excepting as regards resumption which virtually is cancellation of allotment.
The position that emerges from the foregoing is that the rules of July, 1949 continued in force except to the extent of inconsistency.
(The next set of rules are those made under Central Act XXXI of 1950).
Then came the rules dated August 29, 1951 made by the Punjab Government in exercise of the powers delegated to it by the Central Government under section 55(1) of the Central Act XXXI of 1950.
It will be seen that the rules of August 29, 1951 are substantially the same as those enumerated in clause (6) of July 8, 1949 notification as regards resumption and only supplement the notification of July 8, 1949 as regards eviction in certain contingencies.
The rights and incidents enjoyed by the allottees under the quasi permanent scheme introduced by the aforesaid notification of July 8, 1949 are catalouged at page 823 of the aforesaid judgment of this Court in Amar Singh vs Custodian, Evacuee Property, Punjab (supra).
They are: "1.
The allottee is entitled to right of use and occupation of the property until such time as the property remains vested in the Custodian.
[Clause 3(1).
The benefit of such right will ensure to his heirs and successors.
(Definition of 'allottee ').
His enjoyment of the property is on the basis of paying land revenue thereupon and ceases for the time being.
1285 Additional rent may be fixed thereupon by the Custodian.
If and when he does so, the allottee is bound to pay the same.
[Clause 3(3).
He is entitled to quiet and undisturbed enjoyment of the property during that period.
(Clause 8).
He is entitled to make improvements on the land with the assent of the Custodian and is entitled to compensation in the manner provided in the Punjab Tenancy Act.
(Clause 7).
He is entiled to exchange the whole or any part of the land for other evacuee land with the consent of the Custodian.
(Clause 5).
He is entitled to lease the land for a period not exceeding three years without the permission of the Custodian and for longer period with his consent.
But he is not entitled to transfer his rights by way of sale, gift, will, mortgage or other private contract.
[Clause 4(c).] 8.
His rights in the allotment are subject to the fairly extensive powers of cancellation under the Act and rules as then in force prior to July 22, 1952, on varied administrative considerations and actions such as the following (Clause 6 and subsequent rules of 1951): (a) That the allotment is contrary to the orders of the Punjab Government or the instructions of the Financial Commissioner, Relief and Rehabilitation, or of the Custodian, Evacuee Property, Punjab; (b) That the claims of other parties with respect to the land have been established or accepted by the Custodian or the Rehabilitation Authority; (c) That it is necessary or expedient to cancel or vary the terms of an allotment for the implementation of resettlement schemes and/or rules framed by the State Government; or for such distribution amongst displaced persons as appears to the Custodian to be equitable and proper; 1286 (d) That it is necessary or expedient to cancel or vary the terms of an allotment for the preservation, or the proper administration, or the management of such property or in the interests of proper rehabilitation of displaced persons.
Then came the two Notifications Nos.
SRO 129 dt.
July 22, 1952 and SRO 351 dated Feb. 13, 1953 amending and recasting sub rule (6) of Rule 14 of the Central Rules of 1950 as under: "(6) Notwithstanding anything contained in this rule, the Custodian of Evacuee Property in each of the States of Punjab and Patiala and East Punjab States Union shall not exercise the power of cancelling any allotment of rural Evacuee property on a quasi permanent basis, or varying the terms of any such allotment, except in the following circumstances: (i) where the allotment was made although the allottee owned no agricultural land in Pakistan; (ii) where the allottee has obtained land in excess of the area to which he was entitled under the scheme of allotment of land prevailing at the time of allotment; (iii)where the allotment is to be cancelled or varied (a) in accordance with an order made by a competent authority under section 8 of the East Punjab Refugees (Registration of Land Claims) Act, 1948; (b) on account of the failure of the allottee to take possession of the allotted evacuee property within six months of the date of allotment; (c) in consequence of a voluntary surrender of the allotted evacuee property, or a voluntary exchange with other available rural evacuee property, or a mutual exchange with such other available property; (d) in accordance with any general or special order of the Central Government; Provided that where an allotment is cancelled or varied under clause (ii), the allottee shall be entitled to retain such portion of the land to which he would have been entitled under the scheme of quasi permanent allotment of land; Provided further that nothing in this sub rule shall apply to any application for revision, made under section 26 or 1287 section 27 of the Act, within the prescribed time, against an order passed by a lower authority on or before 22nd July, 1952.
" Thus the power of resumption or cancellation of quasi permanent allotment was restricted and reduced.
The next legislative measure is the (Act No. XLIV of 1954), important provisions whereof which may be useful in dealing with the first question may be noticed.
Section 4 provides for the time, the manner and the form of making an application for payment of compensation.
Section 10 of the Act inter alia lays down that where any immovable property has been leased or allotted to a displaced person by the Custodian under conditions published by the Notification of the Government of Punjab No. 4891 S or 4892 S dated July 8, 1949 and such property is acquired under the provisions of the Act and forms part of the compensation pool, the displaced person shall so long as the property remains vested in the Central Government, continue in possession of such property on the same conditions on which he held the property immediately before the date of the acquisition.
It further provides that the Central Government may for the purpose of payment of compensation to such displaced persons transfer to him such property on such forms and conditions as may be prescribed.
Section 12 provides: "12.(1) If the Central Government is of opinion that it is necessary to acquire any evacuee property for a public purpose, being a purpose connected with the relief and rehabilitation of displaced persons, including payment of compensation to such persons, the Central Government may at any time acquire such evacuee property by publishing in the official gazette a notification to the effect that the Central Government has decided to acquire such evacuee property in pursuance of this section.
(2) On the publication of a notification under sub section (1), the right, title and interest of any evacuee in the evacuee property specified in the notification shall, on and from the beginning of the date on which the notification is so published be extinguished and the evacuee pro 1288 perty shall vest absolutely in the Central Government free from all encumbrances.
(3) . . . . . " It may be noted that by virtue of Central Government Notification No. S.R.O. 697 dated March 24, 1955, under sub section (1) of this section 12, all evacuee property allotted under the Punjab Government Notification dated July 8, 1949 was acquired by the Central Government excepting certain specified categories in respect of which proceedings were pending.
Section 13 which deals with compensation for evacuee property acquired says: "13.
There shall be paid to an evacuee compensation in respect of his property acquired under section 12 in accordance with such principles and in such manner as may be agreed upon between the Governments of India and Pakistan.
" Section 14 which provides for the constitution of compensation pool runs thus: "14.
(1) For the purpose of payment of compensation and rehabilitation grants to displaced persons, there shall be constituted a compensation pool which shall cosist of: (a) all evacuee property acquired under section 12, including the sale proceeds of any such property and all profits and income accruing from such property; (b) such cash balances lying with the Custodian as may, by order of the Central Government, be transferred to the compensation pool; (c) such contributions, in any form whatsoever, as may be made to the compensation pool by the Central Government or any State Government; (d) such other assets as may be prescribed.
(2) The compensation pool shall vest in the Central Government free from all encumbrances and shall be utilised in accordance with the provisions of this Act and the rules made thereunder.
" Section 16 authorised the Central Government to appoint Managing Officers or constitute Managing Corporations for the custody, management and disposal of compensation pool so that it may be effectively used in accordance with the provisions of the Act.
1289 Section 40 enables the Central Government by notification in the official gazette to make rules.
Whereas sub section (1) of the section confers general power on the Central Government to make rules to carry out the purposes of the Act, sub section (2) of the Section particularities the subjects on which rules may be made by the Central Government without prejudice to the general power contained in sub section (1).
In exercise of this power, the Central Government made rules called the Displaced Persons (Compensation and Rehabilitation) Rules, 1955 and published the same vide Notification dated May 21, 1955.
Rule 3 lays down that an application for compensation may be made by a displaced person having a verified claim or if such displaced person is dead, by his successor in interest.
Rule 4 prescribes the from of application for compensation.
Rule 16 says that compensation shall be payable in accordance with the scale specified in Appendices VIII or IX as the case may be.
Rule 49 as originally made ran thus: "49.
Compensation normally to be paid in the form of land.
Except as otherwise provided in this chapter, a displaced person having verified claim in respect of agricultural land shall, as far as possible, be paid compensation by allotment of agricultural land.
Provided that where any such person wishes to have his claim satisfied against property other than agricultural land, he may purchase such property by bidding for it at an open auction or by tendering for it and in such a case the purchase price of the property shall be adjusted against the compensation due on this verified claim for agricultural land which shall be converted into cash at the rate specified in Rule 56." In 1960, the following explanation was added to the above rule: "Explanation: In this rule and in the other rules of this chapter, the expression 'agricultural land ' shall mean the agricultural land situated in a rural area.
" Rule 51 lays down that the scale for the allotment of land as compensation in respect of a verified claim for agricultural land shall be 1290 the same as in the quasi permanent land Allotment Scheme in the States of Punjab and Patiala and the East Punjab States Union as set out in Appendix XIV.
Rule 67AA provides: "67A. Compensation to displaced persons from West Punjab, etc., in respect of agricultural land.
Notwithstanding anything contained in this Chapter, a displaced person from West Punjab or a displaced person who was originally domiciled in the undivided Punjab, but who before the partition of India had settled in North West Frontier Province, Baluchistan, Bhawalpur or Sind, whose verified claim in respect of agricultural land has not been satisfied or has been satisfied only partially by the allotment of evacuee land under the relevant notification specified in section 10 of the Act shall not be paid compensation in any form other than the transfer of acquired evacuee agricultural land and rural houses and sites in the State of Punjab or Patiala and East Punjab States Union in accordance with the scales specified in the quasi permanent allotment scheme operating in those States: Provided that if any person has been allotted land in a State other than Punjab and his land claim has not been satisfied fully, he may, for the remaining claim, either be allotted land due to him in that State or issued a Statement of Account which he may utilise for purchase of property forming part of the compensation pool or for adjustment of public dues.
" Rule 68 is to the following effect: "68.
Grant of Sanad for transfer of agricultural land Where any agricultural land is transferred to any person under these rules, the transferee shall be granted a Sanad in the form specified in Appendix XV (with such modifications as may be necessary in the circumstances of any particular case), or the transfer may be effected in any other manner in conformity with the provisions of any local or special law relating to transfer of agricultural land in force in the area where such agricultural land is situated.
" Rule 71 casts an obligation on every person to whom any immoveable property has been allotted by the Custodian under any of the notifications specified in section 10 of the Act to file a declara 1291 tion in the form specified in Appendix XVI in the office of the Settlement Officer or before the authorised officer in the village concerned on the date and place notified under sub rule (4).
Rule 72(1) provides for an enquiry where the allottee has no verified claim.
Rule 72(2) lays down that if the Settlement Officer is satisfied that the allotment is in accordance with the quasi permanent scheme, he may pass an order transferring the land allotted to the allottee in permanent ownership as compensation and shall also issue to him a sand in the form specified in Appendix XVII or XVIII, as the case may be with such modifications as may be necessary in the circumstances of any particular case granting him such right.
After the foregoing conspectus of the various legislative and delegated legislative measures, let us see whether the respondent had any right the enforcement of which he could have sought by means of the above mentioned writ petition.
From the material on the record it is abundantly clear that the respondent migrated to India from West Punjab in the wake of the partition of the Sub Continent in 1947 and that the settlement and rehabilitation authorities satisfied themselves that he was entitled to an allotment of 113 Standard acres and 3 units of land in lieu of the land left behind by him in Bhawalpur.
Since the respondent migrated from Bhawalpur where he had indisputably settled before the partition of the Sub Continent and his verified claim in respect of agricultural land had been only partially satisfied, he could not according to rule 67A of the Displaced Persons (Compensation and Rehabilitation) Rules, 1955, be paid compensation in any form other than by transfer of acquired evacuee agricultural land in accordance with the scale specified in the quasi permanent allotment scheme.
Consequently, it was the duty of the Settlement officer under Rule 72(2) of the Displaced Persons (Compensation and Rehabilitation) Rules, 1955 to pass an order transferring the land allotted to the respondent in permanent ownership as compensation and had to issue him a Sanad in the prescribed form.
It also appears that by virtue of Notification No. 697 dated March 24, 1955 issued under sub section (1) of section 12 of the , all evacuee property allotted under the Punjab Government Notification dated July 8, 1947 (excepting certain specified categories in respect of which proceedings were pending) was acquired by the Central Government.
It is in view of this unchallengable position that we 1292 find from the record particularly the copy of Dharam Chand Patwari 's statement dated April 6, 1962 made before the Assistant Settlement Commissioner (Annexure 'A ' to the petition at pages 24 and 25 of the printed Paper Book) that allotment on permanent proprietary basis of 13 standard acres and 3 1/2 units of land situate in village Bahmniwala was made in favour of the respondent on March 1, 1957 that Sanad evidencing allotment of the aforesaid 28 kila numbers was issued in favour of the respondent on the same date; that possession of the aforesaid area of 13 standard acres and 3 1/2 units was handed over to the respondent on June 17, 1957; that entry regarding delivery of possession of the aforesaid 28 kila numbers was made by the Patwari in the Roznamcha Waqaati on June 17, 1957; that entries exist in khasra girdawaries of village Bahmniwala regarding the respondent 's possession of the aforesaid fields from June 17, 1957 upto Rabi 1960 when due to carelessness on the part of the Consolidation Officer, Ratia, Rectangle No. 133 (kila Nos.
4min, 5min, 6min, 7min, 14min, 15, 16, 17min, 24 and 25) and Rectangle No. 134 (kila Nos.
8min, 9min, 18min, 19min, 20, 21min and 22min) which were allotted in exchange of the aforesaid 28 kila numbers were entered not in the name of the respondent but in the kurrah of the Custodian and subsequently due to the carelessness on the part of the Naib Tehsildar cum Managing Officer were allotted to Madan Mohan Singh and others.
In view of the foregoing, we are of the opinion that the respondent has succeeded in establishing that permanent proprietary allotment of the aforesaid 28 kila numbers of village Bahmniwala was validily made in his favour vide aforesaid allotment order dated March 1, 1957.
Accordingly, we have no hesitation in holding that the respondent had an enforceable right in respect of the aforesaid 28 kila numbers of village Bahmniwala.
In view of our aforesaid finding that permanent proprietary allotment of the aforesaid 28 kila numbers was validly made in favour of the respondent which conferred an enforceable right on him, the answer to the second question cannot but be in the negative.
The view that we have formed is reinforced by the provisions of section 19 of the and Rule 102 of the Displaced Persons (Compensation and Rehabilitation) Rules, 1955 which provide as under: "19.
Powers to vary or cancel allotment of any property acquired under this Act. (1) Notwithstanding anything contained in any contract or any other law for the 1293 time being in force but subject to any rules that may be made under this Act, the managing officer or managing corporation may cancel any allotment or amend the terms of any allotment under which any evacuee property acquired under this Act is held or occupied by a person, whether such allotment was granted before or after the commencement of this Act. " 102.
Cancellation of allotments : "A managing officer or a managing corporation may in respect of the property in the compensation pool entrusted to him or to it, cancel an allotment or vary the terms of any such allotment if the allottee (a) has sublet or parted with the possession of the whole or any part of the property allotted to him without the permission of a competent authority, or (b) has used or is using such property for a purpose other than that for which it was allotted to him without the permission of a competent authority, or (c) has committed any act which is destructive of or permanently injurious to the property, or (d) for any other sufficient reason to be recorded in writing.
Provided that no action shall be taken under this rule unless the allottee has been given a reasonable opportunity of being heard." Though in view of the above quoted provisions, it may, in certain contingencies, be open to the Managing Officer or Managing Corporation to cancel the allotment under the aforesaid section 19 of the read with Rule 102 of the Displaced Persons (Compensation and Rehabilitation) Rules, 1955, it cannot be done unless an allottee is given a reasonable opportunity of being heard.
In the present case, it is clear from the record that no action for cancellation of allotment was taken under the aforesaid provisions of the Act and the Rules.
It is not understood how without complying with the aforesaid provisions, the Naib Tehsildar cum Managing Officer allotted the aforesaid parcel of land which already stood allotted in the name of the respondent to the appellants.
The action on the part of the Naib Tehsildar cum Managing Officer was evidently in flagrant violation of the clear and unequivocal provisions of law.
Accordingly, 1294 we agree with the High Court that the impugned orders are manifestly illegal, arbitrary, unjust and cannot be sustained.
However, taking into consideration all the facts and circumstances of the case particularly the fact that the appellants appear to have purchased the area in question from Madan Mohan Singh for a huge sum of Rs. 40,000/ and invested a considerable amount on the construction of a house, we think that it will be eminently just and fair if the appellants are allowed to retain Rectangle No. 134 comprising kila Nos.
8min, 9min, 10min, 11, 12, 13min, 18min, 19min, 20, 21min and 22min on which their house also stands and Rectangle No. 133 comprising kila Nos.
4min, 5min, 6min, 7min, 14min, 15, 16, 17min, 24 and 25 is given over to the respondent.
The learned counsel for the parties also agree to this course being adopted in the interest of justice.
The respondent shall be at liberty to approach the settlement authorities for allotment of some other suitable land in lieu of Rectangle No. 134 comprising kila Nos.
8min, 9min, 10min, 11, 12, 13min, 18min, 19min, 20, 21min and 22min to make up the deficiency, if any, in the land to which he may be entitled and if the latter i.e. the settlement authorities find that the area already held by the respondent if added to the area now ordered to be given to him still falls short of his entitlement, they will be free to allot him an area which will make up his unsatisfied claim provided he is found otherwise authorised to hold the said area on allotment or occupy the same under any other law in force in the State.
The allotment of the area to which the respondent may be found entitled to shall, as far as possible, be made in the vicinity of the area already held by him.
Subject this modification, the rest of the judgment and order of the High Court will stand.
The appeal is disposed of accordingly.
[/INST]The respondent, who was a displaced person from West Pakistan, was allotted certain land in India and was given its possession.
At the time of consolidation of holdings in 1960 the Consolidation Officer included a part of this land comprising 13 odd acres in the area of the Custodian.
The respondent 's representations protesting against the action of the Consolidation Officer having failed at the different levels, the respondent moved the High Court under article 226 of the Constitution.
The High Court set aside the impugned orders of the Consolidation Officer on the ground that they were wholly without jurisdiction and that the concerned officer was not authorised to allot to the appellant the land which was already comprised in a subsisting valid allotment made to the respondent.
On the question whether the land in dispute which had already stood allotted in favour of the respondent could be allotted in favour of others without notice to the respondent and without affording an opportunity of being heard.
^ HELD: The respondent had succeeded in establishing that permanent proprietary allotment of the land in dispute was validly made in his favour.
Therefore the respondent had enforceable right in respect of the land and it could not be allotted in favour of others.
[1292F G] Although in certain contingencies it would be open to the Managing Officer or the Managing Corporation to cancel the allotment under section 19 of the read with Rule 102 of the Displaced Persons (Compensation and Rehabilitation) Rules 1955, it can not be done unless the allottee is given a reasonable opportunity of being heard.
[1293F] In the instant case no action for cancellation of allotment was taken under the provisions of the Act and the Rules.
The action of the Naib Tehsildar cum Managing Officer in allotting to the appellant the land which had already stood in the name of the respondent without complying with the relevant provisions of the Act was in flagrant violation of the provisions of the law.
Therefore, the impugned orders were manifestly illegal, arbitrary and unjust and could not be sustained.
[1293H]
</s>
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<s>[INST] Summarize the judgementAppeal No. 1789 of 1966.
Appeal from the judgment and decree dated May 24, 1961 of the Allahabad High Court in Second Appeal No. 1302 of 1952.
B.C. Misra, G.S. Chatterjee and M.M. Kshatriya, for the appellants.
J.P. Goyal and G.N. Wantoo, for the respondents.
The Judgment of the Court was delivered by Hegde, J.
The scope of section 9 of the U.P. Zamindari Abolition and and Reforms.
Act, 1950 (U.P. Act 1 of 1951) (to be hereinafter referred to as the Act) comes up for decision in this appeal by certificate.
The facts relevant for deciding this appeal are no more in dispute.
The respondents were Ryots under the appellants in village Nagli Abdulla, a hemlet of village Machhra.
The site of the building in dispute in this appeal had been taken by the father of the respondents from the appellant 's ancestors over 60 years ago and thereafter the respondents put up some buildings on that site for their residential purposes.
During the communal disturbances in 1947 they left the village temporarily as a measure of safety and took shelter with some of their relations in some other village at a distant place.
They came back to their village in the year 1949 when the conditions improved.
At that time they found the appellants occupying that site after putting up a cow shed on the site in which their residential buildings stood.
Those residential buildings had been demolished and the site in question included as a part of the house of the appellants.
As the appellants refused to deliver possession of the suit property, the respondents instituted a suit for possession of the same on January 9, 1951.
On January 26, 1951, the Act came into force.
Section 4 of the Act provided for the vesting of the Estates in the State.
It prescribes that as soon as may be after the commencement of the Act, the State Government may, by notification, declare that as from a date to be specified, all Estates situate in Uttar Pradesh shall vest in the State and as from the beginning of the date so specified, all such Estates shall stand transferred to and vest, except as otherwise provided in the Act, in the State free from all encumbrances.
Section 6 of the Act enumerates the consequences of the vesting of an Estate in the State.
Section 9 deals with the buildings in the abadi.
Reading sections 4, 6 and 9 together, it follows that all Estates notified under s.4 vest in the State free from all encumbrances.
The quondam proprietors or tenure holders of those Estates lose all interests in those Estates.
As proprietors ' 13 or tenure holders they retain no interest in respect of them whatsoever.
But 'in respect of the land or buildings enumerated in section 6 and section 9, the State settled on the person who held them certain rights.
Though in fact the vesting of the Estates and the deemed settlement of some rights in respect of certain classes of land or buildings included in the Estate took place simultaneously, in law the two must be treated as different transactions; first there was a vesting of the Estates in the State absolutely and free of all encumbrances.
Then followed the deemed settlement by the State of some rights with the persons mentioned in sections 6 and 9.
Therefore in law it would not be correct to say that what vested in the State are only those interests not coming within sections 6 or 9; see Rana Sheo Ambar Singh vs Allahabad Bank Ltd., Allahabad(1).
In this connection reference may also usefully be made to the decision of this Court in Shivashankar Prasad Shah and Ors.
vs Vaikunth Nath Singh and Ors.(2), a decision rendered under the Bihar Land Reforms Act, 1950, the relevant provisions of which are similar to the provisions of the Act.
In this case notification under s.4 of the Act was issued on July 1, 1952.
Hence the vesting contemplated under section 4 took place on that date.
Section 9 of the Act, the section with which we are concerned in this case, reads thus: "All wells, trees in abadi, and all buildings situated within the limits of an estate, belonging to or held by an intermediary or tenant or other persons, whether residing in the village or not, shall continue to belong to or be held by such intermediary or tenant or person as the case may be, and the site of the wells or the buildings within the area appurtenant thereto shall be deemed to be settled with him by the State Government on such terms and conditions as may be prescribed.
" In view of that provision all buildings situate within the limits of an Estate held by an intermediary or tenant or other person, whether residing in the village or not continues to be held by him and the site: of the buildings within the area appurtenant thereto should be deemed to have been settled with him by the State Government on such terms and conditions as may be prescribed.
As seen earlier till about 1947, the respondents were lawfully holding the buildings and the site with which we are concerned in this case as Ryots.
They never gave up their possession of (1) ; (2) Civil Appeal No. 368/66 decided on 3 7 1969.
14 the buildings voluntarily.
The fact that they vacated those buildings and took shelter with their relations during the time of the communal disturbances cannot be considered as abandonment of the buildings.
In law they continued to be in possession of the buildings.
Hence the appellant 's entry into the suit site was an unlawful act.
In the eye of law they were trespassers.
In demolishing the buildings put up by the respondents, they, committed the offence of mischief.
The fact they had put up new structures cannot under the Transfer of Property Act, enhance their rights to the property.
We have no material before us from which we can find out the value of the buildings.
demolished by them and the value of the buildings put up by them unlawfully.
From the description of the buildings given in evidence, it appears that the newly put up building is only cattle shed.
We are not satisfied that the newly put up building is worth more than the buildings that had been demolished by the appellants.
In the the circumstances of the case all that can be said is that the old buildings have been substituted by the new building.
Therefore the owners of the old buildings continue to be the owners of the new building.
In that view of the matter it is not necessary to consider whether if a stranger builds a building on the land of another, the true owner of the land is entitled to recover the land with the building on it.
Equitable considerations persuade us to hold that when the respondents came back to their village in 1949, they were entitled to recover not only the site but also the building constructed on it by the appellants.
Hence it should be held that on the date of vesting, the respondents were the owners the building in question.
In law they were holding the same.
The controversy between the parties in this appeal is as to the meaning to be attached to the word "held" in s.9 of the Act.
Is the holding contemplated therein 'lawful holding" or a mere holding lawful or otherwise.
It is contended on behalf of the appellants that the dictionary meaning of the word "held" merely means 'to have a possession of s 9 merely contemplates Physical possession and nothing more; on the date of the vesting they were in physical possession of the site as well as the building; therefore the building must be deemed to have been settled with them.
On the other hand it is contended on behalf of the respondent that the word "held" in section 9 of the Act means "lawfully held" and that section does not confer any benefit on a trespasser.
The meaning of the word "held" in s.9 came up for consideration before a Division Bench of the Allahabad High Court consisting of Agarwala and Chaturvedi, JJ.
in Pheku Chamar and Ors.
vs Harish Chandra and Ors.(1).
In that case the learned 1) A.I.R. 1953 All. 406. 15 judges held that the legislature has deliberately used the word "held" and that word connotes the existence of a right or title in the holder.
They further opined that section 9 does not confer a right on the persons having no title to the land.
The settlement contemplated by the section is confined in its application to the case where the building is lawfully held by the person in possession.
The learned judges also observed that in enacting s.9, the legislature never meant to deprive the citizens of their lawful rights over the lands merely because a trespasser has succeeded in making some construction on it.
Section 9 does not mean that if a person has made some construction whatsoever over any land lying within the limits of an estate, however wrongful or recent the possession might be, that construction must be deemed to have been settled with him by the State Government.
The meaning of the word "held" in s.9 again came up before another Division Bench of the Allahabad High Court consisting of Desai and Takru, JJ.
in Bharat and anr.
vs Ch.
Khazan Singh & ant.(1) The learned judges declined to follow the decision in Pheku Chamar 's case(2).
They came to the conclusion that the legislature used a wide language in s.9 and it covers the case of buildings belonging to persons who constructed them lawfully or unlawfully.
It is unfortunate that the latter.
Division Bench should have thought it proper to sit in judgment over the correctness of a decision rendered by a Bench of co ordinate jurisdiction.
Judicial propriety requires that if a bench of High Court is unable to agree with the decision already rendered by an other coordinate bench of the same High Court, the question should be referred to a larger bench.
Otherwise the decisions of High Courts will not only lose respect in the eyes of the public, it will also make the task of the sub ordinate courts difficult.
The question of law referred to hereinbefore again arose for decision in this case.
When this case came up in the second appeal before Sahai, J. he referred it to a Full Bench in view of the conflict of opinion noticed earlier.
The Full Bench was presided over by Dasai, C.J. who was a party to the decision in Bharat 's case(1).
The other members of the bench were Mukerji and Dwivedi, JJ.
Mukerji and Dwivedi, JJ.
agreed with the view taken in Pheku Chamar 's case(2).
Desai, C.J. in his dissenting judgment did not deal with the meaning of the word "held" in section 9 but on the other hand opined that the suit should have been dismissed because of the fact that the buildings put up by the respondents were not there on the date of vesting and hence the respondents were not entitled to the benefit of s.9.
Before considering the meaning of the word "held" in section 9, it is necessary to mention that it is proper to assume that the lawmakers who are the representatives of the people enact laws (1) A.I.R. 1958 All.
(2) A.I.R.1953 All. 406 which the society considers as honest, fair and equitable.
The object of every legislation is to advance public welfare.
In other words as observed by Crawford in his book on Statutory Constructions the entire legislative process is influenced by considerations of justice and reason.
Justice and reason constitute the great general legislative intent in every piece of legislation.
Consequently where the suggested construction operates harshly,.
ridiculously or in any other manner contrary to prevailing conceptions of justice and reason, in most instances, it would seem that the apparent or suggested meaning of the statute, was not the one intended by the law makers.
In the absence of some other indication that the harsh or ridiculous effect was actually intended by the legislature,, there is little reason to believe that it represents the legislative intent.
We are unable to persuade ourselves to believe that the legislature intended to ignore the rights of persons having legal title to possession and wanted to make a gift of any building to a trespasser howsoever recent the trespass might have been if only he happened to be in physical possession of the building on the date of vesting.
We are also unable to discern any legislative policy in support of that construction.
It was urged before us by the learned Counsel for the appellants that the legislature with a view to put a stop, to any controversy as to any rights in or over any building directed that whoever was in physical possession of a building on the date of vesting shall be deemed to be the settle of that building.
He further urged that it would have been a hard and laborious.
task for the State to investigate into disputed questions relating to title or possession before making the settlement contemplated by section 9 and therefore the legislature cut the Gordian Knot by conferring title on the person who was in possession of the building.
We see no merit in this argument.
The settlement contemplated by section 9 is a deemed settlement.
That settlement took place immediately the vesting took place No inquiry was contemplated before that settlement.
If there is any dispute as to who is the settle, the same has to be decided by the civil courts.
The State is not concerned with the same.
Section 9 merely settles the building on the person who was holding it on the date of vesting.
It is true that according to the dictionary meaning the word "held" can mean either a lawful holding or even a holding without any semblance of a right such as holding by a trespasser.
But the real question is as to what is the legislative intent? Did the legislature intend to settle the concerned building with a person who was lawfully holding or with any person holding lawfully or otherwise? Mr. Misra contended that there is no justification for us to read into the section the word "lawfully" before the word "held".
According to him, if the legislature intended 17 that the holding should be a lawful one, it would have said"lawfully held".
He wanted us to interpret the section as it stands.
It is true that the legislature could have used the word "lawfully held" in place of the word "held" in section 9 but as mentioned earlier one of the dictionary meanings given to the word "held" is, "lawfully held".
In Webster 's New Twentieth Century Dictionary (Second Edition), it is stated that in legal parlance the word "held" means to possess by "legal title".
In other words the word "held" is technically understood to mean to possess by legal title.
Therefore by interpreting the word "held" as "lawfully held", we are not adding any word to the section.
We are merely spelling out the meaning of that word.
It may further be seen that the section speaks of all buildings . within the limits of an Estate, belonging to or held by an intermediary or tenant or other person" .
The word "belonging" undoubtedly refers to legal title.
The words "held by an intermediary" also refer to a possession by legal title.
The words "held by tenant" also refer to holding by legal title.
In the sequence mentioned above it is proper to construe the word "held" in section 9 when used in relation to the words "other person" as meaning "lawfully held" by that person.
That interpretation flows from the context in which the word "held" has been used.
We have earlier mentioned that the said interpretation accords with justice.
The expression "held" has been used in the Act in various other sections see sections 2(1)(c), 13, 17, 18, 21, 144, 204, 240A, 298, 304, and 314 to connote possession by legal title.
Mr. Misra, learned Counsel for the appellants does not deny that the expression "held" in those sections means held lawfully.
But according to him that is because of the context in which the word is used.
Mr. Misra is right in saying so but he overlooks the context in which that expression is used in section 9.
We have already made reference to that context.
He failed to point out to us any section in the Act, leaving aside section 9 for the time being where the word "held" has been used as meaning mere holding, lawful or otherwise.
In K.K. Handique vs The Member, Board of Agricultural Income Tax, Assam(1) this Court was called upon to consider the meaning of the word "holds" in sections 12 and 13 of ' the Assam Agricultural Income Tax Act.
Subba Rao, J. (as he then was ) speaking for the Court observed that the expression "holds" includes a two fold idea of the actual possession of a thing and also of being invested with a legal title though some times it is used only to mean actual possession.
After reading sections 12 and 13 together he observed that the word "holds" in those sections means holding by legal title.
In Eramma vs Verrupanna & Ors.(2), this Court considered the meaning of the word (1) A.I.R. 1966 S.C. 1191.
(2) [1966] 2, S.C.R. 626. "possessed" in section 14 (1 ) of the Hindu Succession Act which laid down that "any property possessed by a female Hindu whether acquired before or after the commencement of this Act shall be held by her as full owner thereof and not as a limited owner".
It held that the property possessed by a female widow, as contemplated in the section, is clearly a property to which she has acquired some kind of title whether before or after the commencement of the Act.
It is true that in arriving at that conclusion the Court took into consideration the language of the provision as a whole and also the explanation to the section.
The scheme of the Act is to abolish all Estates and vest the concerned property in the State but at the same time certain rights were conferred on persons in possession of lands or buildings.
It is reasonable to think that the persons who were within the contemplation of the Act are those who were in possession of lands or buildings on the basis of some legal title.
Bearing in mind the purpose with which the legislation was enacted, the scheme of the Act and the language used in section 9, we are of opinion that the word "held" in section 9 means "lawfully held".
In other words we accept the correctness of the view taken by Mukerji and Dwivedi, JJ.
For the reasons already mentioned we are unable to agree with Desai, C.J. that the fact that the appellants had demolished the buildings put up by the respondents and put up some other building in their place had conferred any rights on them under section 9.
In the result the appeal is dismissed with costs.
G.C. Appeal dismissed.
[/INST]The disputes between the appellant and the respondent, arising out of a contract between them, were referred to.
arbitration under the arbitration clause in the contract.
The award was made and signed on April 26, 1950.
The arbitrator did not send any notice of the making and signing of the award but sent a copy of the signed award to the appellant.
The appellant acknowledged receipt of the copy by two letters dated May 5, 1950 May 16, 1950.
On March 30, 1951, the appellant filed an application in the Subordinate Judge 's Court for passing a decree in terms of the award.
On the question whether the application was out of time, because, under article 178 of the Indian Limitation Act, 1908, the application had to be filed within 90 days of the date.
of service of the notice of the making of the award, HELD: Under section 14(1) of the , when the arbitrators have given their award, they shall sign it and shall give notice in writing to the.
parties of the making and signing thereof and of the amount of fees and charges payable in respect of the arbirtation and the award.
The notice need not be in the form of a separate letter.
It is sufficient, if it is in writing and intimates clearly that the award has been made and signed.
The non mention of the amount of the fees and charges payable in respect of the arbitration and award will not affect the notice as it is not an essential part of it for the purpose of limitation.
In the present case, since the appellant had sufficient notice that the award had been made and signed when a copy of the award signed by the arbitrator was sent to the appellant, the application for passing a decree in terms of the award was out of time.
[138 B, F G; 139 ' A, C D]
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<s>[INST] Summarize the judgementiminal Appeal No. 90 of 1961.
Appeal by special leave from the judgment and order dated January 10, 1961, of the Calcutta High Court in Criminal Revision No. 1545 of 1960.
Sukumar Ghose, for the appellant.
D. N. Mukherjee, for the respondent.
276 January 21, 1964.
The Judgment of the Court was delivered by MUDHOLKAR J.
This is an appeal against the judgment of the Calcutta High Court quashing the issue of process against the respondent.
The respondent is an Assistant Commissioner of Police in the City of Calcutta and the appellant had made a complaint against him alleging that he had committed an offence under section 348, I.P.C. that is, wrongful confinement in order to extort a confession or compel restoration of property.
The facts as alleged by the appellant are as follows: One Manoharlal Seth had lodged a complaint on July 28, 1960 against him and two other persons Fatehlal and Jaichand for offences under section 120B/420, I.P.C. and section 420 I.P.C. Manoharlal Seth had alleged in his complaint that these persons had induced him to purchase a bar of brass for Rs. 6,000 on the representation that it was of gold and thus duped him.
Upon this complaint, investigation was taken up by the police.
He came to know Manoharlal Seth in the course of his business.
They were on quite friendly terms in the beginning and later on considerable differences arose between him and Manoharlal Seth.
As a result of that Manoharlal Seth told him that unless he settled his differences with Manoharlal Seth according to the latter 's dictates he would put him into trouble through his friend, the respondent, and that it is because of this that Manoharlal lodged a complaint against him for cheating.
This complaint was thus a false complaint and it is common ground that ultimately it was dismissed by the Presidency Magistrate, 8th Court, Calcutta on January 2, 1961.
Then according to the appellant, on August 3, 1960 at about 6 00 A.M. P. C. Kundu, Sub Inspector of Police attached to Burrabazar Police Station along with another Sub Inspector section Bhattacharya, visited his residence, searched his house and arrested him.
Neither of them had any warrant with them for the search of the house or for the 277 arrest of the appellant.
Upon enquiry by him from these persons they told him that this was being done under the orders of the respondent.
After his arrest the appellant said that he was taken to the Burrabazar police station at about 7 00 a.m. and then to Jorasanko Police Station and produced before T. K. Talukdar, Sub Inspector in charge of that police station.
From there he was taken to various places in Calcutta with a rope tied round his waist by Kundu and Bhattacharya and was eventually produced at about 12 noon before the respondent in his office at Lalbazar.
There the respondent started threatening the appellant and asked him to settle the dispute with Manoharlal Seth and pay him Rs. 5,000 or to acknowledge in writing that he would pay this sum of money to Manoharlal Seth.
At about 3 30 p.m. on the same day his brother Iswarilal accompanied by a lawyer Chakravarthy visited the respondent 's office and sought the appellant 's release on bail as the offence was a bailable one.
The respondent, however, refused to grant bail saying that no bail would be granted until a sum of Rs. 5,000 was paid to Manoharlal Seth.
The appellant says that he was detained at Lalbazar Police Station till 8 00 p.m.
From there he was taken to Jorasanko Police Station and kept in the lock up for the whole night.
On the next day, that is, August 4, 1960 he was again produced before the respondent at Lalbazar where the latter repeated his threats and that after obtaining his finger prints and taking his photographs he was taken to the court of the Additional Chief Presidency Magistrate where he was released on bail at about 2 30 p.m.
On August 19, 1960 the appellant preferred a complaint before the Chief Presidency Magistrate, Calcutta, under section 348 and section 220, I.P.C. and section 13C of the Calcutta Police Act, 1866.
In so far as two of the persons named as accused therein, section I. Kundu and section I. Talukdar, he decided to issue process against them under section 220 I.P.C. and section 13C of the Calcutta Police Act.
As regards the respondent, he decided to issue process against him under section 348, I.P.C.
Upon a revision application preferred by the respondent the High Court quashed the process issued against him by 278 the learned Chief Presidency Magistrate.
The ground urged before; the High Court on behalf of the respondent was that before he could be proceeded against sanction of the State Government under section 197, Cr.
P.C. ought to have been obtained.
This contention was upheld by the High Court.
On.1 behalf of the appellant Mr. Sukumar Ghose contends that the High Court in quashing the process has proceeded to decide on the merits of the case even though there was no material before it to do so and that therefore its judgment cannot stand.
It is true that for considering whether section 197, Cr.
P.C. would apply the Court must confine itself to the allegations made in the complaint.
But that does not mean that it need not look beyond the form in which the allegations have been made and is incompetent to ascertain for itself their substance.
Here the substantial allegation is that the respondent questioned the appellant when he was produced at his office in Lalbazar, asked him to restore Rs. 5,000 to Manoharlal Seth who had lodged a complaint of cheating against the appellant and two others and that he declined to release him on bail.
No doubt the appellant has made a grievance in his complaint that the respondent said that the appellant would not be released on bail unless he either paid the amount or acknowledged in writing his liability to pay this amount.
Assuming that the allegation is true all that the thing boils down to is that the respondent refused to enlarge the appellant on bail and that he wanted the appellant to settle the matter with Manoharlal Seth.
It cannot be disputed that whether a person charged with an offence should or should not be released on bail was a matter within the discretion of the respondent and if while exercising a discretion he acted illegally by saying that bail would not be granted unless the appellant did something which the appellant was not bound to do, the respondent cannot be said to have acted otherwise than in his capacity as a public servant.
For this reason the sanction of the appropriate authority for the respondent 's prosecution was necessary under section 197, Cr P.C. 279 Mr. Ghose, however, contends that the appellant 's detention in the respondent 's office was illegal and that, therefore, the respondent could not be said to have been in a position to exercise any lawful authority with respect to him.
It is difficult to appreciate how the appellant 's detention could be said to be illegal because it was in pursuance of the investigation of the complaint lodged by Manoharlal Seth that he was arrested and brought for interrogation before the respondent.
It was not disputed before us that investigation into Manoharlal 's complaint had been ordered though there is a dispute as to whether it was ordered by the respondent or by the Deputy Commissioner of Police.
Whether it was by one or the other makes little difference.
We would like to make it clear that Mr. Ghose did not contend before us that the appellant 's detention in the office of the respondent was illegal because his initial arrest was without a warrant.
But we may point out that a police officer is legally empowered to arrest a person alleged to have committed an offence under section 420, I.P.C. without a warrant.
Such being the position the High Court was justified in quashing the process.
Accordingly we dismiss this appeal.
Appeal dismissed.
[/INST]The appellant made a complaint against the respondent, an Assistant Commissioner of Police for having committed an offence under section 348, Indian Penal Code, alleging that on the arrest of the appellant under section 1208/420 Indian Penal Code, the respondent had refused to grant him bail until a certain sum was paid or acknowledged in writing to be paid to the complainant.
The Chief Presidency Magistrate issued process.
On revision, the High Court quashed the process holding that sanction of the State Government under section 197 Code of Criminal Procedure ought to have been obtained.
On appeal by special leave, it was contended that the High Court in quashing the process had proceeded to decide on the merits of the case even though there was no material before it and therefore its judgment could not stand.
Held: (i) For considering whether section 197 Code of Criminal Procedure would apply the Court must confine itself to the allegations made in the complaint.
But that does not mean that it need not look beyond the form in which the allegations have been made and is incompetent to ascertain for itself their substance.
(ii) The sanction of the appropriate authority for the respondent 's prosecution was necessary under section 197 Code of Criminal Procedure.
Whether a person charged with an offence should or should not be released on bail was a matter within the discretion of the respondent and if while exercising a discretion he acted illegally by saying that bail would not be granted unless the appellant did something which the appellant was not bound to do, the respondent cannot be said to have acted otherwise than in his capacity as a public servant.
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<s>[INST] Summarize the judgementRISDICTION: Criminal Appeal N4.
133 of 1971.
Appeal by special leave from the judgment and order dated the 15 2 1971 of the Borrrbay High Court in Criminal Appeal No. 1354 (lf 1 969.
section K. Gambhir and 5.
M. Sikka for the appellant.
M. C. Bhandare and M. N. Shroff for Respondent.
The Judgment of the Court was delivered by BEG, J.
The appellant before us by special leave was charged as follows by the Presidency Magistrate of Bombay: "I.B. P. Saptarshi, Presidency Magistrate 6th Court, Mazaagaon, Bombay, do hereby charge you: Karnal Singh S/o Uttam Singh as follows: "That you on or about the 20th day of February, 1968 at Bombay along with one Balwant Singh s/o Uttam Singh who has absconded, at 171, Kazi Sayyed Street, being entrusted with certain property to wit M/Lorry No. 7372 valued at Rs. 52,000/ belonging to the complainant Shankar Dhondiba Sutar as driver committed criminal breach of trust in respect of the said property and aided and abetted to the absconding accused in commission of the said offence and thereby committed an offence punishable under Sec.
408 r.w. 114 of the Indian Penal Code and within my cognizance.
And I hereby direct that you be tried by me on the said charge".
The prosecution evidence in the case was: one Shankar Dhondiba Sutar a member of the Ex Servicemen Transport Cooperative Society Ltd., Bombay, had purchased the Truck No.
MRS 7372 after taking a loan of Rs. 50,000/ from the Society out of which he had paid up Rs. 43,000/ .
He had entrusted Balwant Singh Uttam Singh, the brother of the appellant, with the truck.
He had a contract with Balwant Singh Uttam Singh under which he used to get a net income of Rs. 2000/ to Rs. 2200/ p.m. from Balwantsingh Uttamsingh who was running the truck and seemed to be incurring all necessary expenses of it.
This amount was paid regularly upto December, 1967.
Thereafter, Balwantsingh Uttamsingh, the driver, avoided meeting the purchaser of the truck and was said to be absconding.
On 4 3 1968, the truck met with an accident and Balwantsingh Uttamsingh is said to have sent information of it to section D. Sutar.
On 9 3 1968, according to Sutar, Balwantsingh him self went to Sutar.
And, when the owner asked him to take him to the truck, it is alleged that he did not comply with this request.
749 As Shankar Dhondiba Sutar had not paid up the whole amount due for the truck which he had borrowed from the Society, the owner of the truck, as entered in the Insurance papers, was the Society itself.
section D. Sutar stated that he found the truck at Thana Katha where he also found the appellant before us, Karnalsingh Uttamsingh, who had been, apparently, driving the truck.
The First Information Report was lodged on 20 4 1968 at 12.30 p.m. by section D. Sutar.
It is against Balwantsingh Uttamsingh and makes no allegations against the present appellant.
It is said that Balwant Singh Uttarnsingh had met section D. Sutar again on 12 3 1968 and told him that he would turn up again.
Vazir Singh Gaya Singh, PW 2, the Secretary of the Bombay Ex Servicemen Transport Co. deposed that section D. Sutar was a shareholder in the Company and proved the terms of his contract with Balwantsingh.
He also made no complaint whatsoever against the present appellant.
All that he said was that the truck was seen near Kashali Bridge and the present accused was its driver.
Sub Inspector Ramesh Damodar, PW 3, stated that, on 13 5 1968, Vazir Singh, PW 2, and a police constable brought the truck to Pydhonie Police Station and that it was being driven by the present appellant at that time.
This is all the evidence against the appellant.
The only question that the appellant was asked by the learned Magistrate under Section 342 Criminal Procedure Code and the appellant 's reply are: "Q.
What do you wish to say with reference to the evidence given and recorded against you? A.
I do not know whether M/Lorry No. MRS 7372 was handed over to the complainant on sale purchase agreement and that the complainant had paid Rs. 43,000/ towards the instalment.
I do not know whether the price was fixed at Rs. 50,000/ .
Balwant Singh is my brother but I do not know if the complainant had given lorry in his possession in his capacity as a driver.
I do not know whether Balwant Singh left with M/Lorry in Dec. 1967.
I do not know anything about Balwant Singh not meeting the complainant thereafter.
Mangal Singh told me that this lorry had met with an accident and that I should invest the amount over repair, and after the amount is recovered from the plying of the lorry, the lorry would be returned to him.
It is true that Vazir Singh and one P.C. had told me to take the lorry at the Pydhonie Police Stn.
I was the driver on the said vehicle at that time.
I do not know where is my brother at present.
He meets me at times.
I have not spoken to him about the case.
I want to lead defence witness".
He led some evidence in defence.
Mangaldas Purshottam, D.W. 1, stated that,one Kartar Singh the driver of the truck had sent him a Trunk Call from Jalan that the truck in question had met with an accident on 4 3 1968 and that he gave this message to section D. Sutar.
As the accident was serious and the damage was considerable 750 section D. Sutar was unable to meet with the money required to repair it.
According to Vazir Singh, PW 2, the claim against Insurance Co. was of Rs.,11000/ .
According to Mangaldas, DW 1, the complainant had agreed that the appellant should repair the truck and deduct its expenses out of the income he could make from plying the truck on hire.
He proved Exhibit 1 dated 12 3 1968 containing a writing, signed by section D. Sutar.
It has been translated as follows: "Ext. '1 ' Dated 12 3 1968.
National India Roadways, "I, shankar Dhondiba give you in writing today that my Lorry No. MRS 7372 which had met with an accident, I am bound to pay total costs whatever comes to of its reparation".
Sd./ Shankar Dhondiba Sutar".
This was put to section D. Sutar in cross examination.
He admitted his signature under the writing and gave no explanation about it.
It is significant that it was executed on the very day on which, according to an admission of section D. Sutar, Balwant Singh also saw section D. Sutar.
Perhaps the defence has also yet come out with the whole truth.
It is, however, quite inconceivable that section D. Sutar would be completely unconcerned as to what had happen to the truck if he had not entrusted it to somebody other than Balwantsingh Uttamsingh for repairs to it.
The matter seems to have been report ed to the police only as a result of some quarrel or differences between parties.
Moreover, nobody would repair the truck without being paid for it.
The explanation given by the appellant was, on the face of it, quite reasonable and credible.
It was not merely supported by Mangaldas Purshottarn, D.W.l, whose cross examination did not elicit anything to show that he was unreliable but also, indirectly, by Ashok Jugannath, DW2, the Superintendent of the Commonwealth Insurance Co. `who proved the bills supplied to the Company on the strength of which the Insurance Co. had paid Rs. 6078.35.
It was, therefore, clear that somebody had got the truck repaired and realised the amounts to be paid for repairs from the Insurance Company.
The beneficiary of the contract of insurance was the Bombay Ex Servicemen Transport Co. of which section D. Sutar was a member.
Apparently, the amount had been realised by somebody on behalf of this Company.
The bills could have been given by the appellant.
In the absence of any proof as to who else could have or had repaired the truck the version of the appellant could not be said to be quite unbelievable.
751 A remarkable part of the case is that the Trying Magistrate had A convicted the appellant under Section 411 Indian Penal Code and sentenced him to six months rigorous imprisonment and to pay a fine of Rs., 500/ when he was not even charged with this offence.
, The High Court had maintained this conviction and the sentence and had not even mentioned the defects in the trial.
There was neither a charge under Section 411 I.P.C. nor was the appellant asked to explain his Possession of the truck although he did account for it.
The appellant 's explanation appeared quite plausible.
It may have been difficult to hold that the appellant could not have been prejudiced by the omission to frame a charge or by the manner in which he was put one omnibus question under Section 342 Criminal Procedure Code without giving him an intimation of the offence of which he was likely to be convicted, if these questions had been seriously raised.
However, as these questions do not appear to have been argued in the High Court and were`not even raised in the grounds of appeal in this Court, we will not consider them further.
We think that this appeal is bound to succeed on the view of the facts we have taken above.
The presumption from recent possession of stolen property is an optional presumption of fact under Section 114 Indian Evidence Act.
It is open to the Court to convict an appellant by using the presumption where the circumstances indicate that no other reasonable hypothesis except the guilty knowledge of the appellant is open to the prosecution.
In the case before us, the appellant had given a fairly acceptable explanations.
The prosecution had been unable to repel the effect of it.
The owner of the truck, section D. Sutar, had made admissions which indicated that the prosecution case of an unlawful possession on the part of the appellant was not likely.
It is more likely that the appellant had been entrusted with the truck in order that he might repair it and realise the costs.
However, we express no opinion on this aspect of the matter as the sentence of such a contract may involve a civil liability.
All we need say is that the explanation which the appellant had given was good enough to raise serious doubts about the sustainability of a charge under Section 411 Indian Penal Code on the strength of what was laid down in Otto George Gfeller vs The King(1), the appellant was entitled to an acquittal.
It was held there (at p. 215): "The appellant did not have to prove his story but if his story broke down the jury might convict.
In other words, the jury might think that the explanation given was one which could not reasonably be true, attributing a reticence or an incuriosity or a guilelessness to the appellant beyond anything that could fairly be supposed".
In that case, the question had to go before the Jury and the charge was found to be defective.
The principle of benefit of doubt, on questions of fact, applies whether the verdict is of a Jury or the finding is to be given by a Judge or a Magistrate.
The principle laid down in Gfeller 's case (supra) (at p. 214) was: 752 ". that upon the prosecution establishing that the accused were in possession of goods recently stolen they may in the absence of any explanation by the accused of the way in which the goods came into their possession which might reasonably be true find them guilty, but that if an explanation were given which the jury think right reasonably be true, and which is consistent with innocence although they were not convinced of its truth the prisoners were entitled to be acquitted inasmuch as the prosecution would have failed to discharge the duty cast upon it of satisfying the jury beyond reasonable doubt of the guilt.
Of the accused" Consequently, we allow this appeal and set aside the conviction and sentence of the appellant.
His bail bonds are discharged.
S.R. Appeal allowed.
[/INST]Section 5(1) of the , provides two types of procedure for fixing and revising minimum wages in respect of any scheduled employment.
Section 7 provides for the appointment of an Advisory Board.
If the procedure provided in s.5(1) (a) is followed consultation with the Advisory Board is not u required while it is mandatory in case the procedure in cl.
(b) is followed.
Under cl.
(a), the Government can appoint as many Committees or sub committees as it considers necessary to hold inquiries and advise it in respect of such fixation or revision.
Section 9 requires that every committee, sub committee and the Advisory Board shall consist of representatives of the employers and employees in equal numbers and independent persons, whose number shall not exceed 1/3 of the total number of members.
One of the independent persons shall be appointed Chairman.
[643 G 644 F] In the present case the State Government followed the procedure under cl.
(a) and appointed a committee for revising the wages with respect to employment in Mica Mines which is a scheduled employment under the Act.
The committee consisted of five members, two representative of the employers,.
two of the employes and a Professor of ' Economics of a Government college as an independent member.
It submitted its report to the Government.
The Government referred the matter to the Advisory Board which consisted of 21 members, 8 representatives of the employers.
8 of the employees and 5 government officers as independent members.
The Advisory Board appointed a sub committee to further into matter.
In the sub committee were taken same persons who were, not members of the Advisory Board.
The sub committee made its recommendations and the Advisory Board after considering those recommendations also submitted its report and the State Government accepted it with slight variations and fixed minimum wages by a notification.
The respondent challenged its validity and the High Court struck it down holding that, (i) the constitution of The Wage Committee and the Advisory Board was not valid because the economics professor and the 5 government member were not independent members, (ii) the Board had exceeded its power.
in appointing a sub committee.
(iii) the Board committed an illegality in taking into consideration its recommendations while submitting its report to the Government.
Allowing the appeal to this Court, ^ HELD :(1) It may be that in certain circumstances persons who are in service of ' the Government may cease to have an independent character if the question arises of fixation of minimum wages in a scheduled employment.
the case of fixation of minimum wages in a scheduled employment in which the Government is directly interested, whether Government servants can come in the category of independent members in addition to the Government officer who come on the Board or Committee as representatives of the employers is a matter which has to be considered in an appropriate case.
But in the instant case the constitution of the Wage Committee or the Advisory Board was not bad as Government was not an employer in the Mica Mines in respect of which minimum wages were fixed.
[646 A E] The State of Andhra Pradesh vs Narayana Velur Beedi Manufacturing Factory and others [1973] I Labour Law Journal, 476, followed.
642 (2) The Advisory Board can device its own procedure and collect information by appointment of sub committees consisting only of some of its members.
But the Advisory Board has no power to appoint a rival subcommittee to the one appointed by the Government and take in such subcommittee, persons who are not members of the Board as was done in this case.
Therefore.
the Advisory Board committed an irregularity in appointing the sub committee and taking into consideration its report.
[646 E G] (3) But it does not follow that the impugned notification based upon the report of the Advisory Board was bad even is the irregularity is assumed to be an illegality.
The recommendations made by the Board even on consideration of the report of its sub committee was only that of the Advisor Board.
Since the procedure was under section 5(1)(a) it was not mandatory for Government to take the opinion of the Advisory Board at all.
Therefore, the impugned notification and the proceedings pursuant to it cannot be quashed [646 G 647 B] Gulamahamed Tarasaheb, a Bidi factory by its proprietors Shamrao and other vs State of Bombay and ' others A.I.R. 1962 Bombay 97 referred to.
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<s>[INST] Summarize the judgementCivil Appeal No. 353 (N) of 1971.
From the Judgment and Order dated 29.7.
1970 of the Punjab and Haryana High Court in C.W. No. 2331/70.
Civil Appeal No. 1469 (N) of 1972.
From the judgment and order dated 28.
1971 of the Patna High Court in C.W No. 1330/10).
AND Civil Appeal No. 1470 of 1972.
From the judgment and order dated 24.
1971 of the Calcutta High Court in F.M.A. No. 201 of 1971) Dr. Y. section Chitale, Anil Sharma and Praveen Kumar for the Appellants.
M. section Gujaral, V. K. Punjwani, C. V. Subba Rao and Ms. A. Subhashini for the Respondents.
The Judgment of the Court was delivered by BALAKRISHNA ERADI, J.
In these three appeals the parties involved are the same and the point arising for determination is identical.
Hence they were heard together and are being disposed of by this judgment.
963 The Bata Shoe Company Ltd. (hereinafter called 'the company ') is an existing company within the meaning of The ; with its head office at No. 30, Shakespeare Sarani, Calcutta 17.
The company is engaged in the business of manufacturing and dealing in articles of footwear and accessories.
For the purposes of the said business, the company has three manufacturing establishments namely, a factory a Batanagar in the district of 24 Parganas, West Bengal, another factory at Batanagar near Patna in the State of Bihar and a third manufacturing establishment at Faridabad in the State of Haryana.
By virtue of Entry 36 of the First Schedule in the (hereinafter called the 'Act ' ), footwear and parts thereof in or in relation to the manufacture of which any process is ordinarily carried on with the aid of power, is chargeable to excise duty, the rate of duty being ten per cent ad valorem in respect of 'footwear and fifteen per cent ad valorem in respect of 'parts of footwear '.
By a Notification G. section R. 360, dated February 28, 1965 issued by the Central Government in exercise of the powers conferred by Sub rule (1) of Rule 8 of the Central Excise Rules, 1944 for short "the Rules" footwear and parts thereof were completely exempted from levy of excise duty.
However, shortly thereafter, by other Notification dated May 26, 1967, the exemption from duty granted in respect of footwear and parts thereof by the preceding Notification dated February 28, 1965 was withdrawn.
Thereafter followed yet another Notification dated July 24, 1967 which was in the following terms: "NOTIFICATION CENTRAL EXCISES G. section R.
In exercises of the powers conferred by Sub rule (1) of rule g of the Central Excise Rule, 1944 the Central Government hereby exempts, with effect from the 26th may, 1967, footwear falling under Item No. 36 of the First Schedule to the (I of 1944) of which the value does not exceed Rs. 5.00 per pair, from the whole of the duty of excise leviable thereon.
(No. 171/67)" 964 The sole question raised in these appeals Concerns the interpretation of this Notification.
During the year 1967 and 1968, the company was manufacturing certain items of footwear of which the wholesale price was RS. 6.25 per pair The company contended that since the assess able value of such items of footwear calculated in accordance with the provisions of Section 4 of the Act, as they stood at the relevant time was only Rs. 4.94 and hence less than Rs. 5 per pair, such items qualified for exemption from duty under the Notification dated July 26,1967.
Though originally the Department appears to have been inclined to accept the correctness of the stand taken by the company.
Later on they changed their stand and informed the company that the articles of footwear manufactured by it, of which the wholesale price was Rs. 6.25 per pair were chargeable to excise duty since while computing the "value" of the articles for the purpose of judging the applicability of the exemption, the duty element of the cost structure could not be deducted from the whole sale price and on such calculation the value of such footwear would exceed Rs. 5 per pair.
The company took up the matter with the respective Collectors of Central Excise in West Bengal, Bihar and Haryana but without success In the meantime the Department continued to levy and collected from the company substantial amounts by way of duty on such articles of footwear.
The company, therefore, instituted separate Writ Petition in the High Courts of Calcutta, Patna and Punjab and Haryana The Patna High Court allowed Writ Petition of the company and upheld its contention that the articles of footwear in question were not exigible to duty since they fell within the scope of exemption granted the Notification of July 26, 1967.
Accordingly a mandamus refund of the duty illegally collected from the Company was issued by the Patna High Court.
The High Court of Calcutta however, took a different view and accepted the stand of the Department that the expression "value" occurring in the Notification dated July 26, 1967 is not the deemed 'value ' calculated according to the provisions of Section 4 of the Act but is the real and actual 'value ' of the goods after payment of duty.
The High Court of Punjab and Haryana was moved by the company only after short interval of time during which it had been pursuing its remedies before the highest Departmental a Authorities as well 965 as before the Patna and Calcutta High Courts.
A Division Bench consisting of two learned Judges of the Punjab and Haryana High Court dismissed the company 's Writ Petition in limini on the ground that the company had approached the High Court at a very belated stage.
The Division Bench however, certified the case to be St one to this Court under Article 133 of the Constitution of India.
Similar certificates were granted to the company and to the Union of India respectively by the High Courts of Calcutta and Patna.
That is how these appeals have come to be filed in this Court.
After hearing Counsel appearing on both sides and giving our anxious consideration to the matter in all its aspects, we are clearly of the opinion that the view taken by the High Court of Patna is the correct one and the contrary view taken by the High Court of Calcutta cannot be sustained We are also of opinion that on the facts and circumstances of the High Court of Punjab and Haryana was not justified in dismissing the Writ Petition of the company in limini on the ground of delay especially having regard to the fact that the matter was throughout being actively pursued by the company before the Departmental Authorities as well as before the two other High Courts.
Section 3 of the Act is the charging section and Sub section (1) thereof lays down that 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 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 Section 4 deals with the subject of valuation of excisable goods for purposes of charging of duty of excise.
We shall reproduce that section as it stood at the relevant time, omitting portions thereof which are unnecessary for our present purpose: "4.
Determination of value for the purposes of duty where under this Act, any article is chargeable with duty at a rate dependent on the value of the article, such value shall be deemed to be (a) the wholesale cash price for which an article of the like kind and quality is sold or is capable of being sold at the time of the removal of the articles chargeable 966 with duty from the factory or any other premises of manufacture or production for delivery at the place of manufacture of production, or if a wholesale market does not exist for such article at such place, at the nearest place where market exists.
(b) (Not relevant) Explanation In determining the price of any article under this section no abatement or deduction shall be allowed except in respect of trade discount and amount of duty payable at the time of removal of the article chargeable with duty from the factory or other premises aforesaid.
" Under this Section, in all cases where any article is charge able with duty at a rate 'dependent upon its value ' such 'value ' is to be computed by deducting from the wholesale cash price referred to in clause (a) two components of the price structure namely (1) trade discount and (2) the amount of duty payable on the article at the time of its removal from the factory or other premises of manufacture or production.
The short question for consideration is whether the mode of determination of "value" prescribed by Section 4 is not attracted while computing the "value ' of the articles of footwear for the purposes of testing the availability of the exemption granted under the Notification dated July 26, 1967.
To our mind the answer to the question is perfectly simple.
Section 4 is comprehensive in its coverage and it lays down the procedure to be followed for determination of "value" of any article in every case where the article is chargeable with duty at rate dependent on the value of the article.
On a careful reading of the Notification dated Jul y 26, 1967, it also become clear that the effect of the Notification is to render the chargeability or otherwise to duty of excise of footwear falling under Item 36 of the First Schedule is made wholly dependent upon the 'value ' of the article of footwear; in case such 'value ' exceeds Rs. 5 per pair, duty will be chargeable at the rate of 10% whereas if the value does not exceed Rs. 5 per pair, no duty will be chargeable on such items of footwear, that is the rate of duty will be 'nil '.
It is precisely to such a situation that the provision of Section 4 gets attracted because as expressly stated in the opening part 967 part of the said section the mode of determination of 'value ' specified in the section will be applicable to; all cases where any article is chargeable with duty at a rate dependent upon the value of the article.
In the case of a total exemption, the rate will be 'nil '.
Thus Entry 36 read along with the Notification dated July 24, 1967 clearly shows that the chargeability to duty in respect of any article of footwear is made dependent upon its value in the sense that the chargeability to duty of excise ill arise only if the 'value ' of the article does not exceed RS.
5 per pair.
; It is therefore, plain that before determining the question of availability of the exemption under the Notification dated July 24, 1967, the first essential step is to determine the value of the article in the manner prescribed in Section 4 of the Act.
The fact that on such a computation the article may ultimately be found to be exempted from excise duty does not have any bearing on the question of applicability of Section 4 of the Act for.
determining the 'value, for purpose of duty.
The expression 'for the purposes of duty ' occurring in Section 4 has a wide import.
For all purposes connected with the determination of chargeability and levy of duty the provisions of the section are to be applied for comuptation of the value ' of the article.
Under the Explanation to Section 4, it is mandatory that in determining the price of an article both trade discount as well as the amount of duty calculated as payable on the wholesale cash price payable at the time of removal of the article based on the wholesale cash price referred to in clause (a) are to be deducted from such wholesale price.
This is the view taken by the High Court of Patna in the judgment appealed against C. A. No. 1469 of 1972 and we have no hesitation to agree with the said view.
The High Court of Calcutta was of opinion that Section 4 only lays down the formula or the principle for determination of "value for the purpose of duty" and it has not laid down any principle or formula for the determination of value for exemption from duty as already indicated.
In our opinion this is not a correct interpretation of the scope and ambit of Section 4 of the Act.
In the result, we hold that inasmuch as the value of the articles of footwear in question calculated in accordance with the provisions of Section 4 of the Act did not exceed Rs. 5 per pair, the articles in question were exempt from the charge to duty of excise under the Notification dated July 24, 1967.
968 In the result C. A. No. 1470 of 1972 arising out of the judgment of the High Court of Calcutta, C. A. No. 353 of 1971 filed against the order of the High Court of Punjab and Haryana and the Writ Petitions filed by the company in the High Courts will stand allowed with the direction that the amounts of duty illegally realised by the Department from the company should be forthwith refunded to it.
C. A. No. 1469 of 1972 filed by the Collector of Central Excise, Patna against the decision of the Patna High Court will stand dismissed In C. A. No. 1470 of 1972 and C, A. No. 353 of 1971 the appellants will get their costs from the respondents.
There will be no order as to costs in C. A. No. 1469 of 1972.
S.R. Civil Appeal Nos.
353/1971 and 1470/2 allowed.
Civil Appeal No. 1469/72 dismissed.
[/INST]The appellant landlady filed a suit for recovering possession from the respondent tenant on the allegation that the demised property was situated beyond the municipal limits of the town, and was exempt from the provisions of the Uttar Pradesh Urban Buildings (Regulation of Letting, Rent and Eviction), Act 1972, that it was let out to the respondent on a rent of Rs. 360 per mensem, that the tenancy had come to an end by efflux of the time fixed in the rent note, and that as the respondent was in arrears of rent to the extent of Rs. 3,960 she was entitled to recover possession of the premises with the arrears of rent.
The respondent oppose the suit contending that the property was situated within three kilometres of the municipal limits of the town and was, therefore, governed by the provisions of the Act, denied that the rent was Rs. 360 per mensem and contended that it was only Rs. 125 per mensem, denied that he had executed the rent note, and the tenancy had come to an end by efflux of time, that the amounts claimed as arrears of rent and mesne profits were wrong and excessive, that the notice to quit was invalid in law and that the suit was barred by the provisions of section 20 of the Act.
The Additional District Judge who tried the suit exercising jurisdiction as a Judge of Small Causes Court, found that the property was situate within three kilometres of the municipal limits and was governed by the provisions of the Act, that the tenancy for the period of 11 months under the rent note had come to an end by efflux of time, and the parties were governed by it, and that the suit was governed by the provisions of section 20 of the Act.
On the question whether the respondent was liable for eviction it was held that though the respondent had deposited the full amount of rent as claimed at Rs. 360 per mensem together with damages for use and occupation, interest and costs as required by section 20(4) of the Act amounting to Rs. 7,490 a day after the first hearing date fixed for the suit, as the respondent had contended in the written statement that the rent was Rs. 125 per mensem the deposit of Rs. 7,490 towards arrears, interest and costs was not unconditional and therefore invalid 584 and section 20(4) of the Act did not help the respondent.
The suit was accordingly decreed for eviction with arrears of rent and mesne profits.
The respondent filed a revision petition and a Division Bench of the High Court noticed that one of the conditions of section 20(4) of the Act was that the tenant should unconditionally pay or deposit the entire amount due together with interest and costs, and that section 20(6) says that any amount deposited under section 20(4) shall be paid to the landlord without prejudice to the pleadings of the parties, and that in the instant case the deposit would not be a conditional deposit merely because the respondent had contended in the written statement that the rent was Rs. 125 per mensem and not Rs. 360 per mensem as alleged in the plaint.
The civil revision petition was allowed and the suit was dismissed with costs.
Dismissing the appeal, ^ HELD: 1.
The suit in the instant case, is not based on any of the grounds mentioned in section 20(2) of the Uttar Pradesh Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972 and though the respondent is alleged to have been in arrears of rent to the extent of Rs. 3,960 there is no allegation in the plaint that he is in arrears of rent for not less than four months and had failed to pay the same to the appellant within one month from the date of service upon him of a notice of demand, which is the ground mentioned in clause (a) of section 20(2) of the Act.
[588 G H] 2.
No interference with the decision of the High Court is called for.
The District Judge should have normally dismissed the suit for want of jurisdiction in view of section 20(1) of the Act on his finding that the Act is applicable to the premises.
It is not known why he did not do so, but on the other hand proceeded to hold that the deposit by the respondent is not unconditional as required by section 20(4) of the Act and ordered his eviction on that basis.
[589 A B] 3.
It is not possible to construe section 20(4) in the manner done by the District Judge as that would amount to foreclosure of any defence regarding the quantum of rent even in cases where the amount alleged by the landlord is more than the actual rent agreed to between the parties.
[589 C] In the instant case, it had been found by the District Judge that the arrears of rent at the rate claimed in the plaint together with interest and cost had been deposited within the time mentioned in section 20(4) of the Act.
Merely because the tenant had failed to prove his case that the rent was only Rs. 125 per mensem and not Rs. 360 per mensem, the discretionary relief could not be denied to him.
[590 E; 591] Mangal Sen vs Kanchhid Mal, [1982] I SCR 331 at 336 distinguished.
The Act is a social piece of legislation which leans in favour of tenants.
It is not possible to lay down any broad and general proposition that 585 the discretionary relief should be denied to the tenant in all cases where he fails to prove his case regarding the quantum of rent even though he had deposited the rent at the rate claimed by the landlord in the plaint together with interest and costs within the time as required by section 20(4) of the Act.
[590 H; 591 B]
</s>
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<s>[INST] Summarize the judgementN: Criminal Appeal No. 26 of 1950.
On appeal by special leave from the judgment and order dated the 13th November, 1950, of the High Court of Judi cature at Bombay (Bavdekar and Dixit JJ.) in Criminal Appeal No. 712 of 1950, arising out of judgment dated the 14th August, 1950, of the Court of the Sessions Judge, South Satara, SangIi, in Criminal Appeal No. 85 of 1950 and Crimi nal Case No. 614 of 1950.
C.K. Daphtary, Solicitor General of India (G. N. Joshi, with him) for the appellant.
B. Somayya (B. K.V. Naidu, with him)for the respondent. 1952.
May 27.
Fazl Ali and Bose JJ.
delivered Judgment as follows: FAZL ALI J.
I agree that the acquittal of the respond ent should not be disturbed, and I also agree generally with the reasoning of my brother, Bose.
The question whether turmeric is foodstuff is not entirely free from difficulty.
In one sense, everything which enters into the composition of food so as to make it palatable may be described as 'foodstuff ', but that word is commonly used with reference only to those articles which are eaten for their nutritive value and which form the principal ingredients of cooked or uncooked meal, such as wheat, rice, meat, fish, milk, bread, butter, etc.
It seems to me desirable that the Act ShoUld be amended so as to expressly include 879 within the definition of the somewhat elastic expression "foodstuff" turmeric and such other condiments as the Legis lature intends to be treated as ' such for achieving the objects in its view.
BOSE J.
The question in this case is whether turmeric is a "foodstuff" within the meaning of clause 3 of the Spices (Forward Contracts Prohibition) Order, 1944, read with section 2 (a) of the Essential Supplies (Temporary Powers) Act, 1946, (Act XXIV of 1946).
The respondent was charged with having contravened clause 3 of the Order of 1944 because he entered into a forward contract in turmeric at Sangli on the 18th of March, 1950, in contravention of clause 3 of the Order.
He was convicted by the trial Court and sentenced to three months ' simple imprisonment together with a fine of Rs. 1,000 and in default, a further three months.
But he was acquitted on appeal by the Sessions Court.
An appeal to the High Court against the acquittal failed.
The State of Bombay appeals here but makes it plain that it does not want to take any further steps against the respondent in this matter but merely wants to have the question of law decided as a test case as the judgment of the Bombay High Court will have far reaching effects in the State of Bombay.
It will be necessary to trace the history of this legis lation.
In the year 1944 the then Central Government of India promulgated the Spices (Forward Contracts 'Prohibi tion) Order, 1944, under Rule 81 (2) of the Defence of India Rules.
Clauses 2 and 3 read together prohibited forward contracts in any of the "spices" specified in the first column of the schedule to that Order.
Among the articles listed in the schedule was turmeric.
The conviction is under that Order and it is admitted that if that Order is still valid the conviction would be good.
The Defence of India Act was due to expire on the 30th of September, 1946, and with it the Spices Order of 1944.
But before it expired an Ordinance called 114 880 the Essential Supplies (Temporary Powers) Ordinance of 1946 was issued.
This was Ordinance No. XVII of 1946.
The object of the Ordinance, as set out in the preamble, was to provide for the control of what it called "essential commod ities".
It defined this to mean, among other things, "foodstuffs", and by a further definition "foodstuffs" was defined to include edible oilseeds and oils.
Neither spices in general nor turmeric in particular were mentioned.
Section 5 of this Ordinance embodied a saving clause which saved certain Orders which would otherwise have expired along with the Defence of India Rules.
The section ran as follows: "Any order . made . under rule 81 (2) of the Defence of India Rules, in respect of any matters specified in section 3, which was in force immediately before the commencement of this Ordinance, shall, notwithstanding the expiration of the said Rules continue in force so far as consistent with th.is Ordinance and be deemed to be an order made under section 3.
" The Ordinance was later replaced by the Act with which we are now concerned, the Essential Supplies (Temporary Powers) Act, 1946, (Act XXIV of 1946).
The Act merely repro duces the language of the Ordinance in all material particu lars and it is conceded that if the matter falls under the Ordinance it will also fall under the Act.
The appellant 's contention is that turmeric is a food stuff, therefore the Order of 1944 is saved.
The respond ent 's contention is that turmeric is not a foodstuff.
He contends that the Order of 1944 was limited to spices and.
that turmeric was included in the term by reason of a spe cial definition which specifically included it; and as the Act of 1946 and the Ordinance are limited to "foodstUffs" the Order of 1944 dealing with turmeric was not saved.
The question therefore is, is turmeric a "foodstuff"? Much learned judicial thought has been expended upon this problem what is and what is not food and what is and what is not a foodstuff; and the only conclusion I can draw from a careful consideration of all 881 the available material is that the term "foodstuff" is ambiguous.
In one sense it has a narrow meaning and is limited to articles which are eaten as food for purposes of nutrition and nourishment and so would exclude condiments and spices such as yeast, salt, pepper, baking powder and turmeric.
In a wider sense, it includes everything that goes into the preparation of food proper (as understood in the narrow sense) to make it more palatable and digestible.
In my opinion, the problem posed cannot be answered in the abstract and must be viewed in relation to its.
background and context.
But before I dilate on this, I will examine the dictionary meaning of the words.
The Oxford English Dictionary defines "foodstuff" as follows: "that which is taken into the system to maintain life and growth and to supply waste of tissue.
" In Webster 's International Dictionary "food" is defined as: "nutritive material absorbed or taken into the body of an organism which serves for purposes growth, work or repair and for the maintenance of the vital processes.
" Then follows this explanation: "Animals differ greatly from plants in their nutritive processes and require in addition to certain inorganic substances (water, salts etc.) and organic substances of unknown composition (vitamins) not ordinarily classed as foods (though absolutely indispensable to life and contained in greater or less quantities in the substances eaten) complex organic substances which fall into three principal groups, Proteins, Carbohydrates and Fats.
Next is given a special definition for legal purposes, namely "As used in laws prohibiting adulteration etc.
, 'food ' is generally held to mean any article used as food or drink by man, whether simple, mixed or compound, including ad juncts such as condiments etc., and often excluding drugs and natural water.
" 882 The definition given of "foodstuff" is 1.
Anything used as food.
Any substance of food value as protein, fat etc.
entering into the composition of a food.
" It will be seen from these definitions that "foodstuff" has no special meaning of its own.
It merely carries us back to the definition of "food" because "foodstuff" is anything which is used as "food" 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 a 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 var ious 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.
The proof of the pudding is, as it were, in the eating, and ii the effect of eating what would otherwise be palatable and digestible and therefore nutritive is to bring on indigestion to a stomach unaccustomed to to such unspiced fare, the answer must, I think, be that however nutritive a product may be in one form it can scarcely be classed as nutritive if the only result of eating it is to produce the opposite effect; and if the essence of the definition is the nutritive element, then the commodity in question must cease 883 to befood, within the strict meaning of the definition, to that particular class of persons, without the addition of the spices which make it nutritive." Put more colloquially, "one man 's food is another man 's poison.
" I refer to this not for the sake of splitting hairs but to show the unde sirability of such a mode of approach.
The problem must, 1 think, be solved in a commonsense way.
I will now refer to the cases which were cited before us.
In The San Jose, Cometa and Salerno(1) sausage skins the envelope in which sausage meat is usually con tained were held to be foodstuffs.
But this was a case of conditional contraband captured during the war in pursuance of a war time measure, and the decision was given in accord ance with international law.
This does not appear from the judgment but is plain from an earlier judgment of the same learned President on which his later decision was based.
The earlier judgment is reported in The Kim(2).
He explains there at page 27 that the law of contraband is based on "the right of a belligerent to prevent certain goods from reach ing the country of the enemy for his military use," and he states, also at page 27, that "International law, in order to be adequate well as just, must have regard to the circumstances the times, including the circumstances arising out the particular situation of the war, or the condition the parties engaged in it." One of the changing circumstances he felt he had to take into consideration is set out at page 29: "The reason for drawing a distinction between foodstuffs intended for the civil population and those for the armed forces or enemy Government disappears when the distinction between the civil population and the armed forces itself disappears.
Experience shows that the power to requisition will be used to the fullest extent in order to make sure that the wants of the military are supplied, and however much goods may be im ported for civil use it is by the military that (1) (2) , 884 they will be consumed if military exigencies require it, especially now that the German Government have taken control of all the foodstuffs in the country.
" It is understandable that viewed against a background like that, the word "foodstuffs" would be construed in its wider sense in order to give full effect to the object behind the law, namely the safety and preservation of the State.
It is also perhaps relevant to note that the term which was under consideration in those cases occurred in a war time measure, namely a Proclamation promulgated on the 4th of August, 1914, the day on which the first world war started.
There is authority for the view that war time measures, which often have to be enacted hastily to meet a grave pressing national emergency in which the very existence of the State is at stake, should be construed more liberally.
in favour of the Crown or the State than peace time legisla tion.
The only assistance I can derive from this case is that the term "foodstuffs" is wide enough to cover matter which would not normally fall within the definition of what I have called food proper.
I do not think it is helpful in deciding whether the wider or the narrower definition should be employed here because the circumstances and background are so different.
The next case to which I will refer is James vs Jones(1).
That was a case of baking powder and it was held that baking powder is an article of food within the meaning of the English Sale of Food and Drugs Act, 1875.
Now it has to be observed here that the object of that Act was to prevent the adulteration of food with ingredients which are injurious to health.
It is evident that the definition would have to be wide so as to include not only foodstuffs strict ly so called but also ingredients which ultimately enter into its preparation, otherwise the purpose of the legisla tion, which was to conserve the health of the British peo ple, would have been defeated.
(1) 885 Next comes a case relating to tea in which a narrower view was taken: Hinde vs Allmond(1).
The question there was whether tea was an "article of food" within the meaning of an Order designed to prohibit the hoarding of food, namely the Food Hoarding Order of 1917.
The learned Judges held it was not.
But here it is necessary to note the background and at any rate some of the reasons given for the decision.
The prosecution there was directed against an ordinary housewife who had in her possession a quantity of tea which exceeded the quantity required for ordinary use and con sumption in her household.
The Food Hoarding Order did not specify tea or indeed any other article.
It merely prohib ited generally the hoarding of any "article of food" by requiring that no person should have in his possession or under his control at any one time more than the quantity required for use and consumption in his household or estab lishment.
Shearman J. said that he rested his judgment on the "commonsense interpretation of the word 'food ' in the Order, apart from its meaning in any other statute" and said : "I agree with my brother Darling that if it had been intended to include tea as food, it ought to have been expressly so provided in the Order." Darling J. explained what he meant in this case in a later decision, Sainsbury vs Saunders(2), and said that there was nothing to prevent the Food Controller from saying that a person should not have, for example, so much wine in his possession, provided he did not simply call it "food" and provided also that he let a person who was to be pun ished know what it was that he was not to do.
I think it is clear that the learned Judges were influ enced in their judgment by the fact that the Order in the earlier case was one which affected the ordinary run of householders and housewives who would not have lawyers at their elbows to advise them regarding their day to day marketing.
In the circumstances, they decided that the word should be given (1) (2) 886 its ordinary and popular meaning, otherwise many inno cent householders, who had no intention of breaking the law, would be trapped; and this seems to be the ratio decidendi in the decision of the Bombay High Court in Hublal Kamtapra sad vs Goel Bros. & Co. Ltd. (Appeal No. 14 of 1950) which is the decision virtually, though not directly, under appeal here, though the learned Judges also take into consideration two further facts, namely that the law should be construed in favour of the freedom of contracts and a penal enactment in favour of the subject.
The English decision about tea just cited is to be contrasted with another decision, also about tea, given a few months later in the same year: Sainsbury vs Saunders(1).
Two of the Judges, Darling and Avory, JJ.
were parties to the earlier decision; Salter J. was not.
He held that though tea had been held in the earlier case not to be a "food" for the purpose of the Food Hoarding Order of 1917, it was a "food" within the meaning of the expressions used in certain Defence of the Realm Regulations read with the New Ministries and Secretaries Act of ,1916 which empowered the Food Controller to regulate "the food supply of the country" and the "supply and consumption and production of food." Avory J. also considered that tea was an article of food for the purposes of these laws though Darling J. pre ferred to adhere to his earlier view.
All three Judges also held that the provisions were wide enough to enable the Food Controller to hit at articles which were not food at all, such as sacks and tin containers (Darling J.) so long as he was able by these means even indirectly to regulate the supply of "food", but that portion of the decision does not concern us here because the laws they were interpreting were more widely phrased.
Now the comparison of one Act with another is dangerous, especially when the Act used for comparison is an English Act and a war time measure, and I have no intention of falling into that error.
I am concerned here with the Act before me and must (1) 887 interpret its provisions uninfluenced by expressions, howev er similar, used in other Acts.
I have referred to the cases discussed above, not for purposes of comparison but to show that the terms "food" and "foodstuffs" can be used in both a wide and a narrow sense and that the circumstances and background can alone determine which is proper in any given case.
Turning to the Act with which we are concerned, it will be necessary again to advert to its history.
Rule 81 (2) was wide and all embracing and the Order of 1944 clearly fell within its ambit.
It is also relevant to note that one of the purposes of the Order, as disclosed in its preamble, was to "maintain supplies essential to the life of the communi ty.
" As turmeric was specifically included with certain other spices, it is clear that turmeric was then considered to be a commodity essential to the life of the community, that is to say.
it was considered an essential commodity and not merely a luxury which at a time of austerity could be dispensed with.
Then, when we turn to the Ordinance and the Act of 1946, we find from the preamble that the legislature considered that it was still necessary "to provide for the continuance . of powers to control the production, supply and distribution of, and trade and commerce in, foodstuffs. "Section 3 (1) of the Act continues this theme: "The Central Government, so far as it appears to it to be necessary or expedient for maintaining or increasing supplies of any essential commodity, or for securing their equitable distribution and availability at fair prices, may by notified order provide for regulating or prohibiting the production, supply and distribution thereof and trade and commerce therein.
" The Ordinance is in the same terms.
Now I have no doubt that had the Central Government re promulgated the Order of 1944 in 1946 after the passing of either the Ordinance of the Act of 1946, the Order would have been good.
As we have seen, turmeric falls within the wider definition of "food" 1142 888 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".
Had the Order of 1944 not specified turmeric and had it merely prohibited forward contracts in "foodstuffs" I would have held, in line with the earlier tea case, that that is not a proper way of penalising a man for trading in an article which would not ordinarily be consid ered as a foodstuff.
But in the face of the order of 1944, which specifically includes turmeric, no one can complain that his attention was not drawn to the prohibition of trading in this particular commodity and if, in spite of that, he chooses to disregard the Order and test its validi ty in a court of law, he can hardly complain that he was trapped or taken unawares; whatever he may have thought he was at any rate placed on his guard.
As I see it, the test here is whether the Order of 1944 would have been a good order had it been repromulgated after the Ordinance of 1946.
In my opinion, it would, and from that it follows that it is saved by the saving clauses of the Ordinance and the Act.
I have already set out section 5 of the Ordinance.
In my opinion, the Order of 1944 falls within its purview, and ii it is saved by that, it is equally saved by section 17 (2) of the Act.
The section is in these terms: "Any order . . deemed to be made under the said Ordinance and in force immediately before the commencement of this Act shall continue in force and be deemed to be an order made under this Act.
" In my opinion, the conviction was good and the High Court was wrong in setting it aside, but though the matter has no relevance here because of the undertaking given by the learned Solicitor General not to proceed against the respondent any further in this matter, I think it right to observe that.
the attitude of 889 the learned English Judges in the first tea case would not be without relevance on the question of sentence in many, cases of this kind.
There can, I think, be no doubt that businessmen who are not lawyers might well be misled into thinking that the Ordinance and the Act did not intend to keep the Order of 1944 alive because the Order related to certain specified spices while the Ordinance and the Act changed the nomenclature and limited themselves to "food stuffs", a term which, on a narrow view, would not include condiments and spices.
However, these observations are not relevant here because we are not asked to restore either the conviction or the sentence.
In view of that, there will be no further order and the acquittal will be left as it ' stands.
[/INST]The State of Travancore Cochin merged with Indian Union on March 7, 1949, but the Travancore Income tax Regulation, VIII of 1096 (Malayalam Era) and the Travancore Taxation on Income (Investigation Commission) Act, II24 (Malayalam Era), continued to apply to that area not withstanding the merger.
On August 6, 1949, the Travancore Cochin Government passed an order referring the case of the appellants to the com mission constituted under the 'Travancore Taxation on Income (Investigation Commission) Act, 1124 M. E.
The investigation commission held by its report that the appellants had made a secret profit in the accounting year 1118 M. E., which was not included in the income tax return submitted by the appellants earlier.
The Travancore Cochin Government accepted the report and directed recovery of the tax due by its order dated February 14, 1950.
The Income tax Officer without holding any fresh assessment proceedings, issued a demand notice.
The Union Legislature enacted the Opium and Revenue Laws (Extension of Application) Act (33 of 1950) providing for extension of certain opium and revenue laws to certain parts of India.
In exercise of the authority under section 8(2) of the said Travancore Investigation Act, read with section 3, cl.
(c), of the Opium and Revenue Laws (Extension of Application) Act, the Government of India, on October 25, 1951, directed that appropriate assessment proceedings under the Travancore Income tax Act be taken against the appellants with a view to assess or reassess the concealed income which bad escaped assessment.
The Commissioner of Income tax withdrew the earlier notice of demand and thereafter the Income tax Officer after reassessment proceedings directed the appellants to pay income tax and super tax on the concealed income.
The said orders of the Government of India and of the 467 Income tax Officer were questioned by the appellants and the matter was referred by the Commissioner of Income tax to the High Court.
The High Court held that the orders in question were valid orders.
The appellant appealed with special leave.
Held, that the Government of India had the powers under section 3(c) of the , to direct proceedings for assessment or reassessment under the Travancore Income tax Regulation after consideration of the report made by the Travancore Investigation Commission.
The order passed by the Government of India on February 14, 1950, was not inconsistent with the order passed by the Travancore Cochin Government.
Liability to pay income tax would arise only on an effective order of assessment.
No such order having been passed by the Income tax Officer in the instant case, there could be no doubt as to the competency of the Government of India to direct proceedings for assessment.
There is nothing in section 8(2) of the Travancore Taxation on Income (Investigation Commission) Act which states that action may be taken thereunder only once, and if an unauthorised direction is given thereunder there is nothing which prevents rectification of that order.
By sub section
(4) 'of section 8 of the Travancore Taxation on Income (Investigation Commission) Act the findings by the Investigation Commission are final in all assessment or reassessment proceedings.
Section 8(2) of the Act removed the bar of limitation which arose by section 25 of the Income tax Act.
Consequently, it was competent to the Income tax Officer to reopen the assessment proceedings notwithstanding any lapse of time and the previous order of assessment did not operate as a bar to such re. assessment.
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<s>[INST] Summarize the judgementtion (Original) No. 567 of 1986.
(Under Article 32 of the Constitution of India).
Dr. Raxna Swamy and P.H. Parekh for the Petitioner.
B. Datta, Additional Solicitor General, V.J. Rao, Y.P. Rao, Ms. K. Kumaramanglam and Ms. section Relhan for the Respond ents.
The facts: The petitioner is one Hem Lall Bhandari residing in Bombay, practising 'law ' there.
The first re spondent is the State of Sikkim through its Home Secretary, the second respondent, the Delhi Administration, Police Department and the third respondent, the Union of India through the Home Secretary.
The petitioner states that he had a humble beginning and that he by dint of hard labour qualified himself in law and secured significant success academically.
It is alleged that the Chief Minister of Sikkim wanted him to join politics and that he incurred the wrath of the Chief Minister because of his disinclination to accept this suggestion and that the order of detention was passed against him consequently.
On 29.9.1986, at 10.15 P.M. three officers of the Sikkim Police Service accompanied by two officers of the Bombay Police went to the residence of the petitioner and took him to the office of the C.I.D., Bombay where he was served with a copy of the detention order.
He was detained in the police lock up at the C.I.D. office and his request to contact a lawyer was not granted.
He was kept in custody till 5.30 P.M. on 30 9 1986.
At 6 P.M. on that day, he was permitted to go to his office to collect some papers.
There he con tacted Shri T.R. Andhyarugina, Senior Counsel and informed him that he was being 81 taken to the Bombay Airport to be flown by flight IC 183, to Delhi.
The Senior Counsel requested the police officers to permit him to approach the Bombay High Court before taking the petitioner to Delhi.
This request was not granted.
However, he filed a habeas corpus petition for the release of the petitioner in the Bombay High Court on the same day and P.B. Sawant, J. stayed the order of detention as per the following order; at 7.30 P.M. "There are no grounds of detention furnished, nor any documents, along with the order.
The grounds for detention have to be served along with the order.
The order is prima facie illegal.
It is, therefore, stayed till further orders from this Court.
" This order could not be served on the detaining officer as the Plane carrying the petitioner took off to Delhi at 8.30 P.M.
Meanwhile at 11.30 P.M.
Shri Andhyarujina tele phonically informed a Delhi Advocate, Dr. Mrs. Swamy, of the order passed by the Bombay High Court.
On receipt of this information, she informed the officer on duty at the Air port, of the order of Bombay High Court.
Nothing happened.
Therefore, a petition was filed before this Court on 1st October, 1986 at 2.30 P.M. on which this Court passed an order directing that the petitioner be detained in Delhi and should not be removed from Delhi by the respondents and further that he should be produced before the Chief Metro politan Magistrate who might release him on bail if he thought it fit.
On 2 10 1986, the petitioner was brought before the Chief Metropolitan Magistrate who after hearing the parties granted bail to the petitioner.
The petitioner was released the same evening at 4.30 P.M. on furnishing a bond of a sum of Rs. 10,000 with a surety in the like sum.
The petitioner returned to Bombay the next day, The address of the petitioner is well known to the respondents.
No serious attempt was made by them between 2 10 1986, and 14 10 1986 to serve the petitioner with the grounds of detention.
On 6th October, 1986, the petitioner attended the Bombay High Court in connection with the writ petition filed there and has been regularly attending his office and carrying on his professional duties both in the office and in the High Court.
On 14 10 1986, the petitioner was served with the impugned order of detention, the grounds of detention and the supporting documents.
The case put forward by the petitioner 's counsel is that the delay caused in serving the grounds of detention, from 2 10 1986 to 14 10 1986, clearly violates Section 8(1) of the Act 82 and on that ground the order of detention has to be quashed.
To meet the case of the petitioner that the grounds of detention were served on him only 15 days after the order of detention a Counter Affidavit is filed, sworn to by the Home Secretary, Government of Sikkim.
We extract below the rele vant portion of the Counter Affidavit. "On 2 10 1986, the petitioner was produced in the Court of the Chief Metropolitan Magis trate.
The petitioner was released on bail in pursuance of the order of this Hon 'ble Court.
On 3 10 1986, the grounds of deten tion alongwith the materials were handed over to Shri K.P. Subba, for service on the peti tioner.
Shri K.P. Subba, having learnt from Mrs. Swami, who was his surety, that the petitioner left for Bombay on the same day.
On 4 10 1986, the Police Officers could not contact the petitioner in his address.
He waited on 5 10 1986 also but he did not find the petitioner at his house address or in the Court.
He returned to New Delhi on 6 10 1986.
The writ petition No. 1015 of 1986 was heard by Hon 'ble Mr. Justice Sawant and Justice Kolse Patil and by order dated 14 10 1986 discharged the rule.
The grounds of detention could not be served within the period of 5 days or 10 days as per section 8 of the Act, because the petitioner was released on bail, by the Chief Metropolitan Magistrate on 2 10 1986 and the petitioner avoided the police officer.
The petitioner received the grounds alongwith the material on 14 10 1986 at Bombay as per the orders of the High Court.
Shri K.P. Subba, the Police Officer waited till 6th October, 1986 at Bombay and having found that he was not able to contact the petitioner returned to Gangtok.
Thus the grounds could not be served on the petitioner within the stipulated period as the petitioner was not under detention from 2nd October, 86 onwards.
Had the petitioner been in detention it would have been possible for me to get the grounds served on the petitioner on 3rd Octo ber, 1986 itself.
I respectfully submit that it is the petitioner who rendered every effort on my part to serve the grounds futile 83 taking advantage of the various orders of the High Court of Bombay and this Hon 'ble Court.
I did not know that the Writ Petition filed by the petitioner was posted in the Bombay High Court on 6th October, 1986.
No notice was served on me or on the State Government about the posting of the writ petition in the Bombay High Court on 6th October, 1986.
The only communication received was that the said case was posted on 14th October, 1986.
Our Advocate General appeared on the day in the High Court of Bombay.
I respectfully submit that the petitioner cannot be allowed to contend that the provisions of Section 8 of the Act were violated by me in view of the fact that the petitioner was not in detention and was en larged on bail by the Chief Metropolitan Magistrate, New Delhi under the orders of this Court.
Therefore, I respectfully submit that there is no violation on my part of the provi sions of Section 8 of the Act.
" The petitioner has made various allegations of malafides against the Chief Minister of Sikkim.
These allegations are not supported by any acceptable evidence.
Therefore, we do not propose to consider them.
Much was made of the fact that the Chief Minister has not filed a Counter Affidavit himself denying the allegations.
According to us it is not necessary since the allegations are wide in nature and are bereft of details.
We do not think it necessary in all cases to call upon persons placed in high positions to controvert allega tions made against them by filing affidavits unless the allegations are specific, pointed and necessary to be con troverted.
We, therefore, propose to confine ourselves purely to the question whether there has been a violation of the mandatory provisions contained in Section 8 of the Act.
or not.
The order of the Home Secretary directing the petition er 's detention under Section 3 of the Act was made on 25 9 1986 and grounds of detention were prepared on the same date.
The petitioner was served with the detention order on '29 9 1986 at 10.15 P.M.
He was taken to the Bombay Police lock up that day.
On 30 9 1986 at 6 P.M. he was taken to his office in Bombay.
On the same day, the Bombay High Court passed an order at 7.30 P.M. staying the detention order.
The Plane carrying the petitioner leaves Bombay for Delhi on the same day at 8.30 P.M.
The detaining officers were in formed of the order of the Bombay High Court on 1 10 1986 at 5 P.M.
On the same day at 3.30 P.M. the Supreme Court di rects that the petitioner shall not be taken out of Delhi.
On 2 10 1986, the Chief Metropolitan 84 Magistrate directs the petitioner 's release on bail.
On 14 10 1986, the petitioner is served with grounds of detention.
These facts are not disputed.
Let us see how the concerned officer explains the delay caused in servings the grounds of detention on the petition er.
But before doing so we will read Section 8(1) of the Act.
"8(1) When a person is detained in pursuance of a detention order, the authority making the order shall, as soon as may be, but ordinarily not later than five days and in exceptional circumstances and fOr reasons to be recorded in writing, not later than fifteen days from the date of detention, communicate to him the grounds on which the order has been made and shall afford him the earliest opportunity of making a representation against the order to the appropriate Government." A bare reading of the Section shows that it is obligato ry on the detaining officer to communicate to the detenu, the grounds on which the order of detention has been made, promptly.
This has to be done as soon as possible and ordi narily not later than 5 days.
The detaining authority is permitted to exceed this limitation of 5 days in exceptional circumstances.
The grounds of detention, under exceptional circumstances, can be communicated to the detenu within a period not later than 15 days from the date of detention but when the detaining authority takes time longer than 5 days he was to record reasons why the grounds of detention could not be communicated within 5 days.
It is clear in this case that the grounds of detention were communicated to the petitioner long after 10 days.
There is no record evidencing any reason for this long delay.
We have therefore to examine the reasons why the grounds of detention were given only on 14 10 1986.
It is stated in the Counter Affidavit sworn to by the Home Secretary that the grounds of detention were handed over to Shri K.P. Subba for service on the petitioner on 3 10 1986.
This K.P. Subba has not chosen to file an affidavit in this case to inform this Court as to what really happened with the grounds of detention given to him for service on the petitioner.
It is stated in the Counter Affidavit that Shri Subba learnt from the petitioner 's Advocate, Mrs. Swamy, that the petitioner had left for Bombay.
The Counter Affidavit continues to say that on 4 10 1986, the 'police officers ' could not contact the petitioner in his home address.
It is not 85 evident from this statement as to which officer tried to contact the petitioner in his home address on 4 10 1986.
It is further stated that he waited on 5 10 1986 also but he did not find the petitioner at his house address or in the Court.
The Counter Affidavit is not sufficiently communica tive as to who this police officer was.
The Counsel for the petitioner tried to impress upon us the fact that this statement cannot be true because 5 10 1986 happens to be a Sunday and that no police officer would try to contact an Advocate in Court on Sunday.
This police officer is said to have returned to New Delhi on 6 10 1986.
The Counter Affida vit is eloquently silent about what happened after 6 10 1986.
The Counter Affidavit thereafter discloses the fact that Shri K.P. Subba, the police officer, waited till 6th October, 1986 in Bombay and returned to Gangtok since he was not able to contact the petitioner.
The complaint of the officer is that the petitioner made it impossible for him to serve the grounds of detention.
Every attempt on the part of the officer to serve the petitioner with grounds of deten tion were rendered futile by taking advantage of the orders of the High Court and the Supreme Court.
It is further stated in the Counter Affidavit that the grounds of deten tion could not be served since the petitioner was released on bail and was not under detention from 2nd October, 1986 onwards.
We have considered the averments in the Counter Affida vit carefully.
We have no hesitation to hold that there has been a flagrant violation of the mandatory provisions of Section 8 in this case.
It is not permissible, in matters relating to the personal liberty and freedom of a citizen, to take either a liberal or a generous view of the lapses on the part of the officers.
In matters where the liberty of the citizens is involved, it is necessary for the officers to act with utmost expedition and in strict compliance with the mandatory provisions of law.
Expeditious action is insisted upon as a safeguard against the manipulation.
In this case there is no acceptable or satisfactory explanation as to what the officer or the officers did after 6 10 1986.
This inaction after 6 10 1986 till 14 10 1986, by itself is sufficient for us to hold that Section 8(1) has been violated by the officer concerned and on that ground alone the order of detention has to be quashed.
An attempt was made by the counsel for the respondents to contend that the delay in communicating the grounds of detention caused in this case has to be condoned and the rigour of the Section relaxed since the detenu had been released on 2 10 1986, and hence 86 not in detention.
This according to us is a specious plea which cannot stand legal scrutiny.
If this contention is to be extended to its logical conclusion it would be clothing the authorities with powers to delay communication of the ground of detention indefinitely, whenever a detenu secures from a Court of law either bail or parole.
To accept this contention would be to destroy the effect of the mandate of the Section.
As indicated earlier, the mandate enacted in the Section is a safety valve for a citizen who is robbed of his liberty and to disable the authorities from manipulating the grounds of detention.
The Section has to be interpreted literally.
No relaxation is permissible.
If the original time of 5 days has to be extended, such extension must 'be supported by an order recording reasons.
If reasons are not so corded the order of detention will automatically fail.
Even if reasons are recorded they have to inspire confidence in the Court and are subject to legal scrutiny.
If the reasons are unsatisfactory, Courts would still quash the order of detention.
On a consideration of the materials placed before us we hold that the order of detention is bad and we quash the same.
Since the petitioner is not in detention there is no need to pass any order to direct his release.
A.P.J. Petition allowed.
[/INST]The Order of detention of the petitioner under s.3 of the was made on 25.9.
1986 and the grounds of detention were prepared on the same date.
The petitioner was detained and served with the detention order on 29.9.1986 at 10.15 P.M.
In a habeas corpus petition filed on behalf of the petitioner on 30.9.
1986 the High Court passed an order at 7.30 P.M. staying the detention order.
However, the stay order could not be served on the detaining officer as the plane carrying the petitioner left Bombay for Delhi at 8.30 P.M.
The detaining officers were informed of the order of the High Court on 1. 10.1986 at 5 P.M.
On the same day a petition was filed in this Court and at 3.30 P.M. this Court passed an order directing that the petitioner shall not be taken out of Delhi.
On 2.10.
1986 the petition er was released on bail by the Chief Metropolitan Magis trate, Delhi.
On 14.10.
1986 the petitioner was served with grounds of detention.
On behalf of the petitioner it was contended that the delay caused in serving the grounds of detention from 2.10. 196 to 14.10.
1986 clearly violates the mandatory require ments, contained in s.8(1) of the Act and, therefore, the order of detention was liable to be quashed.
On behalf of the respondents it was contended: (1) that the petitioner made all efforts of the police officer to serve the grounds of detention futile by taking advantage of the orders of the High Court and this Court, and (2) that the delay in communicating the grounds of detention caused in this case should be condoned and rigour of the section relaxed since the detenu had been released on 2.10.1986, and hence not in detention.
Allowing the petition, 78 79 HELD: (1) Section 8(1) of the Act shows that it is obligatory on the detaining officer to communicate to the detenu, the grounds on which the order of detention has been made.
This has to be done as soon as possible and ordinarily not later than 5 days.
The limitation of 5 days can be exceeded in exceptional circumstances.
The grounds of deten tion under exceptional circumstances can be communicated to the detenu within a period not later than 15 days from the date of detention but when the detaining authority takes time longer than 5 days he has to record reasons why the grounds of detention could not be communicated within 5 days.
(2) The mandate enacted in the section is a safety valve for a citizen who is robbed of his liberty from manipulating the grounds of detention.
The section has to be interpreted literally.
No relaxation is permissible.
If the original time of 5 days is to be extended, such extension must be supported by an order recording reasons.
If reasons are not so recorded the order of detention will automatically fail.
Even if reasons are recorded they have to inspire confidence in the Court and are subject to legal scrutiny.
If the reasons are unsatisfactory, Courts will still quash the order of detention.
(3) In the instant case, the grounds of detention were communicated to the petitioner long after 10 days.
There is to record evidencing any reason for this long delay.
The contention that the delay in communicating the grounds of detention caused in this case has to be condoned and the rigour of the section relaxed since the detenu had been released on 2.10.
1986, and hence not in detention, is a specious plea which cannot stand legal scrutiny.
If this contention is to be extended to its logical conclusion it would be clothing the authorities with powers to delay communication of the grounds of detention indefinitely, whenever a detenu secures from a Court of law either ball or parole.
To accept this contention would be to destroy the effect of the mandate of the section.
(4) In the case there is no acceptable or satisfactory explanation as to what the officer or the officers did after 6.10. 1986.
This inaction after 6.10.1986 till 14.10.
1986, by itself is sufficient to hold that s.8(1) has been violat ed by the officer concerned.
The order of detention is bad and, therefore, quashed.
(5) It is not necessary in all cases to call upon per sons placed in high positions to controvert allegations made against them by filing 80 affidavits unless the allegations are specific, pointed and necessary to be controverted.
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<s>[INST] Summarize the judgementon (Civil) No.3 of 1990 etc.
(Under Article 32 of the Constitution of India).
K.T.S. Tulsi, Addl.
Solicitor General, M.K. Ramamurthy, Govinda Mukhoty and N. Santosh Hegde, Ms. C. Ramamurthi, M.A. Krishna Moorthy, M.A. Chinnaswamy, H. Subramaniam, Ms. C.M. Chopra, A Bhattacharjee, G.S. Chatterjee, H.K. Puri, M.P. Jha, Serva Mitter, R.K. Maheshwari, Vineet Maheshwari, Ms. Niranjan Singh, B.D. Prasad, K. Swamy and B.K. Prasad for the appearing parties.
The Judgment of the Court was delivered by KASLIWAL, J.
All these cases are an upshot of the case R.D. Gupta & Ors.
vs Lt. Governor, Delhi Administration & Ors.
; , It is not necessary for us to give the background and history of the constitution of the two main civic bodies namely, New Delhi Municipal Committee (in short 'MDMC ') and the Municipal Corporation of Delhi (in short 'MCD '), in the Union Territory of Delhi as the same has already been mentioned in detail in the above R.D. Gupta 's case (supra).
We would thus mention only such details which are relevant and necessary for the purpose of deciding the above cases.
All the above cages relate to the employees of the NDMC who are claiming the benefit of the report of Shiv Shankar Committee (in short 'SSC ') in respect of the grant of pay scales 416 as allowed to other employees of NDMC in R.D. Gupta 's case.
The Government accepted the report of the Third Pay Commission and granted pay scales as recommended to the employees of NDMC as well as to the MCD.
The technical staff of the Delhi Electricity Supply Undertaking (in short 'DESU ') claimed higher scales of pay as they were not satisfied with the pay scales recommended by the Third Pay Commission.
The Government therefore constituted Shiv Shankar Committee to go into the question of revision of pay scales of the technical staff of DESU.
The SCC submitted its report in 1973 according to which higher pay scales were allowed to the technical staff of DESU.
The non technical/ministerial staff of DESU who were not covered by the report of the SSC demanded that they should also be granted pay scales as recommended by the SSC.
The DESU considered the demand of the ministerial staff at its meeting held in May 1973 and decided to revise the pay scales of the non technical staff also working in DESU.
Since the technical as well as the ministerial staff working in the DESU were granted the pay scales recommended by SSC, the NDMC also.
by its resolution No.154 dated 19.10.1973 allowed the benefits of pay scales as recommended by SSC to its staff working in the electricity wing.
In view of the fact that the benefit of the SSC pay scales was granted by the NDMC to the ministerial staff working in the electricity wing only, the employees working in the general wing of the NDMC also raised a demand for granting them also the benefit o f the pay scales recommended by SSC.
Many orders were passed from time to time and writ petitions Were also filed by the concerned parties, but we do not think it necessary to give the details as the same have been narrated in R.D. Gupta 's case and we come to the resolution of the NDMC dated 27.6.1978 constituting the electricity wing with effect from 1.5.1978 or such subsequent date as may be fixed composed of 28 posts of pump drivers, two posts of welders, three posts of carpenters and one post of pump.
mechanic and 496 posts of ministerial staff and to give all of them scales of pay as per SS Committee Report.
Three petitions under Article 226 of the Constitution viz. CW Nos.
1231, 557 and 280 of 1978 were filed in the Delhi High Court.
We are only concerned with the grievance of the ministerial staff who were claiming to be treated at par with the ministerial staff of the electricity win in the matter of pay and allowances.
The ministerial staff in the general wing having not received the full relief in the High Court filed C.A. 2969 of 1973 417 before this Court.
It was claimed in the said appeal that instead of restricting the payment of SS Committee pay scales to the 496 ex cadre posts in the electricity wing and directing the NDMC to fill up those posts on the basis of seniority cum option, the High Court should have directed the NDMC to give the SS Committee pay scales to all the members of the ministerial staff.
In R.D. Gupta 's case, this Court decided many appeals by a common order, but we are only concerned with the C.A. No. 2969 of 1983 which relates to the ministerial staff in the general wing of the NDMC.
It was contended by the appellants in the said appeal that the electricity wing of the NDMC was not a distinct and independent unit entitled to have its own scales of pay and secondly the ministerial staff of the NDMC belonged to a unified cadre and the staff members were liable to transfer from one branch of the NDMC to another and as such the NDMC cannot create a cadre within a cadre and fix different scales of pay for those in the carved out cadre.
It was also urged that the nature of the duties performed by the ministerial staff in all the three wings of the NDMC is more or less similar, if not identical, and hence the well established rule of 'equal pay for equal work ' should govern the staff members.
This Court in R.D. Gupta 's case held that the grievance of the ministerial staff of the general wing was well founded.
The ministerial staff in the NDMC constituted a unified cadre.
The recruitment policy for the selection of the ministerial staff is a common one and the recruitment is also done by a common agency.
They are governed by a common seniority list.
The ministerial posts in three wings of the NDMC, viz. the general wing, the electricity wing and the water works wing are interchangeable posts and the postings are made from the common pool according to administrative convenience and exigencies of service and not on the basis of any distinct policy or special qualifications.
It was held that it would be futile to say that merely because a member of the ministerial staff had been given a posting in the electricity wing, either due to force of circumstances or due to voluntary, preferment, he stands on a better or higher footing or in a more advantageous position than its counterparts in the general wing.
It was thus held that all sections of the ministerial staff should be treated alike and all of them were entitled to the same scales of pay for the work of equal nature done by them.
After the above decision in R.D. Gupta 's case, the employees of NDMC working in different departments have filed the above writ petitions under Article 32 of the Constitution or Civil Miscellaneous Petitions in 418 R.D. Gupta 's case which have been directed by this Court to be treated as Writ Petitions by order dated 17.11.1989.
In all these cases the employees have prayed for granting the same pay scales including the ex gratia benefits as was recommended by SSC.
Writ Petition No.1 of 1990 has been filed by NDMC Workship Employees Association on behalf of the employees of Auto Workship of NDMC.
In Writ Petition No.5 of 1990, the petitioners are Class IV employees of NDMC holding the posts of Duplicating Machine Operators and Gunmen/Dog Shooters.
In Writ Petition No.3 of 1990, the petitioners were initially appointed as Junior Clerks and subsequently promoted to the posts of Junior Technical Assistants (Hindi) also knows as Translator (Hindi).
In Writ Petition No.13 of 1990, the petitioner is working on the post of Assistant Store Keeper.
In Writ Petition No.292 of 1990, the petitioners are pump drivers in the water supply, horticulture and civil wings of NDMC.
In Writ Petition No.1109 of 1990, the petitioners are the employees of Junior Navyug School run by NDMC.
In Writ Petition No.409 of 1990, the petitioners are working as Telephone Operators under the NDMC.
The short controversy to be decided in the above cases is whether the petitioners fall within the cadre of ministerial staff or fall in similar cadres which have already been granted the benefit of SSC pay scales? It is no longer in controversy now that the ministerial staff working in all the wings are also entitled to the same benefit of SSC pay scales as has been given to the ministerial staff working in the electricity wing of the NDMC.
It has already been decided in R.D. Gupta 's case that the entire ministerial staff in the NDMC constitutes a unified cadre.
The ministerial post in the three wings of the NDMC viz., the General Wing, the Electricity Wing the the Water Works Wing are interchangeable posts and the postings are made from the common pool according to administrative convenience and exigencies of service and not on the basis of any distinct policy or special qualifications.
It may be further noted that the NDMC itself in order to extend the benefit of R.D. Gupta 's case in a meeting dated 9.6.1988 resolved as under: "IMPLEMENTATION OF BENEFIT OF S.S. SCALE SLP.
11270 OF 1982 SHRI R.D. GUPTA 419 AND OTHERS VERSUS LG.
DELHI AND OTHERS.
The Committee as per the advice of the Law Deptt.
and the opinion given by our counsel, justice V.D. Mishra on 26.2.1988 had decided that following categories of employees who constitutes 496 posts created by the.
NDMC while forming the Electricity Cell vide Reso.
passed on 27.6.1978 should be extended the benefits: 1.
Office Supdt.
HA/Accountant 3.
Personal Asstt.
Clear 5.
Stenographers 6.
Jr. Clerk 7.
Asstt.
Storekeepers 8.
Adrema Operators 9.
Asstt.
Adrema Operators 10.
Asstt.
Record Keepers 11.
Daftry 12.
Peon 13.
Bill Collector 14.
Sorter 15.
Ferro Printer 16.
Chowkidar 17.
Sewerman 18.
Sweeper Accordingly, the Committee passed orders to extend the benefits vide orders dated 26.2.1988 to all the above 420 categories.
These employees have already been paid a part of the arrears and salaries under S.S. Scale.
The CAP while checking the pay fixation have required a formal resolution of the Committee for processing the cases.
Accordingly, this is noted to the Committee for information in continuation of Reso.
No.26 dated 9.2.1988.
ADMINISTRATOR 'S DECISION Information noted.
" By another order dated 27.7.1988 the benefit of S.S. Committee 's scales was extended to the following cadre of employees: "NEW DELHI MUNICIPAL COMMITTEE DATED: 27.7.1988 OFFICE ORDER Under the orders of the Administrator dated 18.7.1988 the following allied categories of sweepers are extended the benefit of S.S. Scales in terms of Reso.
No.26 dated 9.2.1988 read with Reso.
No.52 dated 9.6.1988 as they form the common cadre of sweepers.
Lorry Belders 2.
Dumping ground beldars 3.
Bhisties 4.
Rat catchers 5.
Verandha Beldars 6.
Hawker Raid Van beldars 7.
Sweepers cum chockidars 8.
Dog catchers.
Sd/ Asstt.
(Health) 421 Copy to: 1.
All Estts.
: with the request to fix the pay of the above mentioned categories in the S.S. Scales.
DS (E) 3.
A.S. (AIC) 4.
P.A. to Secy.
NDMC 5.
C.A.0.
O.S. (CBS) 7.
Supdt.
A/Cs. 8.
File 9.
P.A. to F.A. 10.
OS (CE 1) The case is laid before the Committee of Officers presided over by the Administrator for consideration and decision if the benefit of Supreme Court Judgment dated 7.8.1987 be extended to all the Drivers in anticipation of the approval of the Lt. Governor, Delhi and in the anticipation of the confirmation of the Minutes of the Committee.
ADMINISTRATOR 'S DECISION Resolved by the Committee of Officers and decided by the Administrator that benefit of Supreme Court judgment dated 7th Aug. 87 is extended to all the Drivers of the Committee in the anticipation of the approval of the L.G. Delhi.
The action be taken in anticipation of confirmation of the minutes of the Committee. ' In Writ Petition No.1 of 1990, the contention of the petitioners is that they are employees working in the Auto Workshop of NDMC which is a part and parcel of the electricity establishment and their duties are mini , sterial in nature.
It has been further contended that the Auto Workshop ' 422 employees have to work throughout on the ground beneath the vehicles belonging to all departments whether it belongs to electricity, water or the administrative staff and they have to work for such time till a vehicle is fit for traffic and have to maintain the vehicle not only for administrative staff but also for the electrical, health, water etc.
It has been further urged that Auto Workshop employees are part and parcel of electrical wing and their appointments, promotions, pension, salaries, increments, transfers, main tenance of personal filing is done by the electricity establishment.
Moreover, their services are inter transferable such as drivers, cleaners, helper, peon, chowkidar, sweepers, fitters, khalasis working in the Auto Workshop can be and are transferred to other departments.
It has also been urged that a discriminatory treatment has been given in the case of the petitioners inasmuch as a fitter which is a promotional post from amongst peon or chowkidar or sweeper is getting less pay scale than the peon or chowkidar and likewise clearner which is a promotional post is getting less pay scale than a chowkidar, peon and sweeper.
We find force in the submission of the petitioners.
As already mentioned above the benefit of the pay scales recommended by the SSC has been allowed to the NDMC to the 18 categories of employees which includes, daftry, peon, chowkidar, sweeper etc.
and we find no valid justification for discriminating the employees of the Auto Workshop which forms a part and parcel of the electricity wing of the NDMC.
In Writ Petition No.5 of 1990, the petitioners are Class IV employees of NDMC holding posts of Duplicating Machine Operators and Gunmen/Dog Shooters.
Needless to say that NDMC has allowed the benefit of SS Committee 's scales to Rat Catchers and Dog Catchers vide order dated 27.7.1978 as already quoted above and we find to valid justification for denying such benefit to Duplicating Machine Operators and Gunmen/Dog Shooters.
When such benefit has been allowed to Rat Catchers and Dog Catchers, there is no essential difference in the job work done by Genmen/Dog Shooters.
The Duplicating Machine Operators are also Class IV employees and such post is transferable and interchangeable from other Class IV employees of the NDMC who have already been granted the benefit of SSC 's pay scales vide order dated 9.6.1988 already mentioned above.
In Writ Petitoin No.3 of 1990, the petitioners are working as Junior 423 Technical Assistants (Hindi) and are also known as Translator (Hindi).
In Writ Petition No.13 of 1990, the petitioner is working on the post of Assistant Store Keeper.
Both the above posts of Junior technical Assistants (Hindi) and Assistant Store Keeper are such posts which clearly fall within the ministerial cadre.
Learned counsel appearing for the NDMC was unable to show any material on record for taking a contrary view.
In Writ Petition No.292 of 1990, the petitioners are pump drivers employed in the water supply, horticulture and civil wings of NDMC.
The benefit of SSC pay scales has already been extended to the pump drivers in the electricity wing and there in no valid ground or justification to deny such benefit to the pump drivers working in the water supply, horticulture and civil wings of NDMC.
In Writ Petition No.1109 of 1990, the petitioners are the employees of Junior Navyug School run by NDMC.
In our view, the employees of the school though run by NDMC fall in a different cadre altogether and as such cannot claim the benefit of SSC pay scales on the basis of R.D. Gupta 's Judgment.
It is not their case that their posts are interchangeable or transferable from any other post under NDMC.
The nature and the duties performed by the petitioners are totally different and they cannot be granted the benefit of the SSC pay scales on the basis of any equality with the other employees of NDMC who have been granted such benefit.
In Writ Petition No.409 of 1990, the petitioners are working as Telephone Operators.
The Telephone Operators fall in a separate cadre and their posts are neither interchangeable nor transferable with the other members of the service in NDMC.
That apart the petitioners are Trained Telephone Operators and Senior Telephone Operators and as such do not fall within the category of ministerial staff and ' as such are not entitled to the benefit of SSC pay scales on the basis of R.D. Gupta 's case.
In the above cases we are only concerned with the granting of benefit of SSC pay scales on the basis of R.D. Gupta 's case and as such we are holding that the petitioners working in the Navyug School in Writ Petition No.1109 of 1990 and Telephone Operators in Writ Petition No. 409 of 1990 are not entitled to the benefit of the SSC pay scales.
These petitioners are free to make their claim if any, for the revision of their pay scales to the competent authorities.
424 In the result, we allow Writ Petition Nos. 1, 3, 5, 13, and 292 of 1990 and grant them the benefit of SSC pay scales in the same manner as granted to other employees vide Resolution No.26 dated 9.2.1988 read with Resolution No.52 dated 9.6.1988.
The respondent Delhi Administration and NDMC shall take appropriate steps within three months of the notice of this order and make payment of the entire arrears and grant future benefit in the pay scales as recommended by SS Committee.
The Writ Petition Nos.1109 of 1990 and 409 of 1990 are dismissed.
No order as to costs.
[/INST]The New Delhi Municipal Committee by its resolution dated 19.10.
1973 extended the benefit of higher pay scales recommended in the Shiv Shankar Committee Report, to its staff working in the electricity wing.
Following this, the employees working in the general wing of the NDMC also raised demand for granting them the benefit of those pay scales.
In the meantime, by its resolution dated 27.6.1978 the NDMC constituted, with effect from 1.5.1978, the electricity wing composed of 28 technical and 496 ministerial posts and decided to give all of them scales of pay as per S.S. Committee 's Report.
In the writ petitions filed in the High Court the ministerial staff failed to receive full relief.
This Court in R.D. Gupta & Ors. etc.
vs Lt. Governor, Delhi Administration & Ors.
; , found that the entire ministerial staff in the NDMC constitutes a unified cadre.
The ministerial posts in the general wing, the electricity wing and the water works wing are interchan geable posts and postings are made from the common pool according to administrative convenience and exigencies of service and not on the basis of any distinct policy or special qualifications.
It was thus held that all sections of the ministerial staff should be treated alike and all of them were entitled to the same scales of pay for the work of equal nature done by them.
In order to extend the benefit of R.D. Gupta 's case, the NDMC by its order dated 9.6.1988, revised the pay scales of ' 18 categories of employees who constituted 496 posts forming the electricity cell.
By another order 414 dated 27.7.1988 the NDMC extended the benefit of S.S. Committee 's scales to eight allied categories of sweepers, subsequently, all the drivers of the NDMC were extended benefit of R.D. Gupta 's case.
On the question: whether the petitioners fall within the cadre of ministerial staff or fall in similar cadres which have already been granted the benefit of S.S. Committee 's pay scales.
Disposing of the writ petitions, the Court, HELD: 1.
There is no valid justification for discriminating the employees of the Auto Workshop which forms a part and parcel of the electricity wing of the NDMC, since the benefit of the pay scales recommended by the S.S. Committee has been allowed by the NDMC to the 18 categories of employees which include daftry, peon, chowkidar, sweeper etc.
[422D E] 2.
The NDMC having allowed the benefit of S.S. Committee 's scales to rat catchers and dog catchers vide order dated 27.7.1988, there is no valid justification for denying such benefit to duplicating machine operators and gunmen/dog shooters.
There is no essential difference in the job work done by gunmen/dog shooters.
The post of duplicating machine operators in transferable and interchangeable from other class IV employees of the NDMC who have already been granted benefit of S.S. Committee 's pay scales vide order dated 9.6.1988.
[422E] 3.
Both the posts of Junior Technical Assistant (Hindi) and Assistant Store Keeper are such posts which clearly fall within the ministerial cadre.
They are thus entitled to the benefit of S.S. Committee 's scales.
[423B] 4.
The benefit of S.S. Committee 's pay scales having already been extended to the pump drivers in the electricity wing, there is no valid ground or justification to deny such benefit to the pump drivers working in the water supply, horticulture and civil wings of NDMC.
[423C] 5.
The employees of Junior Navyug School run by NDMC fall in a different cadre altogether and as such cannot claim the benefit of S.S. Committee 's pay scales on the basis of R.D. Gupta 's judgment.
Their posts are not interchangeable or transferable from any other post under the NDMC.
The nature and the duties performed by them are totally different and they cannot be granted the benefit of the S.S. Committee 's pay scales 415 on the basis of any equality with the other employees of NDMC who have been granted such benefit.
[423D E] 6.
The telephone operators working in the NDMC fall in a separate cadre and their posts are neither interchangeable nor transferable with the other members of the service in the NDMC.
That apart, the petitioners are trained Telephone Operators and Senior Telephone Operators and as such do not fall within the category of ministerial staff and are not entitled to the benefit of S.S. Committee 's pay scales on the basis of R.D. Gupta 's case.
[423F] 7.
The respondent Delhi Administration and NDMC are directed to take appropriate steps within three months and make payment of the entire arrears and grant future benefit in the pay scales as recommended by S.S. Committee.
[424B]
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<s>[INST] Summarize the judgementivil Appeal No. 1466 of 1987.
From the Judgment and Order dated 8.12.1986 of the Calcutta High Court in Matter No. 1636 of 1985.
A.K. Sen, Shanker Kumar Ghosh and D.P. Mukherjee for the Appellant.
S.N. Kacker and G.S. Chatterjee for the Respondents.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J.
Special leave granted.
this is an application challenging the order of the learned single judge dated the 8th December, 1986 of the High Court of Calcutta.
By the impugned judgment the said learned Judge has set aside the order dated the 19th April, 1983 of anoth er learned single judge on the ground, inter alia, that the first learned Judge, when she passed the order, acted with out 571 jurisdiction.
There was an arbitration agreement.
Clause 25 of the said Agreement, inter alia, was as follows: "except where otherwise provided in the contract all questions of disputes relating to the granting of specifications, designs, drawings and instructions hereinbefore mentioned and as to the quality of workmanship and materials used in the work or as to any question claims, rights, matters, or things whatsoever in any way arising out of or relating to the contract, designs, drawings, specifications, estimates, instructions orders or these conditions or otherwise concerning the work or execution or failure to execute the same where arising during the progress of the work or after completion or abandonment thereof was to be referred to sole arbitration of the Director/Unit Head, C.M.D.A. not connected with the particular work as may be appointed by the authority.
The award of the arbitrator shall be final, conclusive and binding on all the parties to the contract.
" On that basis the appellant had moved an application for removal of the named arbitrator before the first learned Judge which came up for hearing on 19th April, 1983 and this was by filing of an application under Section 20 of the for an order for filing the arbitration agreement, for appointment of an arbitrator and for other consequential reliefs.
By the order,dated 19.4.83 the said learned Judge has recorded the facts of this case and fur ther recorded that by virtue of the Clause 25 of the agree ment the appellant herein and prayed for appointment of an arbitrator for determination of the dispute that had arisen which had been set out in paragraph 15 of the petition.
Inasmuch as according to the appellant the directors of all the units of Calcutta Metropolitan Development Authority had already expressed their opinion in respect of the disputes that had arisen between the appellant and the respondent and inasmuch as by the Central Tender Committee, the directors were members.
Under the circumstances the appellant appre hended that the appellant might not get justice or proper relief under such circumstances.
There was reasonable basis of the apprehension against the unnamed arbitrator, and it was urged that instead of appointing any officer of the respondent as arbitrator an independent member of the Bar be appointed as arbitrator.
The learned Judge passed such order on 19th April, 1983 while recording these facts as alleged by the petitioner.
These appear to have been reasons for appointing Sri Amitav Guha as the arbitrator in this case in terms of prayer (c) of the said petition.
572 The learned judge in the impugned order has observed that the Court was bound to enforce the particular agreement with which the parties came to the Court, and the parties were not entitled to have any fresh opportunity to appoint a new arbitrator as that would amount to a new agreement between the parties.
This position is good in so far as it goes.
But that does not solve the problem in all situations.
The learned Judge also observed that no appointment can be made by the Court on the ground of disqualification of the arbitrator without having proper materials on record and without coming to a definite finding on this point.
The learned Judge further observed that the Court either should have given effect to the agreed machinery for appointment of the arbitrator or it could have appointed afresh after coming to a clear finding that all directors of the Unit of C.M.D.A. were biased against the appellant herein as well as they had rendered themselves disqualified from being ap pointed as arbitrators.
Until all of them were found dis qualified, the Court did not have the jurisdiction to ap point any new one and had to follow the correct machinery.
It appears that the first learned Judge has in fact held that the arbitrator named had disqualified himself on the ground of bias and on that basis, appointed an outside Advocate, Shri Amitav Guha as the arbitrator.
If the re spondents were not satisfied they could have moved an appeal against the order; instead respondents participated in the arbitration proceedings and acquiesced in such appointment.
The order was made on 19.4.83 appointing Shri Amitav Guha an advocate of the Calcutta High Court as sole Arbitrator.
The arbitrator appointed, started arbitration proceedings in which both the parties submitted to his jurisdiction and filed their respective claims and other documents in support thereof.
It appears from the List of Dates submitted before us that respondent No. 1 moved three interlocutory applica tions at different points of time which were, however, disposed of with orders in favour of the appellant.
Both parties got extention of the arbitration proceedings even by Hon 'ble Mrs. Justice Pratibha Bonnerjea at least 14 times and the last extention was granted upto November, 1985 by Justice Mrs. Bonnerjea.
In the meantime the said Arbitrator had held 74 sittings which were attended by the parties of both sides and their counsel.
A large amount of time and money, same at the cost of public have been spent on these.
In the year 1985 the respondent No. 1 challenged the validity of the order of appointment of arbitrator passed by first learned judge Where she acted on the basis of the findings mentioned hereinbefore.
Can a party be permitted to do that? In Arbn.
Jupiter Gener al 573 Insce.
Co. Ltd. vs Corporation of Calcutta, at 472) P.B. Mukherji, J. as the learned Chief Justice then was observed: "It is necessary to state at the outset that Courts do not favour this kind of contention and conduct of an applicant who participates in arbitration proceedings without protest and fully avails of the entire arbitration proceedings and then when he sees that the award has gone against him he comes forward to challenge the whole of the arbitration proceedings and without jurisdiction on the ground of a known disability of a party.
That view of the Court is ably stated by the Editor of the 15th Edition of Russell on the Law of Arbitration at page 295 in the following terms: 'Although a party may by reason of some disability be legally incapable of submitting matters to arbitration that fact is not one that can be raised as a ground for disputing the award by other parties to a reference who were aware of the disability.
If one of the parties is incapable the objection should be taken to the submission.
A party will not be permitted to lie by & join in the submission and then if it suits its purpose attack the award on the ground.
The presumption in the absence of proof to the contrary will be that the party complaining was aware of the disability when the submission was made. '" Mr. Kacker submitted that this principle could be in voked only in a situation where the challenge is made only after the making of an award, and not before.
We are unable to accept this differentiation.
The principle is that a party shall not be allowed to blow hot and cold simultane ously.
Long participation and acquiescence in the proceeding preclude such a party from contending that the proceedings were without jurisdiction.
Russell on Arbitration, 18th Edition,page 105 explains the position as follows: "If the parties to the reference either agree beforehand to the method of appointment, or afterwards acquiescence in the appointment made, with full knowledge of all the circum stances, they will be precluded from objecting to such appointment as invalidating subsequent proceedings.
574 Attending and taking part in the proceedings with full knowledge of the relevant, fact will amount to such acquiescence." The Judicial Committee in decision in Chowdhury Murtaza Hossein vs Mussumat Bibi Bechunnissa, (31.A. 209) observed at page 220: "On the whole, therefore, their Lordships think that the appellant, having a clear knowledge of the circumstances on which he might have founded an objection to the arbitrators proceedings to make their awards, did submit to the arbitration going on; that he allowed the arbitrators to deal with the case as is stood before them, taking his chance of the decision being more or less favourable to himself; and that is too late for him, after the award has been made, and on the application to file the award, to insist on this objection to the filing of the award.
" Relying on the aforesaid observations this Court in N. Chellappan vs Secretary, Kerala State Electricity Board and Another, ; , acted upon the principle that acquiescence defeated the right of the applicant at a later stage.
In that case the facts were similar.
It was held by conduct there was acquiscence.
Even in a case where initial order was not passed by consent of the parties a party by participation and acquiescence can preclude future chal lenges.
In the grounds of appeal no prejudice has been indicated by the appointment of the second arbitrator.
Mr. S.N. Kacker, learned counsel for the respondents drew our attention to the fact that the decision in the Chowdhuri Murtaza Hossein 's case was where the party chal lenged the appointment of the receiver after the award was made.
He also submits that in this case the respondents herein had challenged the order of appointment of the arbi trator on 19.4.83 and not after the arbitrator had made the award.
We are unable to accept this distinction.
Basically the principle of waiver and estoppel is not only applicable where the award had been made but also where a party to the proceeding challenges the proceedings in which he partici pated.
In the facts of this case, there was no demur but something which can be called acquiescence on the part of the respondents which precludes them from challenging the participation.
575 In that view of the matter, we are of the opinion that the judgment and impugned order cannot be sustained.
In the premises the appeal is allowed.
The order and judgment of the High Court dated the 8th December, 1986 are set aside.
The arbitration proceedings will go on before the Arbitrator appointed by order dated 19th April, 1983.
Time for making the award is extended for four months from today.
For fur ther extention of time the party may apply to the High Court of Calcutta.
The appeal is disposed of accordingly.
The parties will bear their respective costs.
P.S.S. Appeal allowed.
[/INST]Clause 24 of the arbitration agreement between the parties provided for reference of all questions of dispute arising under the contract to the sole arbitration of the Director/Unit Heads of the respondent Authority, not con nected with the particular work.
All such officers having already expressed their opinion in respect of the disputes that had arisen, the appellant apprehended that he may not get justice or proper relief.
He, therefore, moved an appli cation under section 20 of the for appointment of an independent member of the bar as arbitrator instead of the named officer of the respondent Authority.
A Single Judge of the High Court held that the arbitra tor named had disqualified himself on the ground of bias and appointed an outside advocate as the sole arbitrator on April 19, 1983.
When arbitration proceedings commenced both the parties submitted to his jurisdiction and filed their respective claims and documents.
Upto November 1985 the said arbitrator held 74 sittings which were attended by the parties of both sides and their counsel.
Respondent No. 1 had moved three interlocutory applications.
Both the parties got extension of arbitration proceedings at least 4 times upto November 1985.
Respondent No. 1 challenged the validity of the order of appointment of arbitrator dated April 19, 1983 in the year 1985, when another Single Judge took the view that if the court was bound to enforce the particular agreement with which the parties came to the court, the parties were not entitled to have any fresh opportunity to appoint a new arbitrator as that would amount to a new agreement between the parties.
He further observed that no appointment can be made by the Court on the ground of disqualification of the arbitrator without having proper materials on record and without coming to a definite finding on this point.
Until then the Court did not have the jurisdiction to appoint 570 any new arbitrator and had to follow the correct machinery.
This order of the Single Judge dated December 8, 1986 set ting aside the earlier order dated April 19, 1983 was as sailed in the appeal by special leave.
Allowing the appeal, this Court, HELD: Long participation and acquiescence in arbitration proceedings preclude a party from contending that the pro ceedings were without jurisdiction.
The principle is that a party shall not be allowed to blow hot and cold simultane ously.
[573F] Basically the principle of Waiver and estoppel is not only applicable where the award had been made but also where a party challenges the proceedings in which he participated.
In the instant case, there was no demur but something which can be called acquiescence on the part of the respondents or which precludes them from challenging the participation.
[574G H] Arbn.
Jupiter General Insce.
Co. Ltd. vs Corporation of Calcutta, at 472; Chowdhury Murtaza Hossein vs Mussumat Bibi Bechunnissa, 3 I.A. 209; N. Chel lappan vs Secretary, Kerala State Electricity Board & Anr., ; and Russel on Arbitration, 18th Edn.
p. 105, referred to.
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<s>[INST] Summarize the judgementAppeal No. 313 of 1993.
From the Judgment and Order dated 9.10.1992 of the Karnataka High Court in Election Petition No. 8 of 1991.
P.N. Misra for the Appellants.
R.N. Narasimha Murthy, E.C. Vidyasagar and Gopal Singh for the Respondents.
The Judgement of the Court was delivered by B.P. JEEVAN REDDY, J. Heard the counsel for the parties.
Leave granted.
This appeal raises the question whether Section 5 of the is applicable to a recrimination notice given under Section 97 of the Representation of People Act, 1951.
The learned Single Judge of the, Karnataka High Court has held that it does not.
His ,view is questioned by the returned candidate (first respondent in the election petition) before us.
The first respondent in the Election Petition who shall hereinafter be referred to as "appellant ', was declared elected from Koppal parliamentary constituency during the general elections held for the 10th Lok Sabha.
He contested on the Congress (1) ticket.
The election petitioner, referred to hereinafter as "the first respondent" had also contested from the said constituency on the ticket of Janata Dal.
Having lost the election, the first respondent filed an election petition No. 8 of 1991 for a declaration that the election of the appellant from the said parliamentary constituency was void and for a further declaration that he himself has been duly elected therefrom.
Since the appellant and some other respondents to the election petition could not be served in the ordinary course, the High Court directed publication of notice in a Kannada Daily Newspaper.
It was so published on 4.11.1991 fixing the date of appearance of the respondents on 25.11.1991.
The appellant (first respondent in the election petition) ap peared before the High Court on 4.11.1991 and sought time for filing his written statement which he did on 6.11.1992.
Thereafter, on 21.1.1992 he submitted the recrimination notice under Section 97 of the Act.
By the said notice, the appellant expressed his intention to give evidence to prove that 316 the election of the first respondent would have been void if he had been . he returned candidate and a petition had been presented calling in question his election.
Along with the recrimination notice he filed an application under Section 5 of the requesting the High Court to condone the delay in filing the same for the reasons stated therein.
According to the proviso to Section 97(j) notice of such intention should have been given to the High Court "within 14 days from the date of commencement of trial".
Admittedly, the appellant gave notice under Section 97(1) beyond the period of 14 days and hence the application under Section 5.
For a proper appreciation of the question arising herein, it would be appropriate to notice the relevant provisions of the Representation of People Act besides Section 29(2) of the .
First the provisions of the Representation of People Act.
Section 97 reads as follows: "97.
Recrimination when seat claimed. (1) When in an election petition a declaration that any candidate other than the returned candidate has been duly elected is claimed, the returned candidate or any other party may give evidence to prove that the election of such candidate would have been void if he had been the returned candidate and a petition had been presented calling in question his election: Provided that the returned candidate or such other party as aforesaid shall not be entitled to give such evidence unless he has, within fourteen days from the date of commencement of the trial, given notice to the High Court of Ins intention to do so and has also given the security and the further security referred to in sections 117 and 118 respectively.
(2)Every notice referred to in sub section (1) shall be accompanied by the statement and particulars required by section 83 in the case of an election petition and shall be signed and verified in like manner.
" Sub section (1) of Section 97 permits the returned candidate or any other party to give evidence (in an election petition seeking a declaration that any candidate other than the returned candidate has been duly elected) to 317 prove that the election of such candidate would have been void if he had been the returned candidate and a petition had been presented calling in question his election.
Sub section (2) says that such a notice shall be accompanied by a statement and particulars required by Section 83 in the case of an election petition and shall also be signed and verified in the same manner.
Proviso to sub section (1) says that such a notice shall be given within fourteen days from the date of "commencement of trial" and the security and further security referred to in Sections 117 and 118 respectively is furnished.
The expression "commencement of trial" has been defined in Explanation to Sub section(4) of Section 86.
The Explanation reads: "For the purposes of this sub section and of Section 97, the trial of a petition shall be deemed to commence on the date fixed for the respondents to appear before the High Court and answer the claim or claims made in the petition." According to the said definition, the notice of the recrimination should have been given in this case within fourteen days of 4.11.91.
Admittedly, it was submitted beyond the said period.
Section 83 deals with "contents of petition".
According to sub section (1) an election petition (a) shall contain a concise statement of the material facts on which the petitioner relies; (b) shall set forth particulars of any corrupt practice that the petitioner alleges including as full a statement as possible of all the names of the parties alleged to have committed such corrupt practice and the date and place of the commission of each of such practice and (c) shall be signed by the petitioner and verified in the manner laid down in the Code of Civil Procedure, 1908 for the verification of pleadings.
The proviso to sub section (1) says that where a petitioner alleges any corrupt practice, the petition shall also be accompanied by an affidavit in the prescribed form in support of the allegation of such practice and particulars therein.
Sub section (2) says that any schedule or annexure to the petition shall also be signed by the petitioner and verified in the same manner as the petition.
Section 117 requires the election petitioner to deposit in the High Court, at the time of presenting an election petition, a sum of Rs. 2,000 as security for the costs of the petition in accordance with the rules of the High Court.
Section 118 says that no person shall be entitled to be joined as a respondent under Sub section (4) of Section 86 unless he has given such security for costs as the High Court may direct.
Section 86(1) declares that "the 318 High Court shall dismiss an election petition which does not comply with the provisions of section 81 or section 82 or section 117.
" There is no provision in the Representation of People Act, 1951 making all or any of the provisions of the applicable to the proceedings under the Act.
The appellant, however, relies upon Section 29(2) of the .
According to him by virtue of the said provision, all the provisions contained in Sections 4 to 24 (both inclusive) apply to the proceedings under the Act including the recrimination notice under Section 97.
Sub section(2) of Section 29, which alone is relied upon before us reads: "Where any special or local law prescribes for any suit, appeal or application a period of limitation different from the period prescribed by the Schedule, the provisions of Section 3 shall apply as if such period were the period prescribed by the Schedule and for the purpose of determining any period of limitation prescribed for any suit, appeal or application by any special or local law, the provisions contained in Sections 4 to 24 (inclusive) shall apply only insofar as, and to the extent to which, they are not expressly excluded by such special or local law." In H.N. Yadav vs L.N. Misra, ; , this court held that the words "expressly excluded ' occurring in Section 29(2) of the do not mean that there must necessarily be express reference in the special or local law to the specific provisions of the , the operation of which is sought to be excluded.
It was held that if on an examination of the relevant provisions of the Special Act, it is clear that the provisions of the are necessarily excluded then the benefits conferred by the cannot be called in aid to supplement the provisions of the Special Act.
That too was a case arising under the Representation of People Act and the question was whether Section 5 of the is applicable to the filing of the election petition.
The test to determine whether the provisions of the applied to proceedings under Representation of People Act by virtue of Section 29(2) was stated in the following words "The applicability of these provisions has, therefore, to be judged not from the terms of the but by the provisions of the Act relating to the fifing of election 319 petitions and their trial to ascertain whether it is a complete code in itself which does not admit of the application of any of the provisions of the mentioned in Section 29(2) of that Act." On an examination of the provisions of the Representation of People Act and the earlier decisions of the Court, it. was held that the Representation of People Act is a self contained code and accordingly, it was concluded that "the provisions of section 5 of the do not govern the filing of election petitions.
or their trial.
" This decision, in our view, practically concludes the question before us inasmuch as the Act equates a recrimination notice to an election petition.
The language of Section 97 makes the said fact abundantly clear.
The relevant words are: "the returned candidate or any other party may give evidence to prove that the election of such candidate would have been void if he had been the returned candidate and a petition had been presented calling in question his election.
" The proviso to sub section (1) applies the provisions of Sections 117 and 118 to such a recrimination notice.
It may be noticed that for non compliance with the requirement of Section 117 an election petition is liable to be dismissed by virtue of sub section (1) of section 86.
Sub section (2) of Section 97 further says that the "notice referred to in sub section (1) shall be accompanied by the statement and particulars required by Section 83 in the case of an election petition and shall be signed and verified in like manner.
" We may also say that the proviso to sub section (1) of Section 97 which requires such a notice to be given to the High Court within fourteen days of the "date fixed for the respondents to appear before the High Court to answer the claim or claims" (reading the definition of "commencement of trial" into it) has also a particular meaning and object behind it.
The idea is that the recrimination notice, if any, should be filed at the earliest possible time so that both the election petition and the recrimination notice are tried at the same time.
The recrimination notice is thus comparable to an election petition.
If Section 5 does not apply to the filing of an election petition, it does not equally apply to the filing of the recrimination notice.
In view of the above position, we do not think it necessary to deal with the several decisions cited before us relating to the interpretation of Sub section (2) of Section 29 of the .
The counsel for the appellant brought to our notice a decision of this 320 Court holding that the provisions of the Section 12(2) of the Limitation Act, 1908 are applicable to an appeal under Section 116(A) of the Representation of People Act, 1951 viz., V.C Shukla vs Khubchand Baghel and Ors., [1964] 6 S.C.R.129.
It is also brought to our notice that certain High Courts have taken the view that both Section 5 and Section 12(2) of the Limitation Act are applicable to the proceedings under the Act.
Reference is to , 1968 Calcutta 69 and (1976) 89 Madras La. Weekly 32.
So far as the decision of this court in V.C Shukla is concerned, it is a decision dealing with the applicability of the provision in Section 12(2) of the Limitation Act to an appeal preferred under Section 116(A) and not with the filing of an election petition.
The said decision was considered and distinguished in H.N. Yadav on the above basis.
At page 42 of the S.C.R., the Division Bench which decided H.N. Yadav distinguished the decision in V.C. Shukla in the following words : "Vidyacharan Shukla 's case (supra) is one which dealt with an appeal under the Act while what we have to consider is whether the Limitation Act is at all applicable to elec tion petitions under the Act.
Thirdly, section 29(2) of the new Limitation Act does not now give scope for this controversy whether the two limbs of the old section are independent or integrated.
No doubt section 5 would now apply where section 29(2) is applicable to even applications and petitions, unless they are expressly excluded.
Even assuming that the Limitation Act applies to election petitions under the Act, what has to be seen is whether section 5 is excluded from application to such petitions.
" The Division Bench then proceeded to examine whether the applicability of Section 5 is excluded in the matter of filing of an election petition and came to the conclusion that it was so excluded.
This aspect has already been dealt with hereinabove.
So far as the decisions of the High Courts are concerned, we cannot agree with them in so far as the applicability of Section 5 to filing on election petition and/or recrimination notice is concerned in view of the decision of this Court in H.N. Yadav.
For the above reasons, the appeal fails and is accordingly dismissed with costs.
N.P.V. Appeal dismissed.
[/INST]The appellant took the suit premises situate in Ludhiana on a monthly rent of Rs. 800 from respondent 1.
Both the respondents are medical practitioners.
The respondent riled a petition for eviction of the appellant tenant on three grounds: their personal need under Section 13(3)(a)(i)(a); change of user under Section 13(2)(ii)(b) and impairment of the value and utility of the rented building under Section 13(2) (iii) of the East Punjab Urban Rent Restriction Act 1948.
The Rent Controller dismissed the petition.
The appellate authority held that the personal need of the respondents and the ground of change of user was proved.
Since the building though let out to the tenant for a residential purpose was used partly for his profession and had become a 'scheduled building ' under Section 2(h), he could not be evicted on the ground of personal need.
The order of eviction was, however, made on the ground of change of user of the building.
Ile High Court on revision affirmed the finding and order of eviction made by the appellate authority.
150 In the Supreme Court, it was argued for the appellant that there was no change of user to justify the order of eviction on that ground and that the finding on the question of personal need was erroneous.
Relying on legislative intent evidenced in amendments to the Act, it was further contended that no order of eviction can be made on the ground of personal need contained in Section 13(3)(a)(i)(a) in respect of a 'scheduled building ' since that ground is available for eviction only from a residential building.
The omission of the words 'or a scheduled ' after the word 'residential ' in Section 13 (3) (a) (i) (a) in 1956 and their addition in Section 13A in 1985 were referred to advance the argument The respondents submitted that there was no ground to interfere with the order of eviction; that 'scheduled building ' In section 2(h) continues to be a 'residential building ' in section 2(g) and that personal need in section 13(3) (a) (i) (a) is available as a ground for eviction; and that the finding of fact relating to personal need of the landlord in not open to challenge.
In the alternative, if a "scheduled building ' is not a "residential building" then the ground of change of user, unilaterally was available.
Dismissing the appeal, this Court HELD: 1.
The finding of fact of personal need is unassailable.
That respondent 2 is carrying on his profession at some distance from Ludhiana is not sufficient to negative the landlords ' need.
[155B] Non examination of respondent 2 is immaterial when respondent 1 has examined himself and proved the need of the landlord; it Is at best a matter relating to appreciation of evidence, on which ground this finding of fact cannot be assailed particularly when it was not seriously challenged in the High Court.
(pp.6/7) [155C] 2.
All buildings are divided into two categories: "non residential" and "residential".
Building, * used for the purpose of business or trade are " non residential" and the remaining buildings are all 'residential '.
This is clear from the definitions in section 2(a), (d) and (g).
(pp.23/24) [167D] 3. 'Scheduled building as defined in section 2(h) is merely a kind of 'residential building, as defined in section 2(g), its characteristic being its part user for a scheduled purpose.
(p.24) [167E] 151 4. 'The Act makes a distinction between a residential building which is being partly used for a scheduled purpose, i.e. a scheduled building, for the purpose of determination of fair rent.
A separate definition of 'scheduled building ' in clause (h) while making it clear therein that it means a residential building used partly for a specific purpose does not, therefore indicate that a scheduled building ceases to be a residential building or is a category of building separate from a residential building for the purpose of eviction of tenants in the scheme of section 13 of the Act This is the only manner in which a harmonious construction can be made of these provisions.
(pp.24/25) [167H, 168A] 5.
The object of the 1956 amendment was to equate the Punjab tenants with the Delhi tenants and exclude the ground of landlord 's personal need for eviction of tenants of non residential property.
Obviously the definition of 'scheduled building ' in section 2(h) clearly indicating that scheduled building is residential building, the words 'or a Scheduled" after "residential" were considered superfluous.
The use of the word "scheduled" after "residential ' in section 13A inserted in 1985 may have been used to avoid any controversy like the present raised on the basis of the 1956 Amendment.
(p.26) [168D E] 6.
Section 13A which provides for an expeditious remedy is not a separate distinct provision but has to be read along with section 13 of the principal Act forming a part of the general scheme contained in section 13 for eviction of tenants on the ground of personal need from buildings which are not non residential.
(p.27) [168H] 7.
This construction of section 13(3) (a) (i) as it stood after the 1956 amendment, is the only construction which can be made to harmonise with the definitions in section 2.
(p.27) [169C] 8.
The question of change of user is not necessary to be considered.
However, the general principle is that if the express terms of lease restrict the user solely for purpose of residence, then use of any part thereof for even a scheduled purpose without the written consent of the landlord may amount to use of the building for a purpose other than that for which it was leased.
That, however, is a question of fact in each case.
In that case while the ground of eviction in section 13 (3) (a) (i) (a) would remain available to the landlord for eviction of the tenant, in view of the express 152 covenant against user of any part of the residential building even for a scheduled purpose, it may make available also the ground of change of user under section 13(2) (ii) (b) of the Act.
(pp.28/29) [169G 170A] Bishamber Dass Kohli (dead) by L.rs.
vs Smt.
Satya Bhalla, referred to.
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<s>[INST] Summarize the judgementivil Appeal No. 1011 of 1972.
Appeal by Special Leave from the Judgment and Order dated the 18th August, 1971 of the Punjab and Haryana High Court in Income Tax Reference No. 17 of 1971.
section T. Desai, (Mrs.) A.K. Verma and Shri Narain for the Appellant.
T.A. Ramachandran and R.N. Sachthey for Respondent.
The Judgment of the Court was delivered by BHAGWATI, J.
The short question that arises for determination in this appeal is whether certain commission paid by the assessee to two of its employees is an allowable expenditure in computing the profits of the assessee from business.
The assessee is a registered firm which at all material times consisted of five partners, namely, Chaman Lal, Madan Lal, Harbans Lal, Raj Mohan and Saheb Dayal representing a trust.
Chaman Lal was the son of Saheb Daval and Raj Mohan was the son of one Gurditta Mal.
During the accounting year relevant to the assessment year 1963 64, Chaman Lal and Harbans Lal had their own independent factories and hence they were not attending 531 to the business of the assessee and Raj Mohan too was not actively associated with the conduct of the business of the assessee as he was working with the Oriental Carpet Manu facturers India Pvt. Ltd. (hereinafter referred to as OCM).
Thus, from amongst the partners, only Madan Lal was looking after the day to day management of the business of the assessee and he was assisted by Saheb Dayal and Gurditta Mal who were engaged as employees of the assessee.
Saheb Dayal and Gurditta Mal were .looking after the busi ness of the assessee since a long time and they were each paid remuneration of Rs. 1000/per month.
The business of the assessee consisted of sole selling agency of OCM in respect of yarn, cloth and blankets manufactured by OCM and for the sales affected by the assessee as such sole selling agents, commission was paid to the assessee by OCM.
The figures show that the business of the assessee prospered from year to year from 1959 60 onwards and there was a gradual increase in the turnover of the assessee which jumped from the figure of Rs. 39.99 lacs for the assessment year 1962 63 to the figures of Rs. 54.28 lacs for the as sessment year 1963 64.
Since the assessee showed very satisfactory turnover from year to year, OCM started giving to the assessee, in addition to the usual commission, over riding commission at the rate of 21/2% on the sales affected by the assessee and the. over riding commission thus re ceived by the assessee during the previous years correspond ing to the assessment year 1960 61 to 1963 64 was as fol lows: Assessment year Amount Received 1960 61 Rs. 35,964/ 1961 62 Rs. 61,818/ 1962 63 Rs. 83,922/ 1963 64 Rs. 1,13,449/ Since the turnover of the sales reached the figure of Rs. 54.28 lacs and overriding commission increased to Rs. 1,13,449/ during the previous year corresponding to the assessment year 1963 64, the assessee decided to give to each of Saheb Dayal and Gurdita Mal, who were look ing after the business and were primarily responsible for the increased prosperity of the assessee, commission at the rate of 1/2% of the sales out of 21/2% overriding commis sion received from OCM and each of these two employees was accordingly paid by the assessee a sum of Rs. 22,690/ by way of commission.
The aggregate amount of commission paid to Saheb Dayal and Gurditta Mal thus came to Rs. 45,380/ and this amount of commission was claimed by the assessee as a deductible expenditure in its assessment to income tax for the assessment year 1963 64.
The Income Tax Officer, disallowed the claim of the assessee on the ground that there was no material produced by the assessee which would "prove the nature of services rendered by these two gentlemen in lieu of which the commission is claimed to have been paid" and there being no evidence to show that the increase in sales during the relevant accounting year was due to the efforts of Saheb Dayal and Gurditta Mal, the claim for deduction of the amount of commission as a business expenditure remained unproved.
The assessee appealed against the disallowance of the amount of commission but the Appellate Assistant Commis sioner in appeal affirmed the disallowance on the ground that no evidence had been 532 produced by the assessee to prove that the activities of Saheb Dayal and Gurditta Mal in the relevant account year were or a nature different from those in the earlier years or that they put in any extra time or energy,in the conduct of the business of the assessee so as to justify the payment of the commission and hence it could not be said that the commisson was paid for services rendered by them.
The matter was carried in further appeal before the Tribu nal, but the Tribunal also took the same view and held that since there was no proof to show that any services were rendered by Saheb Dayal and Gurudayal Mal for which payment of commission in addition to salary and bonus could be justified, commission could not be said to have been paid for services rendered so as to attract the applicability of section 36, subsection (1 ) clause (ii).
The Tribunal observed that it was not possible to say "that the increase in the turnover in the year under appeal was due to the extra efforts put in by these two employees or that the employees had worked in the hope of receiving extra commission" and since bonus equivalent to three months ' salary was paid to saheb Dayal and Gurditta Mal in addition to their salary during the relevant accounting year, any extra services rendered by them, if any, "should be deemed to have been covered by the payment of this bonus" Since in the view taken by the Tribunal it was necessary that there should be some extra services rendered by Saheb Dayal and Gurditta Mal for which payment of commission could be said to be justi fied and there was nothing to show that any such extra services were rendered by them, the Tribunal came to the conclusion that the payment of commission could not be said to be justified on grounds of commercial expediency and section 36, sub section (1), clause (ii) had no application.
The assessee being aggrieved by the order made b the tribu nal applied for a reference of the question of law arising out of the order of the Tribunal and on the application of the assessee, the following question of law was referred for the opinion of the High Court: "Whether on the facts and circum stances of the case the sum of Rs. 45,380/ paid to L. Gurandittamal and L. Sahebdiyal, employees of the applicant firm is permissi ble deduction in computing the business income of the applicant ?" The High Court answered the question in favour of the Revenue.
The view taken by the High Court was that in order to attract the applicability of section 36, sub section (1), clause (ii), it was necessary that the payment of commission should be for services rendered and since there was no evidence led on behalf of the assessee to show that any extra services were rendered by Saheb Dayal and Gurditta Mal, which were responsible for increase in the sales and consequent enlargement of the overriding commission, there was no justification for payment of commission to them and the commission paid could not be said to be for services rendered.
The High Court in this view held that section 36, sub section (1), clause (ii) was not applicable and no claim for deduction could be sustained under it.
The correctness of this decision is impinged in the present appeal preferred by the assessee with special leave obtained from this Court.
533 Now, before we proceed to consider, the question which arises for determination before us, we must make it clear at the out set that m the present case the genuineness of the payment of commission made to Saheb Dayal and Gurditta Mal was at no time doubted by the Revenue authorities.
It was not the ease of the Revenue that this payment was not made or that it was sham or bogus.
If that had been the finding, there would have been an end of the case of the assessee.
No question would then have arisen for considering the applica bility of section 36, sub section (1), clause (ii).
No payment having been made, no deduction would have been permissible.
But here the commission was paid: it was a genuine payment and the only question was whether it was deductible as an allowable expenditure under section 36, sub section (1), clause (ii).
Section 36, sub section (1) provides for making of various deductions in computing the income of an assessee under the head: "Profits and Gains of Business or Profession" and one such deduction is set out in clause (ii) which, as it stood at the material time during the assessment year 1963 64, read as follows: "36(1)(ii) Any sum paid to an employee as bonus or commission for services rendered, where such sum would not have been payable to him as profit or dividend if it had not been paid as bonus or commission: Provided that the amount of bonus or commission is reasonable with reference to (a) the pay of the employee and the condi tions of his service; (b) the profits of the business or profes sion for the previous year in question; and (c) the general practice in similar busi ness or profession.
" Saheb Dayal and Gurditta Mal were admittedly employees of the assessee.
They were each paid a salary of Rs. 1000/ per month and for the previous year relevant to the assess ment year 1963 64 bonus equivalent to three months ' salary was also paid to each of them.
The income Tax Officer disal lowed even this salary and bonus paid to Saheb Dayal and Gurditta Mal on the ground that there was nothing to show that any services were rendered by them and the payment of salary and bonus appeared to be ex gratia.
But this deci sion was reversed in appeal by the Appellate Assistant Commissioner who, following his earlier order dated 12th December, 1967 in the appeal against the assessment to tax for the assessment year 1962 63, allowed the payment of salary and bonus as a deductible expenditure.
The Appel late Assistant Commissioner c:early recognised that Saheb Dayal and Gurditta Mal were employees of the assessee and were attending to the business of the assessee as such employees since a long time and Gurditta Mal was in fact "a seasoned and experienced businessman" and he looked after the assessee 's transactions with OCM and on behalf of 'he assessee advised OCM in connection with designs etc.
The Tribunal also found that Saheb Dayal and Gurditta Mal 534 "were looking after the business of the assessee firm for a long time".
Thus, there can be no doubt that services were rendered by Saheb Dayal and Gurditta Mal to the asses see and for these services, besides Salary and bonus, com mission was paid to them, because, according to the asses see, during the relevant accounting year, there was consid erable enlargement in the turnover of the sales with consequent increase in the amount of overriding commis sion and the assessee felt, on grounds of commercial expediency, that a part of the overriding commission should be paid to the two employees who had worked so well and contributed to the prosperity of the assessee.
The question is whether this commission qualifies for deduction as an allowable expenditure under section 36, sub section (1), cause (ii).
The only ground on which the High Court negatived the ap plicability of section 36, sub section (1), clause (ii) was that during the relevant accounting year Saheb Dayal and Gurditta Mal rendered the same services which they were rendering in earlier years and no extra services were ren dered by them which could justify payment of commission in addition to salary and bonus.
The High Court appeared to take the view that there must be correlation between the payment of commission and the services rendered and since commission was paid by the assessee for the first time during the relevant accounting year, there must be some extra services rendered by Saheb Dayal and Gurditta Mal in that year over and above the usual services rendered by them in the earlier years.
Since, according to the High Court, there was no proof that any extra services were rendered by Saheb Dayal and Gurditta Mal, the High Court held that the payment of commission could not be said to be for services rendered within the meaning of section 36, sub section (1), clause (ii).
This view taken by the High Court is, in our opinion, plainly erroneous.
Section 36, sub section (1 ), clause (ii) does not postulate that there should be any extra services rendered by an employee before payment of commission to him can be justi fied as on allowable expenditure.
What it requires is only this, namely, that commission paid to an employee should be for services rendered by him.
For example, if an employ ee has not rendered any services at all during the relevant accounting year, no commission can be paid to him which would be an allowable expenditure.
There must be some services rendered by an employee and where commission is paid for the services so rendered, section 36 sub section (1), clause (ii) would apply and the commission to the extent to which it is found reasonable would be an allowable expenditure under that provision.
It is not necessary that the commission should be paid under a contractual obligation.
It may be purely voluntary.
But it must be for services rendered and here services were in fact rendered by Saheb Dayal and Gurditta Mal during the relevant accounting year.
It is true that the services rendered by these two employees during the relevant accounting year were in no way greater or more onerous than the services ren dered by them in the earlier years, but that is immaterial.
There is no such requirement and the argument based on it cannot be sustained.
It is not justified by the language of section 36 sub section (1), clause (ii) and indeed, if it were pushed to its logical extreme, it would be difficult to support even payment of bonus as a permissible deduction under that provision.
Of course the circumstance that no additional services are rendered 535 by an employee would undoubtedly be of some relevance in determining the reasonableness of the amount of commission but it would have to be considered along with other circum stances and the question whether commercial expediency justified the payment of commission would have to be judged in the light of all the circumstances existing at the mate rial time.
This was the view taken by the Gujarat High Court in Laxmandas Sejram vs Commissioner of Income Tax, Gujarat, (1) and we wholly accept that view.
It is, therefore, no answer to the applicability of section 36, sub section (1), clause (ii) to say that no extra services were rendered by Saheb Dayal and Gurditta Mal during the relevant accounting year.
The amount of commission having been paid for services admittedly rendered by them, the only question would be whether it was reasonable under section 36, sub section (1), clause (ii).
Turning to the provisions of section 36, sub section (1), clause (ii), we find that the proviso to that clause lays down three factors for the purpose of determining the reasonableness of the commission paid to an employee.
The question whether the amount of the commission is a reasona ble amount or not has to be determined with reference to these three factors.
Sometimes these three factors are loosely described as conditions but they are not really conditions on the fulfilment of which alone the amount of commission paid to an employee can be regarded as reasona ble.
They are merely factors to be taken into account by the Revenue authorities in determining the reasonable ness of the amount of commission.
It may be that one of these factors yields a negative response.
To take an exam ple, there may be no general practice in similar business or profession to give commission to an employee, but, yet, having regard to the other circumstances, the amount of commission paid to the employee may be regarded as reasonable.
What the proviso requires is merely that the reason ableness of the amount of commission shall be determined with reference to the three factors.
But it is well settled that these factors are to be considered from the point of view of a normal, prudent businessman.
The reasonableness of the payment with reference to those factors has to be judged not on any subjective standard of the assessing authority but from the point of view of commercial expediency.
Let us see whether the amount of commission paid to Saheb Dayal and Gurditta Mal in the present case can be said to be reasonable from this stand point.
It is clear from the order of the Tribunal that reliance was placed by the Tribunal mainly and substantially on the fact that the nature of the work done by Saheb Dayal and Gurditra Mal remained unchanged in the relevant accounting year and there was nothing to show that the increase in the turnover during the relevant accounting year was as a result of any extra efforts made by these two employees and hence it could not be said that there were any special circumstances which warranted the payment of commission to them.
But, as al ready pointed out above the commission aid to an employee cannot be branded as unreasonable merely because the employ ee has done m the relevant accounting year the same work which he was doing in the earlier years.
Even where the nature of the work has remained the same, commercial expedi ency may require payment of commission to an employee.
Here, Saheb Dayal and Gurditta (1) 536 Mal were each receiving a salary of Rs. 1000/ per month and besides this salary, there were admittedly no other perqui sites given to them.
They were the persons attending to the business of the assessee and in fact Gurditta Mal was an experienced and seasoned businessman and it was he who was advising OCM in regard to designs etc.and he and Saheb Dayal were primarily responsible for the flourishing state of the business.
The turnover of the sales of the assessee steadily rose from 1960 61 and in the relevant accounting year, it reached the exciting figure of Rs. 54.28 lacs.
So also the overriding commission which started with the modest figure of Rs. 35,964/ in the accounting year relevant to the assessment year 1960 61 went on steadily increasing from year to year until it reached the figure of Rs. 1,13,449/ in the relevant accounting year.
The assessee, therefore, felt that in view of the tremendous progress in the business which was largely the result of the services rendered by Saheb Dayal and Gurditta Mal, apart of the overriding commission should be paid to them, so than they may carry a sense of satisfaction that their efforts have been suitably rewarded and they may have an added incentive to work and may be spurred to greater efficiency in the future.
It may be noted that the overriding commission of the assessee during the relevant accounting year was Rs. 1,13,449/ and the total profit was Rs. 3,08,034/ and if out of this total profit of Rs. 3,08,034/ , an aggregate sum of Rs. 45,380/ was paid to Saheb Dayal and Gurditta Mal as commission, it is difficult to see how such payment could be regarded as unreasonable.
It is true that there was no obligation on the assessee to make payment of this commission to Saheb Dayal and Gurditta Mal, but it is now well settled that the mere fact that commission is paid ex gratia would not necessarily mean that it is unreasonable.
Commercial expediency does not mean that an employer should not make any payment to all employee unless the employee is entitled to it under a contract.
Even where there is no contract, an employer may pay commission to an employee if he thinks that it would be in the interest of his business to do so.
It is obvious that no business can prosper unless the employees engaged in it are satisfied and contented and they feel a sense of involvement and identifi cation and this can be best secured by giving them a stake in the business and allowing them to share in the profits.
It would indeed be a wise step on the part of an employer to offer incentive to his employees by sharing a part of his profits with them.
This would not only be good business but also good ethics.
It would be in consonance with Gandhian concept as also modern socialistic thought which, with its deeply rooted faith in social and economic democracy, regards; the employees as much as the employer as co sharers in the business.
If an employer earns profits to which the employees have necessarily contributed by putting in their labour, there is no reason why the employer should not share a part of these profits with the employees.
That is the demand of social justice today and it is high time that the administration of our tax law recog nised it and encouraged sharing of profits by employers with employees by adopting a progressive and liberal approach in the applicability of section 36, sub section (1), clause (ii) What is the requirement of commercial expediency must bejudged not in the light of the 19th Century laissez faire doctrine which regarded man as an economic being concerned only to protect and 537 advance his serf interest but in the context of current socio economithinking which places the general interest of the community above the personal interest of the individu al and believes that a business or undertaking is the product of the combined efforts of the employer and the employees and where there is sufficiently large profit, after providing for the salary or remuneration of the employer and the employees and other prior charges such as interest on capital, depreciation, reserves etc,a part of it should in all fairness go to the employees.
We are, there fore, of the view that the sum of R.s. 45,380/ paid by the assessee to Saheb Dayal and Gurditta Mal by way of commission during the relevant accounting year was reasona ble having regard to all the circumstances of the case and it ought to have been allowed as a deductible expenditure under section 36, sub section (1), clause(ii).
We accordingly allow the appeal, set aside the judgment of the High Court and answer the question referred by the Tribunal in the affirmative in favour of the assessee.
The Commissioner will pay the costs of the appeal as also of the reference to the assessee.
S.R. Appeal allowed.
[/INST]Per section R. DAS, ACTING C.j., VIVIAN BOSE, BHAGWATI AND JAGANNADHADAS JJ., SINHA J. dissenting.
The exemption created by the provisions of section 5(2)(a)(iii) of the Bengal Finance (Sales Tax) Act of 1941 must be construed strictly and cannot be extended to sales to Government departments other than those mentioned therein.
The Department of Industries and Supplies, which was subse quently redesignated as the Ministry of Industries and Supplies, was not the same as the Indian Stores Department or the Supply Department of the Government of India and, consequently, sales made to the Ministry of Industries and Supplies are not exempt from payment of sales tax under that section.
In a welfare State with ever expanding activities in different fields including trade and commerce, Government departments are often entrusted with the performance of well defined activities and are authorised to deal with the outside world and enter into transactions in the same way as an ordinary person or a Company may do and may well be regarded as distinct units or quasi legal entities for the purpose for which they are created.
Consequently, the sales of hessian made to the Ministry of Industries and Supplies of the Government of India by the appellant Mills were not exempt from payment of sales tax under the Act and the State of West Bengal was entitled to levy the same.
1077 Per SINHA J.
The language of a statute has sometimes to be construed in a modified form in order to give effect to the real intentions of the legislature where, as in the present case, the language is only of a descriptive nature and not a definitive one.
Miller vs Salomons ([1852] 7 Exchequer 475), referred to.
Commissioners of Inland Revenue vs Forrest ([1890] 15 A. C. 334), held inapplicable.
The terms of section 5(2)(a)(iii) indicate that the exemption created attaches to a particular function of the Government of India described by a certain name.
The change of nomenclature was, therefore, of no consequence so long as a particular department continued to discharge that function, namely, that of purchasing articles including hessian for the Government of India.
History of the department shows that the Ministry of Industry and Supply is a lineal descendant of the Indian Stores Department and was at the time of the contract discharging its function on behalf of the Government of India and, consequently, the sales made to it must be held to be exempt from payment of sales tax.
A department of the Government is neither a natural nor a legal person but is one of the many functions of a Government placed in charge of a hierarchy of officials with the head of the department at the apex.
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<s>[INST] Summarize the judgementt Petition No. 8118 of 1983.
Under article 129 of the Constitution read with Section 15 of the .
762 Subhash Sharma, N. M. Popli and K. R. R. Pillai for the petitioner.
section N. Kacker and Altaf Ahmad for Respondent No. 1.
M. C. Bhandare E. C. Agarwala and Mrs. Indira Sawhney for Respondent.
The Judgment of the Court was delivered by CHANDRACHUD, C.J.
This is a petition asking that the respondents be committed for contempt for certain statements allegedly made by Respondent 1, who is the Chief Minister of Jammu and Kashmir.
Respondent 2 is the Editor of a newspaper called Daily Kashmir Times in which those statements were published, while Respondent 3 is its correspondent.
In the issue of the Daily Kashmir Times dated November 13, 1982, a news item appeared under the caption "CM asks engineers to forcibly occupy club building".
According to the report, the Chief Minister, while addressing the annual general meeting of the Institute of Engineers, said that the engineers should occupy a certain building forcibly as it would not be possible for them to evict the Amar Singh Club through the normal legal process and that he would provide the necessary police assistance for that purpose.
The report says that the Chief Minister advised the Institute of Engineers to move quickly in the matter before the management of the Club could obtain a stay order from the Court.
Another news item appeared in the same newspaper on November 23, 1982 under the caption "Chief Minister says he will never accept courts ' stay orders".
According to the report, the Chief Minister, while addressing a rally of Judicial Employees ' Welfare Association, denounced and ridiculed the judiciary by saying that "justice is being bought in the judicial courts".
Taking exception to the frequent stay orders issued by the Courts against the Government, the Chief Minister is alleged to have said: "I will never honour these stay orders even if I am hanged", that justice could be bought with money and that this task could be performed conveniently by any leading lawyer.
The news item concludes by saying that later, the Chief Minister expressed his regret to the Chief Justice and other Judges of the High Court who were present at the meeting, explaining that the strong words used by him were the voice of his conscience but, otherwise, he had the greatest regard 763 for the judiciary, and that he only wanted quick justice for the people.
On March 18, 1983 a notice was issued by this Court to the respondents asking them to show cause why action under the should not be taken against them.
Since one of the respondents is a Chief Minister, we assumed that there would be no difficulty in serving the notice upon him and he would file his reply promptly, in view of the seriousness of the allegations made against him.
But, until September 26, 1983 no counter affidavit was filed in the matter.
When the Contempt Petition was called out on that date, Mr. Altaf Ahmed, accepted the notice on behalf of the Chief Minister.
On that date, the Court directed the Chief Minister to file his counter affidavit within four weeks.
On October 21, 1983 the Registry submitted a report to the Court that Mr. Altaf Ahmed had not yet filed his appearance for the Chief Minister.
On November 21, 1983 an affidavit dated November 9, 1983 of the Chief Minister was taken on record.
Since the Chief Minister denied by that affidavit that he had made the kind of statements attributed to him, we issued a specific direction that Respondent 2, the Editor of Daily Kashmir Times, should appear in person before the Court on November 28, 1983.
That was with a view to obtaining his explanation as to how the newspaper came to publish the various statements which the Chief Minister denied he had ever made.
Respondent 2 appeared before us on November 28, 1983 and stuck to the version published in the newspaper.
In the light of that, we reverted to the counter affidavit filed by the Chief Minister when we found that it did not traverse the allegations of the petitioners satisfactorily.
We therefore directed him to file a further affidavit dealing with the allegations against him clearly and specifically.
In pursuance of that direction, Respondent I filed an affidavit dated December 14, 1983.
By his affidavit dated January 9, 1984, Respondent 2 has adhered to his original stand that the report which appeared in the Daily Kashmir Times was true and correct.
According to him, the Chief Minister did make the various statements complained of and that his denial is untrue.
If we were satisfied that the Chief Minister had made the statements attributed to him, it would have been a serious matter.
Then, we could not have dismissed the peroration as an ill tempered 764 outburst of an uninformed person.
Considering the high position which Chief Ministers occupy in the public life of our country, their words and deeds have to be presumed to be intended.
The defence that what was said or done was not intended is not open to persons occupying high public offices.
The formal expression of regard for the courts under the pressure of a contempt notice becomes a mere escape if speeches and writings betray defiance of judicial authority and constitute an exhortation to the public to disregard orders passed by courts.
But, the Chief Minister denies to have made the utterances, as stoutly as the editor asserts that the reports of the speeches published in his newspaper are true.
There is word against word, and no preponderating circumstance which, objectively, compels the acceptance of the word of one in performance to the word of the other.
We have two responsible persons before us who pursue honourable professions: one is the Chief Minister of a State and the other is the editor of a newspaper.
Both cannot be true in their contentions before us.
One of them has clearly violated the law of contempt.
If the Chief Minister said what is alleged, he is in contempt.
If he has not, the editor has committed contempt by publishing a false report of a scurrilous speech that was never made.
In face of denial by one and an assertion by the other without more, it is difficult to decide who is right.
On one hand is the tendency to ridicule the system of justice and malign those who administer it.
On the other is the propensity of the fourth estate for some little sensation and its political involvement.
When political considerations pollute the stream of life, sifting truth from falsehood becomes a formidable and forbidding task In these circumstances, we are unable to record a positive finding that the allegation that the Chief Minister made the particular statements is proved beyond a reasonable doubt.
What is involved in this petition is criminal contempt and, therefore, it is necessary to apply that particular standard of proof.
There is one circumstance which puts us on our guard in accepting the contempt petition.
That circumstance is that though, during the course of arguments, it was stated at the Bar on behalf of the petitioners that the learned Judges of the Jammu & Kashmir High Court were present at one of the functions and that they walked out of the meeting on hearing the 'abusive ' language used by the Chief Minister, no attempt was made to establish the truth of that assertion.
A walk out by Judges of the High Court during the speech of the Chief Minister or soon after he ended it, would have lent considerable weight to the allegation that the statements made by the Chief Minister were open to grave objection.
765 But we record the finding of 'not guilty ' with a caveat.
It is not for us to advise a chosen representative of the people as to how he should conduct his public affairs and what precautions he should take in order to protect himself from similar allegations in future.
But, it causes us some surprise that there is on official record whatsoever of the speeches made by the Chief Minister at the two functions.
He was invited at those functions in his capacity as the Chief Minister.
And admittedly, he spoke at those functions.
With the little knowledge that we have of these matters, we suppose that when a Chief Minister makes a formal speech, an official record of the speech is generally available.
If he speaks from a prepared text, that forms the record of what he spoke.
But, whether he speaks from a text or speaks extempore, it is unlikely, in the times in which we live, that a speech made by a Chief Minister on a formal occasion will not be taken down or tape recorded.
Tapes have become a part of our life, public and private, sometimes to the point of annoyance.
In times when mechanical gadgets have become the order of the day and 'taping ', especially, has become a common practice, it is surprising that no one taped or took down the speeches of a person as important as the Chief Minister.
No written record, kept contemporaneously or prepared soon after, is cited to contradict the allegation that the Chief Minister scandalized the Courts and assailed the character of Judges.
As we said, it is not for us to advise any one, least of all those who, in the discharge of their onerous responsibilities, have their own select group of advisers.
But, we cannot restrain the observation that it is so much safer for persons who have to make frequent public appearances to have their utterances duly put on paper, before of soon after the event.
For those who have nothing to conceal or fear, that is a prudent course of action.
For the rest, a constant friction with the law of contempt is inevitable.
The former will lay their cards on the table and be cleared.
The latter have to live in the hope that the rigorous standard of 'proof beyond a reasonable doubt ' will act as their saviour.
The latter course of conduct leaves much to be desired from the point of view of men of honour.
Courts are not astute to reason to their power to punish any one for criminal contempt.
But that reluctance should not be overtaxed.
The reluctance of courts to resort to the provisions of the springs from their regard for the rule of law.
The role of a prosecutor is incompatible with the role of a judge.
In matters involving allegations of criminal contempt of Court, these roles are combined and the Court has to act both as a 766 prosecutor and as a judge.
True, that it acts in order to uphold the authority of law and not in defence of this or that particular judge.
But an order punishing a person for such contempt is likely to create the impression, more so in the mind of lay observers, that the judges have acted in defence of themselves.
Courts do not like to create such an impression even unwittingly.
Secondly, the right of free speech is an important right of the citizen, in the exercise of which he is entitled to bring to the notice of the public at large the infirmities from which any institution suffers, including institutions which administer justice.
Indeed, the right to offer healthy and constructive criticism which is fair in spirit must be left unimpaired in the interest of public institutions themselves.
Critics are instruments of reforms, not those actuated by malice but those who are inspired by the spirit of public weal.
Bona fide criticism of any system or institution is aimed at inducing the administrators of that system or institution to look inwards and improve its public image.
Courts do not like to assume the posture that they are above criticism and that their functioning needs no improvement.
But it is necessary to make it clear that though law does not restrain the expression of disapprobation against what is done in or by courts of law, the liberty of free expression is not to be confounded with a licence to make unfounded allegations of corruption against the judiciary.
The abuse of the liberty of free speech and expression carries the case nearer the law of contempt.
We would also like to remind those who criticise the judiciary that it has no forum from which to defend itself.
The legislature can act in defence of itself from the floor of the House.
It enjoys privileges which are beyond the reach of law.
The executive is all powerful and has ample resources and media at its command to explain its actions and, if need be, to counter attack.
Those who attack the judiciary must remember that they are attacking an institution which is indispensable for the survival of the rule of law but which has no means of defending itself.
In the very nature of things, it cannot engage itself in an open war, nor indulge in releasing contradictions.
The sward of justice is in the hands of the Goddess of Justice, not in the hands of mortal judges.
Therefore, Judges must receive the due protection of law from unfounded attacks on their character.
The Chief Minister has stated in his affidavit that he spoke extempore.
We are not on that.
In the first place, extempore speeches confer no greater immunity on the speaker than the 767 speeches made from prepared texts.
Secondly, extempore speeches are not to be made without the application of a careful mind.
That is not the definition of an extempore speech.
Thirdly, more the extempore, greater the need to keep a written record of the spoken word.
In the written record lies the safety of the public speaker, though not, perhaps, the benefit of posterity.
In the result, we dismiss the contempt petition.
P.B.R. Petition dismissed.
[/INST]On February 2, 1966, the Respondent No. 1, B. A. Jayaram had been granted by the Regional Transport Authority, Bangalore, a stage carriage permit on the inter state route Guddapah in the State of Andhra Pradesh to Bangalore in the Karnataka State, which was duly countersigned by the State Transport Authority, Andhra Pradesh.
On 10.1 1968, the Mysore (Karanataka) State granted its approval under section 68(D)(2) of the Motor Vehicle Act, 1939, to a scheme, popularly known as the "Kolar Pocket Scheme", to nationalize passenger transport service between Bangalore and various places in the Kolar District, as also certain routes within the Kolar District, covering 87 inter state routes referred to in its appendix.
Under clause 4 of the "Kolar Pocket Scheme", the existing permit holders on the inter state routes, were permitted to continue to operate such inter state routes subject to the conditions that their permit shall be rendered ineffective for the overlapping portions of the notified routes.
The route between Bangalore and Royal pad in the State of Karnataka formed part of the route between Bangalore and Cuddapah and was covered by the Scheme, with the result that the First Respondent 's permit for the said portion of the Bangalore Cuddapah route became ineffective and consequent that the vehicles operated by him could not either pick up or set down passengers on the Bangalore Royalpad portion of the Bangalore Cuddapah route though they could traverse the said portion.
On January 24,1973, the first respondent made an application to the Second Respondent the Karnataka State Transport Authority for varying the conditions of the stage carriage permit granted to him by increasing the number of trips on the Bangalore Cuddappah route from one trip per day to two trips per day so as to eliminate one overnight halt at either of the two terminal.
The said application having been rejected, the First Respondent filed a writ petition No. 3360/74 which was allowed and a mandamus issued to the Second Respondent to dispose of the application in accordance with law holding that the said Scheme did not ope 769 rate as a bar to increasing the number of trips on an existing inter state route.
The Second Respondent accordingly invited representation in connection therewith.
In the meantime, the Appellant the Karnataka State Road Transport Corporation, filed on November 27, 1974 a writ petition No. 6399/74 to recall the order made in the said writ petition No. 3360/74 and to rehear it after impleading the Appellant as a respondent thereto.
The writ petition was dismissed holding that the appellant was not a necessary party to writ petition No. 3360/74.
On December 23/24, 1974, the Second Respondent granted to the first respondent the additional trip applied for by him.
Against the order of dismissal of the W.P. 6399/74, the Appellant filed, an appeal No. WA 949/1979 under section 4 of the Karnataka High Court Act, 1961 (Mysore Act V of 1962).
On a reference by the Division Bench, the Full Bench by its Judgment delivered on September 19, 1979, opined that "If the condition of a permit for operating a stage carriage over a route is altered by increasing the maximum number of trips over that route specified earlier in the permit such variation of the condition of the permit does not amount to grant of a ner permit".
The Third Respondent who had been granted three stage carriage permits on three different inter state routes, namely, Bangalore to Cuddapah, Bangalore Kalabasti, and Bangalore to Vellore applied on June 11, 1979 to the Second Respondent for varying the conditions of the said three permits by increasing the number of vehicles by an additional vehicle on each route and by increasing the number of trips from two to four on each route, that is for two round trips, which were granted.
The Fourth respondent who did not file any objection to the applications of the Third Respondent filed three writ petitions being writ petitions Nos.
16247 16249 of 1979 in the High Court against the said orders of variations of the Third Respondent 's permits.
The writ petitions having been dismissed he preferred three appeals being W.A. Nos.
1285 87/1979 and an application to implead himself as a respondent in WA No.949/74 filed by the appellant, though he had never objected to the grant of the variation to the First Respondent earlier.
The writ appeals were dismissed on 22.2.1980.
His application to implead himself as a respondent to the said Writ Appeal No. 949/79 was granted.
The Fourth Respondent thereafter filed three special leave petitions Nos.
5141 43 of 1979 against the order dated 22.2.1980 dismissing his appeals.
He has also filed another special leave petition No. 4771/80 against the Judgment in W.A. No. 949/74 by virtue of his having been allowed to be impleaded by the High Court of Karnataka as third respondent thereto though it was not all necessary since in the writ appeal No. 949 of 1974 which was dismissed on 22.2.1980, the Karnataka High Court granted to the appellant a certificate of fitness to appeal to the Supreme Court.
Dismissing the appeal, the Court ^ HELD: 1: 1.
Section 57(8) of the does not create a legal fiction and grant of an application for variations in the conditions of a permit in respect of matter set out in section 57(8) does not result in the grant of a new permit.
Admittedly the language of sub section (8) is not one which is normally used by legislatures in creating a legal fiction for sub.s.
(8) does not state that an application of the nature referred in that sub section is to be deemed to be an application for the grant of a new permit.
[787D E] 1: 2.
Section 57 is a procedural section.
Its various sub sections form 770 an integral whole providing for the manner in which an application for variation of certain conditions of a permit is to be made, the mode of inviting objections thereto and the disposal of such applications and objections.
[787E F] 1: 3.
Reading sub section (8) in the context of sub sections (3) to (7) and in juxtaposition with them, it is clear that the legislative instant in enacting that sub section was to prescribe the procedure to be followed when an application for variation of the conditions of a permit referred to in that sub section is made, this procedure being the same as is laid down in sub sections (3) to (7) with respect to an application for a new stage carriage permit or a new public carrier 's permit.
It is for the purpose of providing that the procedure to be followed in the case of an application made under sub sections (8) is to be the same as the procedure to be followed in the case of an application for a new permit that sub section (8) uses the words "shall be treated as an application for the grant of a new permit.
" By the use of these words what sub section (8) does is to incorporate in it the provisions of sub sections (3) to (7).
This is a very different thing from enacting a legal fiction.
[787B D] East Eng.
Dwelling Co. Ltd. vs Finsbury Borough Council, [1951] 2 All.
E.R. p. 587, 589 H.L.; quoted with approval.
State of Bombay vs Pandurang Vinayak Chaphalkar and others.
[1953] S.C.R. p. 773, 778 9; M/s. Shivchand Amolokchand vs Regional Transport Authority and Anr.
[1984] I S.C.R. 288=A.I.R. ; followed.
Assuming that the application for variation of the conditions of a permit referred to in sub section (8) of section 57 is to be deemed to be by a fiction of law to be an application for a new permit, the question to be considered is for what purpose is such an application to be deemed to be an application for grant of a new permit.
Reading sub sections (3) to (8) of section 57 as a whole, it is clear that the only purpose is to apply to such an application for variation the procedure prescribed by sub sections (3) to (7) of section 57 and not for the purpose of providing that when the application for variation is granted, the permit so varied would be deemed to be a new permit.
If the permit so varied were to be deemed to be a new permit, the result would be anomalous.
[789A C] Ex parte Walton, In Re Levy ; 756 CA; Arthur Hill vs East and West Dock Co. , 456; The Bengal Immunity Co. Ltd. vs The State of Bihar and others, 647; The Commissioner of Income tax, Bombay City, Bombay vs Amarchand N. Shroff [1963] Supp.
I S.C.R. 699, 709; Maharani Madalasa Devi vs M. Ramnarayan (P) Ltd. and others; , , 424; Commissioner of Income tax, Gujarat vs Vadialal Lalubhai, ; , 1064; referred to.
In the case of an existing inter state permit exempted under the said Scheme an increase in the number of trips or the number of vehicles allowed to he operated under such a permit would not be inconsistent with the provision of the said Scheme.
There is no inconsistency between an increase in the number of vehicles or trips allowed under such a permit and the provisions of the said scheme.
So far as the portions of the interstate route covered by the said scheme are concerned, the permits of the existing permit holders have been 771 rendered ineffective.
Further by the said Scheme as notified by a notification dated January 10, 1980, the existing permit holders are not allowed to pick up or set down passengers on these portions of the notified routes.
Whether one vehicle or more traverse these portions or whether the same vehicle traverses such portion more than once cannot in any manner affect the services operated by the Appellant on such portions since no passengers are allowed to be picked up or set down on such portions All that would happen is that these vehicles, in the source of their inter state operation would traverse these portions of the notified routes without in any way operating as stage carriages for such portion .
[790C F]
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<s>[INST] Summarize the judgementminal Appeal 185of 1967.
Appeal by special leave from the judgment and order dated May 18, 1967 of the Punjab and Haryana High Court in Cri minal Appeal No. 247 of 1967 and Murder Reference No. 23 of 1967.
A.S.R. Charl, B. A. Desai, section C. Agarwal, A. K. Gupta, Shiva Pujan Singh and Virendra Verma, for the appellant.
Hans Rai Khanna and R. N. Sachthey, for the respondent.
The Judgment of the Court was delivered by Bhargava, J.
Bhupendra Singh has come up to this Court in appeal by special leave against a judgment of the High Court of Punjab and Haryana confirming the sentence of death awarded to him by the Sessions Judge of Jullundur for an offence, under section 302 of the Indian Penal Code and dismissing his appeal against the conviction and sentence.
The conviction of the appellant was recorded for committing the murder of one Gurdarshan Singh who was living in the same.
village Birpind as the appellant in the house adjoining the appellant 's house.
The appellant 's father, Ajit Singh, also lived with the appellant, while, with Gurdarshan Singh, were living his sons, Gurdial Singh and Sarvjit Singh, and his daughter Gian Kaur.
According to the prosecution, on the 6th November, 1965, at about 7.45 p.m., the two brothers, Gurdial Singh and Sarvjit Singh, happened to be standing in front of their house talking to each other, when the appellant came out of his house and asked them what they were talking about.
Gurdial Singh replied that he and Sarvjit Singh were brothers and were talking between themselves and it was no business of the appellant to interfere.
The appellant, thereupon, abused the two brothers and also slapped Sarvjit Singh on the face.
Gurdial Singh asked the appellant why he had beaten his brother and used abusive language against the appellant.
The appellant got enraged, ran into his house abusing the two boys, and return 406 ed with a double barrel 12 bore gun.
When he came out of his house this time, he was accompanied by his father, Ajit Singh.
Gurdial Singh and Sarvjit Singh then ran into the 'deorhi ' of their house.
In the meantime, their father, Gurdarshan Singh, and their sister, Gian Kaur, returned to the house from their fields.
When Gurdarshan Singh saw the appellant carrying the gun, he enquired what the matter was.
Thereupon, Ajit Singh raised a 'lalkara ' asking his son, the appellant, to finish off Gurdarshan Singh.
The appellant then fired two shots in quick succession from his gun hitting Gurdarshan Singh on vital parts of his body.
Gurdarshan Singh fell down dead on the ground.
One Malkiat Singh, who lived in a house nearby, had arrived and saw this occurrence, so that the four persons, who witnessed the occurrence.
were Malkiat Singh, Gurdial Singh, Sarvjit Singh and Gian Kaur.
Gurdial Singh, leaving others to look after the dead body of his father, went with Lal Singh, Lambardar, to the Police Station which was situated at a distance of about three miles and lodge the First Information Report at about 9.30 p.m. on the same day.
The ,case was then investigated.
A post mortem examination on the corpse of Gurdarshan Singh was performed and articles like pellets, blood stained cardboard pieces lying near the scene of occurrence were taken into their possession by the Police.
Both the appellant and his father, Ajit Singh, were thereafter prosecuted for this murder.
The appellant was charged with being the principal offender in committing the murder, while his father, Ajit Singh, was prosecuted for having participated in the murder with the common intention that Gurdarshan Singh should be killed.
However, before the trial could take place in the Court of Sessions, Ajit Singh was murdered and, for that murder, Gurdial Singh was prosecuted.
In the case, at the first stage before the Court of the Committing Magistrate, both Ajit Singh and the appellant took the plea that neither of them was responsible for committing the murder of Gurdarshan Singh and contented themselves with denying the correctness of the prosecution case.
In the Court of Sessions, when the appellant was examined under section 342 of the Code of Criminal Procedure, he came forward with the plea that it was his father, Ajit Singh, who actually fired and killed Gurdarshan Singh.
He pleaded that he himself was not present in this village at all and was, in fact, that day staying at Phillaur.
He, thus, put forward the plea of alibi.
The Sessions Judge believed the evidence of the four prosecution witnesses mentioned above, and, after discussing the defence evidence given on behalf of the appellant in support of his pleas.
rejected that evidence.
He did not accept the defence evidence that Gurdarshan Singh was fired at by Ajit Singh and he also, held that the evidence given on behalf of the appellant to prove 407 his alibi could not be relied upon.
On these findings, the Sessions Judge convicted the appellant and sentenced him to death for committing the murder of Gurdarshan Singh.
When the case came up before the High Court, the High Court briefly examined the evidence of the prosecution witnesses and held that their evidence was reliable.
The High Court did not, however, go into the defence evidence, because the counsel appearing for the appellant, according to the High Court, frankly admitted that there was no substance in it.
On this view, the High Court dismissed the appeal of the appellant and confirmed his sentence of death.
In this appeal, the principal question that was canvassed before us on behalf of the appellant was that the High Court, in not examining the defence evidence for itself on the simple ground that counsel for the appellant admitted that there was no substance in it, committed an error and did not properly discharge its duty.
It appears that there is substance in the submission made on behalf of the appellant.
Ordinarily, in a criminal appeal against conviction, the appellate Court, under section 423 of the Code of Criminal Procedure, can dismiss the appeal, if the Court is of the opinion that there is no sufficient ground for interference, after examining all the grounds urged before it for challenging the correctness of the decision given by the trial Court.
It is not necessary for the appellate Court to examine the entire record for the purpose of arriving at an independent decision of its own whether the conviction of the appellant is fully justified.
The position is, however, different where the appeal is by an accused who is sentenced to death, so that the High Court dealing with the appeal has before it, simultaneously with the appeal, a reference for confirmation of the capital sentence under section 374 of the Code of Criminal Procedure.
On a reference for confirmation of sentence of death, the High Court is required to proceed in accordance with sections 375 and 376 of the Code of Criminal Procedure and the provisions of these sections make it clear that the duty of the High Court, in dealing with the reference, is not only to see whether the order passed by the Sessions Judge is correct, but to examine the case for itself and even direct a further enquiry or the taking of additional evidence if the Court considers it desirable in order to ascertain the guilt or the innocence of the convicted person It is true that, under the proviso to section 376, no order of confirmation is to be made until the period allowed for preferring the appeal has expired, or, if an appeal is presented within such period, until such appeal is disposed of, so that, if an appeal is filed by a condemned prisoner that appeal has to be disposed of before any order is made in the reference confirming the sentence of death.
In disposing of such an appeal, however, it is necessary that the High Court should keep in view its duty under section 375 of the Code of Criminal Procedure and, consequently, the Court must examine the appeal record for itself,.
408 arrive at a view Whether a further enquiry or taking of additional evidence is desirable or not, and then come to its own conclusion on the entire material on record whether conviction of the condemned prisoner is justified and the sentence of death should be confirmed.
In Jumman and Others vs The State of Punjab( '), this Court explained this position in the following words: ". . but there is a difference when a reference is made under section 374, Criminal Procedure Code, and when, disposing of an appeal under section 423, Criminal Procedure Code, and that is that the High Court has to satisfy itself as to whether a case beyond reasonable doubt has been made out against the accused persons for the infliction of the penalty of death.
In fact the proceedings before ' the High Court are a reappraisal and the reassessment of the entire facts and law in order that the High Court should be satisfied on the materials about the guilt or innocence of the accused persons.
Such being the case, it is the duty of the High Court to consider the proceedings in all their aspects and come to an independent conclusion on the materials, apart from the view expressed by the Sessions Judge.
In so doing, the High Court will be assisted by the opinion expressed by the Sessions Judge, but under the provisions of the law above mentioned it is for the High Court to come to an independent conclusion of its own.
" The same principle was recognised in Ram Shankar Singh Others, vs
State of West Bengal (2) :_ ".
The High Court had also to consider what order should be passed on the reference under section 374, and to decide on an appraisal of the evidence, whether the order of conviction for the offences for which the accused were convicted was justified and whether, having regard to the circumstances, the sentence of death was the appropriate sentence." In Masalti V. State of U.p.(3) this Court was dealing with an appeal under Article 136 of the Constitution and, in that appeal, on behalf of the persons who; were under sentence of death, a point was sought to be urged which was taken before the trial Court and was, rejected by it, but wits not repeated before the High Court.
This Court held: ". . it may, in a proper case, be permissible to the appellants to ask this Court to consider (1) A.I.R. 1957 S.C. 469.
(2) [1962] Supp.
I S.C.R. 49 at p. 59.
(3) ; at P. 144. 409 that point in an appeal under Article 136 of the Constitution; after aft in criminal proceedings of this character where sentences of death are imposed on the appellants, it may not be appropriate to refuse to consider relevant and material pleas of fact and law only on the ground that they were not urged before the High Court.
If it is shown that the pleas were actually urged before the High Court and had not been considered by it, then, of course the party is entitled as a matter of right to obtain a decision on those pleas from this Court.
But even otherwise no hard and fast rule can be laid down prohibiting such pleas being raised in appeals under article 136.
" In view of these principles indicated by us above, and in view of the fact that, in this case, the ' High Court did not properly examine the defence evidence on the ground that the counsel for the appellant in that Court admitted that there was no substance in it, we permitted learned counsel for the appellant in this appeal to take us through the entire evidence on the record given by the prosecution and the defence so as to enable us to form our own judgment about the correctness of the conviction and sentence of the appellant.
We, however, find that, after examining the entire evidence, we are unable to hold that any grounds are made out for interference with the conviction.
The prosecution case, as already mentioned by us above, is supported by the evidence of four eye witnesses, Gurdial Singh, Sarvjit Singh, Gian Kaur and Malkiat Singh.
Three of these witnesses, Gurdial Singh, Sarvjit Singh and Gian Kaur are the sons and daughter of the deceased Gurdarshan Singh, but this circumstance, in our opinion, does not detract from the value to be attached to their evidence, because, naturally enough, they are interested in seeing that the real murderer of their father is convicted of the offence and they cannot be expected to adopt a course by which some innocent person would be substituted for the person really guilty of the murder.
None of these witnesses had any such enmity with the appellant as could induce him to give false evidence and to substitute him as the murderer in place of the person really guilty.
In fact, their feelings. would be strongest against the real culprit and, consequently, their evidence cannot be discarded on the mere ground of their close interest in the deceased.
Malkiat Singh has been held both by the Sessions Judge and the High Court to be an independent witness and we find no reason to differ from the view taken by the two Courts.
On behalf of the appellant, it was sought to be.
urged that Malkiat Singh bore a grudge against Ajit Singh, because Ajit Singh had been instrumental in the adoption of a son by Malkiat Singh 's real uncle, Veer Singh, with the result that Malkiat Singh was 410 deprived of the succession to the property of his uncle.
Malkiat Singh denied that he had any grievance against Ajit Singh on such a ground.
In support of the plea put forward on behalf of the appellant, one defence witness, Niranjan Singh was examined who claimed to be the son of another real uncle of Malkiat Singh.
Niranjan Singh came to depose that his son, Sadhu Singh, had been adopted by Veer Singh and this adoption took place because Ajit Singh had asked Veer Singh to take Sadhu Singh in adoption.
Niranjan Singh had, however, to admit that, in the deed of adoption, the person adopted is described as Mukhtiar Singh and not Sadhu Singh.
To explain this discrepancy, Niranjan Singh came forward with the assertion that his son, Sadhu Singh, bore an alias Mukhtiar Singh.
If Sadhu Singh was the real and principal name of the boy adopted by Veer Singh, there is no reason why that name was not mentioned in the deed of adoption and why the person adopted was described only as Mukhtiar Singh.
There is further the circumstance that, even according to Niranjan Singh, Malkiat Singh, witness, did not try to challenge the adoption, even though the adoption had taken place in April 1965, seven months before this incident.
Malkiat Singh had stated that he had no grievance against Ajit Singh and was in fact not interested in challenging the adoption.
In these circumstances, we do not think that Malkiat Singh can be said to be an interested witness and must hold that his evidence has been rightly relied upon.
The time of the murder was not only proved by the evidence of these four witnesses, but is also borne out by the circumstance that the First Information Report was lodged at the Police station three miles away at about 9.30 p.m. without any undue delay.
On behalf of the appellant, it was urged that the First lnformation Report was in fact recorded much later and not at 9.30 p.m. the same day, on the basis that the copy of that report sent to the Ilaqa Magistrate was received by him at 10.30 a.m. on 8th November, 1965.
The argument was that, if the report had been lodged at 9.30 p.m. on 6th November 1965, the copy should have reached the Magistrate the same night or early on the 7th November and not as late as 8th November.
We are unable to accept this submission.
The evidence of Gurdial Singh was perfectly clear that he reached the police station and lodged the report that very night at 9.30 p.m. and there is no reason to disbelieve him.
It appears that in this case, the investigating officer, Sub Inspector Ram Saran Dass was, to some extent, negligent.
In the report lodged by Gurdial Singh, the facts given clearly made out an offence of murder, and yet the Sub Inspector chose to register the case wrongly as for an offence under section 304 read with section 34 of the Indian Penal Code.
It may be that, having wrongly put down the offence as under 304 I.P.C. 'instead of section 102, the Sub Inspector did not consider it necessary to 411 send the report to the Ilaqa Magistrate the same night and delayed sending it, so that it was received at 10 30 a.m. on 8th November, 1965 by the Magistrate.
It is also not clear from the evidence whether, apart from the copy of the First Information Report sent to the Ilaqa Magistrate, any special report was also sent to the Magistrate by the Sub Inspector.
In any case, we do not think that this late receipt of the copy of the First Information Report by the Magistrate can lead to the inference that Gurdial Singh is not right in saying that he had the report recorded the same night at 9.30 p.m.
The evidence of the doctor who performed the post mortem examination and of the ballistic expert clearly establish that Gurdarshan Singh had died as a result of gun shot injury received by him from a gun.
The gun which the appellant possessed under a licence issued to him was examined by the ballistic expert and his evidence proved that the shots, which killed the deceased, were fired from that very gun.
In these circumstances, the Sessions Judge and the High Court were right in recording the conviction of the appellant for the murder of Gurdarshan Singh on the basis of this prosecution evidence.
So far as the defence put forward on behalf of the appellant is concerned, the first point to be noticed is that the plea that the shots, which killed Gurdarshan Singh, were fired by Ajit Singh, was not taken by the appellant until his father, Ajit Singh, had already died.
It seems to be clear that this plea, which was put forward for the first time in the Court of Sessions, was an afterthought which could be taken safely by the appellant after Ajit Singh had died and he could not be convicted for the murder.
When the appellant was examined in the court of the Committing Magistrate while Ajit Singh was alive, he did, not make any such statement.
This is an important circumstance that militates against the plea put forward in defence.
The appellant relied upon the evidence of two witnesses in support of the plea that the shots which killed Gurdarshan Singh were fired by Ajit Singh and not by the appellant.
The first of these witnesses is Uggar Singh who stated that he was in his house situated opposite to the house of the appellant and, when he came out on hearing the noise, he saw Ajit Singh quarelling with Gurdarshan Singh deceased and exchanging abuses.
Thereafter, Ajit Singh fired the gun shots towards Gurdarshan Singh killing him instantaneously.
According to him, neither Malkiat Singh nor the sons of Gurdarshan Singh were present at that time.
Even Shrimati Giano, according to him, was not there.
The evidence of this witness cannot be relied upon for several reasons.
According to this witness, his statement was recorded by the Police at about 10 a.m. the next day, i.e., the 7th November, 1965; but L7Sup.
C.l.68 2 412 the investigating officer 's statement is clear that no person residing in the neighbourhood had been examined by him or had come forward to give any statement to him.
Uggar Singh, thus, made a wrong statement that he was examined by the Police the next day.
It also appears that he was prosecuted in a murder case in which he was acquitted and Ajit Singh had assisted him in that trial.
The answers given by him in the cross examination also show that, in fact, his house is not in front of the house of the appellant but is situated in the same line as the house of the appellant and the deceased and at some distance.
He tried to get over this difficulty by stating that he has another house which is opposite to the house of the appellant, but it appears that that house belongs to his cousin, Ujagar Singh, and that is how the house is described in the site plan also.
In all these circumstances, the evidence of Uggar Singh cannot be accepted.
The second witness is Niranjan Singh, whose evidence we have noticed Above, and he also partially supported this part of the defence case by saying that he came rushing to the spot after the incident and found Gurdarshan Singh lying dead, while Ajit Singh was standing outside his house with something which appeared to be a gun.
It is clear that this is art another attempt by Niranian Singh to help the appellant and on this point also reliance cannot be ,placed on his evidence.
There remains to be considered the evidence given on behalf of the appellant to establish his plea of alibi.
One defence witness Kirpal Singh was examined to prove that the accused was on deputation in the Seed Corporation at Phillaur and was attached to the Tehsildar, Phillaur and that he was not suspended until 11th November, 1965.
His evidence is of no help, because it is obvious that the appellant could be suspended only after he surrendered in connection with this charge which happened on 11th November 1965.
The fact that he was in service on 6th November, 1965, does not necessarily prove that he could not have been present at the place of occurrence.
The Witness, on whose evidence reliance is primarily placed is Bunta Ram, Patwari.
Bunta Ram stated that on 6th Novem ber, 1965 he had come to the office of the Corporation at Phillaur in order to collect his pay and he also brought some files from Nakodar in order to consign those files.
In that connection.
he remained in the office of the Corporation throughout the day.
He saw the appellant also working in the said office throughout the day.
According to him, at about 6.30 p.m., he and the appellant went to the house of Inderjit Singh, Patwari and spent the night at his house.
It, 'however, I appears that this witness is a direct subordinate of the appellant and that is the reason why he has come forward to support the appellant 's case.
In this connec 413 tion, Jagdish Rai Batta, Tehsildar in the Seed Corporation, was examined as a court witness by the Sessions Judge and his evidence shows that Bunta Ram was one of the Patwaris working as a subordinate of the appellant who was a kanoongo in the Corporation.
Bunta Ram had stated that on that day he had himself appeared before the Tehsildar in connection with the consignment of the tiles and the Tehsildar had given him some directions in that behalf.
Jagdish Rai Batta stated that on that day Bunta Ram, Patwari did not appear before him nor did he produce any files.
He went further and stated that he did not point out any defects to Bunta Ram Patwari either orally or in writing.
Thus, Bunta Ram is proved to be an untruthful witness by the evidence of Jagdish Rai Batta, Tehsildar.
Bunta Ram, in his cross examination, purported to state that the appellant was living in a part of the house of Inderjit Singh at Phillaur.
On the face of it, it cannot be correct because the appellant did not belong to Phillaur and was not even posted there in connection with his employment.
His headquarters, according to Jagdish Rai Batta, was Nakodar and not Phillaur.
The evidence of Jagdish Rai Batta only shows that he saw the appellant working in his office at Phillaur on that day until about 5 p.m. Phillaur is connected with Nako dar by a metalled road along with which there is a bus service, and village Birpind,where the murder took place, is only three miles from Nakodar.
It is quite clear that the appellant could easily reach Birpind well before 7.45 p.m. even if he worked at Phillaur till 5 p.m. on that day.
It is also significant that the murder was committed with the gun belonging to the appellant.
If the appellant himself had not been at Birpind and had been at Phillaur or Nakodar, the gun should have been with him.
at one of these places and not at Birpind.
The gun could not, therefore, have been available for use by Ajit Singh, his father in his absence.
Considering all these circumstances and the nature of the evidence, we are unable to accept that there is any force in the defence plea of alibi put forward by the appellant, so that the conviction based on the prosecution evidence must be upheld.
A plea was put in for reduction of sentence.
Ordinarily, this Court, in exercise of its powers under article 1 36 of the Constitution, does not interfere with a sentence awarded by a Sessions Judge and upheld by the High Court; but, in this case, there are some special features which we cannot ignore.
Even according to the prosecution, the murder of Gurdarshan Singh by the appellant was not pre meditated.
The act of firing at him appears to be that of a hot headed person who was incited to do so by his father.
The murder was, not in any way cruel or brutal.
In all these circumstances, we think that the ends of justice would be met if the lesser penalty prescribed by law is awarded to the appellant.
414 Consequently, while upholding the conviction, we allow the appeal to the extent that the sentence of death is set aside, and, instead, the appellant is sentenced to imprisonment for life.
R.K.P.S. Appeal allowed.
[/INST]The appellant lived with his father A in a house adjoining that of the deceased G who lived there with his two sons and a daughter.
An argument developed one evening between the appellant and one of the sons of G.
When G intervened, the appellant 's father A raised a 'lalkara ' asking the appellant to finish him off.
Thereupon the appellant shot and killed G. By this time G 's two sons, his daughter and one M who lived nearby had arrived and witnessed the occurrence.
At the trial the appellant 's defence was a pica of alibi but the Trial Court rejected the defence and convicted the appellant of G 's murder and sentenced him to death.
in appeal, the High Court did not go into the defence evidence because the counsel appearing for the appellant admitted that there was no substance in it.
The High Court accordingly dismissed the appeal and confirmed the sentence of death.
In appeal to this Court against the conviction and the sentence it was contended that the High Court in not examining the defence evidence for itself, committed an error and did not properly discharge its duties.
HELD : (i) Although ordinarily, in a criminal appeal against conviction, the appellate Court, under section 423 of the Code of Criminal Procedure, can dismiss the appeal if the Court is of the opinion that there is no sufficient ground for interference and it is not necessary for the appellate Court to examine the entire record for the purpose of arriving at an independent decision, the position is different where the appeal is by an accused who is sentenced to death, so that the High Court dealing with the appeal has before it, simultaneously with the appeal,a reference for .confirmation of the capital sentence under section 374 of the Code.
On a re ference for confirmation of sentence of death, the High Court is required to proceed in accordance with sections 375 and 376 of the Code of Criminal Procedure and the provisions of these sections make it clear that the duty of the High Court, in dealing with the reference, is not only to see whether the order passed by the Sessions Judge Is correct but to examine the case for itself and even direct a further enquiry or the taking of additional evidence if the Court considers it desirable in order to ascertain the guilt or the innocence of the convicted person.
[407 D G] Jumman and Others vs The State of Punjab, A.I.R. 1957, S.C. 469; Ram Shanker Singh & Ors.
vs State of West Bengal, [1962] Supp. 1 S.C.R. 49 at p. 59; applied.
(ii)(Upon an examination of the entire evidence by the Court) : No s had been made out for interference with, the appellants con[409 D E] 405 Maaslti vs State of U.P., ; at p. 144; referred to.
(iii) The sentence of death must be set aside and instead the appellant sentenced to imprisonment for life Although ordinarily this Court, in exercise of its power under Art 136, does not interfere with a sentence, in the present case there were some special features which had to be taken into account : even according to the prosecution, the murder of G by the appellant was not premeditated; the act of firing at him a to be that of a hot headed person who was incited to do so by his father; the murder was not in any way cruel or brutal.
In all these circumstances, the ends of justice would be met if the lesser penalty prescribed by law was awarded to the appellant.
[413 G H]
</s>
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<s>[INST] Summarize the judgementnd the writ petitions of the appellants will have to be heard by the High Court on merits.
Since the appellants have applied for amendment of their respective writ petitions and the Court feels that the amendments sought to be made are of such a nature that they require to be considered and dealt with by the High Court, the same are allowed.
[400G H; 401A D; F H] 387 3(i).
It is difficult to reconcile to the decision in Trilok Singh & Co, 's case.
The Court 's attention was not drawn in that case to Rule 8 of the said Rules.
Rule 8 to which the court has adverted earlier is the one as substituted by Notification No. 1995/XXIX E 55 (A) 75 dated May 25, 1977.
The original rule, however, was to the same effect and under it also the conclusion reached by the Rent Control Inspector contained in his report of the inspection of the building was required to be posted on the notice board of the office of the District Magistrate for the information of the general public, and the order of allotment could not be passed before the expiration of three days from the date of such posting and, if in the meantime any objection was received, not before the disposal of such objection.
The District Magistrate was, therefore, not justified in immediately directing the vacancy to be notified and this act on his part was a clear violation of the statutory requirements of Rule 8 and had the result of depriving the appellant firm of an opportunity of hearing which Rule 8 conferred upon it.
On this ground alone the appellant firm should have succeeded.
The observation of this Court in Trilok Singh & Co.s Case that it was unnecessary for the District Magistrate to hear the appellants before notifying the vacancy does not, therefore, appear to be correct.
It equally does not, appear to be correct to hold that an order notifying the vacancy did not injury and caused no prejudice to the interests of any party because an order notifying the vacancy could be objected to and if any objections were filed, they would have to be decided after considering the evidence that the objector or any other person concerned might adduce and that after an order of allotment or release was passed following upon the notification of vacancy, the aggrieved person could file a review application or an appeal under s.18.
In so holding the court appears to have overlooked that the stage for objecting to a vacancy being notified was not after it was notified and that under the said Rule 8 the notification of vacancy could only be after the objections were heard and disposed of.
[398H; 399A F] 3(ii).
It is also difficult to understand how a party who has no right to appear at the original hearing of an application could be said to have a right of review or an appeal against an order passed on that application.
From the very nature of things, a right to defend an application in the first instance is a very different matter from a right to seek a review of the order on that application or a right of appeal against that order.
In its very nature and scope, an original hearing differs substantially from a review or an appeal party applying for review or an appellant cannot as of right lead evidence Further, it is he who comes before the authority challenging an order passed to his prejudice and is not in the same position as the party against whom an order is sought in the first instance.
The correctness of Trilok Singh & Co. 's case is, therefore, open to doubt.
[400 B C] & CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3552 of 1983 From the Judgment and order dated 5.10.1982 of the High Court of Judicature at Allahabad in Civil Misc.
Writ Petition No, 14310 of 1981.
388 Civil Appeal No. 8553 of 1983 From the Judgment and order dated 5.10.82 of the High Court of Allahabad in Civil Misc.
Writ No. 1058 of 1982.
Shanti Bhushan, R.K. Jain, R.P. Singh, Advs.
with him for the Appellants in C. A. No. 8552/83.
Mr. S.N. Kacker, Sr.
Adv., Mr. R.B. Mahrotra, Adv.
with him for the Respondents in C. A. No. 8552/83.
Mr. Soli J. Sorabjee, Sr.
Adv., Mr. E.C. Agarwala, Adv.
with him for the Appellants in C. A. No. 8553/83.
Mr. Anwar Ahmed, Sr. Adv., Mr. Ali Ahmed & Miss Halida Khatoon, Advs.
with him for the Respondents in C. A. No. 8553/83.
The following Judgment of the Court was delivered by MADON, J. The Appellants in each of the above two Appeals by Special Leave granted by this Court filed in the High Court of Allahabad a writ petition under Article 226 of the Constitution of India challenging an order notifying a deemed vacancy under sub section (2) of section 12 of the Uttar Pradesh Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972 (U.P. Act No. 13 of 1972).
This Act will hereinafter be referred to in short as "the Act".
The High Court dismissed both these petitions holding that they were premature.
In coming to this conclusion the High Court relied upon a judgment of a two Judge Bench of this Court in Trilok Singh & Co. vs District Magistrate, Lucknow, & Ors.(1) The said decision of this Court was given prior to the amendment of the Act by the Uttar Pradesh Urban Buildings (Regulation of Letting, Rent and Eviction) (Amendment) Act, 1976(U.P. Act No. 28 of 1976) (hereinafter in short referred to as "the 1976 Amendment Act").
The 1976 Amendment Act came into force on July 5, 1976.
It is unnecessary for the purpose of deciding these Appeals to set out the facts in great detail The subject matter of Civil Appeal (1) [1976] 3 S.C.R.942 389 No. 8552 of 1983 is a shop bearing Municipal No. 24/34, situate at Mahatma Gandhi Marg, Civil Lines Market, Allahabad.
According to the Appellants in this Appeal, the premises were let out to their father, Sheobux Roy, in 1937 and the Appellants ' father commenced carrying on business in the said premises in the name and style of Messrs B.N. Rama & Co. The Appellants ' father died on or about February 3, 1941, and according to these Appellants the tenancy was inherited by them being his sons.
Thereafter, there was a partition amongst the Appellants but in spite of it all the three brothers continued to carry on their businesses separately in the same premises though under different names.
While according to the Appellants the tenancy continued jointly with all of them, according to the contesting Respondents, who are the landlords, the tenancy rights belonged to the First Appellant, Ganpat Roy, alone, who is carrying on business in the said premises as Messrs B.N. Rama & Co. (Stores) and who paid the rent and used to recover rent from his other brothers in respect of the businesses carried on by them in the said premises.
Under section 12 (2) of the, Act, a tenant of a non residential building carrying on business in the said building is deemed to have ceased to occupy the premises on his admitting as a partner or a new partner a person who was not a member of his family.
The definition Of "family" given in clause, (g) of section 3 of the Act does not include a son in law or a daughter in law.
By a Deed of Partnership dated August 10, 1976, the First Appellant entered into a partner ship with his son, Ramesh Roy, and his son in law, Swarup Kailash, to carry on business as authorized retail dealer of the Mafatlal, Group of Mills under the firm name and style of Messrs B.N. Rama & Co. (Textiles) According to the Appellants, the said partner ship is Occupying less than one seventh area of the said premises.
Thereafter in 1979, the landlords filed a suit for eviction against the First Appellant on the ground that he had sublet the said premises to his son in law.
For some reason not apparent on record, the First Appellant 's defence in the suit was struck out.
The First Appellant filed a revision application to the Allahabad High Court and further proceedings in that suit were stayed by an interim order.
That suit was withdrawn some time before the hearing of these Appeals.
On or about March 19, 1981, one Ramesh Nath Kapoor and Radhey Shyam Kapoor, who are related to the landlords.
filed an application for allotment of the said premises to them on the ground that there was a deemed vacancy under section 12 (2) of the 390 Act in respect of the said premises.
Thereupon the Rent Control and Eviction Officer got the said premises inspected by a Rent Control Inspector who made his report on May 23, 1981, to the effect that as the matter relating to the said premises was pending in the High Court and a stay order had been granted by the High Court, there was no need to take any action.
It thereafter appears that in order to clarify the position with respect to the stay order, the Rent Controller issued notices to the parties.
The Appellants did not appear on the date fixed for hearing and the Rent Controller by his order dated August 13, 1981, held that there was a deemed vacancy in respect of the said premises and ordered such deemed vacancy to be notified and fixed the hearing of the application for allotment on September 2, 1981.
Thereafter a fresh inspection report was made on September 1, 1981, by the Rent Control Inspector to the effect that the requirement of the applicants for allotment of the said premises was genuine.
It further appears that an application for release of the said premises was also made by the landlords.
On September 2, 1981, the Rent Controller fixed September 11, 1981, for the hearing of the said application for allotment as also of the said application for release.
On September 11, the said order directing notification of deemed vacancy and for permission to urge their objections and to contest the said application for release.
By an order dated September 30, 1981, the Rent Controller set aside the order notifying the deemed vacancy but refused permission to the Appellants to contest the said application for release of the said premises on the ground that if it were held that there was no vacancy, the question of release would not arise and if it were held that there was a vacancy, the occupant would go out of the picture and thereafter the matter would lie between the District Magistrate and the landlord and that no other person could contest the release of the premises to the landlord according to a judgment of the Allahabad High Court.
Thereafter, by his order dated November 11, 1981, the Rent Controller negatived the contentions of the Appellant and held that there was a deemed vacancy in respect of the said premises and ordered such vacancy to be notified.
The Appellants thereupon filed the said writ petitions in the High Court which, as mentioned earlier, was dismissed.
During the pendency of this Appeal, further proceedings with respect to the release or allotment of the said premises have been stayed by this Court.
The subject matter of Civil Appeal No. 8553 of 1983 is also 391 non residential premises consisting of a house bearing Nos. 51 and 52, known as West Mount and West View Estates situate on Survey No. 256 in Santhat Cantonment, Ranikhet, District Almora, Uttar Pradesh.
By a registered Indenture of Lease dated November 10, 1964, the said property was leased to the First Appellant in this Appeal, Smt.
Kaushal Rekhi, for a period of few years with two options for renewal for a like period.
The First Appellant has been conducting a hotel in the said premises known as "West View Hotel".
Respondents Nos. 2 to 4 to the said Appeals are the present landlords of the said property.
On or about June 1, 1968, the First Appellant entered into a deed of partnership with her son.
Thereafter the First Appellant exercised two Options given to her.
According to the First Appellant, as her son went to the United States for advanced training in hotel managements the said partnership was dissolved and she took her daughter in law, Smt.
Sunita Rekhi, the Second Appellant in this Appeal, as a partner in the said business by a Deed of Partnership dated October 22, 1975.
According to the first Appellant, she had intimated the fact of this partnership to the District Magistrate who is the prescribed authority under the Act.
On October 4, 1980, the landlords made an application to the prescribed authority for release of the said property in their favour on the ground that there was a deemed vacancy in respect thereof.
By his order dated May 6, 1981, the Rent Controller and Eviction Officer held that there was a deemed vacancy in respect of the said premises.
According to the Appellants, the Rent Controller had earlier by his order dated January 20, 1981, held that there was no deemed vacancy in respect of the said premises but had thereafter without any jurisdiction suo moto held a fresh inquiry and passed the said order dated May 6, 1981.
According to the contesting Respondents, the earlier order was passed on some of the objections raised by the Appellants on the said application for release and the other objections were disposed of by the said order dated May 6, 1981.
The Appellants thereafter filed their said writ petition in the High Court which, as aforesaid was dismissed.
In their respective writ petitions, the Appellants had raised various contentions.
Several of them were contentions of law relating to the interpretation of the definition of the word "family" in clause (g) of Section 2 and of other Sections of the Act.
The Appellants in Civil Appeal No. 8552 of 1983 had also contended that sub sections (1) and (2) of Section 12 of the Act were discrimi 392 natory and unconstitutional as infringing Articles 14 and 19 of the Constitution of India.
None of these contentions were dealt with by the High Court because, as mentioned earlier, it held that the writ petitions were premature.
It was urged on behalf of the Appellants in Civil Appeal No. 8552 of 1983 that in any event the point of constitutionality raised by them ought to have been decided by the High Court because an authority constituted by an Act has no power to determine the constitutionality of that Act or of any provision thereof.
This does not appear to be a just criticism of the judgment of the High Court.
Apart from stating that the said sub sections were unreasonable, discriminatory and unconstitutional and, therefore, violated Articles 14 and 19 of the Constitution, no, reason was given nor any ground set out in support of the said contention and most probably either the attention of the High Court was not drawn to this ground or it was not urged before the High Court at the hearing of the writ petition.
At the hearing of these Appeals, the said Appellants have made an application to amend their writ petition setting out elaborately their grounds and reasons in support of the said contention and have applied for leave to amend their said writ petition in case their Appeal succeeds and their writ petition is sent back to the High Court for reconsideration.
They have also prayed for the State of Uttar Pradesh to be added as Respondent No. 5 to the said writ Petition.
The Appellants in the other Appeal have also similarly prayed for the amendment of their writ petition in case they succeed in their Appeal.
The question whether these applications should be granted or not falls to be considered only if these Appeals are allowed.
It will be convenient to see the relevant provisions of the Act before we turn to the Trilok Singh & Co. 's Case.
Clause (g) of Section 3 defines "family" as follows: "(g) 'family ', in relation to a landlord or tenant of a building, means, his or her (i) spouse, (ii) male lineal descendants, 393 (iii)such parents, grand parents and any unmarried or widowed or divorced or judicially separated daughter or daughter of a male lineal descendant, as may have been normally residing with him or her.
and includes, in relation to a landlord, any female having a legal right of residence in that building".
What is pertinent to note about this definition is that a son in law and a daughter in law are not expressly included in this definition.
Section 11 of the Act prohibits a person from letting any building except in pursuance of an allotment order issued under Section 16.
Sub Sections 2 and 4 of Section 12 provide as follows: "(2) In the case of a non residential building, where a tenant carrying on business in the building admits a person who is not a member of his family as a partner or a new partner, as the case may be, the tenant shall be deemed to have ceased to occupy the building. "(4) Any building or part which a landlord or tenant has ceased to occupy within the meaning of sub section (1), or sub section (2), or sub section (3), sub section (3 A) or sub section (3 B), shall, for the purposes of this Chapter, be deemed to be vacant," Section 13 provides that where a landlord or tenant ceases to occupy a building or part thereof, no person is to occupy it in any capacity on his behalf or otherwise than under an order of allotment or release under Section 16 Section 15 casts a duty on every landlord or tenant to give intimation of vacancy to the District Magistrate.
Under Section 16, the District Magistrate may, by an order, require the landlord to let any building which is or has fallen vacant or is about to fall vacant, or a part of such building, to any person specified in the order (called the allotment order) or may release the whole or any part of such building in favour of the landlord.
Under the proviso to Section 16(1), in the case of a vacancy referred to in section 12(A), the District Magistrate is to 394 give an opportunity to the landlord or the tenant, as the case may be, of showing that the said section is not attracted to his case before making an order under clause (a) of section 16(1), that is before making an allotment order.
This proviso was inserted by the 1976 Amendment Act.
Strangely enough, in the case of release of the premises to the landlord the proviso does not require any such opportunity to he given to the tenant who would be the person affected by that order.
Sub section (2) of section 16 sets out the circumstances in which a building or any part thereof may be released to the landlord Under sub section (4) of section 16, where the allottee or the landlord has not been able to obtain possession of the building allotted or released to him, as the case may be, the District Magistrate, on an application made to him in that behalf, may by order evict or cause to be evicted any person named in that order as well as every other person claiming under him or found in occupation, and may for that purpose use or cause to be used such force as may be necessary and put or cause to be put the allottee or the landlord in possession of the building or part thereof.
Sub section (5) of Section 16 provides as follows: "(5) (a) Where the landlord or any other person claiming to be a lawful occupant of the building or any part thereof comprised in the allotment or release order satisfies the District Magistrate that such order was not made in accordance with clause (a) or clause (b), as the case may be, of sub section (l), the District Magistrate may review the order: Provided that no application under this clause shall be entertained later than seven days after the eviction of such person.
(b) Where the District Magistrate on review under this sub section sets aside or modifies his order of allotment or release, he shall put or cause to be put the applicant, if already evicted, back into possession of the building, and, may for that purpose use or cause to be used such force as ; may be necessary.
" Under sub section (7) of Section 16, every order made under that Section, subject to any order made under Section 18, is to be .
final, Under Section 18, as substituted by the 1976 Amendment 395 Act, no appeal lies against any order of allotment, reallotment or release but any person aggrieved by a final order of allotment, re allotment or release may, within fifteen days from the date of such order, prefer a revision to the District Judge on any one or more of the following grounds, namely: (a) that the District Magistrate has exercised a jurisdiction not vested in him by law: (b) that the District Magistrate has failed to exercise a jurisdiction vested in him by law; (c) that the District Magistrate acted in the exercise of his jurisdiction illegally or with material irregularity.
On such application being made, the revising authority may confirm or rescind ` the final order of allotment, re allotment or release or may remand the case to the District Magistrate for rehearing and, pending revision, may stay the operation of such order on such terms as he thinks fit.
Sub section (3) of section 18 provides that where an order of allotment or reallotment or release is rescinded, the District Magistrate shall, on an application made to him in that behalf, place the parties back in the position which they would have occupied but for such order or such part thereof as has y been rescinded, and may for that purpose use or cause to be used such force as may be necessary.
Prior to the substitution of section 18 by the 1976 Amendment Act, that section provided for an appeal to the District Judge by a person aggrieved by an order of allotment, reallotment or release and where such order was varied or rescinded in appeal, the District Magistrate had the power, on an application made to him in that behalf, to place the parties back in the position which they would have occupied but for such order or such part thereof as was varied or rescinded and to use or cause to be used for that purpose such force as may be necessary.
Under section 34(8), for the purpose of any proceedings under the Act and for purposes connected therewith the authorities under the Act are to have such power and follows such procedure, principles of proof, rules of limitation and guiding principles as may be prescribed by rules made under the Act.
The Uttar Pradesh Urban Buildings (Regulation of Letting, 396 Rent and Eviction) Rules, 1972, prescribe the procedure for ascertainment of vacancy and for allotment or release of premises.
Under Rule 8, before he makes any order of allotment or release in respect of any building which is alleged to be vacant under section 12 or to be otherwise vacant or to be likely to fall vacant, the District Magistrate is required to get the building inspected.
The inspection of the building, so far as possible, is to be made in the presence of the landlord and the tenant or any other occupant.
The facts mentioned in the inspection report are, wherever practicable, to be elicited from at least two respectable persons in the locality and the conclusion of the inspection report is to be posted on the notice board of the office of the District Magistrate for the information of the general public, and an order of allotment is not to be passed before the expiration of three days from the date of such posting, and if in the meantime any objection is received, not before the disposal of such objection.
Any objection received is to be decided after consideration of any evidence, which the objector or any other person concerned may adduce.
Rule 10 prescribes the procedure for allotment of a building where an application for allotment is made.
The material portion of sub rule (6) and of proviso (a) to that subrule are relevant and may be reproduced.
These provisions are as follows: "(6). a person who is deemed to have ceased to occupy a building within the meaning of Section 12(2), shall not be allotted that or any other non residential building for a period of two years from the date of such. deemed cessation: Provided that (a) If the District Magistrate is satisfied in a case referred to in Section 12(2) that the admission of partner or new partner is bona fide transaction and not a mere cover for subletting, he shall, if any application had been made in that behalf before the admission of such partner or new partner, allot the non residential ; building in question afresh to the newly constituted or reconstituted firm; X X X 397 Under Rule 19, where an allotment or release of a building or part thereof is ordered under section 16(1) on the ground inter alia of deemed vacancy within the meaning of section 12, no such order is to be executed until after the expiration of fifteen days from the service upon the occupant of a notice to vacate that building or part thereof, as the case may be.
We will now turn to Trilok Singh & Co. 'section case.
The facts in that case were that an application for release was made by the landlords in respect of certain residential premises of which the appellant firm claimed to be the tenant.
A Senior Inspector was directed to inspect the premises and make a report.
According to the report, the premises were in occupation of three persons, two of whom claimed to be the partners of the appellant firm.
The report stated, "After hearing the parties it would be proper to take further action".
On receipt of the report, the Rent Controller passed an order "Let the vacancy be notified" without granting any hearing to the appellant firm.
The appellant firm thereupon filed a writ petition in the High Court of Allahabad challenging the said order on the ground that it was passed in violation of the principles of natural justice.
The said writ petition was rejected summarily on the ground that it was premature and the proper remedy for the appellant firm was to approach the Rent Controller under section 16(5) (a) of the Act for review of the said order.
In appeal, this Court upheld the order of the Allahabad High Court.
This Court held that by reason of section 16(2) no order bf release could be passed under clause (b) of section 16(1) unless the District Magistrate was satisfied that the building was required by the landlord bona fide for occupation by himself or any member of his family or for any of the purposes specified in sub section (2) of section 16.
The Court further stated P that under clause (a) of section 16(5), where the landlord or any other person claiming to be a lawful occupant of the building comprised in the order of allotment or release satisfied the District Magistrate that such an order was not made in accordance with clause (a) or clause (b) of section 16(1), the District Magistrate could review his order and if on review he set aside or modified the order of allotment or release, he was empowered to put the applicant, if already evicted back into possession.
The Court further observed that section 18 gave a right of appeal against an order of allotment or release and that any person aggrieved by such an order could prefer an appeal to the District Judge and if the order of allotment or release was varied or rescinded by the District Judge in appeal the 398 District Magistrate had under section 18(2) the power to place the parties back in the position which they would have occupied but for such order.
The Court further pointed out that the Act did not provide for a hearing at the stage when the District Magistrate passed an order of allotment or release but any person aggrieved by such an order was entitled to ask the District Magistrate to review his order and if in the meanwhile any person in possession of the building had been evicted, the District Magistrate had the power, if he set aside or modified the order of allotment or release, to put the applicant back in possession The Court held (at page 945): "Thus, in the first place, it was unnecessary for respondent ; I to hear the appellants before notifying the vacancy be cause ' under the scheme of the U P. Rent Act, an order notifying the vacancy does no injury and causes no prejudice to the interests of any party.
A notification of the vacancy is a step in aid of an order of allotment or release and it is only when such an order of allotment or release is passed that the landlord or the tenant, as the case may be, can have a grievance.
Orders of allotment and release are, in the first instance, reviewable by the District Magistrate himself an`d an order passed by the District Magistrate under section 16 is appealable under section 18." The Court then summarized the conclusion it had reached as follows: "The Act thus contemplates successive opportunities " being afforded to persons whose interests are likely to be affected by any order passed by the District Magistrate.
Putting it briefly, an order notifying the vacancy can be objected to and the objection has to be decided after considering the evidence that the objector or any other person concerned may adduce.
Secondly, if an order of allotment , or release is passed under section 16, following upon the notification of a vacancy, the aggrieved person can file a review application.
Thirdly, as against an order passed under section 16, there is a right of appeal under section 18.
" We find it difficult to reconcile ourselves to the decision in Trilok Singh & Co. 's Case.
The Court 's attention was not drawn 399 in that case to Rule 8 of the said Rules Rule 8 to which we have adverted earlier is the one as substituted by Notification No. 1995/XXlX E 55 (A) 75 dated May 25, 1977.
The original rule, however, was to the same effect and under it also the conclusion reached by the Rent Control Inspector contained in his report of the inspection of the building was required to be posted on the notice board of the office of the District Magistrate for the information of the general public, and the order of allotment could not be passed before the expiration of three days from the date of such posting and, if in the meantime any objection was received, not before the disposal of such objection.
The District Magistrate was, therefore, not justified in immediately directing the vacancy to be notified and this act on his part was a clear violation of the statutory requirements of Rule 8 and had the result of depriving the appellant firm of an opportunity of hearing which Rule 8 conferred upon it.
On this ground alone the appellant firm should have succeeded.
The observation of this Court in Trilok Singh & Co 's case that it was unnecessary for the District Magistrate to hear the Appellants before notifying the vacancy does not, therefore, appear to be correct.
It equally does not appear to be correct to hold that an order notifying the vacancy did no injury and caused no prejudice to the interests of any party because an order notifying the vacancy could be objected to and if any objections were filed, they would have to be decided after considering the evidence that the objector or any other person concerned might adduce and that after an order of allotment or release was passed following upon the notification of vacancy, the aggrieved person could file a review application or an appeal under section 18.
In so holding the Court appears to have overlooked that the stage for objecting to a vacancy being notified was not after it was notified but, as provided by Rule 8, before it was notified and that under the said Rule 8 the notification of vacancy could only be after the objections were heard and disposed of.
This Court itself pointed out in that case that the Act did not provide for a hearing at the stage when the District Magistrate passed an order of allotment or release.
In such an event, it can hardly be said that a review or an appeal against an order of allotment or release was an adequate remedy.
As the very provisions for review and appeal show, if the order appealed against or sought to be reviewed is varied or rescinded, the appellant or the person seeking review, if evicted is the meanwhile, is to be restored back in possession.
How the fact of being evicted or even the danger of 400 it can cause no prejudice, particularly in these days of acute shortage of accommodation, is something we are not able to appreciate.
It is also difficult to understand how a party who has no right to appear at the original hearing of an application could be said to have a right of review or an appeal against an order passed on that application.
From the very nature of things, a right to defend an application in the first instance is a very different matter from a right to seek a review of the order on that application or a right of appeal against that order.
In its very nature and scope, an original hearing differs substantially from a review or an appeal.
A party applying for review or an appellant cannot as of right lead evidence.
Further, it is he who comes before the authority challenging an order passed to his prejudice and is not in the same position as the party against whom an order is sought in the first instance.
The correctness of Trilok Singh & Co. 's case is, therefore, open to doubt.
Apart from this, the position under the Act as amended in 1976 is greatly changed and the right of appeal which was granted by section 18 has been substituted by a right of revision on the grounds set out in the substituted section 18 and which are the same as those on which a revision lies to the High Court under section 115 of the Code of Civil Procedure, 1908.
While in an appeal, findings of fact can also be challenged on the ground that the evidence was not properly appreciated, in revision the only question would be whether the District Magistrate had exercised a jurisdiction not vested in him by law or had failed to exercise a jurisdiction vested in him by law or had acted in the exercise of his jurisdiction illegally or with material irregularity.
The scope of revision under section 18 is, therefore, much narrower than in the case of an appeal.
Under the proviso to section 16(1), which was inserted by the 1976 Amendment Act, the District Magistrate is required in the case of a vacancy referred to in sub section (4) which includes a deemed vacancy under section 12(2) to give an opportunity to the landlord or the tenant, as the case may be, of showing that section 12(4) is not attracted to his case before he makes an order of allotment under clause (a) of section 16(1).
Thus, this proviso gives a right of hearing to the tenant before an order of allotment is made.
The proviso, however, does not apply in the case of an 401 order of release made under clause (b) of section 16(1).
Even in the case of an application for allotment, it is doubtful whether a tenant whose objections to notification of a deemed vacancy have been negatived and thereafter the vacancy has been ordered to be notified could be permitted to reagitate the same contentions because such contentions would be barred by principles analogous to res judicata.
In such an event, it would be difficult to say that he can exercise his right of review on the ground that there was no vacancy.
This would apply equally where an order of release is made.
Further, the revision which is provided for under section 18 is against an order of allotment or release and not against a notification of vacancy and an issue, which was concluded earlier and on the basis of the finding on which the District Magistrate had proceeded to allot or release the premises, cannot be reagitated in revision.
In fact, as would appear from the order dated September 30, 1981, of the Rent Control and Eviction Officer in Civil Appeal No. 8552 of 1983, the Allahabad High Court has held that where a release of a building is sought, the matter lies only between the District Magistrate and the landlord and no other person has a right to object to the release of the premises to the landlord.
The tenant has thus no adequate or effective remedy against an order notifying a vacancy.
Further, it should be borne in mind that under Rule 10 (6) a tenant who is deemed to have ceased to occupy a building under section 12(2) is not entitled for a period of two years from the date of such deemed vacancy to the allotment of the same or any other non residential building.
In our opinion, the scheme of the Act would show that a tenant of premises in whose case it is found that there is a deemed vacancy has no efficacious or adequate remedy under the Act to challenge that finding.
A petition under Article 226 or 227 of the Constitution of India filed by such a tenant in order to challenge that finding cannot, therefore, be said to be premature.
In the view that we take, those Appeals will have to be allowed and the writ petitions of the Appellants will have to be heard by the High Court on merits.
As mentioned earlier, the Appellants have applied for amendment of their respective writ petitions.
Without expressing any opinion on the merits of the contentions sought to be raised in the proposed amendments, we feel that the amendments sought to be made are of such a nature that they require to be considered and dealt with by the High Court.
402 In the result, we allow both these Appeals and reverse the judgment and set aside the order passed by the High Court.
We further direct the High Court to rehear on merits the writ petitions filed by the Appellants.
We also allow the application for amendment of both these writ petitions.
The Appellants will amend their respective writ petitions in terms of the applications for amendment made by them within one month of the receipt by the High Court of the order of this Court.
The High Court will thereupon issue notice in each of these two writ petitions to the newly added State of Uttar Pradesh.
The State of Uttar Pradesh will be at liberty to file a counter affidavit within four weeks of the receipt of such notice.
The original respondents to the writ petitions will also be at liberty to file a supplementary counter affidavit within four weeks from the date of receipt by them of the notice that the writ petitions have been amended.
The High Court will thereafter endeavour to dispose of these writ petitions as expeditiously as possible.
Pending disposal of the writ petitions by the High Court, there will be a stay of further proceedings for allotment or release of the concerned premises and the Appellants will not be dispossessed from the premises they are occupying.
In the circumstances of the case, there will be no order as to the cost of these Appeals.
M.L.A. Appeals allowed.
[/INST]That Constitutional validity of the Karnataka Tax on Entry of Goods into Local Areas for consumption , use or sale therein Act , 1979 , which came into force with effect from 1 6.1979 was challenged in the Karnataka High Court by a large number of traders though a batch of 1590 writ petitions including writ petition No. 7039/79 by M/s. Hansa corporation Bangalore.
A Division Bench of the Court, by a common judgment dated 24.8.79 reported in ILR 1980 (1) Karnataka 165 allowed all the writ petitions and issued writs of mandamus against the State Government forbearing it from taking any proceedings under the Act.
The State took the matter in appeal in this Court.
However , only one appeal was filed , numbered as 3049 of 1979 against writ petition No. 170 39 of 1979 filed by M/s Hansa Corporation , impleading this Corporation alone as respondent.
This Court by its judgment dated 25.9.80 which is reported in ; , allowed the appeal , set aside the judgment of the Karnataka High Court and upheld the validity of the Act.
During the pendency of the civil appeal No 3049 of 1979 Governor of Karnataka enacted the Karnataka Tax on Entry of Goods into a Local Area 660 for Consumption , use or sale therein (Act with retrospective effect from 8.6.80 removing the infirmities in the 1979 Act.
After the judgment of the Supreme Court in the Hansa Corporation 's case the Governor of Karnataka promulgated another ordinance , Ordinance No. 11 of 1980 on 25.10.1980 repealing the Entry Tax Act , 1980 from its inception with certain other directions regarding adjustment of tax if any paid.
This was followed by Karnataka Tax on Entry of Goods into Local Areas , Use or Sale therein Act , of 1981 , and Karnataka Act No. 10 of 1981 , repealing the 1980 Act.
however , did not repeal ordinance No. 11 of 1980.
In the meantime , Karnataka Ordinance No. 3 of 1981 came into force which was followed by Karnataka Act 12 of 1981 I which repealed Ordnance No. II of 1980.
As a result of the combined operation of ordinance No. 3 of 1981 and Act No 12 of 1981 , the 1979 Act was made to be Operative but only from 1.10.80 and not from 1.6.79 as originally enacted After the judgment of the Hansa Corporation 's case upholding the validity of the 1979 Act , the authorities appointed under the Act , issued notices under the Act to all the dealers including those who had filed writ petition earlier , calling upon them to register themselves under the Act , to file returns and to pay the amounts of tax due by them under the original Act of 1979.
Aggrieved by the said notices , the original writ petitioners again filed writ petitions before the High Court of Karnataka contending that the notices issued to them were bad in as much as the writ of mandamus issued in their favour by the High Court in the earlier judgment survived and was effective since no state appeals were performed against them and that the judgment of the Supreme Court could rescue the State from taking proceedings only against the Hansa Corporation and not against them.
The Statement this contention with the plea that the judgment of the Supreme Court was binding on all and no one could escape from it.
The writ petitions were dismissed by a single judge holding among other things , that section 3 of the Act No 10 of 1981 revived the 1979 Act and that action taken against the petitioners in the writ petitions was , therefore , valid.
Appeals were filed against the judgment and a Division Bench of the Karnataka High Court dismissed the appellants holding that section 3 of the re pealing Act of 1981 re enacted the 1979 Act and that , therefore , the appeals were not well founded i 1 their challenge against the action taken by the State.
Hence the appeals by special leave and also writ petitions under Article 32 of the Constitution.
Dismissing the appeals and the writ petition , the Court ^ HELD: 1.1 The judgment of the Supreme Court in Hansa Corporations ' case reported in ; is binding on all concerned whether they were parties to the judgment or not To contend that the conclusion therein applies only to the partly before the Supreme Court is to destroy the efficacy and integrity of the judgment and to make the mandate of Article 141 illusory.
By setting aside the common judgment of the High Court , the mandamus issued by the High Court is rendered ineffective not only in one case but in all cases.[675; 673 H] 1.2 In the instant case , though a large number of writ petitions were filed challenging the Act , all those writ petitions were grouped together , heard 661 together and were disposed of by the High Court by a common judgment.
No petitioner advanced any contention peculiar or individual to his petition , not common to others.
To be precise , the dispute in the cause or controversy between the State and each petitioner had no personal or individual element in it or anything personal or peculiar to each petitioner.
The challenge to the Constitutional validity of 1979 Act proceeded on identical grounds common to all petitioners.
This challenge was accepted by the High Court by a common judgment that was the subject matter of appeal before Supreme Court in Hansa Corporations ' case.
When the Supreme Court repealed the challenge and held the Act constitutionally valid it in terms disposed of not the appeal in Hansa Corporation 's case alone , but all petitioners in which the High Court issued mandamus on the non existent ground that the 1979 Act was constitutionally invalid.
Therefore , to contend that the law laid down by Supreme Court in that judgment would bind only the Hansa Corporation and not the other petitioners against whom the State of Karnataka had not filed any appeal , is to ignore the binding nature of a judgment of Supreme Court under Article 141 of the Constitution.
[673B C) 1.3 A mere reading of Article 141 bring into sharp focus its expanse and its all pervasive nature.
In cases like this , where numerous petitions are disposed of by a common judgment and only one appeal is filed , the parties to the common judgment could very well have and should have intervened and could have requested the court to hear them also.
They cannot be heard to say that the decision was taken by the Supreme Court behind their back or profess ignorance of the fact that an appeal had been filed by the State against the common judgment.[673B C] 2.
There is no inconsistency in the finding of the Supreme Court in Joginder 's case and Makhanlal Waza 's case the ratio Is the same and the appellants cannot take advantage of certain decisions made by this Court in the earlier case.
Both the decisions in Joginder 's and Makhanlal Waza 's case lay down identical principles and there is nothing to distinguish between the two.
in the earlier case, the Supreme Court , on its facts , overruled the preliminary objection that absence of appeals against the three petitioners let out.
would not render the appeal before the Supreme Court incompetent , holding thereby that the effect of decision in that appeal would be binding on the appellant therein.
In the latter case , the Supreme Court in unmistakable terms laid down that the law laid down in the earlier case , namely , Triloknath 's case, applied even to those who were not parties to the case.
These two decisions were given by two Constitution Benches of the Supreme Court , the fact that Joginder Singh 's case was not noted by the Bench that decided Makhanlal Waza 's case does not create any difficulty.
The two decisions , on the principles laid down by them , speak the same voice, that is the law laid down by the Supreme Court is binding on all , notwithstanding the fact that it is against the State or a private party and that it is binding on even those who were not parties before the court , State of Punjab vs Joginder Singh. ; Makhanlal Waza vs J & K. State. ; discussed and followed.
662 OBSERVATION: In the fitness of things , it would be desirable that the State Government also took out publication in such cases to alert parties bound by the judgment , of the fact that an appeal had been preferred before Supreme Court by them.
Here the State Government cannot be find fault with for having filed only one appeal.
It is , of course , an economising procedure.
[673C D] 3.1 A writ or an order in the nature of mandamus has always been understood to mean a command issuing from the Court , competent to do the same , to a Public servant amongst others , to perform which leads to the initiation of action.
3.2 In this case , the petitioners appellants assert that the mandamus in their case was issued by the High Court commanding the authority to desist or forbear from enforcing the provisions of an Act which was not validity enacted.
In other words , a writ of mandamus was predicated upon the view that the High Court took that the 1979 Act was constitutionally invalid.
Consequently the Court directed the authorities under the said Act to forbear from enforcing the provisions of the Act qua the petitioners; The Act was subsequently declared constitutionally valid by the Supreme Court.
The Act , therefore , was under an eclipse , for a short duration; but with the declaration of the law by the Supreme Court , the temporary shadow cast on it by the mandamus disappeared and the Act revived with its full the constitutional invalidity held by the High Court having been removed by the judgment of the Supreme Court.
If the law so declared invalid is held constitutionally valid , effective and binding by the Supreme Court , the mandamus forbearing the authorities from enforcing its provisions would become ineffective and the authorities cannot be compelled to perform a negative duty.
The declaration of the law is binding on everyone.
And therefore , the mandamus would not survive in favour of those parties against whom appeals were not filed.
[774B E] 3.3 Further , assuming that the mandamus in favour of the appellants survived not withstanding the judgment of this Court , the normal procedure to enforce the mandamus is to move the court in contempt when the parties against whom mandamus is issued disrespect it and if contempt petitions are filed and notices are issued to the State, the States ' obvious answer will be a reference to Article 141 and taking protection thereunder.
No Court can punish a party for contempt under these circumstances , because the mandamus issued by the High Court becomes ineffective and unenforceable when the basis on which it has issued falls, by the declaration by the Supreme Court of the validity of 1979 Act.
[674E; G H]
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<s>[INST] Summarize the judgementminal Appeal No. 190 of 1962.
Appeal by special leave from the judgment and order dated September 27, 1962 of the Punjab High Court in Criminal Revision No. 1172 of 1962.
Nanak Chand, for the appellant.
Gopal Singh, R.N. Sachthey and R.H. Dhebar, for the respondent.
April 10, 1964.
The Judgment of Subba Rao and Das Gupta JJ. was delivered by Subba Rao J. Raghubar Dayal, J. delivered a dissenting Opinion.
678 SUBBA RAO, J.
This appeal by special leave raises the question of jurisdiction of an appellate court to exercise its power under s.6 of the (Act, No. 20 of 1958), hereinafter called the Act, in respect of an accused who was convicted by the trial court before the Act The facts are not now in dispute.
The appellant, a resident of Palwal in Gurgaon District, committed house trespass and tried to outrage the modesty of a girl aged 7 years.
He was sent up for trial before the Magistrate, First Class, Palwal.
The said Magistrate, on May 31, 1962, convicted him under sections 451 and 354 of the Indian Penal Code and sentenced him to six months ' rigorous imprisonment under each count and directed that the sentences should run concurrently.
He further imposed a fine of Rs. 200/ on the appellant under section 451 of the Indian Penal Code and ordered that, in default of payment of fine, he should undergo rigorous imprisonment for two months.
The appellant was 16 years old at the time of his conviction.
The Act was extended to Gurgaon District on September 1, 1962 and, therefore, at the time the appellant was convicted by the Magistrate, the Magistrate had no power or duty to make any order under the Act.
The appellant preferred an appeal against his conviction and sentences to the Additional Sessions Judge, Gurgaon, who by his judgment dated September 22, 1962, dismissed the appeal.
Though by the time the Additional Sessions Judge disposed of the appeal the said Act had come into force, neither the appellant relied upon the provisions of the Act nor did the learned Additional Sessions Judge exercised his power there under.
The revision filed in the High Court by the Appellant was dismissed on September 27, 1962.
The revision petition was dismissed in limine, but no ground was taken in the revision petition that the Additional Sessions Judge should have acted under s.6 of the Act.
After the revision petition was disposed of, it appears that the appellant filed Criminal Miscellaneous Petition No. 793 of 1962 requesting the High Court to exercise its jurisdiction under section 1 of the Act and to pass orders under sections 3, 4 or 6 thereof.
The said application was also dismissed.
Unfortunately the said application is not on the record and we are not in a position to know the exact scope of the relief asked for in the application and the reasons for which it was dismissed.
The appellant filed a petition in the High Court under article 134(1) (c) of the Constitution for a certificate of fitness to appeal to this Court.
One of the grounds for seeking such a certificate was that the High Court should have acted under section 11 of the Act and passed orders under sections 3, 4 or 6 thereof.
That petition having been dismissed, the appellant has preferred the present appeal to this Court by obtaining special leave.
679 Learned counsel for the appellant contends that, having regard to the admitted facts in the case, the High Court should have acted under section 11 of the Act and released the appellant on probation of good conduct instead of sending him to prison.
On the other hand, learned counsel for the State argues that the Act is not retrospective in operation and, therefore, it will not apply to the appellant, as he was convicted before it came into force in Gurgaon District.
Further he contends that neither section II of the Act nor s.6 thereof, on the basis of the express phraseology used therein, can be invoked in the circumstances of the present case.
In any view, he says that the appellant, not having raised this plea till after the revision petition was dis posed of by the High Court, is precluded by his default to raise this contention at this very late stage.
The Act is a milestone in the progress of the modern liberal trend of reform in the field of penology.
It is the result of the recognition of the doctrine that the object of criminal law is more to reform the individual offender than to punish him.
Broadly stated, the Act distinguishes offenders below 21 years of age and those above that age, and offenders who are guilty of having committed an offence punishable with death or imprisonment for life and those who are guilty of a lesser offence.
While in the case of offenders who are above the age of 21 years absolute discretion is given to the court to release them after admonition or on probation of good conduct, subject to the conditions laid down in the appropriate provisions of the Act, in the case of offenders below the age of 21 years an injunction is issued to the court not to sentence them to imprisonment unless it is satisfied that.
having regard to the circumstances of the case, including the nature of the offence and the character of the offenders.
it is not desirable to deal with them under ss, 3 and 4 of the Act.
With this short background we shall now read the relevant provisions of the Act.
Section 6.(1) When any person under twenty one years of age is found guilty of having committed an offence punishable with imprisonment (but not with imprisonment for life), the Court by which the person is found guilty shall not sentence him to imprisonment unless it is satisfied that, having regard to the circumstances of the case including the nature of the offence and the character of the offender, it would not be desirable to deal with him tinder section 3 or section 4, and if the Court passes any sentence of imprisonment on the offender, it shall record its reasons for doing so.
680 (2) For the purpose of satisfying itself whether it would not be desirable to deal under section 3 or section 4 with an offender referred to in sub section (1) the Court shall call for a report from the probation officer and consider the report, if any, and any other information available to it relating to the character and physical and mental condition of the offender.
Section 11.
(1) Notwithstanding anything contained in the Code or any other law, an order under this Act may be made by any Court empowered to try and sentence the offender to imprisonment and also by the High Court or any other Court when the case comes before it on appeal or in revision.
(2) Notwithstanding anything contained in the Code, where an order under section 3 or section 4 is made by any Court trying the offender (other than a High Court), an appeal shall lie to the Court to which appeals ordinarily lie from the sentences of the former Court.
(3) In any case where any person under twenty one years of age is found guilty of having committed an offence and the Court by which he is found guilty declines to deal with him under section 3 or section 4, and passed against him any sentence of imprisonment with or without fine from which no appeal lies or is preferred, then, notwithstanding any thing contained in the Code or any other law, the Court to which appeals ordinarily lie from the sentences of the former Court may, either of its own motion or on an application made to it by the convicted person or the probation officer, call for and examine the record of the case and pass such order thereon as it thinks fit.
(4) The first question is whether the High Court, acting under section II of the Act, can exercise the power conferred on a court under s.6 of the Act.
It is said that the jurisdiction of the High Court under section 11(3) of the Act is confined only to a case that has been brought to its file by appeal or revision and, therefore, it can only exercise such jurisdiction as the trial court had, and in the present case the trial court could not have made any order under s.6 of the Act, as at the time it made the order the Act had not been extended to Gurgaon District.
On this assumption, the argument proceeds, the Act should not be given retrospective operation, as, if so given, it would affect the criminal liability of a person for an act committed by him before the Act came into operation.
In support of this contention a number of decisions bearing on the question of retroactivity of a 681 statute in the context of vested rights have been cited.
Every law that takes away or impairs a vested right is retrospective.
Every ex post facto law is necessarily retrospective.
Under article St 20 of the Constitution, no person shall be convicted of any offence except for violation of a law in force at the time of the commission of the act charged as an offence, nor be subjected to a penalty greater than that which might have been inflicted under the law in force at the time of the commission of the offence.
But an ex post facto law which only mollifies the rigour of a criminal law does not fall within the said prohibition.
If a particular law makes a provision to that effect, though retrospective in operation, it will be valid.
The question whether such a, law is retrospective and if so, to what extent depends, upon the interpretation of a particular statute, having regard to the well settled rules of construction. "Maxwell On Interpretation of Statutes", 11th edition, at pp.
274 275, summarizes the relevant rule of construction thus: "The tendency of modern decision, upon the whole, is to narrow materially the difference between what is called a strict and a beneficial construction.
All statutes are now construed with a more attentive regard to the language, and criminal statutes with a more rational regard to the aim and intention of the legislature, than formerly.
It is unquestionably right that the distinction should not be altogether erased from the judicial mind, for it is required by the spirit of our free institutions that the interpretation of all statutes should be favourable to personal liberty, and this tendency is still evinced in a certain reluctance to supply the defects of language, or to eke out the meaning of an obscure passage by strained or doubtful influences.
The effect of the rule of strict construction might almost be summed up in the remark that, were an equivocal word or ambiguous sentence leaves a reasonable doubt of its meaning which the canons of interpretation fail to solve, the benefit of the doubt should be given to the subject and against the legislature which has failed to explain itself.
But it yields to the paramount rule that every statute is to be expounded according to its expressed or manifest intention and that all cases within the mischiefs aimed at are, if the language permits, to be held to fall within its remedial influence.
" Let us now proceed to consider the question raised in the present case.
This is not a case where an act, which was not an offence before the Act, is made an offence under the Act; nor 682 is this a case where under the Act a punishment higher than that obtaining for an offence before the Act is imposed.
This is an instance where neither the ingredients of the offence nor the limits of the sentence are disturbed, but a provision is made to help the reformation of an accused through the agency of the court.
Even so the statute affects an offence committed before it was extended to the area in question.
It is, therefore, a post facto law and has retrospective operation.
In considering the scope of such a provision we must adopt the rule of beneficial construction as enunciated by the modern trend of judicial opinion without doing violence to the provisions of the relevant section.
Section 11(3) of the Act, on the basis of which the learned counsel for the State advances most of his arguments, has no relevance to the present appeal: the said subsection applies only to a case where no appeal lies or is preferred against the order of a court declining to deal with an accused under s.3 or s.4 of the Act, and in the instant case an appeal lay to the Sessions Judge and indeed an appeal was preferred from the order of the Magistrate.
The provision that directly applies to the present case is section 1 1 (1) of the Act, where under an order under the Act may be made any Court empowered to try and sentence the offender to imprisonment and also by the High Court or any other court when the case comes before it on appeal or in revision.
The sub section ex facie does not circumscribe the jurisdiction of an appellate court to make an order under the Act only in a case where the trial court could have made that order.
The phraseology used therein is wide enough to enable the appellate court or the High Court, when the case comes before it, to make such an order.
It was purposely made comprehensive, as the Act was made to im plement a social reform.
As the Act does not change the quantum of the sentence, but only introduces a provision to reform the offender, there is no reason why the Legislature should have prohibited the exercise of such a power, even if the case was pending against the accused at one stage or other in the hierarchy of tribunals.
If the provisions of section 6(1) of the Act were read along with section 11, we would reach the same result.
When section 11 (1) says that an appellate court or a revisional court can make an order under the Act, it means that it can make an order also under s.6(1) of the Act.
If so, "court" in s.6(1) will include an appellate court as well as a revisional court.
If an appellate court or a revisional court finds a person guilty, under that section it shall not sentence him to imprisonment unless the conditions laid down in that section are satisfied.
Can it be said that the expression "the court by which the person is found guilty" does not include the appellate or revisional court? When an appellate court or a revisional court confirms a conviction made by a trial court or sets aside an acquittal made by it and convicts the accused, in either case it 683 finds the accused guilty, for without finding the accused guilty it cannot either confirm the conviction or set aside the order of acquittal and convict him.
If the contention advanced by learned counsel for the State, namely, that the Act will apply only to convictions made by the trial court after the Act came into force, be accepted, it would lead to several anomalies; it would mean that the Act would apply to a conviction made by a trial court after the Act came into force, but would not apply to an accused, though his appeal was pending after the Act came into force; it would apply to the accused if the appellate court set aside the conviction and sent back the case to the trial court for fresh disposal, but would not, if the appellate court itself convicted him.
On the other hand if the expression "found guilty" was given the natural meaning, it would take in the finding of guilty made by any court in a pending criminal proceeding in the hierarchy of tribunals after the Act came into force.
This view gets support from the judgment of this Court in Ramji Missar vs State of Bihar(1).
The facts of that case relevant to the present case were as follows: The Assistant Sessions Judge, Arrah, convicted one Basist under section 307 and section 326 of the Indian Penal Code.
As the offences under the said sections were punishable with imprisonment for life, the provisions of the , were not applicable to Basist and, therefore, the Assistant Sessions Judge sentenced him to undergo rigorous imprisonment for 6 years under section 307 of the Indian Penal Code and for 4 years rigorous imprisonment under section 326 of the said Code and ordered the sentences to run concurrently.
But the High Court on appeal found Basist guilty of an offence under s.324 of the Indian Penal Code.
It was contended that the High Court could not make an order under s.6(1) of the , on the ground that section 11 of the Act did not confer such a power on the High Court.
Dealing with this argument, this Court observed: "It is however possible that the words in section 11(1) "pass an order under the Act" are not to be construed so strictly and literally, but to be understood to mean "to exercise the powers or jurisdiction conferred by the Act." This wide interpretation might perhaps be justified by the scope and object of this section.
Section 11 is to apply "notwithstanding anything in the Code or any other law" to all courts empowered to sentence offenders to imprisonment.
To read a beneficial provision of this universal type in a restricted sense, so as to confine the power of these courts to the exercise of the [1963] Supp. 2 S.C.R. 745, 755.
684 powers under sections 3 and 4 alone would not, in our opinion, be in accord with sound principles of statutory interpretation.
We are therefore inclined to hold that the Courts mentioned in section II be they trial courts or exercising appellate or revisional jurisdiction are thereby empowered to exercise the jurisdiction conferred on Courts not only under sections 3 and 4 and the consequential provisions but also under s.6.
" When it was contended that the word "may" in section 11 of the Act empowers the appellate court or the High Court to exercise the power at its option and the words "any order under the Act" empower it to make an order without reference to the standards laid down in the Act, this Court rejected both the contentions.
It held that the expression "may" has compulsory force and that the power conferred on the ap pellate court was of the same nature and characteristic and subject to the same criteria and limitations as those ,conferred on courts under sections 3 and 4 of the Act.
This decision lays down three propositions, namely, (i) an appel late court or a revisional court can make an order under s.6(1) of the Act in exercise of its power under s.11(1) thereof; (ii) it can make such an order for the first time even though the trial court could not have made such an order, having regard to the finding given by it; and (iii) in making such an order it is subject to the conditions laid down in sections 3, 4 and 6 of the Act.
The only distinguishing feature between the present case and the said decision is that in the present case the trial court did not make the order as the Act was not extended to the area within its jurisdiction and in the said decision the trial court did not make the order as it could not, on its finding that the accused was guilty of an offence Dunishable with imprison ment for life.
But what is important is that this Court held that the High Court for the first time could make such an order under section 11 of the Act, as such a power was expressly conferred on it by section 11 of the Act.
We, therefore, hold that the appellate court in appeal or the High Court in revision can, in exercise of the power conferred under section 11 of the Act, make an order under section 6(1) thereof, as the appellate court and the High Court, agreeing with the Magistrate, found the accused guilty of the offences for which he was charged.
The next question is whether this Court can exercise the same power under section 11(1) of the Act.
This Court in disposing of an appeal against an order of the High Court would be deciding what the High Court should have held in the revision before it.
This Court 's power would also be confined to the scope of the power exercisable by the High Court.
This Court, therefore, can either make an order under s.6(1) of the Act or 685 ,direct the High Court to do so.
But whether this Court directly makes an order under s.6(1) or directs the High Court to do :so, it is bound to comply with the provisions of s.6 of the Act.
A court cannot impose a sentence of imprisonment on a person under 21 years of age found guilty of having committed ,an offence punishable with imprisonment (but not with imprisonment for life) unless it is satisfied that, having regard to the circumstances of the case including the nature of the offence and the character of the offender, it would not be desirable to deal with him under s.3 or s.4 of the Act.
For The purpose of satisfying itself in regard to the said action, under sub section
(2) of section 6 of the Act the Court shall call for a report from the probation officer and consider the report, if any, and any other information available to it relating to the character and physical and mental condition of the offender.
After con sidering the said material the court shall satisfy itself whether it is desirable to deal with the offender under section 3 or section 4 of the Act.
If it is not satisfied that the offender should be dealt with under either of the said two sections, it can pass the sentence of imprisonment on the offender after recording the reasons for doing so.
It is suggested that the expression "if any" in sub section
(2) of s.6 indicates that it is open to the court to call for a report or not; but the word "shall" makes it a mandatory condition and the expression "if any" can in the context only cover a case where notwithstanding such requisition the Probation Officer for one reason or other, has not submitted a report.
Briefly stated the calling for a report from the Probation Officer is a condition precedent for the exercise of the power under s.6(1) of the Act by the Court.
We think that in the circumstances of the case the best course is to remand the matter to the High Court to make an order after complying with section 6(1) of the Act.
lastly it is contended that we should not at this very late stage of the proceeding, and especially in view of the observations of the Additional Sessions Judge in sentencing the accused, interfere with the order of the High Court.
Ordinarily this Court would be reluctant to allow a party to raise a point for the first time before it.
But in this case both the Additional Sessions Judge and the High Court ignored the mandatory provisions of the Act.
It is true that the accused did not bring the provisions of the Act to the notice of the court till after the revision was disposed of.
But that does not absolve the court from discharging its duty under the Act.
The observations made by the Additional Sessions Judge in sentencing the accused were made de hors the provisions of the Act.
these observations it cannot be held that the learned Additional Sessions Judge had satisfied himself of the conditions laid down in s.6(1) of the Act.
That apart, as we have pointed out, he could not have legally satisfied himself of the matters mentioned in s.6(1) of the Act without complying with the conditions laid down therein.
We are satisfied that, as the Act was recently extended to Gurgaon District, its existence had escaped the attention of the Additional Sessions Judge as well.
as of the High Court and, therefore, it is a fit case for our interference under article 136 of the Constitution.
We set aside the order of the High Court and direct it to make an order under s.6 of the Act, or, if it so desires, to remand it to the Sessions Court for doing so.
We should also make it clear that we do not intend to question the correctness of the finding of the courts in regard to the guilt of the accused; indeed, the learned counsel for the appellant did not question the said finding.
that when a person has been found guilty for the first time of an offence to which the provisions of sections 3 and 4 of the (Act No. XX of 1958), hereinafter called the Act, could apply, and such finding, be it of the trial Court or of the appellate Court, is arrived at before the application of the Act, the Court of appeal or revision cannot take action under section 11 (1) of the Act when the case comes, before it in appeal or revision.
In this case, the trial Court had convicted the appellant prior to the application of the Act in that area and could not take into consideration the provisions of that Act in the passing of the sentences on convicting the appellant.
The appellant was convicted by the trial Court on May 31, 1962, prior to the application of the Act to that area,.
The Act was applied on September 1, 1962, by a Government Notification, when the appellant 's appeal was pending in the Court of the Sessions Judge.
The appeal was dismissed on September 22, 1962.
The appellant did not draw the attention of the Court to the provisions of the Act.
The Court did not consider them.
The appellant went in revision to the High Court.
The revision was dismissed on September 27, 1962.
The High Court also did not refer to the provisions of the Act.
On September 28, 1962 the appellant filed a petition praying that under sections 3, 4 and 6 of the Act the petitioner be released or that he be dealt with under section 562(2) of the Code of Criminal Procedure, hereinafter, called the Code.
That application was rejected.
Neither this petition nor the order of ' rejection was mentioned in the petition for special leave to appeal.
Reference to these is found in the petition filed in the High Court for leave to appeal to this Court under article 134(1)(c) of the Constitution dated October 3, 1962, printed at 687 p. 25 of the appeal record and in the grounds of appeal accompanying it.
The petition for special leave filed in this Court sought leave to appeal against the order and judgement dated September 27, 1962 in the main revision case and not against the order rejecting the petition, Criminal Miscellaneous, No. 793 of 1962.
It was not a correct statement in paragraph 9 of the special leave petition, to the effect that the petitioner filed an application under article 134(1)(c) of the Constitution for grant of certificate of fitness for leave to appeal to this Court, but it was refused on October 19, 1962.
The ground, as recorded, prima facie showed that such an application was for leave to appeal against the order in the Criminal Revision, No. 1172 of 1962.
In these circumstances, the special leave granted is liable to be revoked.
The appellate court sees that the order of the court below ,on the material on record is correct or not and has to pass a correct order on that material.
If the trial Court could not have taken action under the provisions of the Act which was riot in force at the time it found the accused guilty, the appellate Court could not have taken action under those provisions unless the Act specifically provided for those provisions to be applicable to cases which had been decided earlier, prior to its application.
There is no such express provision in the Act and I do not find any necessary implication from the provisions of the Act in that regard.
It is true that appellate Courts have allowed parties to take advantage of a law enacted during the pendency of the case, but this is done when parties can litigate further in view of the changed law and is done to save multiplicity of proceedings.
Such a ground is not available in the present case.
Ordinarily, it takes a few years for a case decided by a Magistrate who tries it in the first instance, and the passing of the final order by the High Court in revision.
Ordinarily, an appeal lies to the Sessions Judge from the order of the Magistrate and a revision against the Sessions Judge 's order to the High Court.
The two proceedings before the Sessions Judge and the High Court do take time.
The Act is an all India Act and there would be a very large number of persons convicted by trial Courts prior to the enforcement of the Act.
It is too much to suppose that the legislature intended that all the orders of the Magistrates in such cases of conviction against persons under 21 years of age automatically become illegal and liable to correction by the Courts of appeal and revision.
Not only would they be liable to be set aside, the setting aside of the Magistrates ' orders about sentences would not have ended the matters but would have led to further proceedings to be taken by the Magistrates or the appellate Courts for the purpose of coming to a conclusion whether action can be taken in accordance with the provisions of sections 3, 4 and 6 of the Act.
All those numerous cases would have to be reopened and I cannot believe that the legislature would have intended such a result and would not have expressed itself very clearly if it had really intended so.
Section 3 of the Act empowers the Court to release certain offenders after admonition and section 4 empowers the Court to release certain offenders on probation of good conduct.
The Court which is to take action under these sections is the Court by which the person is found guilty of the offences in the respective sections and in circumstances specified in the respective sections.
Such orders are made instead of sentencing the person found guilty to any punishment which could be awarded to him.
It is clear that action under these sections can be taken by the Court which finds a person guilty of the offence for the first time.
A person may be found guilty of the respective offence by the trial Court or by appellate Court if it alters his conviction for an offence which did not fall under either of those sections to one which falls under any of them, or by the High Court if it finds the accused person guilty on appeal against acquittal.
It is in these circumstances that it can be said that the trial Court or the appellate Court or the High Court has found an accused guilty.
A Court of revision cannot convert a finding of acquittal into a finding of conviction and therefore no such case can arise in which a Court of revision for the first time finds an accused guilty of an offence to which the provisions of sections 3 and 4 of the Act apply.
When an appellate Court confirms the conviction of a person it is not the Court which finds him guilty but is the, Court which confirms the finding of the trial Court about the person being guilty on forming an opinion that the order of the trial Court is correct.
If the expression 'the Court by which the person is found guilty ' was to include the appellate Court confirming the conviction of a person for the offence which fell under any of the two sections, it would not have been necessary to clothe the appellate Court with a power to take action under these sections, as sub section
(1) of section 11 does.
This subsection reads: "Notwithstanding anything contained in the Code or any other law, an order under this Act may be made by any Court empowered to try and sentence the offender to imprisonment and also by the High Court or any other Court when the case comes before it on appeal or in re vision.
" It is clear from the language of this sub section that the Court which is empowered to order under the Act in the first instance is the Court which is empowered to try and sentence the offender to imprisonment, i.e., the original trial 689 Court.
It is given the power to take action under the Act.
Orders under the Act can also be made by the High Court or any other Court when the case comes before it on appeal or in revision.
The question is as to in which case the High Court or any other Court, can exercise its power.
It can exercise it, when the case in which the trial Court could have exercised the power comes before it.
This is to be deduced from the use of the word 'also ' and from the occasion when the High Court or any other Court can make such an order, it being when the case comes before it on appeal or in revision.
It must, therefore, be the case in which the trial Court could take a certain action in which the High Court or any other Court could also take action only when it came before it on appeal or in revision.
I do not consider it reasonable to construe the language of sub section (1) to mean that the High Court or any other Court could take action in all cases of appeal or revision before it irrespective of the fact whether the trial Court could have made an order tinder the Act in those cases or not.
The scheme of section 11 seems to support this view sub section (1) mentions the Courts which can make orders under the Act.
Sub section (2) provides an appeal where an order under section 3 or section 4 is made by any Court in trying an offender.
This means that when a Court trying an offender convicts him and takes action under section 3 or section 4, an appeal in that case will lie.
Of course no question of the appellate Court taking action under section 3 or section 4 arises in such appeals because action has already been taken by the trial Court and the appellate Court would only look to the correctness of the conviction and in case it finds action under section 3 or section 4 to be unjustified, may even set aside that order and pass suitable sentence as provided in sub section
Sub section (2) makes provision for an appeal and sub section
(4) makes provision for the appellate Court to consider the propriety of any order made under sections 3 or 4 of the Act.
These provisions in sub section
(2) and sub section
(4) exhaust the cases in which orders under sections 3 or 4 could be made by the High Court or any other Court.
While sections 3 and 4 confer a discretionary power in the Court to make an order under those sections in certain cir cumstances, sub section
(1) of section 6 makes it incumbent on the Court finding a person under 21 years of age guilty of offences punishable with imprisonment not to sentence such person convicted of such an offence to imprisonment unless it is satisfied, having regard to the facts mentioned in the sub section that it would not be desirable to deal with him under section 3 or section 4 and in that case it has to record its reasons for sentencing him to imprisonment.
Sub section (2) makes it incumbent on the Court to get a report from the Probation Officer and consider it in order to satisfy itself whether it would not be desirable to deal under section 3 or section 4.
These provisions of section 6 restrict 690 the discretion of the trial Court for taking action under section 3 and section 4 in regard to persons under 21 years of age and constricted of all offences except offences punishable with imprisonment for life.
A Court can, however, sentence such a person to imprisonment only after considering various matters and finally satisfying itself that it would not be desirable to make an order under section 3 or section 4 in regard to that person.
A case to which the provisions of section 6 apply is dealt with by sub section
(3) of section II which provides that when a Court has declined to deal with the person under section 3 or section 4 and has passed a sentence of imprisonment and when no appeal lies or none has been preferred from that order, the Court to which appeals ordinarily lie from the sentence of the Court may, suo motu or on an application made to it by the convicted person or the Probation Officer, call for and examine the record of the case and pass such order thereon as it thinks fit.
Of course, if the order is appealable, the appellate Court can consider the matter in view of the power conferred under sub section
(1), which enables the appellate Court when the case comes before it to make any order under the Act.
Action under sub section
(3), it is clear, can be taken by the appellate Court only in cases in which the trial Court has declined to take action under section 3 or section 4, that is to say, the trial Court, at the time of conviction and sentencing a person, had the power to make an order under section 3 or section 4 and had felt satisfied that such an order was not desirable.
If it has no such power at the time and has passed a non appealable order, or when the convicted person does not appeal, action cannot be taken under sub section
(3) because it cannot be said with any propriety that the trial Court had declined to take action under section 3 or section 4.
This is a strong indication of the fact that powers conferred on the High Court or any Court of appeal or revision under section II are to be exercised in the cases coming before them in which the trial Court itself could have made an order under the Act.
Reference may also be made to an incidental matter.
An order of admonition under section 3 puts an end of the case it being the final order against the convicted person, subject of course to the orders of the appellate Court in case the convicted person appeals against his conviction.
This cannot be said with respect to an order under section 4, an order which would direct that the convicted person be released on his entering into a bond to appear and receive sentence when called upon during such period, not exceeding 3 years, as the Court may direct and in the meantime to keep the peace and be of good behaviour.
The passing of the sentence provided for the offence is put off and the convicted person stands the risk of a proper sentence being passed against him in future in 691 certain circumstances.
Section 9 provides in case of the convict 's failure to observe the conditions of the bond that he and his sureties be summoned to Court which may remand the accused to custody or grant him bail and, if satisfied that he had failed to observe any of the conditions of the bond, forthwith to sentence him for the original offence and where the failure is for the first time to impose upon him a penalty not exceeding Rs. 50/ without prejudice to the continuance in force of the bond.
In case a convicted person has not been able to observe the conditions of the bond, he, in a way, stands to suffer larger punishment than what he would have got in the first instance in case in addition to the sentence which would be passed upon him he had already, for a certain period, observed the conditions of the bond and had also, in view of the provisions of section 5, paid compensation to the victim of the offence and costs of the proceedings which are recovered as fine.
The Code does not provide for the payment of costs and provides for the payment of compensation when ordered out of the fine imposed on an accused; vide sections 545 and 546A of the Code.
This Court considered certain provisions of the Act in Ramji Missar vs State of Bihar(1) and held that the crucial date for the application of the aforesaid sections viz., sections 3, 4 and 6 of the Act to, the case of an accused whose conviction by the trial Court of offences to which those sections do not apply, was altered by the appellate Court to an offence to which the provisions of those sections applied, would be the (late of the decision of the trial Court in view of the terms of the section on grounds of logic as well as on the theory that the order passed by an appellate Court was the correct order which the trial Court should have passed.
This tends to support the view I have expressed above.
It may be mentioned that in that case the trial Court could make an order under section 4 of the Act at the time it convicted one Basist, who was then under 21 years of age, if it had convicted him of the offence to which the provisions of section 4 applied.
The High Court altered the conviction to such an offence but held that it was not competent to pass an order under section 6 of the Act.
This Court held that it could.
In the instant case, the trial Court could not take any action in accordance with the provisions of the Act for the simple reason that the Act was not in force on the day it convicted the appellant.
I am, therefore of opinion that the point for determination before us.
that is, whether the appellate Court can make an order under the Act in cases in which the trial Court on the date of conviction could not have made an order under the Act did not arise for decision in that case.
This question, (1) [1963] Supp. 2 S.C.R. 745.
692 is very different from the question whether an appellate Court can make an order under the Act when it alters the conviction of an appellant to an offence with respect to which an order under the Act could have been made by the trial Court as arose in Ramji 's Case(1).
I am therefore of opinion that the High Court could not have made an order under the Act in this case and that therefore this appeal should fail.
I would accordingly dismiss it.
ORDER In accordance with the opinion of the majority, we set aside the order of the High Court and direct it to make an order under section 6 of the , or, if it so desires, to remand it to the Sessions Court for doing so.
Appeal allowed.
(1) [1963] Supp. 2 S.C.R. 745.
[/INST]The appellant, a resident of Palwal in Gurgaon District, committed house trespass and tried to outrage the modesty of a girl aged 7 years.
By an order dated May 31, 1962, he was convicted by magistrate and sentenced to rigorous imprisonment.
He was also ordered to pay fine.
At the time of his conviction, he was 16 years old.
The was extended to Gurgaon on September 1, 1962 and hence at the time of his conviction the magistrate had no power or duty to make any order under the Act.
The appeal of the appellant was dismissed by the Additional Sessions Judge, Gurgaon by his order dated Sep tember 22, 1962.
His revision petition was also dismissed by the High Court on September 27, 1962.
No ground was taken either before the Additional Sessions Judge or High Court that the provisions of the should be applied in the case.
After the dismissal of the revision petition, appellant filed a criminal miscellaneous petition requesting the High Court to exercise its powers under section 11 of the Act and pass orders under sections 3, 4 or 6 of the Act.
The application was also dismissed by High Court.
The appellant filed a petition in the High Court for the grant of a certificate of fitness to appeal to this Court and one of the grounds taken was that High Court should have acted under section 11 of the Act and passed orders under sections 3, 4 or 6 of the Act.
The certificate having been refused by High Court, the appellant came to this Court by special leave.
Accepting the appeal, Held (Per Subba Rao and Das Gupta, JJ.): The order of the High Court be set aside and High Court be directed to make an order under section 6 or if it so desires, remand the case to the Sessions Court for doing so.
It is true that ordinarily, this court is reluctant to allow a party to raise a point for the first time before it, but in this case, both the Additional Sessions Judge and the High Court ignored the mandatory provisions of the Act.
It is true that the appellant did not bring the provisions of the Act to the notice of the Court till after the disposal of the revision petition, but that does not absolve the court from discharging its duty under the Act.
The appellate court in appeal or the High Court on revision can, in exercise of the powers conferred under section 11 of the Act, make an order under section 6(1).
The Act is a milestone in the progress of the modern liberal trend of reform in the field of penology.
It is the result of the recognition of the doctrine that the object of criminal law is more to reform the individual offender than to punish him.
The Act distinguishes offenders below 21 years of age and those 677 above that age and offenders who are guilty of committing an offence punishable with death or imprisonment for life and those who are guilty of a lesser offence.
While in the case of offenders who are above the age of 21 years, absolute discretion is given to the court to release them after admonition or on probation of good conduct, in the case of offenders below the age of 21 years an injunction is issued to the court not to sentence them to imprisonment unless it is satisfied that having regard to the circumstances of the case, including the nature of the offence and the character of the offenders, it is not desirable to deal with them under sections 3 and 4 of the Act.
An order under section 1 1 (1) of the Act can be made by any court empowered to try and sentence the offender to imprisonment and also by High Court or any other court when case comes before it on appeal or in revision.
The sub section ex facie does not circumscribe the jurisdiction of an appellate court to make an order under the Act only in a case where the trial court could have made that order.
The phraseology used therein is wide enough to enable the appellate court or High Court, when the case come before, it, to make such an order.
It was purposely made comprehensive as the Act was made to implement a social reform.
As the Act does not change the quantum of the sentence, but only introduces a provision to reform the offender, there is no reason why the legislature should have prohibited the exercise of such a power even if the case was pending against the accused at one stage or other in the hierarchy of tribunals.
The term "court" in section 6(1) includes an appellate court as well as revisional court.
Per Raghubar Dayal, J. (dissenting) When a person has been found guilty for the first time of an offence to which the provisions of sections 3 and 4 of the could apply, and such finding, be it of the trial court or of the appellate court, is arrived at before the application of the Act, the court of appeal or revision cannot take action under section 11(1) of the Act when the case comes before it in appeal or revision.
It is true that appellate courts have allowed parties to take advantage of a law enacted during the pendency of the case, but this is done when parties can litigate further in view of the changed law and is done to save multiplicity of proceedings.
Such a ground is not available in the present case.
Ramji Missar vs State of Bihar, [1963] Supp.
2 S.C.R. 745, referred to.
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<s>[INST] Summarize the judgementition No. 8911 of 1981.
(Under article 32 of the Constitution of India) Petitioner in Person K.G. Bhagat, Addl.
Gen., N.C. Talukdar and R.N. Poddar for the Respondents.
The Judgment of the Court was delivered by RANGANATH MISRA, J.
The petitioner in this petition under Article 32 of the Constitution is a resident of Sultanbattery area in the State of Kerala and describing himself as a commuter of the Indian Railways he has alleged violation of fundamental rights guaranteed under Articles 19 and 21 and claims reliefs of mandamus to the Union of India for implementing the reports of the Kunzru, Wanchoo and Sikri Committees, appointing a fact finding Commission to inquire and report about the numerous train accidents from 1970 onwards and for several other directions to the Union Government and the instrumentalities connected with the administration of the Railways.
As the petition which the petitioner, an allopathic doctor by profession, had himself drafted and filed was unduly long and repetitive, written submission with the assistance of counsel crystalising the issues for determination by the Court was filed, leave to amend the writ petition was granted and notice thereon was issued on August 2, 1982.
The petitioner alleged, inter alia, that the Railways in this country are owned by the Central Government and on account of failure to fulfil the constitutional, statutory and commercial obligations by the Railways, adequate safety protection to the passengers and their properties is not available.
The Indian Railways Act, 1890 ( 'Act ' for short) has prescribed several safety measures; based upon experience, the Railway Board through which apex body the administration is run and controlled has also prescribed rules and issued instructions which are not being properly implemented.
The Union Government had appointed three high powered Committees in the post independence period, namely, the Kunzru, Wanchoo and Sikri Committees to investigate into the 712 affairs of the Railways with particular reference to accidents and though detailed and useful recommendations have been made by these committees, there has been no adequate implementation thereof.
Particular reference has been made to the unmanned level crossings, increasing human error as a contributing factor to accidents, non allocation of adequate funds for improvements, improper utilisation of the assets and facilities, inefficiency in the administration at different levels, prevalence and increase of indiscipline, frequency of thefts, robberies and murders of passengers, ineffective checking and supervisory system, want of replacement of equipment and repairs to bridges as also non provision of adequate facilities to passengers.
The Joint Director (Safety) has filed a counter affidavit in answer to the Rule on behalf of the respondents.
It has been averred that the recommendations of the Accidents Enquiry Committees were examined and implemented within the limits of financial and material resources.
So far as manned level crossings are concerned there were as many as 14471 of them as on March 1, 1982; unmanned level crossings were provided mostly on roads where the volume of road and train traffic was low.
It has been further pleaded that periodic review is undertaken about manning of unmanned level crossings and opening of new level crossings in consultation with appropriate State Governments.
Initially it used to be the obligation of the respective State Governments to provide for such level crossings at their cost in view of the accepted position that at a level crossing the right of way is of the train in preference to the traffic on the road.
As that arrangement was not working well, with effect from April 1, 1966, a Railway Safety Work Fund has been set up and expenses are being met out of it.
From 1978 potentially hazardous unmanned level crossings with a volume of traffic of more than 6000 train vehicle units or poor approach visibility are being manned in a phased manner at the cost of the Railways and control at the gate is also being improved.
As on June 1, 1982, there were as many as 27233 unmanned level crossings on the Railways and if all of them are to be manned, a capital expenditure of 330 crore rupees would be necessary and similarly an annual recurring expenditure of Rs.44 crores will have to be met.
As a measure of safety, whistle boards have been fixed near unmanned level crossings requiring the engine driver to whistle while approaching such level crossings.
Most of the States have framed rules under the , making it obligatory for 713 drivers of motor vehicles to stop short of unmanned level crossings, observe and then proceed.
Speed breakers are usually provided on the road approaches to all unmanned level crossings.
With a view to educating the users of the roads wide publicity is given through newspapers, cinema slides, commercial broadcasting and the television about the hazards involved while negotiating unmanned level crossings.
It has been alleged that unmanned level crossings are gradually being replaced by manned ones and improved technical gadgets are being provided for efficient operation.
Relying on the Sikri Committee Report of 1978, it has been submitted that the State Governments appeared to be aware of their responsibilities in this matter and about 2/3 of the funds of the Safety Works had been utilised by March 31, 1982.
While admitting that in the initial period utilisation of funds was poor and finalisation of schemes for over bridges and under bridges was slow, the situation is claimed to have improved and in 1982 83 as many as 15 works in different States involving an expenditure of Rs.22 crores have been cleared.
Dealing with manpower, the counter affidavit asserts that direct recruits are given proper training required for the respective posts and only qualified people are entrusted with assignments.
Pragmatic and scientific classification of various posts has been made and suitable care is being taken in this regard.
So far as the locomotive drivers are concerned, strict vision standards have been laid down and general physical fitness is a prescribed pre requisite.
Drivers are subjected to periodical medical examination until the age of 45 at intervals of three years and thereafter until superannuation every year.
Every accident, it has been averred, is thoroughly enquired into to fix the responsibility for it and to visit the delinquent with proper punishment.
Ordinarily such enquiries are conducted by the administrative machinery.
Accidents involving loss of human life and properties estimated over one lakh are earmarked for enquiry by Commissioners of Railway Safety who as authorities appointed under section 4 of the Act function independently of the Railway Administration and are under the administrative control of the Ministry of Civil Aviation.
Enquiries by the Railway officials are stipulated to commence within three days of the accident and are intended to be over within one week of their commencement, while enquiries by Commissioners of Railway Safety are also required to start within three days and official reports are required to be made within 60 days 714 of the accident.
Adequate disciplinary control is exercised and on the findings of the enquiries, the delinquent officials are visited with necessary punishment.
Adverting to robberies and dacoities in the running trains, it has been pointed out that they are problems of law and order, maintenance of which is an obligation of the State Governments.
Government Railway Police, Civil Police and plain clothed CID officers operate for the purpose of reducing crime and for detection.
A moiety share of the cost of GRP is borne by the Railway administration.
Added to this the Railway Protection Force is maintained to protect consignments booked for transport as also Railway property.
The overall strength of the GRP stands at 6,740.
They escort passenger trains running at night by deploying armed guards, provide beat patrolling at stations and waiting halls, keep surveillance over criminals and post pickets at vulnerable points.
With reference to improvements in the rolling stock and required gadgets, it has been stated that the Sixth Plan for the Railways has been termed as 'Rehabilitation Plan '.
Overaged gadgets are intended to be withdrawn subject to availability of resources and manufacturing capacity within the country.
The Planning Commission which is an expert body is responsible for fixing of the priorities.
It has again been pleaded that there are nearly 120000 bridges on the Railways out of which 195 are important bridges and nearly 9400 are major bridges.
It is said that every bridge is annually inspected and continuous record is maintained in regard to every bridge in the bridge register.
On an average 400 to 600 bridges are annually built.
Speed restriction is imposed on old and weak bridges and at present there are 202 such bridges.
Figures of six years between 1977 and 1983 of the outlay on bridges have been provided which indicate substantial sums having been set apart for the rebuilding of bridges.
It is said that the total life of 80 years for steel work and 100 years for masonry part of the bridges stipulated in the Railway Code is for the purpose of provision in the Depreciation Reserve Fund.
The codal life does not have any direct relevance with the condition of a bridge and there is no necessity of rebuilding a bridge when its codal life is over.
There has been no instance where the work of bridge rebuilding has been postponed for lack of funds and no accident has occurred owing to structural failure of any bridge or girders.
715 Colour light signalling which is an improved device less dependent on direct visibility and where signal is pre warned by a signal in the rear, is being provided on the trunk and main routes on a graduated scale.
Automatic warning system has been introduced in Gaya, Mughalsarai and Howrah Burdwan chord line sections on the Eastern Railway.
Due to theft of aluminium track magnets the system has been found not very satisfactory.
Experiments are being made for evolving a design which would not be prone to theft.
The petitioner has filed a rejoinder pointing out that the counter affidavit clearly indicated a negative approach on the part of the respondents to the entire matter.
According to the petitioner assistance of 500 crores of rupees was to come during the year ending March 31, 1983 and from out of such funds, pressing improvements like manning the unmanned level crossings could be undertaken.
Reliance has been placed on the observations of Sikri Committee that accidents at unmanned level crossings take a heavy toll of human lives every year.
The petitioner has pleaded for abolition of overtime employment of safety category staff.
He has pointed out that though he asked for directions for providing appropriate monitoring of speed of trains particularly at accident prone spots in the track, no reply has been given thereto in the counter affidavit.
The strength of the GRP has been said to be totally inadequate keeping in view the size of the Railways and volume of the passenger traffic it handles.
The petitioner has denied the assertion in the counter affidavit that no accident has taken place on account for defective bridges and has pointed out that the accident of June 6, 1981 on a river bridge in the Bihar State was attributable to this factor only.
The petitioner has pleaded again for the introduction of the automatic warning system and has referred to a publication of the Directorate of Safety, Railway Board, entitled, "A Review of Accidents on Indian Railways 1979 80", where the introduction of automatic warning system has been suggested to be introduced to avoid accidents.
He has also pleaded for enhancing the minimum compensation in the event of loss of life of a passenger arising out of accidents to a sum of Rs. 75,000 by appropriate amendment of section 82A (2) of the Act.
The petitioner has found fault with the counter affidavit for being silent in regard to his plea for the appointment of Railway Inspectors to make periodical inspection of carriages, engines, tracks, etc.
716 The lis before us is not of the ordinary type where there are two contending parties, a claim is raised by one and denied by the other, issues are struck, evidence is led and the findings follow.
Though the petitioner is commuter of trains run by the Indian Railways, the writ petition is essentially in the nature of public interest litigation and the petitioner has attempted to voice the grievances of the community availing the services of the Indian Railways.
In view of the recent pronouncements of this Court no objection has been raised in the counter affidavit and we have not been called upon to adjudge the locus standi of the petitioner to maintain an action like this.
Railways came to India in 1853 and the first track to be laid was of a small length connecting the then city of Bombay with a suburb.
Through the decades that followed the expansion was usually for considerations of trade and commerce, troop movement and administrative convenience.
More of expansion came gradually connecting almost the entire country through a well woven net work of Railways and by the time the country became independent most of the Railways had been nationalised and Railways constituted the most important commercial activity of the Government of India.
As early as 1850 and three years before the opening of the first Railway track, Lord Dalhousie, the then Governor General of India had said in his minutes: "I trust they (the East India Company and the Government of India) will ever avoid the error of viewing Railways as private undertakings and will regard them as national works, over which the Government may justly exercise and is called upon to exercise stringent and salutary control This control should not be an arbitrary right of interference but a regulated authority defined and declared by law which is not to be needlessly or vexatiously exacted but which, in my humble judgment, is necessary at once for the interests of the State and for the protection of the public." (Minutes of Lord Dalhousie, July 4, 1850).
This regard for the public interest during the pre independence period was often subject to the limitations imposed by the British Capital and Management and by British Commercial and economic interests until the Railways were nationalised between 1925 and 1944.
717 At any rate, by 1947 when the foreign domination ended, the Railways had emerged as the main viable and stable means of transport and were providing the lifeline and link throughout the length and breadth of the country.
By 1955 the total length of all Indian Railways was 34705 miles and the capital sunk was more than 900 crore rupees.
The rise in the importance of the Railways in the national sphere has been gradual.
With the expansion of the Railways a high powered body known as the Railway Board has come to be placed at the apex of control and with the new set up following independence a Minister remained incharge to administer the affairs of the Railways through the Board.
As early as 1924 by a resolution known as the Convention Resolution of the Legislative Assembly the Railway budget had been separated from the general budget and this historical practice has been continued till today.
Today the Railways provide the most effective means of transport both for passengers also for the goods traffic.
The Railways have a great impact in holding this great country together and in promoting and running its economy.
Their contribution to the community is manifold some seen and others not apparently visible.
Briefly stated, it is a big force, the largest employer in the country and a monopoly transport agency.
Before we come to deal with the specific aspects raised in the writ petition and countered by the respondents certain general observations need be made.
The Indian Railways are a socialised public utility undertaking.
There is at present a general agreement among writers of repute that the price policy of such a public Corporation should neither make a loss nor a profit after meeting all capital charges and this is expressed by covering all costs or breaking even; and secondly, the price it charges for the services should correspond to relative costs.
Keeping the history of the growth of the Railways and their functioning in view, the commendable view to accept may be that the rates and fares should cover the total cost of service which would be equal to operational expenses, interest on investment, depreciation and payment of public obligations, if any.
We need not, however, express any opinion about it.
After independence, keeping to the ideologies that had been nurtured during the period of struggle an attempt has been made 718 for the simplification of the classes in the Railways.
Instead of first class, second class, inter class and third class, two classes only have been maintained, namely, the first class and the second class besides the air conditioned class.
In developed countries usually the classification is higher and lower; sleeping or sitting and the like.
In India 90% of the earnings in respect of passenger traffic come from the lower class commuters.
Also after independence expansion projects have been undertaken and many areas which have hitherto remained unlinked and unconnected have been joined up as part of the national lifeline.
Pandit Jawahar Lal Nehru, first Prime Minister of India had once said: "Our final aim can only be a classless society with equal economic justice and opportunity to all, a society organised on a planned basis for the raising of mankind to higher material and cultural level. .
Every thing that comes in the way will have to be removed; gently if possible, forcibly, if necessary.
And there seems to be little doubt that coercion will often be necessary.
" This approach on principle does not appear to have been abandoned.
It is proper that this is worked out also in the Railways and, as quickly as possible, classification conforming to this is introduced.
It is manifest that the Indian Constitution has definitely rejected the authoritarian form of Government and directed the State to bring about an egalitarian social order through the rule of law.
In keeping with this mandate several guiding policies are being indicated but implementation is not being made.
What Tolstoy remarked can relevantly be quoted as apt: "The abolition of slavery has gone on for a very long time.
Rome abolished slavery; America abolished it and we did, but only the words were abolished, not the thing.
" The implementing machinery has become non functional.
This is so not only in our country.
Wilfred Jenks in his address in April 1972 to the International Law Organisation had summed up the position thus: 719 "Throughout the world there is an acute crisis of confidence in integrity and fairness.
This crisis of confidence lies at the heart of political instability, economic disorder, industrial disturbance, racial and religious conflict, cultural anarchy, youth unrest and continuous international tension.
Disruptive in all these fields, it paralyses action to remove its causes.
" Burger, C.J. of the United States has said: "We are approaching the status of an imperfect society where capability of maintaining elementary security in the streets, in the schools and for the homes of our people is in doubt.
At every stage of the criminal process, the system cries out for change.
" What has been extracted above appropriately summarises the current situation all the world over.
No purpose is served by placing the blame at the doors of the Government of the day.
We must have realism and candour.
Independence has been secured at great cost and sacrifice.
It is our obligation to maintain it and create an environment in which its fruits can be harvested and shared.
Freedom brings responsibility.
There can be no rights without responsibilities.
In our country, unfortunately individual rights seem to have received disproportionate emphasis without proper stress on corresponding social obligations and responsibilities.
In a welfare State like ours the citizen is for ever encountering public officials at various levels, regulators and dispensers of social services and managers of State operated enterprises.
It is of the utmost importance that the encounters are as just and as free from arbitrariness as are the familiar encounters of the rights.
Edmund Burke spoke thus: "All persons possessing a portion of power ought to be strongly and awfully impressed with an idea that they act in trust, and they are to account for their conduct, in that trust to the one great master, author and founder of society.
" 720 Equally apt are the observations of Lord Denning in his address to the National Conference of the Law Society in 1980: "When you look upon these scientific achievements, then look back for a moment on our world today, what do you see, Crime, increasing every where; sins, disgraceful sins, corroding corruption, increasing everywhere.
When we see this, surely we recall the words of 2000 years ago what doth it profit a man if he gains the whole world and loses his own soul.
" What is, therefore, of paramount importance is that every citizen must get involved in the determined march to resurrect the society and subordinate his will and passion to the primordial necessity of order in social life.
Abraham Lincoln once told his Congress: "This country, with its institutions, belongs to the people who inhabit it." Such also is the position in our country.
Everyone in the country must realise this and be told the great truth said by Lord Wright: "The safeguard of British liberty is in the good sense of the people." Liver sidge vs Anderson ; It is useful to conclude our general observations by quoting from Robert Ingersoll: "A Government founded on anything except liberty and justice cannot stand.
All the wrecks on either side of the stream of time, all the wrecks of the great cities and all the nations that have passed away all are a warning that no nation founded upon injustice can stand.
From the sand enshrouded Egypt, from the marble wilderness of Athens, and from every fallen crumbling stone of the once mighty Rome, comes a wail as it were the cry that no nation founded on injustice can permanently stand.
" 721 Having thus cleared the way by indicating the approach, ordinarily the powers of the Court to deal with a matter such as this which prima facie appears to be wholly within the domain of the Executive, should have been examined.
Lord Simond in Shaw vs Director, Public Prosecution, has observed: "I entertain no doubt there remains in the Courts of Law a residual power to enforce the supreme and fundamental purpose of the law, to conserve not only the safety and order, but also the moral welfare of the State and that it is their duty to guard against attacks which may be more insiduous because they are novel and unprepared for.
" Mathew, J. in Murlidhar Aggarwal vs State of U.P., indicated: "Public policy does not remain static in any given community.
It may vary from generation to generation and even in the same generation.
Public policy would be almost useless if it were to remain in fixed moulds for all time.
If it is variable, if it depends on the welfare of the community at any given time, how are the courts to ascertain it ! The Judges are more to be trusted as interpreters of the law than as expounders of public policy.
However, there is no alternative under our system but to vest this power with Judges.
The difficulty of discovering what public policy is at any given moment certainly does not absolve the Judges from the duty of doing so.
In conducting an enquiry, as already stated, Judges are not hidebound by precedent.
The Judges must look beyond the narrow field of past precedents, though this still leaves open the question in which direction they must cast their gaze." The learned Judge then quoted with approval the famous statement of Cardozo (The Nature of Judicial Process): 722 "No doubt there is no assurance that Judges will interpret the mores of their day more wisely and truly than other men.
But this is beside the point.
The point is rather that this power must be lodged somewhere and under our Constitution and laws, it has been lodged in the Judges and if they have to fulfil their function as Judges, it would hardly be lodged elsewhere.
" The petitioner has grounded his petition on Articles 19 and 21 of the Constitution.
Article 19, inter alia, guarantees freedom of movement throughout the territory of India and to practice any profession, to carry on any occupation, trade or business, and Article 21 guarantees that no person shall be deprived of his life and personal liberty except according to procedure prescribed by law.
The petitioner has maintained that he, may every citizen of this country for the matter of that, is entitled to demand that the State shall provide adequate facilities and create and maintain an environment in which the right to move freely and carry on any business or profession would both be practicable and feasible.
Since the State maintains the Railways which provide the link and make working out of both these rights possible, it is contended, such facilities should be in good shape, adequate, prompt, efficient, economic and within the reach of the common man, free from danger or apprehension of life.
Similarly, this service must operate efficiently for transport of goods to facilitate business and practice of profession and trade by citizens.
There is hardly any scope to doubt that the guarantees provided in Part III of the Constitution are fundamental and it is the paramount obligation of the State to ensure availability of situations, circumstances and environments in which every citizen can effectively exercise and enjoy those rights.
The right to life has recently been held by this Court to connote not merely animal existence but to have a much wider meaning to include the finer graces of human civilization.
If these rights of the citizens are to be ensured, it is undoubtedly the obligation of the Union of India and its instrumentalities to improve the established means of communication in this country.
Here again, however, we need not express any opinion as we do not propose to give any directions to the opposite parties.
No dispute regarding maintainability having been raised, that question also did not arise for consideration.
We have said earlier that the Railways are a public utility service run on monopoly basis.
Since it is a public utility, there is 723 no justification to run it merely as a commercial venture with a view to making profits.
We do not know at any rate it does not fall for consideration here if a monopoly based public utility should ever be a commercial venture geared to support the general revenue of the State but there is not an iota of hesitation in us to say that the common man 's mode of transport closely connected with the free play of this fundamental right should not be.
We agree that the Union Government should be free to collect the entire operational cost which would include the interest on the capital outlay out of the national exchequer.
Small marginal profits cannot be ruled out.
The massive operation will require a margin of adjustment and, therefore, marginal profits should be admissible.
It is of paramount importance that the services should be prompt, efficient and dignified.
The quality of the service should improve.
Travel comforts should be ensured.
Facilities in running trains should be ensured.
Quality of accommodation and availability thereof should be ensured.
The administration should remain always alive to the position that every bona fide passenger is a guest of the service.
Ticketless travelling has to be totally wiped out.
We are of the view that it is this class of passengers which is a menace to the system.
Without any payment these law breakers disturb the administration and genuine passengers.
Stringent laws should be made and strictly enforced to free the Railways from this deep rooted evil.
Security both to the travelling public as also to the non travelling citizens must be provided and this means that accidents have to be avoided, attack on the persons of the passengers and prying on their property has to stop.
Scientific improvements made in other countries and suitable to the system in our country must be briskly adopted.
The obligations cast by the Railways Act and the Rules under it must be complied with.
It is relevant to point out here that in the counter affidavit the respondents have denied some of the assertions of the petitioner, yet no dispute has been generally raised to the stand taken in the writ petition.
We are alive to the fact that Government have limitations, both of resources and capacity, yet we hope that the Government and the Administration would rise to the necessity of the occasion and take it as a challenge to improve this great public utility in an effective way and with an adequate sense of urgency.
If necessary, it shall set up a high powered body to quickly handle the many faced problems standing in the way.
Giving directions in a matter like this where availability of resources has a material bearing, policy regarding 724 priorities is involved, expertise is very much in issue, is not prudent and we do not, therefore, propose to issue directions.
We, however, do hope and believe that early steps shall be taken to implement in a phased manner the improvements referred to in the counter affidavit and in our decision.
We think it proper to conclude our decision by remembering the famous saying of Henry Peter Broughan with certain adaptations: "It was the boast of Augustus that he found Rome of bricks and left it of marble.
But how noble will be the boast of the citizens of free India of today when they shall have it to say that they found law dear and left it cheaper; found it a sealed book and left it a living letter; found it the patrimony of the rich and left it the inheritance of the poor; found it the two edged sword of craft and oppression and left it the staff of honesty and the shield of innocence.
" It is only in a country of that order that the common man will have his voice heard.
The dream can become a reality if every citizen becomes aware of his duty and before asking for enforcement of his right, volunteers to perform his obligation.
And before we part, we must record our appreciation of the performance of the petitioner.
He has taken great pains to highlight his stand collected a lot of relevant material and argued his case quite well a doctor by profession though.
As this was a public interest litigation, we direct that he shall be entitled to consolidated cost of Rs. 5,000 recoverable from the Railway Ministry of the Union Government unless paid within two months hence.
[/INST]The appellant was the Chairman of an autonomous cooperative society under the control and supervision of the State Government.
On receipt of complaints about the financial management of the Society, the Registrar of Cooperative Societies appointed a special auditor to audit the Society 's accounts.
On the basis of the audit report a charge sheet was filed against all the accused for entering into a conspiracy to commit criminal breach of trust.
The conspiracy charge having failed, all the accused except one were acquitted by the Sessions Judge.
On appeal by the State, the High Court convicted the appellant in respect of three items, namely, purchase of fertilisers involving two transactions and missing of certain oil engines, on the ground that as Chairman of the Managing Committee he must be held to be vicariously liable for any order given or misappropriation committed by the other accused.
In appeal to this Court it was contended on behalf of the appellant that no case of defalcation had been made out against the appellant.
Allowing the appeal, ^ HELD: 1.
There was no justification for the High Court to interfere with the appellant 's acquittal.
The case against the appellant had not been proved beyond reasonable doubt and he was wrongly convicted by the High Court.
[802 D E] 798 2.
In a case where there was serious defalcation of the properties, unless the prosecution proved that there was a close cohesion and collusion between all the accused which formed the subject matter of a conspiracy, it would be difficult to prove the charges against the appellant.
The charge of conspiracy having failed, the most material and integral part of the prosecution story against the appellant disappeared.
[801 B C] 3.
In a criminal case of such serious nature mens rea cannot be excluded.
Once the charge of conspiracy has failed the onus lay on the prosecution to prove affirmatively that the appellant was directly and personally connected with acts or omissions pertaining to the items purchased.
[801 E] 4.
In the absence of a charge of conspiracy the mere fact that the appellant happened to be the Chairman of the Committee would not make him liable in a vicarious sense.
There is no evidence either direct or circumstantial to show that apart from approving the purchase of fertilisers he knew that the firms from which the fertilisers were purchased did not exist.
If the Chairman was to be made liable then all members of the Committee, viz Tehsildar and other nominated members would be equally liable because all of them participated in the deliberation of the meetings of the Committee.
The appellant as Chairman of the Sangh, had to deal with a large variety of matters and it would not be humanly possible for him to analyse and go into the details or every small matter in order to find out whether there has been any criminal breach of trust.
[801 G H; 802 A B]
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<s>[INST] Summarize the judgementAppeal No. 84 of 1957.
Appeal from the judgment and decree dated November 7, 1955, of the Bombay High Court in Appeal No. 629 of 1955, arising out of the judgment and decree dated August 9, 1955, of the.
City Civil Court, Bombay, in Suit No. 2178 of 1954.
A.V. Viswanatha Sastri and I. N. Shroff, for the appellants.
Purshotam Tricumdas and C. P. Lal, for the respondents.
March 31.
The following Judgment of the Court was delivered by IMAM J.
The sole question considered and decided by the High Court was whether the suit filed by the appellants in the City Civil Court could be entertained by that Court, having regard to the provisions of section 28 of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 (hereinafter referred to as the Act).
The High Court was of the opinion that the City Civil Court had no jurisdiction to entertain the suit.
It did not pronounce any opinion on the merits of the appellants ' case.
The only question which requires con sideration in this appeal is whether the High Court correctly decided that the City Civil Court had no jurisdiction to entertain the suit filed by the appellants.
The first plaintiff in the suit before the City Civil Court, was a tenant of the premises in question under the first defendant.
The second and third plaintiffs were persons to whom the said premises were sublet by 369 the first plaintiff.
The first defendant as landlord of the premises in suit gave notice to quit to the first plaintiff on December 6, 1947.
Thereafter, he filed suit ' No. 483/4400 of 1948 in the Court of Small Causes Bombay on April 29,1948, whereby he sought to evict the first plaintiffs To that suit the first defendant also made the second and the third plaintiffs parties alleging that they were trespassers and had no right to be on the premises.
The Small Cause Court held that the second and third plaintiffs were not lawful subtenants and the subletting by the first plaintiff to them being contrary to law the latter had deprived himself of the protection of the Act.
It accordingly passed a decree for eviction of all the plaintiffs of the present suit.
An appeal against the decree was unsuccessful and a revisional application to the High Court of Bombay was summarily dismissed by that Court.
Thereafter, the present suit No. 2178 of 1954 was filed by the appellants in the Bombay City Civil Court on September 20, 1954.
In this suit the appellants prayed for a declara tion that the first plaintiff was a tenant of the defendants and was entitled to protection under the Act and that the second and the third plaintiffs were lawful subtenants of the first plaintiff and were entitled to possession, use and occupation of the premises as subtenants thereof.
The City Civil Court held that it had jurisdiction to entertain the suit but dismissed the suit on the ground that there bad been no lawful subletting, by the first plaintiff of the premises to the second and the third plaintiffs as the provisions of section 10 of the Bombay Rents, Hotel Rates and Lodging House Rates (Control) Act, 1944 (Bombay Act No. VII of 1944) (hereinafter referred to as the Bombay Rents Act, 1944) had not been properly complied with.
Against that decision the appellants appealed to the Bombay High Court which was dismissed.
The High Court disagreed with the view of the Judge of the City Civil Court that he had jurisdiction to entertain the suit but did not record any decision on the merits of the appellants ' case.
The preamble of the Act states that it was expedient 47 370 to amend and consolidate the law relating to the control of rents and repairs of certain premises, of rates of hotels and lodging houses and of evictions.
The entire provisions of the Act read as a whole show that the Act was passed to achieve that purpose.
The Act defines " landlord " to mean " any person who is for the time being, receiving, or entitled to receive, rent in respect of any premises whether on his own account or on account, or on behalf, or for the benefit of any other person or as a trustee, guardian, or receiver for any other person or who would so receive the rent or be entitled to receive the rent if the premises were let to a tenant ; and includes any person not being a tenant who from time to time derives title under a landlord; and further includes in respect of his subtenant a tenant who has sublet any premises " and " tenant " to mean " any person by whom or on whose account rent is payable for any premises and includes (a) such subtenants and other persons as have derived title under a tenant before the coming into operation of this Act, (a) any person to whom interest in premises has been transferred under the proviso to section 15, (b) any person remaining, after the determination of the lease, in possession, with or without the assent of the landlord, of the premises leased to such person or his predecessor who has derived title before the coming into operation of this Act, (c) any member of the tenant 's family residing with him at the time of his death as may be decided in default of agreement by the Court.
" Section 12 gives protection to a tenant from eviction if he pays or is ready and willing to pay standard rent and permitted increases.
Section 13 states the grounds upon which the landlord is entitled to recover possession of any premises.
Amongst the numerous grounds one is if the tenant had since the coming into operation of the Act sublet the whole or part of the premises or assigned or transferred in any other manner his interest therein.
Section 14 states: ,,Where the interest of a tenant of any premises is determined for any reason, any subtenant to whom the premises or any part thereof have been lawfully 371 sublet before the coming into operation of this Act shall subject to the provisions of this Act, be deemed to become the tenant of the landlord on the same terms and conditions as he would have held from the tenant if the tenancy had continued.
" Section 28 of the Act deals with jurisdiction of courts and it states: " (1) Notwithstanding anything con tained in any law and notwithstanding that by reason of the amount of the claim or for any other reason, the suit or proceeding would not, but for this provision, be within its jurisdiction, (a) in Greater Bombay, the Court of Small Causes, Bombay, (aa) in any area for which, a Court of Small Causes is established under the Provincial Small Cause Courts Act, 1887, such Court and (b) elsewhere, the Court of the Civil Judge (Junior Division) having jurisdiction in the area in which the premises are situate or, if there is no such Civil Judge, the court of the Civil Judge (Senior Division) having ordinary jurisdiction, shall have jurisdiction to entertain and try any suit or proceeding between a landlord and a tenant relating to the recovery of rent or possession of any premises to which any of the provisions of this Part apply and to decide any application made under this Act and to deal with any claim or question arising out of this Act or any of its provisions and subject to the provisions of subsection (2), no other court shall have jurisdiction to entertain any such suit, proceeding or application or to deal with such claim or question." Section 29 deals with appeals.
It provides that there will be no further appeal from the appellate order.
Section 29A, however, states that nothing contained in sections 28 or 29 shall be deemed to bar a party to a suit, proceeding or appeal mentioned therein in which a question of title to premises arises and is determined, from suing in a competent court to establish his title to such premises.
The plaint in the suit filed by the appellants in the City Civil Court clearly asserts that the first plaintiff was entitled in law to sublet the premises in question to the second, and third plaintiffs and that there had been a lawful subletting of the premises to them.
It 372 was not necessary for the first plaintiff to comply with the provisions of section 10 of the Bombay Rents Act, 1944.
It further alleged that the Appeal Court of Small Causes of Bombay erred in holding that the first plaintiff could sublet the premises only if he had complied with the provisions of section 10 of the aforesaid Act.
According to para.
11 of the plaint the plaintiffs asserted that they were always ready and willing to pay the rent in respect of the said premises and to observe and perform the terms and conditions of the tenancy.
Paragraph 12 states the declaration which the plaintiffs prayed for in the suit, which is in the following terms: " The plaintiffs submit that they are entitled to a declaration that 1st plaintiff is a tenant of the said premises within the meaning of the Bombay Rents, Hotel and Lodging House Rates Control Act of 1947, and that the 2nd and 3rd plaintiffs are entitled to the possession, use and occupation of the said premises as the lawful subtenants of the 1st plaintiff in respect of the said premises".
Clauses (a) and (b) of para.
18 of the plaint contain the relief sought by the plaintiffs.
They are in substance what is stated in para.
12 though separately stated for the first plaintiff and second and third prayer in cl.
(c) of the defendants, their plaintiffs respectively.
The para an injunction against servants or agents restraining them from proceeding further with the execution of the decree of the Court of Small Causes in suit No. 483/4400 of 1948.
It is manifest from the assertion in the plaint and the nature of the relief asked for that the plaintiffs based their case on the provisions of the Act.
According to them, the Act gave the first plaintiff protection and the second and third plaintiffs were entitled to remain in possession as subtenants of the first plaintiff.
They accordingly sought to avoid eviction by seeking an injunction against the execution of the decree for eviction.
One of the grounds upon which a landlord is permitted to evict a tenant under section 13 of the Act is that he has since the coming into operation of the Act, sublet the premises or assigned or transferred in any other manner his interest therein.
The 373 Act, however, saved a subletting before its commencement, provided the premises had been lawfully sublet.
"Tenant " in the Bombay Rents Act, 1944, means " any person by whom or on whose account rent is payable for any premises, and includes every person I from time to time deriving title under a tenant.
" It was never pretended here or in the High Court, as indeed it could not be, that outside the Act a subtenancy would continue to subsist and the sub tenant would become the tenant when the principal tenancy itself had been lawfully terminated.
As the definition of "tenant " in the Bombay Rents Act, 1944, included a subtenant, that Act required, under section 10, certain conditions to be complied with for the creation of a lawful subtenancy, as a statutory status of a tenant was being conferred on a subtenant unknown to the ordinary law.
Even a lawful termination of the principal tenancy would not affect the subtenant.
In suit No. 483/4400 it was finally held by the Appeal Court that the first plaintiff had not lawfully sublet the premises and as his tenancy had been terminated he and his subtenants were liable to be evicted.
The plaintiffs seek for a redetermination of these very questions in the suit filed by them in the City Civil Court.
The plaintiffs rely upon section 29A of the Act in justification of the suit filed by them in the City Civil Court.
According to them, questions of title are expressly allowed to be reagitated in a competent Civil Court other than those specified in section 28 even if such a question arose and was determined by a court exercising jurisdiction under that section.
This contention of the plaintiffs makes it necessary to construe the provisions of sections 28 and 29A of the Act.
In a suit for recovery of rent where admittedly one party is the landlord and the other the tenant, section 28 of the Act explicitly confers on courts specified therein jurisdiction to entertain and try the suit and expressly prohibits any other court exercising jurisdiction with respect thereto.
Similarly, in a suit relating to possession of premises where the relationship of landlord and tenant admittedly subsists between the parties, jurisdiction to entertain and try such a suit is in the 374 courts specified in section 28 and no other.
All applications made under the Act are also to be entertained and disposed of by the courts specified in section 28 and no other.
In all such suits or proceedings the courts specified in section 28 also have the jurisdiction to decide all claims or questions arising out of the Act or any of its provisions.
The words employed in section 28 make this quite clear.
Do the provisions of section 28 cover a case where in a suit one party alleges that he is the landlord and denies that the other is his tenant or vice versa and the relief asked for in the suit is in the nature of a claim which arises out of the Act or any of its provisions ? The answer must be in the affirmative on a reasonable interpretation of section 28.
Suit No. 483/4400 of the Court of Small Causes, Bombay was admittedly by a landlord.
Eviction of the tenant and those to whom he had sublet the premises was sought on the ground that the latter were trespassers and the former was not entitled to remain in possession, that is to say, that none of the defendants to that suit were protected from eviction by any of the provisions of the Act.
The suit, in substance, was a denial of the right of the defendants as tenants.
The claim of the defendants was that they were protected by the provisions of the Act.
In such a suit the claim of the defendants was one which arose out of the Act or any of its provisions and only the courts ,specified in section 28 and no other could deal with it and decide the issue.
The present suit filed in the City Civil Court raised in substance a claim to the effect that the plaintiffs were the tenants of the premises within the meaning of the Act.
Such a claim was one which arose out of the Act or any of its provisions.
The suit related to possession of the premises and the right of the landlord to evict any of the plaintiffs was denied on the ground that the first plaintiff was a tenant within the meaning of the Act and the premises had been lawfully sublet by him to the second and third plaintiffs.
The City Civil Court was thus called upon to decide whether the first plaintiff was a tenant of the premises within the meaning of the Act and whether he had 375 lawfully sublet the same to the second and third plaintiffs.
The City Civil Court, therefore, had to determine whether the plaintiffs had established their claim to be in possession of the premises in accordance with the provisions of the Act.
As the tenancy of the first plaintiff had been terminated by the landlord, this plaintiff could resist eviction only if he established his right to continue in possession under the provisions of the Act.
On the termination of the tenancy of the first plaintiff, outside the provisions of the Act, the subtenancy would come to an end and the landlord would be entitled to possession.
This could be denied to him only if the second and third plaintiffs could establish that the premises had been lawfully sublet to them and under section 14 of the Act they must be deemed to be tenants of the premises.
in other words, the City Civil Court could not decree the suit of the plaintiffs unless their claim to remain in possession was established under the Act or any of its provisions.
Independent of the Act the plaint in this suit disclosed no cause of action.
Section 28 obviously contemplates the filing of any suit relating to possession.
of any premises to which any of the provisions of Part 11 of the Act apply between a landlord and a tenant and it authorizes the court to deal with any claim or question arising out of the Act or any of its provisions in such a suit.
The suit of the plaintiffs filed in the City Civil Court certainly is one relating to possession of premises to which the provisions of Part 11 of the Act apply and in that suit claims and questions arising out of the Act or any of its provisions had to be dealt with.
It was, however, suggested that the suit in the City Civil Court was not one between a landlord and a tenant because the defendants of this suit did not admit that the plaintiffs were the tenants of the premises in question.
Section 28 applies to a suit where admittedly the relationship of landlord and tenant within the meaning of the Act subsists between the parties.
The plaint in the suit in the City Civil Court admits that the defendants were landlords of the premises at various stages and the plaintiffs were their tenants.
The suit, therefore, was 376 essentially a suit between a landlord and a tenant.
The suit did not cease to be a suit between a landlord and a tenant merely because the defendants denied the claim of the plaintiffs.
Whether the plaintiffs were the tenants would be a claim or question arising out of the Act or any of its provisions which had to be dealt with by the court trying the suit.
On a proper interpretation of the provisions of section 28 the suit contemplated in that section is not only a suit between a landlord and a tenant in which that relationship is admitted but also a suit in which it is claimed that the relationship of a landlord and a tenant within the meaning of the Act subsists between the parties.
The courts which have jurisdiction to entertain and try such a suit are the courts specified in section 28 and no other.
No doubt section 29A expressly provides that nothing contained in section 28 or section 29 shall be deemed to bar a party to a suit, proceeding or appeal, mentioned therein, in which a question of title to premises arises and is determined, from suing in a competent court to establish his title to such premises.
Even if it be assumed that a claim to a right to tenancy of premises is a question of title to the premises, is that a title which section 29A permits a party to establish in a com petent court other than that specified in section 28 ? If it is possible to avoid a conflict between the provisions of section 28 and section 29A on a proper construction thereof, then it is the duty of a court to so construe them that they are in harmony with each other.
It is possible to conceive of cases where in a suit under section 28 a question of title to premises which does not arise out of the Act or any of its provisions may be determined incidentally.
Any party to the suit aggrieved by such a determination would be free to sue in a competent court to establish his title to such premises by virtue of the provisions of section 29A.
On the other band, in a suit where a question of title entirely arises out of the Act or any of its provisions, the jurisdiction to try such a suit was exclusively vested in the courts specified in section 28 and no other.
That is to say, a title which could not be established outside the Act but 377 which arose under the provisions of the Act by virtue of a claim made thereunder must be determined by a court specified in section 28 and a title de hors the Act may be determined in any other court of competent jurisdiction.
The Act purported to amend and consolidate the law relating to the control of rents of certain premises and of evictions.
It defined " landlord " and " tenant " to have a meaning wider in scope and concept than those words have under the ordinary law.
Any one, who was a landlord or a tenant, as defined in the Act, would have to conform to the provisions of the Act and all claims to such a status would have to be determined under the provisions of the Act as they would be claims arising out of it.
The Act specially provided that the courts specified in section 28 shall have the jurisdiction to deal with any claim or question arising out of the Act or any of its provisions and expressly excluded any other court from having such jurisdiction.
It is difficult to accept the suggestion that the legislature intended, after setting up special courts under section 28 to deal with such matters, that the same should be reagitated and redetermined in another suit by a court not specified in section 28.
By enacting section 29A the legislature clearly intended that no finality should be attached to the decision of a court trying a suit under section 28 on a question of title de hors the Act.
The provisions of the Act, on the other hand, clearly indicate that all claims or questions arising out of the Act or any of its provisions, even though they may be in the nature of a title to the premises, were to be determined by the courts specified in section 28 and no other.
Some reference was made to section 49 of the which provides that recovery of possession of any immovable property under Ch.
VII of the Act shall be no bar to the institution of a suit in the High Court for trying the title thereto.
The provisions of this section render no assistance in the matter of interpretation of sections 28 or 29A.; Chapter VII of the deals with the recovery of possession of 48 378 immovable property from a person including a tenant.
The provisions of section 41 onwards prescribe a summary mode for recovery of possession which could even be stayed by the Small Cause Court if the provisions Of section 47 were complied with.
Indeed, under section 41 no claims or rights are determined.
In such a situation it is clearly understandable that nothing contained in Ch.
VII could be a bar to the institution of a suit in the High Court for trying the title to the immovable property.
In a suit under section 28 the court has to determine all questions relating to recovery of rent or relating to possession and all claims or questions arising out of the Act or any of its provisions.
Section 29 provides for an appeal against the decision of the court.
Under Ch.
VII of the there is no provision for an appeal against an order directing recovery of possession.
In our opinion, the High Court correctly decided that the suit filed by the plaintiffs, who are the appellants in this appeal, could not be determined by the City Civil Court.
On behalf of the appellants a request was made that if the appeal should fail, they may be given some time to vacate the premises.
The High Court in dismissing the appeal had directed " Decree not to be executed for a fortnight ".
In granting special leave this Court had granted an ex parte stay, staying the execution of the decree in suit No. 483/4400 of 1948 of the Court of Small Causes, Bombay until the 16th day of January, 1956 and had directed that the stay application be posted for hearing on that date.
On that (lay the application for stay was allowed on two conditions being fulfilled and on the non compliance of which the stay order would stand vacated.
On February 19, 1957, another order was passed by this Court when its attention was drawn to the non compliance of the conditions stated in the order of January 16, 1956, on the part of the appellants.
The stay order was not vacated as the appellants were ordered to do certain things and because of the undertaking given by them that they would deliver forthwith possession of the premises to the respondents in 379 the event of the appeal being dismissed or decided against them.
Having regard to the undertaking given, as also the fact that execution of the decree in suit No. 483/4400 of the Court of Small Causes, Bombay has been delayed long enough.
, we are unable to accede to the request made by the appellants.
The appeal is accordingly dismissed with costs.
Appeal dismissed.
[/INST]A who was a tenant of N sub let the premises to B and C. N filed a suit for ejectment against A, B and C in the Court of Small Causes, Bombay, on the ground of illegal sub letting.
The suit was decreed.
Thereafter, A, B and C filed the present suit in the Bombay City Civil Court for a declaration that A was a tenant of N and was protected from eviction by the provisions of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, and that B and C were lawful sub tenants of A and were as such entitled to possession, use and occupation of the premises.
The City Civil Court held that it had jurisdiction to entertain the suit but dismissed it on the ground that there was no lawful subletting.
On appeal, the Bombay High Court held that the City Civil Court had no jurisdiction to entertain the suit and dismissed the appeal without going into the merits : Held, that the High Court was right in holding that section 28 of the Act barred the City Civil Court from entertaining the suit.
Section 28 explicitly confers on courts specified therein jurisdiction to entertain a suit between a landlord and a tenant in respect of a claim which arose out of the Act or any of its provisions, 368 and expressly prohibits any other court exercising jurisdiction with respect thereto.
In the present suit the claim being one which arose out of the Act, and the City Civil Court not being a court specified in section 28, it could not entertain the suit.
Though section 29A of the Act allows questions of title to be regarded in a civil court, it applies only to titles which do not arise out of the Act or any of its provisions; and titles which could riot be established outside the Act but which arose under the provisions of the Act by virtue of a claim made thereunder must be determined by a court specified in section 28.
</s>
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<s>[INST] Summarize the judgementAppeal No. 2210 of 1966.
Appeal by special leave from the judgment and order dated January 20, 1966 of the Assam and Nagaland High Court in Civil Rule No. 184 of 1964.
Naunit Lal, for the appellants.
D. N. Mukherjee, for respondent No. 1.
The Judgment of the Court was delivered by Vaidialingam, J.
This appeal, by special leave, is directed against the judgment, dated January 20, 1966 of the High Court of Assam and Nagaland, in Civil Rule No. 184 of 1964 by which the High Court quashed the inquiry proceedings conducted by the 4th respondent therein and the order, dated December 3, 1958 passed by the 3rd respondent dismissing the first respondent (hereinafter shortly referred to as the respondent) from service and the orders of the appellate authorities confirming the same.
89 The respondent joined the Assam Police Service as a constable in 1933 and was promoted to the post of Assistant Sub Inspector of Police in 1936.
He was then promoted as Sub Inspector of Police in 1944.
He was made permanent as Sub Inspector of .police in 1952.
In 1955, when the respondent was the Officer incharge of the Sorbhog Police Station, certain allegations appear to have been made against him in consequence of which a confidential enquiry was conducted by the Superintendent of Police, Anti Corruption Branch, who submitted a report to the Government on December 21, 1957.
In view of the complaints received against him, the respondent had already been placed under suspension with effect from July 24, 1957.
The Sub Divisional Police Officer, Barpeta, having been authorised under section 7 of the framed charges against the respondent on March 22, 1958.
It is not really necessary to enumerate the various items of charges, but they can be grouped under three broad heads.
Under charge No. 1, the respondent was alleged not to have taken cognisance of the items of cognizable offences reported to him and enumerated under that charge and, as such, he had neglected to perform his duty as a police officer in charge of a Police Station.
The second charge related to his having accumulated assets in his name as well as in .the name of his wife, far beyond his known sources of income.
Items of assets purchased by the respondent were again given in detail.
The third charge related to the respondent having concealed the items, enumerated therein, and given false statements regarding his assets in the declaration of assets submitted to the authorities on July 22, 1957.
The respondent submitted his explanation contravening the allegations made against him.
The enquiry was conducted by the Sub Divisional Police Officer, Barpeta (shortly referred to as the Enquiry Officer) and,.
as many as 14 witnesses were examined on the side of the prosecution.
The respondent cross examined those witnesses and he also examined four witnesses on his side.
The Enquiry Officer, by his report dated September 11, 1958 found the respondent guilty of the various charges, excepting regarding one item under the first charge.
He declined to place any reliance on the evidence adduced by the respondent and rejected the explanation furnished by him.
Ultimately, the Enquiry Officer, after finding the respondent guilty, submitted his report to the Superintendent of Police, Kamrup.
The Superintendent of Police, after referring to the charges framed against the respondent, the nature of the evidence adduced before the Enquiry Officer as well as the finding recorded by the said Officer, issued a memo, dated October 18, 1958 asking the respondent to submit his explanation.
A copy of the report of the Enquiry L 11 SupCI/70 7 90 Officer had already been given to the respondent.
Still the Superintendent of Police also sent a copy along with his memo.
On receipt of this memo, the respondent requested the Super intendent of Police, by his letter dated October 29, 1958 for being furnished with copies of the depositions of the prosecution and defence witnesses recorded by the Enquiry Officer to enable him to submit his explanation.
But this request was rejected by the Superintendent of Police stating that there was no rule for giving copies of statements.
The respondent submitted a fairly long explanation, dated November 21, 1958.
He disputed the correctness of the findings recorded against him by the Enquiry Officer and, ultimately stated that he was innocent and was not guilty of any offence.
He prayed that if in case he was found guilty, he should not be awarded the extreme punishment of dismissal from service.
But he ,added a request to the effect that he should be allowed to examine witnesses and submit documents and he should be exonerated by the Superintendent of Police after a perusal and consideration of the same.
On receipt of the explanation, the Superintendent of Police, by his order dated December 3, 1958 rejected the explanation of the respondent, accepted the findings of the Enquiry Officer and holding that the charges had been proved beyond all reasonable doubt, dismissed the respondent from service with immediate effect.
In the said order, the Superintendent of Police had referred to the charges framed against the respondent, the explanation furnished by him as well as the evidence recorded during the enquiry and the findings recorded by the Officer and the explanation sent by the respondent to the show cause notice and ultimately held that the charges had all been proved established and that the findings recorded by the Enquiry Officer were correct.
With regard to the request made by the respondent in his explanation dated November 21, 1958 the disciplinary authority stated that the respondent was afforded a full and fair opportunity to adduce all evidence that he desired to be placed before the Enquiry Officer and that opportunity had also been fully utilised by the respondent.
Therefore there was no further necessity for giving the respondent an opportunity to furnish documentary or oral evidence.
Regarding the punishment to be awarded, the Superintendent of Police stated that the charges proved against the respondent, who was a member of the Police force, were very serious and hence no leniency could be shown.
The respondent filed an appeal.
before the Deputy Inspector General of Police, Range, Assam, who, by his order dated May 11, 1960 dismissed the same.
91 The respondent thereupon filed a revision before the Inspector General of Police, Assam, which, again, was rejected on June 30, 1961.
A further revision, filed before the State Government was also dismissed on January 21, 1964.
On August 17, 1964 the respondent filed the writ petition in question, challenging the disciplinary proceedings initiated against him and the orders of dismissal passed on the basis of the enquiry conducted by the Enquiry Officer.
He had taken several grounds of attack as against the disciplinary proceedings.
He alleged that no reasonable opportunity was afforded to him during the enquiry proceedings.
During the enquiry, the Enquiry Officer was in frequent consultation and contact with the Deputy Superintendent of Police of the Anti Corruption Branch, regarding the charges which were being tried by him.
In particular, he referred to the record made by the Enquiry Officer in his proceedings that on July 14 and 15, 1958 he consulted the Deputy Superintendent of Police, Anti Corruption Branch about the proceedings and went through his records relating to the charges.
He averred that the nature of the consolation and the materials collected by the Enquiry Officer from the Deputy Superintendent, Anti Corruption Branch, were not made known to him and those materials had been taken into account in recording the findings against him.
He also alleged that copies of the report of the Anti Corruption Department, on the basis of which disciplinary proceedings had been initiated, had not been furnished to him nor were the copies of the evidence recorded during the enquiry given to him, though a specific request was made in that behalf.
On all these grounds, he sought to have all the orders quashed on the ground that there had been a gross violation of the principles of natural justice.
He took a further ground of attack that he had been appointed by the Inspector General of Police and the order of dismissal by a subordinate authority, viz., the Superintendent of Police, was illegal and void.
The allegations made by the respondent in the writ petition were controverted by the appellants.
They averred that the respondent was not entitled to a copy of the report of the Anti Corruption Branch, which was only in the nature of a preliminary investigation into the complaints received against the respondent to enable the disciplinary authority to consider whether disciplinary action against the respondent should be initiated or not.
It was further stated that the respondent was given a full and fair opportunity to participate in the enquiry and the witnesses were all examined in his presence and, apart from cross examining the prosecution witnesses, he had also adduced defence evidence on his behalf.
The State further averred that the mere circumstance that the Enquiry Officer consulted the Deputy Superintendent of 92 Police, Anti Corruption Branch, did not vitiate the enquiry proceedings as no information or material gathered therein had been used by the Enquiry Officer when he recorded findings against the respondent.
According to the State, the findings had been recorded on the basis of the evidence adduced during the actual enquiry.
It was also pointed out that the disciplinary authority, viz., the Superintendent of Police, after receipt of the report of the Enquiry Officer, had himself gone into the various items of evidence and, after a due consideration of the explanation submitted by the respondent, had agreed with the findings recorded by the Enquiry Officer and, after further consideration of the explanation submitted by the respondent to the show cause notice, ultimately passed the order of dismissal.
The appellate authority, the.
Deputy Inspector General of Police had also considered the matter in great detail and had upheld the order of the Superintendent of Police.
The State further averred that the appointing authority of persons like the respondent, was the Superintendent of Police and not the Inspector General of Police, and, as such, the order of dismissal passed by the former was perfectly legal.
On these grounds the State maintained that the enquiry proceedings were valid and legal and did not suffer from any infirmity.
Though, as pointed out above, several grounds of attack against the disciplinary proceedings initiated against the respondent were taken in the writ petition, it is seen from the judgment of the High Court under appeal that the order of dismissal was ultimately assailed only on two grounds : (1) The request of the respondent, made on October 29, 1958 after receipt of the second show cause notice dated October 18, 1958 issued by the Superintendent of Police, for supply of copies of the statements of the witnesses recorded at the enquiry, was arbitrarily rejected on the ground that there was no rule under which copies could be given and hence the respondent did not have any reasonable opportunity to show cause against the action proposed against him.
(2) The Enquiry Officer, during the course of the enquiry was keeping himself in regular contact with the Anti Corruption Branch and had utilised the material so gathered by him, behind the back of the respondent, against the respondent in the enquiry proceedings.
The respondent 's request for being furnished with a copy of the report of the Anti Corruption Branch had also been refused and therefore there had been a violation of the principles of natural justice in the conduct of the enquiry.
So far as the first ground of objection is concerned, the High Court did not accept the same as it was satisfied that the witnesses were all examined in the enquiry in the presence of the respondent 93 and that he had a full and fair opportunity of cross examining the prosecution witnesses and also of examining witnesses on his behalf.
Though the request of the respondent, made on October 29, 1958 for being furnished with copies of the evidence recorded during the enquiry was rejected, the High Court was of the view that as the respondent was fully aware of the nature of the evidence adduced in his presence during the enquiry, his grievance that he had no reasonable opportunity to show cause to the notice issued by the Superintendent of Police was unfounded.
So far as the second ground of objection was concerned, the High Court was impressed by the fact that the Enquiry proceedings showed that on July 14, 1958 and July 15, 1958 the Enquiry Officer consulted the Deputy Superintendent of Police of the Anti Corruption Branch about the proceedings and went through his records relating to those charges.
Based upon those entries found in the record of the enquiry proceedings, the High Court came to the conclusion that it was abundantly clear that the Enquiry Officer had discussion with the Anti Corruption Branch, the report of which had not been furnished to the respondent.
The High Court was further of the view that the Enquiry Officer had taken into consideration the materials gathered from the records of the Anti Corruption Branch.
It was the further view of the High Court that inasmuch as a copy of the report of the Anti Corruption Branch as well as the materials that were gathered by the Enquiry Officer during his consultation with that Branch had not been furnished to the respondent, the enquiry held under such circumstances was in clear violation of the principles of 'natural justice and hence the order dismissing the respondent from service was void.
In this view the High Court set aside the order of dismissal and allowed the writ petition, Mr. Naunit Lal, learned counsel for the appellant State, raised two contentions : (1) The report of the Enquiry Officer, dated September 11, 1958 clearly shows that the findings against the respondent have been recorded exclusively on the basis of the evidence adduced before him and there is nothing to show that the Enquiry Proceedings have been influenced by the consultations that the Enquiry Officer had with the Deputy Superintendent of Police, Anti Corruption Branch, on July 14 15, 1958.
(2) In any event, the disciplinary authority, viz., the Superintendent of Police, before accepting the findings recorded by the Enquiry Officer, has himself considered the entire evidence bearing upon the charges and the explanations offered by the respondent and it is after such a consideration that he has agreed with the findings of the Enquiry Officer regarding the guilt of the respondent.
The appellate authority, the Deputy Inspector General of Police, has also made a similar approach when disposing of the appeal 94 filed by the respondent and therefore there has been no violation of the principles of natural justice.
Mr. D. N. Mukherjee, learned counsel for the respondent, has urged that the High Court 's view that the enquiry proceed ings is vitiated inasmuch as the Enquiry Officer has acted upon the information collected from the Anti Corruption Branch is perfectly justified, especially in view of the record made by the Enquiry Officer himself.
Counsel pointed out that the examination of witnesses commenced on June 23, 1958 and concluded only on August 30, 1958.
It was during this period when the.
enquiry was actually going on that the Enquiry Officer, on July 14 and 15, 1958 consulted the Anti Corruption Branch about the matters connected with the enquiry proceedings and had gone through the records available with that Branch relating to the charges levelled against the respondent and which were being tried by the Enquiry Officer.
Counsel further urged that the respondent was not furnished with a copy of the report of the Anti Corruption Branch nor was he furnished with the information and materials that must have been gathered by the Enquiry Officer in his consultation with the Anti Corruption Branch and from their records which he inspected on July 14 and 15, 1958.
All these circumstances would clearly show that there had been a violation of the principles of natural justice in the conduct of the enquiry.
When once the enquiry proceedings were so vitiated,, the order of dismissal based upon the findings recorded at such an enquiry, has been rightly held by the High Court to be illegal and void.
We are of opinion that in the particular circumstances of this case, which will be indicated presently, the High Court has not made a proper approach when it came to the conclusion that there had been a violation of the principles of natural justice in the conduct of the enquiry, on the second ground of objection raised by the respondent.
The principle, in this regard, has been laid down by this Court in State of Mysore vs section section Makapur(1) "For a correct appreciation of the position, it is necessary to repeat what has often been said that tribunals exercising quasi judicial functions are not courts and that therefore they are not bound to follow the procedure prescribed for trial of actions in Courts nor are they bound by strict rules of evidence.
They can, unlike Courts, obtain all information material for the points under enquiry from all sources, and through all channels, without being fettered by rules and procedure, which govern proceedings in Court.
The only obligation which the law casts on them is that they should not (1) ; , 947.
95 act on any information which they may receive unless they put it to the party against whom it is to be used and give him a fair opportunity to explain it.
What is a fair opportunity must depend on the facts and circumstances of each case but where such an opportunity had been given, the proceedings are not open to attack on the ground that the enquiry was not conducted in accordance with the procedure followed in courts.
" It has been further laid down by this Court in The Collector of Central Excise and Land Customs vs Sanawarmal Purohit (1) that: "A quasi judicial authority would be acting contrary to the rules of natural justice if it acts upon information collected by it which has not been disclosed to the party concerned and in respect of which full opportunity of meeting the inferences which arise out of it has not been given.
" The above two extracts, it will be noted, emphasize that rules of natural justice can be considered to have been violated only if the authority concerned acts upon information collected by it and the said information has not been disclosed to the party against whom the material has been used.
In paragraph 10 of his writ petition the respondent had alleged that the Enquiry Officer had, during the course of the enquiry, maintained regular correspondence and contact with the Deputy Superintendent of Police, Anti Corruption Branch, Gauhati.
In para 12 he had further alleged that the Enquiry Officer started recording statements of witnesses on and from July 23, 1958 and after recording the statements of thirteen witnesses, came to Gauhati on July 14, 1958 and had consultation with the Deputy Superintendent, Anti Corruption Branch, about the proceedings against the respondent and also went through the record of the Anti Corruption Branch on July 15, 1958.
The request of the respondent for being furnished with a copy of the report of the Anti Corruption Branch was not complied with.
He further alleged that the enquiry proceedings show that the enquiry officer had taken into consideration, against the respondent, the report of the Anti Corruption Branch.
In the counter affidavit on behalf of the State, filed in the writ petition, it was contended in para 10 that the report of the Anti Corruption Branch being a confidential document and not having been used as an Exhibit in the disciplinary proceedings, the respondent was not entitled to a copy of the same.
It was further averred in para 11 that the findings of the Enquiry Officer, (1) Civil Appeals Nos.
1362 1363/1967 decided on 16 2 1968.
96 Barpeta, recorded against the respondent were based on the evidence recorded during the enquiry and not on any consultation with the Anti Corruption Branch officers.
It was further averred in Para 13 that as the report of the Anti Corruption Branch was not exhibited in the disciplinary proceedings, there was no question of the Enquiry Officer taking the said report into consideration and, as a matter of fact also the report was not taken into consideration by the Enquiry Officer and the findings against the respondent had been recorded on the basis of the evidence recorded by the Enquiry Officer and no part of it is based on the report of the Anti Corruption Branch.
From the above averments it will be noted that the respon dent no doubt made a grievance of the consultation stated to have taken place during the midst of the enquiry between the Enquiry Officer and the Anti Corruption Branch.
But his specific averment was that the findings against him recorded in the enquiry were based upon the report of the Anti Corruption Branch the copy of which was not furnished to him.
The State, on the other hand, did not controvert the fact that the Enquiry Officer did have consultation with the Anti Corruption Branch on the dates mentioned in the record of proceedings.
But, according to the State, no part of any information contained in that report had been taken into account in the enquiry proceedings and that on the other hand the report of the Enquiry Officer was exclusively based on the evidence adduced during the enquiry.
A perusal of the report of the Enquiry Officer, in the pro ceedings before us, shows that there is absolutely no reference to any data or material, if any, collected by him when he consulted the Deputy Superintendent of Police, Anti Corruption Branch on July 14 and 15, 1958.
But, we have to state that it is highly improper for an Enquiry Officer during the conduct of an enquiry to attempt to collect any materials from outside sources and not make that information, so collected, available to the delinquent officer and further make use of.
the same in the enquiry proceedings.
There may also be cases where a very clever and astute enquiry officer may collect outside information behind the back of the delinquent officer and, without any apparent reference to the information so collected, may have been influenced in the conclusion recorded by him against the delinquent officer concerned.
, If it is established that the material behind the back of the delinquent officer has been collected during the enquiry and such material has been relied on by the enquiry officer, without its having been disclosed to the delinquent officer, it can be stated that the enquiry proceedings are vitiated.
It was, under such circumstances, that this Court, in Executive Committee of U.P. State 97 Warehousing Corporation vs Chandra Kiran Tyagi(1) accepted the view of the High Court that the enquiry proceedings were vitiated by the enquiry officer collecting information from outside sources and utilising the same in his findings recorded against the delinquent officer without disclosing that information to the accused officer.
It was again, under similar circumstances that this Court in Sanawarmal Purohit 's Case (2 ) upheld the order of the High Court holding the enquiry proceedings to be contrary to the principles of natural justice when the enquiry officer had collected information from third parties and acted upon the information so collected, without disclosing the same to the accused.
If the disciplinary authority himself had been also the enquiry officer and, during the course of the enquiry he had collected materials behind the back of the accused and used such materials without disclosing the same to the officer concerned, the position will be still worse and the mere fact that such an order passed by the disciplinary authority had even been confirmed by an appel late authority without anything more, will not alter the position in favour of the department.
But, in the case before us, it is no doubt true that the enquiry officer has made a note that he consulted the Deputy Superintendent of Police, Anti Corruption Branch on July 14 and 15, 1958 and perused the records relating to the charges.
But the enquiry report does not show that materials, if any, collected by the Enquiry Officer on those two days, have been utilised against the respondent.
We do not find any warrant for the High Court 's view that : "there is no doubt that the S.D.P.O. took into consideration the materials found by the Anti Corruption Branch.
" On the other hand, a perusal of the report shows that each and every item of charge had been discussed with reference to the evidence bearing on the same and findings recorded on the basis of such evidence.
Therefore, it cannot be stated that the Enquiry Officer in this case has taken into account materials if any that he may have collected from the Anti Corruption Branch.
Nor is there anything to show that, in the discussion contained in his report, the Enquiry Officer was in any way influenced by the consultation that he had with the Anti Corruption Branch.
If so, it cannot be held that the enquiry proceedings are violative of the principles of natural justice.
The fact that a copy of the report of the Superintendent of Police, Anti Corruption Branch, dated December 21, 1957 was (1) C. A. No. 559 of 1967, decided on 8 9 1969.
(2) Civil Appeals Nos.
1362 1363/67 decided on 16 2 1968.
98 not furnished to the respondent is, in our opinion,, of no consequence in relation to the actual enquiry conducted against the respondent.
That report was necessitated in view of the complaints received against the respondent and the enquiry made by the Anti Corruption Branch was only for the purpose of enabling the Government to consider whether disciplinary proceedings should be initiated against the respondent.
On receipt of the report, the Government felt that disciplinary proceedings will have to be initiated against the respondent and that is how the enquiry proceedings were commenced.
The validity of the enquiry will have to be decided only by the manner in which it has been conducted.
So far as that is concerned, it is clear from the record that the respondent had a full opportunity of participating in the enquiry and adducing evidence on behalf of himself and of cross examining the witnesses for the prosecution and the entire evidence was recorded in his presence.
The non furnishing of the copy of the report of the Superintendent of Police, Anti Corruption Branch, does not vitiate the enquiry proceedings.
Over and above these circumstances, it is also to be seen that the enquiry officer was not the disciplinary authority competent to impose the punishment against the respondent.
The competent authority is the Superintendent of Police.
The show cause notice, issued on October 18, 1958 as well as the order of dismissal passed by the Superintendent of Police, dated December 3, 1958 clearly show that the said officer has independently gone into the evidence on record in respect of the charges for which the respondent was tried and has, after taking into account the explanations furnished by him, independently come to the conclusion that the respondent is guilty.
Similarly, the Deputy Inspector General of Police, Range Assam, before whom the respondent filed an appeal has also very elaborately and in considerable detail discussed the entire evidence on record and has agreed with the conclusions regarding the guilt of the respondent.
We have already held that there is no violation of the rules of natural justice in the enquiry proceedings.
Even assuming that there was any defect in the said enquiry proceedings, inasmuch as the punishing authority and the appellate authority, the Superintendent of Police and the Deputy Inspector General of Police, respectively, have independently considered the matter and found the respondent guilty on the evidence on record, it must be held that in the circumstances of this case there has been no violation of the principles of natural justice when the order of dismissal was passed.
We may state that the respondent, when he sent his explanation on November 21, 1958 to the show cause notice issued by the Superintendent of Police on October 18, 1958 did not make any 99 grievance regarding the consultation by the Enquiry Officer with the Anti Corruption Branch on July 14 and 15, 1958.
For the first time the respondent took this ground of objection to the enquiry proceedings only when he filed the appeal before the Deputy Inspector General of Police and the latter has quite rightly rejected this objection holding that any consultation that the Enquiry Officer had with the Anti Corruption Branch has not affected the case in any way since the findings had been recorded against the respondent entirely on the evidence adduced during the enquiry.
The High Court has not considered the various aspects, referred to above.
Both the contentions of the learned counsel for the appellant, in the circumstances, will have to be accepted and, in consequence, it must be held that the view of the High Court that the order of dismissal is illegal and void is erroneous.
Mr. Mukherjee, learned counsel for the respondent, raised the contention that the materials on record disclose that the respondent was appointed permanent Sub Inspector by the Inspector General of Police whereas the order of dismissal has been passed by a subordinate authority, the Superintendent of Police and therefore the order of dismissal is illegal and void.
Normally, this contention should not be entertained, because it is stated by the High Court that apart from the two points considered by it, no other grounds of objection were raised by the respondent against the order of dismissal.
But, if really the records support this contention of Mr. Mukherjee, that will make the order of dismissal illegal and so we permitted the counsel to raise this contention.
But, after a reference to the material on record, we are satisfied that this contention is devoid of merit.
The respondent, no doubt, averred in his writ petition that he, was appointed to the substanive post of Sub Inspector of Police by order of the Inspector General of Police, Assam, and therefore the order of dismissal passed by a subordinate authority, viz., the: Superintendent of Police, is illegal and ultra vires.
In the counter affidavit filed before the High Court, the State maintained that the Superintendent of Police was the appointing authority of a Sub Inspector of Police and it placed reliance upon rule 66, as corrected by the Correction Slip No. 150, dated June 1, 1938 of the Assam Police Manual, The State further categorically stated that the Superintendent of Police is the appointing and punishing authority of the Sub Inspector of Police and the respondent has been properly and validly dismissed by the competent authority.
Rule 66, referred to above, clearly supports the '.
contention of the State in this regard.
Annexure X to the counter affidavit of the State in the High Court is the order of the Inspector General of Police, Assam,, 100 dated December 16, 1952.
That refers to the selection for confirmation as Sub Inspectors of.
Police of the persons mentioned therein.
The respondent is serial number 5 in the said order.
Note No. 2 to this order specifically directs the Superintendents of Police to send to the Inspector General of Police, Assam, copies of confirmation orders issued by them in respect of the officers.
In accordance with the orders of the, Inspector General of Police dated December 16, 1952 the Superintendent of Police passed an order D.O. No. 3777 dated December 31, 1952 that among other officers, the respondent, who was officiating as Sub Inspector, has been selected for confirmation as Sub Inspector of Police (Unarmed Branch) with effect from September 1, 1951 and that he has been confirmed as Sub Inspector of Police (Unarmed Branch) from the same date and absorbed against an existing substantive vacancy in the district.
These orders clearly show that the respondent was appointed permanent Sub Inspector of Police not by the Inspector General of Police but by the Superintendent of Police.
Obviously because of these records, such a contention, as is now taken on behalf of the respondent, was not raised before the High Court.
The appeal is accordingly allowed and the judgment of the High Court set aside.
The first respondent will pay the costs of the appeal to the appellants.
G.C. Appeal allowed.
[/INST]One Perumal Nadar, a Hindu, married Annapazham, daughter of an Indian Christian, on November 29, 1950 at Kannimadam in the State of Travancore Cochin according to Hindu rites.
Of the two children born of the marriage one died.
The younger child, a son born in 1958, acting through his mother, the afoResaid Annapazham, as his guardian, filed an action in the Court of the Subordinate Judge, Tirunelveli, for separate possession of a half share in the properties of the joint family held by his father Perumal.
The 'suit was defended by Perumal.
The trial court decreed the suit and the High Court confirmed the decree.
In appeal to this Court by certificate Perumal, the appellant, contended : (i) that Annapazham was an Indian Christian and a marriage between a Hindu and an Indian Christian must be regarded as void; (ii) that the marriage was invalid because the appellant was already married .before he married Annapazham and bigamous marriages were prohibited by Madras Act 6 of 1949; (iii) that the appellant and Annapazham were living apart for a long time before the birth of the plaintiff and on that account the plaintiff could not be regarded as a legitimate child of the appellant.
HELD : (i) The question whether marriage between a Hindu male and a Christian female is valid or not did not arise for consideration in the present case because the finding of the Courts below that Annapazham was converted to Hinduism before her marriage with Perumal was amply supported by evidence.
[52 D E] A person may be a Hindu by birth or conversion.
A mere theoretical allegiance to the Hindu faith by a person born in another faith does not convert him into a Hindu, nor is a bare declaration that he is a Hindu sufficient to convert him to Hinduism.
But a bona,fide intention to be converted to the Hindu faith, accompanied by conduct unequivocally expressing that intention may be sufficient evidence of conversion.
No formal ceremony of purification or expiration is necessary to effectuate conversion.
[52 E F] Muthusami Mudaliar vs Musilamani alias Subramania Mudaliar I.L.R. and Goona Durgaprasada Rao vs Goona Sudarasanaswami, I.L.R. , referred to.
The evidence in the present case established that the parents of Annapazham arranged the marriage.
The marriage was performed 50 according to Hindu rites and ceremonies in the presence of relatives who were invited to attend : customary ceremonies peculiar to a marriage between Hindus were performed : no objection was raised to the marriage and after the marriage Annapazham was accepted by the local Hindu Nadar community as belonging to the Hindu faith; and the plaintiff was also treated as a Hindu.
On the evidence there could be no doubt that Annapazham bona fide intended to contract marriage with Perumal.
Absence of specific expiatory or purificatory ceremonies would not be sufficient to hold that she was not converted to Hinduism before the marriage ceremony was performed.
The fact that the appellant chose to go through the marriage ceremony according to Hindu rites with Annapazham in the presence of a large number of persons clearly indicated that he accepted that Annapazham was converted to Hinduism before the marriage ceremony was performed.
[53 C E] (ii) On the facts and pleadings the High Court was right in holding that it was not proved that the appellant was domiciled in the State of Madras at the date of his marriage with Annapazham.
He could not therefore rely upon the provisions of the Madras Hindu (Bigamy Prevention and Divorce) Act 6 of 1949.
[54 F] (iii) There was a concurrent finding by the courts below that there was no evidence to establish that the appellant living in the same village as Annapazham had no access to her during the time when the plaintiff could have been begotten.
Therefore, in view of section 112 of the Indian Evidence Act it could not be held that the plaintiff was an illegitimate child.
[55 A B] Chilukuri Venkateswarlu vs Chilukuri Venkatanarayana, , Karapaya vs Mayandi, I.L.R. 12 Rang.
243 (P.C) and Ammathayee vs Kumaresain, , applied.
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<s>[INST] Summarize the judgementCivil Appeal No. 22 15(NA) of 1988.
From the Judgment and Order dated 2.11.87 of the Customs Excise and Gold (Control) Appellate Tribunal, New Delhi in Appeal No. 478 of 86 D (Order No. 877 of 1987 D.) A.K. Ganguli, T.V.S.N. Chari, P. Parmeswaran and Sushma Suri for the Appellant.
Soli J. Sorabjee, R. Narain, Kamal Mehta, P K. Ram and D.N. Misra for the Respondent.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J.
This is an appeal under section 35L(b) of the Central Excises & Salt Act, 1944 (hereinafter referred to as 'the Act ').
The appeal is directed against the order dated 2nd November, 1987 passed by the Customs, Excise and Gold (Control) Appellate Tribunal, New Delhi (hereinafter referred to as 'the Tribunal ').
The respondent, viz., M/s Ambalal Sarabhai Enterprises manufacture sorbitol failing under item 68 of the erstwhile Central Excise Tar iff.
There was a visit to the factory premises of the re spondent by the Central Excise Officers on 26th February, 1985.
It was 787 allowed that it was found that the respondent manufactured and captively consumed starch hydrolysate but the respondent had failed to take out a licence with reference to the said manufacture of starch hydrolysate and had been removing the same without, according to the appellant, payment of duty and without observing the necessary central excise formali ties.
It was the view of the revenue that starch hydrolysate was glucose and, therefore, fell under Item 1 E of the Central Excise Tariff, which covered glucose in whatever form including liquid glucose.
Accordingly, a show cause notice was issued to the respondent.
A reply was filed on behalf of the respondent contending that starch hydrolysate was not "goods" since the same was not marketable and, therefore, no excise duty would be payable on the same.
In those circumstances, it was submitted that the proposed adjudication by the Collector following the aforesaid notice was without jurisdiction in view of section 11A of the Act.
It was urged that starch hydrolysate is not glucose and that even if the same was liable for duty it would not be under item E.
According to him, starch hydrolysate was an interme diate product in the manufacture of sorbitol and no duty could be demanded on the same.
There were adjudication proceedings thereafter.
In the said proceedings, affidavits were filed on behalf of the respondent, witnesses on behalf of the revenue were cross examined and the Collector also cross examined the witnesses of the respondent.
By an order dated 6th December, 1985, the Collector of Central Excise, Baroda rejected frae contention of the respondent.
It was held by him that starch hydrolysate was glucose and fell under item 1 E of the Central Excise Tariff and that the respondent had suppressed the fact of manufacture thereof for consumption in the further manufacture of sorbitol.
In the premises, he ordered the respondent to pay excise duty amounting to Rs.34,92,559.55 paise and imposed a penalty of Rs. 10 lakhs.
Aggrieved by the said order of the Collector, the respondent preferred an appeal before the Tribunal.
The Tribunal by its order dated 2nd November, 1987, being the order under appeal, held that starch hydrolysate manufac tured by the respondent is not and never was marketable commodity, and hence that would not be "goods" on which excise duty could be charged.
In the premises, the Tribunal allowed the appeal filed by the respondent and set aside the order of the Collector.
Aggrieved thereby, the appellant has come up in appeal to this Court under section 35L(b) of the Act.
On behalf of the appellant, Shri Ganguly contended that the Tribunal misdirected itself in applying the proper test for the determination of the question.
He urged that the true test to determine in a 788 matter of this nature was to consider not only whether starch hydrolysate was actually marketable but also to consider whether conceptually the said goods in question were capable of being marketable.
It was urged by Shri Ganguly that the Tribunal had misdirected itself in not appreciating this aspect of the matter and did not as such examine or view the evidence on record in the proper per spective.
He urged that in the aforesaid light and in view of the findings made by the Collector, there was no ground for the Tribunal to interfere with the order of the Collec tor.
He further submitted that in any event, if the Tribunal was not fully satisfied with the evidence on record to determine whether starch hydrolysate were goods in the sense of being marketable, then the Tribunal should have, in the facts and the circumstances of the case and in the interest of justice, remanded the matter back for appraisement and examination in the light of the true principle or the Tribu nal should have examined or called for the fresh evidence to determine this question.
The Tribunal not having done so, has failed to render justice and as such the order of the Tribunal is bad, according to Shri Ganguly.
Shri Ganguly further submitted that in starch hydrolysate the percentage of dissolved solids present is 64.
It was submitted that the criterion laid down in the IS Specification for liquid glucose or glucose syrup, the two terms are being used synonymously by the Indian Standard Institution, was not satisfied in this case.
The IS Specification defines liquid glucose or glucose syrup as "a refined and concentrated non crystalizable aqueous solution of d glucose, maltose and other polymers of d glucose, obtained by controlled hydroly sis of starch containing material".
The United States Phar meopeia XIX describes liquid hydrolysis of starch, consist ing chiefly of dextrose, dextrins, maltose and water and in these circumstances and in view of the components and the dictionary meaning as discussed by the Tribunal in its order, it is urged that it cannot be said that the said goods is the same thing as glucose or glucose syrup.
In the premises, it was contended that the Tribunal has not consid ered this aspect of the matter.
We are concerned in this appeal with starch hydrolysate and, therefore, if the process or activity of the assessee brings into existence an article different and distinct from what it was before the process and a new identifiable arti cle known in the market as such comes into being, then the use of such starch hydrolysate captively would attract duty on the part of the assessee even in captive consumption.
It is not in dispute as the Tribunal noted in the instant case that starch is hydrolysed by the respondent.
The operation of hydrolysis, it is contended, results in bringing into being starch hydrolysate which is utilised in the manufac ture of sorbitol.
The question is whether 789 starch hydrolysate is "goods".
The case of the respondent was that the starch hydrolysate being wholly unstable and quickly fragmented and losing its character in a couple of days, the same could, therefore, neither be stored nor marketed.
In the premises, it was the case of the respondent that starch hydrolysate was not marketable product and would not, therefore, be "goods" on the manufacture of which excise duty could have been demanded or would have been payable and, therefore, for non payment of duty, there has been no negligence or failure on the part of the respondent and as such section 11 A of the Act was not applicable.
In this connection, it would be instructive to refer and it would be necessary to rely on the principles laid down by this Court in South Bihar Sugar Mills Ltd., etc.
vs Union of India & Ors.
, ; There, the appellant compa nies manufactured sugar by carbonation process and paid excise duty on sugar manufactured by them under Item I of Schedule I to the Act.
According to one affidavit filed on behalf of the respondents, filed in those proceedings, these manufacturers employed a process of burning lime stone with coke in a lime kiln with a regulated amount of air whereby a mixture of gases was generated consisting of carbon dioxide, nitrogen, oxygen and a small quantity of carbon monoxide.
The gas thus produced was thereafter compressed so as to achieve pressure exceeding atmospheric pressure and then passed through a tank containing sugarcane juice so as to remove impurities from it and to refine the juice.
For that process of refining it was only the carbon dioxide in the gas which was used and the other gases, i.e., nitrogen, oxygen and carbon monoxide escaped into the atmosphere by a vent provided for the purpose.
The carbon dioxide content in this mixture of gases ranged from 27 to 36.5%.
Similarly, another company manufactured Soda ash by solvay ammonia soda process for which also carbon dioxide was required and this was produced by the petitioner therein by burning lime stone with coke in a kiln in the same manner as the appellant sugar manufacturing companies employing the carbonation process.
The respondents therein regarded all the companies as manufacturers of compressed carbon dioxide and levied excise duty on them under Item 14 H in Schedule I to the Act.
Writ petitions were filed in the High Court challenging the validity of the excise duty but the same petitions were dismissed.
It was contended, inter alia, on behalf of the appellants therein that the lime kiln was maintained to generate a mixture of gases and not carbon dioxide and at no stage in the process of generating this mixture and passing it through the sugarcane juice was carbon dioxide which formed one of the contents of the mixture either com pressed, liquidified or solidified.
The mixture of gases so generated was not carbon dioxide as known to the market nor was it accord 790 ing to the specifications laid down by the Indian Standards Institution which required the carbon dioxide content to be at least 99%.
It was, therefore, contended that the excise duty sought to be recovered on the contend of carbon dioxide in the mixture of gases could not fall under Item 14 H.
It was further contended that the duty being on goods it could be charged only on goods known as carbon dioxide in the trade and marketable as such.
As is evident from the said narration of facts the contentions urged were more or less similar to the contentions involved in the instant appeal before us.
It was held by this Court that the gas generated by the appellant companies was kiln gas and not carbon dioxide as known to the trade, i.e., to those who dealt in it or who used it.
The kiln gas in question, therefore, was neither carbon dioxide nor compressed carbon dioxide known as such to the commercial community and therefore, could not attract item 14 H in the First Schedule.
This Court reiter ated at p. 31 of the report that the Act in question charges duty on manufacture of goods.
The word "manufacture" implies a change but every change in the raw material is not manu facture.
There must be such a transformation that a new and different article must emerge having a distinct name, char acter or use.
The duty is levied on goods.
As the Act does not define goods, the legislature must be taken to have used that word in its ordinary, dictionary meaning.
The diction ary meaning of the expression is that to become goods it must be something which can ordinarily come to the market to be bought and sold and is known to the market.
It would be such an article which would attract duty under the Act.
This Court referred to the previous decision in the case of Union of India vs Delhi Cloth & General Mills Ltd., [1963] Suppl.
1 SCR 586.
Therefore, in this instant appeal, in order to determine whether starch hydrolysate was "goods" or not, it is necessary to determine whether there was any application of process to the raw materials and as a result of that application there emerged new and different article having a distinctive name, character or use and the resultant product being goods in the sense of being marketable or marketed.
In this connection, Shri Soli Sorabjee referred us to the observations of this Court in Union Carbide India Ltd. vs Union of India and Ors., There, this Court reiterated that in order to attract excise duty, the article manufactured must be capable of being sold to a consumer.
Entry 84 of List I of Schedule VII to the Consti tution specifically speaks of "duty of excise on tobacco or other goods manufactured or produced in India" and it is now well accepted that excise duty is an indirect tax, in which the burden of the imposition is passed on to the ultimate consumer.
This Court held that in that context, the expres sion "goods manufactured or produced" must refer to articles which 791 are capable of being sold to a consumer.
To become "goods", an article must be something which can ordinarily come to the market to be bought and sold.
The Court found in that case that aluminium cans prepared by the appellants therein were employed entirely by it in the manufacture of flash lights and were not sold as aluminium cans in the market.
It also appeared from the records that aluminium cans at the point of levy of excise duty existed in a crude and elemen tary form which were incapable of being employed as a compo nent in a flashlight.
These cans had sharp uneven edges and in order to use them as a component in making flashlight cans, these cans had to undergo various processes such as trimming, threading and redrawing.
After that these were reeded, beaded and anodized or painted, it was at that point only that these became distinct and complete component capable of being used as flashlight cans for housing battery cells and having a bulb fitted to the can.
This Court noted that it was difficult to believe that the elementary and unfurnished form in which these existed immediately after extrusion sufficed to attract a market.
The assertion of the appellant on affidavit that aluminium cans were unknown in that form in the market had not been proved to the contrary by any satisfactory material by the respondents therein.
This Court further found that not a single instance had been provided by the respondents domenstrating that such alumini um cans had a market.
The conduct of the appellants in the past, having regard to the circumstances of the case, would not serve as evidence of the marketability of the aluminium cans, it was in that case.
This Court noted that record disclosed that whatever aluminium cans were produced by the appellants were subsequently developed by it into a complet ed and perfected component for being employed as flashlight cans.
In those circumstances, the aluminium cans produced by the appellants were not liable to excise duty under section 3 of the Act read with Item 27 of the Central Excise Tariff.
In the case of Bhor Industries Ltd., Bombay vs Collector of Central Excise, Bombay, ; , this Court had to deal with the liability to duty on intermediate products and it was reiterated that liability to excise duty arises only when there is manufacture of goods which is marketable or capable of being marketed.
It was held that excise is a duty on goods as specified in the Schedule.
The taxable event in the case of excise duties is the manufacture of goods.
Under the Act, in order to be goods as specified in the Entry, it was essential that as a result of manufacture goods must come into existence.
For articles to be goods, these must be known in the market as such or these must be capable of being sold in the market as goods.
Actual sale 792 is not necessary.
User in the captive consumption is not determinative but the articles must be capable of being sold in the market or known in the market as goods.
It is, there fore, necessary to find out whether these are goods, that is to say, articles as known in the market as separate distinct identifiable commodities and whether the tariff duty levied would be as specified in the Schedule.
Marketability, there fore, is an essential ingredient in order to be dutiable under the Schedule to .
In that case, the Court found that crude PVC firms as produced by the appellant were not known in the market and could not be sold in the market and was not capable of being marketa ble.
The Court further reiterated that it was the duty of the revenue to adduce evidence or proof that the articles in question were goods.
The Tribunal went wrong, it was held, in not applying the test of marketability.
There being no contrary evidence found by the Tribunal in that case, it was held that in those circumstances, no excise duty should be charged.
It is in this light, therefore, that the evidence dis cussed by the Tribunal in this case, have to be viewed in order to test the validity of the order impugned.
The case of the respondent had always been that starch hydrolysate was not being marketed and is not capable of being marketed in view of its highly unstable character resulting in fer mentation even if kept for a day or two.
Shri Ganguly ap pearing for the revenue sought to urge that the Tribunal was wrong in approaching the problem in that light.
The test was not whether the starch hydrolysate was not of a highly unstable character and resulted in fermentation even in a day or two, but whether it was capable of being marketable.
He submitted that the test applied was not the true test.
He urged that even transient items of articles can be goods, provided that these were known in the market as distinct and separate articles having distinctive and separate uses, these would still become goods if these were capable of being marketed even during short period.
From a conceptual and jurisprudential point of view, Shri Ganguly is right.
But we are concerned with the question whether actual goods in question were marketed or, in other words, if not, wheth er these are marketable or not.
It is true that the goods with unstable character can be theoretically marketable if there was a market of such transient type of articles which are goods.
But one has to take a practical approach.
The assessee produced evidence in the form of affidavit.
One Shri Khandot.
who filed an affidavit in support of the case of the respondent, had stated in his affidavit that com pletely hydrolysed starch would start fermenting and decom posin and at higher concentration it would start crystaliz ing out within two or three days.
This is evidence indicat 793 ing propensity of its not being marketed.
It is good evi dence to come to this conclusion that it would be unlikely to be marketable as it was highly unstable.
There was evi dence as noted by the Tribunal that it has not been marketed by anyone.
There is also an admission of the Superintendent of the appellant that no enquiry whatsoever was conducted by the Department as to whether starch hydrolysate was ever marketed by anybody.
It was pointed out by the revenue that even according to the respondent, it stored starch hydroly sate in tanks before transporting it through pipes but according to the appellant, the storage of starch hydroly sate was only for a period of a few hours only as a step in the process of transfer thereof to sorbitol.
It, therefore, appears to us that there was substantial evidence that having regard to the nature of the goods that this was unlikely that the goods in question were marketable.
This should be judged in the background of the evidence that the goods have not been marketed in a pregmatic manner.
All this again would have to be judged in the light of the fact that revenue has not adduced any evidence whatsoever though asked to do so.
It was pointed out that if the Department was to charge duty of excise on this starch hydrolysate as one form of glucose it would be the burden on the Department to establish that starch hydrolysate was not merely marketable but was being marketed as glucose in some form.
This would be so since what is liable for duty under item E is glucose in any form and, therefore, in order to demand duty under that section, the Department must establish that the product on which duty was demanded was known in the market as glu cose in one form or the other.
There .is no such evidence as observed by the Tribunal.
The Tribunal noted and, in our opinion, rightly that revenue cannot be said to have dis charged its burden of establishing that by applying the process of hydrolysis to starch for production of starch hydrolysate the respondent manufacturers any excisable goods in the sense of being goods known in the market and being marketed or marketable.
Our attention was drawn to the affidavit of Shri P.D. Khander, Chemist, who was a Food Technologist and was holding a degree of B.Sc.
(Chemistry).
He was carrying on business of dealing in glucose.
He stated in his affidavit as follows: .
I have been the starch hydroly sate made by Sarabhai M. Chemicals.
It is completely hydrolysed starch.
It appears as aqueous syrup containing about 66 71% reduc ing sugars expressed as Dextrose.
It is nei ther glucose or dextrose in any form nor glucose in liquid state nor liquid glucose.
In order to find out the market for completely hydrolysed starch as is made in Sarabhai M. Chemicals, at 794 their instance, I had made trade inquiries.
However, there is no market for such sub stance.
Since it can act only as an intermedi ate product for the manufacture of Sorbitol.
Dextrose or Glucose and Fructose and every manufacturer of Glucose, Dextrose, Sorbitol and Fructose would have his own plant for hydrolysing starch, it is commercially not a viable proposition both the manufacturers of Glucose, Dextrose, Sorbitol or Fructose or the persons undertaking the process of hydrolysing starch either to purchase completely hydroly sed starch from the market or sell or under take process of hydrolysing starch for the purpose of sale in the market, because at lower concentration, starch which is complete ly hydrolysed would start fermenting and decomposing.
At higher concentration, it would start crystallising out within two or three days.
" This affidavit evidence remains uncontradicted Shri Ganguly, however, drew our attention to an order of the Tribunal in M/s. Anil Starch Products Ltd., Ahmedabad vs The Collector of Central Excise, Ahmedabad being Appeal No. ED(SB)(T) 1534/81 D arising out of the Revision Order No. 820/81.
He referred to the observations at page 117 of the Paper Book which dealt with the evidence of one Shri Khabho lia, where, according to Shri Ganguly, the Tribunal came to a different conclusion.
But the Tribunal in that case relied on the decision of the Allahabad High Court in the case of Union of India vs Union Carbide India Ltd., There the Allahabad High Court held that things would be nevertheless goods even these did not have a general market, where they can be easily bought and sold.
The High Court hold that the fact that products might not be known to the general public or to the traders in general would not change the position and therefore the test did not appear to be sound.
This decision of the Allahabad High Court which was relied upon by the Tribunal was set aside by this Court in Appeal in the case of Union Carbide India Ltd. vs Union of India & Ors.
(supra).
In view of the test laid down and in view of the evidence discussed, it is difficult to sustain the order of the Tribunal.
In this connection, it appears that there was no market enquiry by the Revenue.
Reference may be made to the crossexamination of Shri Shukla, Superin tendent (Central Excise) by Shri Nanawati as appears at pp.
235 237 of the present paper book.
In view of the fact that there was positive evidence that starch hydrolysate was never marketed and in view of further fact that in the light of the nature of the goods being highly unstable, it is highly improbable that the goods were capable of being marketed and there being in spite of 795 the opportunities, no evidence produced at all that the goods, in fact, were capable of being marketable, in our opinion, it must be held as did the Tribunal that the starch hydrolysate were not dutiable under the Act.
In the premises, the revenue has failed to discharge its onus to prove that starch hydrolysate was dutiable.
In the premises, the Tribunal cannot be said to have committed any error.
The appeal must, therefore, fail and is, accordingly, dismissed.
In the facts and the circumstances of the case, there will, however, be no orders as to costs.
R.S.S. Appeal dis missed.
[/INST]The respondent was engaged in the manufacture of sorbi tol, which fell under items 68 of the Central Excise Tariff.
During a visit to the factory premises by the Central Excise Officers it was found that the respondent also manufactured and captively consumed starch hydrolysate which, according to the appellant, was glucose and fell under Item E of the Central Excise Tariff.
In reply to the show cause notice issued by the appellant, the respondent contended that starch hydrolysate was not 'goods ' since the same was not marketable and therefore no excise duty was payable on it; and that even if the same was liable for duty it would not be under Item 1 E.
There were adjudication proceedings thereafter, and the adjudicator held that starch hydrolysate was glucose and fell under item E, and that the respondent had suppressed the fact of manufacture thereof.
In the premises, the adjudicator ordered payment of excise duty and further imposed a penalty.
The Tribunal, however, allowed the respondent 's appeal and held that starch hydrolysate manufactured by the re spondent was not, and never was, a marketable commodity, and hence that would not be 'goods ' on which excise duty could be charged.
The Revenue appealed to this Court.
Before this Court, it was inter alia contended on behalf of the appellant: (i) that the Tribunal misdirected itself in applying the proper test for the determination of the question, and that the true test to determine in a matter of this nature was to consider not only whether starch hydrolysate was actually marketable but also to consider whether conceptually the said goods were capable of being marketed, and the Tribunal should have examined or called for fresh evidence to deter mine that question; and (ii) even transient items of arti cles could he 'goods '.
provided these were known in the market as distinct and separate articles having distinct and separate uses, and if these were capable of being marketed even during short period.
784 785 On behalf of the respondent it was contended that; (i) starch hydrolysate which was utilised in the manufacture of sorbitol, was not being marketed and was not capable of being marketed in view of its highly unstable character resulting in fragmentation even if kept for a day or two; and (ii) starch hydrolysate was not marketable product and would not therefore be "goods" on the manufacture of which excise duty could have been demanded or would have been payable and therefore for non payment of duty, there had been no negligence or failure.
Dismissing the appeal, this Court, HELD: (1) If the process or activity of the assessee brings into existence an article different and distinct from what it was before the process and a new identifiable arti cle known in the market as such comes into being, then the use of such article in the instant case starch hydrolysate would attract duty on the part of the assessee even in captive consumption.
[788G] South Bihar Sugar Mills Ltd., etc.
vs Union of India & Ors.
, ; , referred to.
(2) The word "manufacture" implies a change but every change in the raw material is not manufacture.
There must be such a transformation that a new and different article emerges having a distinct name, character or use.
[790D] Union of India vs Delhi Cloth & General Mills Ltd., [1963] Supp. 1 SCR 586.
(3) Duty is levied on goods.
As the does not define "goods", the legislature must be taken to have used that word in its ordinary, dictionary meaning.
The dictionary meaning of the expression is that to become goods it must be something which can ordinarily come to the market to be bought and sold and is known to the market.
It would be such an article which would attract 'duty ' under the Act.
[790E] Union Carbide India Ltd. vs Union of India & Ors., (4) It is true that the goods with unstable character can be theoretically marketable if there was a market of such transient type of articles which are goods.
But one has to take a practical approach.
[792G] 786 (5) It was the duty of the Revenue to adduce evidence or proof that the articles in question were goods.
If the Department was to charge duty of excise on this starch hydrolysate as one form of glucose it would be the burden on the Department to establish that starch hydrolysate was not merely marketable but was being marketed as glucose in some form.
The Revenue has not produced any evidence whatsoever though asked to do so.
Bhor Industries Ltd. Bombay vs Col lector of Central Excise, Bombay; , [793A F] (6) It appears that there was no market enquiry by the Revenue.
In view of the fact that there was positive evi dence that starch hydrolysate was never marketed and in view of further fact that in the light of the nature of the goods being highly unstable, it was highly improbable that the goods were capable of being marketed and there being in spite of the opportunities, no evidence produced at all that the goods, in fact, were capable of being marketable, it must be held, as did the Tribunal, that the starch hydroly sate were not dutiable under the .
[794G 795A]
</s>
|
<s>[INST] Summarize the judgementiminal Appeals Nos.
151 to 158 of 1966.
Appeals from the judgment and order dated December 30.
1964 of the Punjab High Court, Circuit Bench at Delhi in Criminal Revisions Nos.
81 D to 83 D, 107 D and 129 D to 132 D of 1964.
Bishan Narain, B. P. Maheshwari and N. K. Jain, for the appellant (in all the appeals).
C. K. Daphtary, N. N. Goswami, K. L. Mehta and section K. Mehta, the respondent (in Cr. A. No. 151/1966).
K. L. Gossain, N. N. Goswami, K. L. Mehta and section K. Mehta, the respondent (in Cr.
152 to 158 of 1966).
section K. Mehta for the intervener.
The Judgment of the Court was delivered by Dua, J.
These eight appeals with certificate (Crl.
Al) peals Nos. 151 to 158 of 1966) raise a common question of law and would, therefore, be disposed of by a common judgment.
In deed, all the appeals in the Punjab High Court were also disposed of by a learned single Judge of that Court sitting on circuit at Delhi by a common judgment and another learned single Judge of the same Court similarly certified the cases to be fit for ,appeal to this Court by a common order.
The only question canvassed at the bar requiring determina tion by us is whether the respondent is liable to be prosecuted under the Prevention of Food Adulteration Act, 37 of 1954 (hereafter called the Adulteration Act) for selling adulterated vinegar when the vinegar is being sold under a licence granted under the Fruit Products Order, 1955 (hereafter called the Fruit Order) made by the Central Government under section 3 of the Essen 609 tial Commodities Act.
The High Court has relying on an un reported Bench decision of the Punjab High Court in State vs RaJ Kumar (Crl. A. 996 f 1961 decided on October 29, 1962) held that they cannot be prosecuted.
It was argued in the High Court that the rules made under the Adulteration Act had come into force after the enforcement of the Fruit Order and vinegar being mentioned as an article of food in those rules, prosecution under both the provisions of law was permissible.
Reliance in support of this argument was also placed on section 26 of the General Clauses Act.
This argument was not accepted and it was observed that the special provisions of the Fruit Order had overriding effect and, therefore, a manufacturer of Fruit Products could only be prosecuted under the provisions of the Fruit Order.
Prayer for reference to a larger Bench for reconsideration of Raj Kumar 's case (supra) did not find favour with the learned single Judge.
In this Court the view taken in Raj Kumar 's case (supra) was sought to be supported by the learned counsel for the, respondent.
The provisions of the Fruit Order and of the Adulteration Act, it was contended, could not harmoniously co exist on the statute book, as compliance with one would, in certain contingencies, result in violation of the other some respects.
With respect to the particular charges tried in the cases in appeal, however, no attempt was made on behalf of the respondents to show that there was any fatal conflict or inconsistency between the two provisions.
The question before us accordingly lies within a very narrow compass.
The appellant urged that there is no implied repeal of the Adulteration Act by the Fruit Order in so far as the sale of vinegar is concerned, whereas the case of the respondent is that there is an implied repeal and the respondents are not liable to be prosecuted under the Adulteration Act for violating its provisions.
Shri Bishan Narain sought support for his submission from Om Prakash Gupta vs State of U.P. (1) and T. section Baliah vs T. section Rangachari (2).
In the former case section 5 (1 ) (c) of the Prevention of Corruption Act was held not to repeal section 409 I.P.C. The decision of the Punjab High Court (Khosla and Falshaw, JJ.) in State vs Gurcharan Singh(3) holding to the contrary was overruled.
In the latter case section 52 of the Income tax Act, 1922 was held not to repeal section 177, T.P.C.
It is unnecessary to refer in detail to the facts of all the eight cases separately as no such reference was made by either side at the bar.
Shri Bishan Narain for the appellant, by way of illustra (1) ; (2) ; (3) A.I.R. 1952 Punjab 89.
610 tion made a passing reference to the facts of Crl.
Appeal No. 155 of 1966.
From the record of that appeal we find that samples of (i) sugar cane juice vinegar, (ii) vine (pure) vinegar and (iii) pure jaman vinegar, were takes by a Food Inspector from the shop of the respondent on October 17, 1960 and on the 'same having been found highly adulterated and unfit for human consumption because of the presence of sulphuric acid which is prohibited, complaints under sections 7/16 of the Adulteration Act were instituted by the Municipal Prosecutor in December, 1960.
After the prosecution evidence was recorded, the respondent Shiv Shan ker applied to the trial magistrate in October, 1963 praying that the prosecution be dropped.
In this application it was admitted that the prosecution had arisen out of a raid dated October 17, 1960 at the promises of the accused "when allegedly samples of vinegar were taken which are stated to be adulterated because of the presence of sulphuric acid".
It was pleaded that the petitioning accused had secured in 1960 a licence under the Fruit Order and vinegar whether brewed or synthetic being a food product and standard specification for such vinegar being tabulated in Part XIV attached to the Second Schedule of the Fruit Order, prosecution without the, previous sanction of the Licensing Officer as required by cl. 15 of the said Order was unauthorised.
Prosecution under the Adulteration Act was on this ground pleaded to be incompetent.
In the application reliance in support of this plea was placed on the unreported Bench decision of the Punjab High Court in Raj Kumar 's case in which according to the accused it had been held that a licensee under the Fruit Order could not be prosecuted for any contravention of that Order or of the Adulteration Act without the previous sanction of the Licensing Authority appointed under the Fruit Order.
The trial magistrate basing himself on an unreported single Bench decision of the Punjab High Court and on section 26 of the General Clauses Act rejected this application.
On revision, the Additional Sessions Judge relying on the decision in Raj Kumar 's, case (supra) made a reference to the High Court recommending that the proceedings be quashed.
J. section Bedi, J., relying on Raj Kumar 's case (supra) quashed the pro ceedings.
section K. Kapur J., who certified the case to be fit for appeal after quoting a passage from Raj Kumar 's case (supra) considered the question raised to be important enough for appeal to this Court.
The general principles governing implied repeal appear to us to have long since been settled.
The difficulty is normally experienced in their application to a given case.
From the passage quoted by Kapur J., from the unreported Bench decision in Raj ' Kumar 's case (supra) upholding the implied repeal of the Adulteration Act by the Fruit Order it seems to us that the Division Bench did not correctly and fully grasp them.
We accordingly, 611 consider it proper to broadly restate the general rule.
It was laid in Paine vs Stater(1) that when two Acts are inconsistent or repugnant the later will be read as having impliedly repealed the earlier.
As the legislature must be presumed in deference to the rule of law to intend to enact consistent and harmonious body of laws, a subsequent legislation may not be too readily presumed to effectuate a repeal of existing statutory laws in the absence of express or at least clear and unambiguous indication to that effect.
This is essential in the interest of certainty and consistency in the laws which the citizens are enjoined and expected to.
The legislature, which may generally be presumed to know the existing law, is not expected to intend to create confusion by its omission to express its intent to repeal in.
clear terms.
The courts, therefore, as a rule, lean against implying a repeal unless the two provisions are so plainly repugnant to each other that they cannot stand together and it is not possible on any reasonable hypothesis to give effect to both at the same time.
The repeal must, if not express, flow from necessary implication as the only intendment.
The provisions must be wholly incompatible with each other so that the two provisions operating together would lead to absurd consequences, which intention could not reasonably be imputed to the legislature.
It is only when a consistent body of law cannot be maintained without abrogation of the previous law that the plea of implied repeal should be sustained.
To determine if a later statutory provision repeals by implication an earlier one it is accordingly necessary to closely scrutinise and consider the true meaning and effect both of the earlier and the later statute.
Until this is done it cannot be satisfactorily ascertained if any fatal inconsistency exists between them.
The meaning, scope and effect of the two statutes, as discovered on scrutiny, determines the legislative intent as to whether the earlier law shall cease or shall only be supplemented.
If the objects of the two statutory provisions are different and the language of each statute is restricted to its own objects or subject, then they are generally intended to run in parallel lines without meeting and there would be no real conflict though apparently it may appear to be so on the surface.
Statutes in pari materia although in apparent conflict should also so far ,is reasonably possible, be construed to be in harmony with each other and it is only when there is an irreconcilable conflict between the new provision and the prior statute relating to the same subject matter, that the former, being the later expression of the legislature, may be held to prevail, the prior law yielding to the extent of the conflict.
The same rule of irreconcilable repugnancy controls implied repeal of 'a general by a special statute.
The subsequent provision treating a phase of the same genera subject matter in a more minute way may be intended to imply repeal pro tanto of the (1) 612 Repugnant general provision with which it cannot reasonably co,exist.
When there is no inconsistency between the general and the special statute the latter may well be construed as supplementary.
In the light of these broad guidelines we may now examine the two statutes as they stood in 1960 because the cases with which we are concerned relate to that year.
The history and the scheme of the two statutory provisions would be helpful in discovering the legislative intent on the question of implied repeal.
Turning first to the Adulteration Act, it was enacted by the Parliament to make provision for the prevention of adulteration of food and it came into force on June 1, 1955.
Previously corresponding laws on adulteration of foodstuffs were in force in different States, having been enacted by their respective legislatures.
All those laws were repealed by section 25 of the Adulteration Act.
It may be pointed ,out that under the Government of India Act, 1935 "adulteration of foodstuffs and other goods" was a provincial subject whereas under the Constitution it is included in the Concurrent List.
Section 2(i) of this Act which defines the word "adulterated" con sists of several sub clauses.
One of these sub clauses is (1) according to which "an article of food shall be deemed to be adulterated if the quality or purity of the article falls below the prescribed standard or its constituents are present in quantities Which are in excess of the prescribed limits of variability".
Clause (v) of section 2 defines "food" to mean "any article used as food or drink for human consumption other than drugs and water and includes : (a) any article which ordinarily enters into or is used in the composition or preparation of human food, and (b) any flavouring matter or condiments.
According to cl.
(ix) an article of food shall be deemed to be "misbranded" if it falls within an) one of the sub clauses (a) to (k).
It is not necessary to reproduce all these sub clauses.
"Pack age" has ' been defined in cl.
(X) to mean "a box, bottle, casket, tin, barrel, case, receptacle, sack, bag, wrapper or other thing in which an article of food is placed or packed".
We have referred to the definitions of "misbranded" and " package" because one of the cases before us (Crl. A. 154 of 1966) is a case of alleged misbranding, the remaining seven cases being ,of alleged adulteration.
Section 5 prohibits import of, inter alia, adulterated and misbranded food and all articles of food in contravention of any provision of the Act or of any rules made thereunder.
Section 7 prohibits manufacture for sale or store and also sale and distribution of, inter alia, adulterated and misbranded food land of articles of food, in contravention of the Adulteration Act and the Rules made thereunder.
Section 8 provides for appointment of Public Analysts and section 9 for the appointment of Food Inspectors.
The powers of Food Inspectors are contained in section 10.
He possesses very wide powers for the purpose of effectively achiev 613 ing the statutory object of preventing the manufacture, sale and distribution etc., of adulterated articles of food.
The procedure for taking samples of food by the Food Inspector for analysis is prescribed in section 11 and the report of the Public Analyst is made admissible by section 13.
The proviso to sub section
(5) of section 15 makes the certificate signed by the Director of Central Food Laboratory final and conclusive proof of the facts stated therein.
The Central Food Laboratory is established by the Central Government under section 4 for the purpose of carrying on functions entrusted to it by the Adulteration Act or by the Rules made thereunder.
Section 16 provides for penalties for offences under the Adulteration Act and cl.
(a) of sub section
(1) makes it an offence for any person, whether by himself or by any person on his behalf to import into India or manufacture for sale or to store, sell or distribute any article of food in contravention of any of the provisions of the Act or of any rules made thereunder.
In the prosecution for an offence pertaining to the sale of an adulterated or misbranded article of food section 19 makes impermissible the defence that the vendor was ignorant of the nature, substance or quality of the food sold by him or that the purchaser having purchased an article for analysis was not prejudiced by the sale.
Section 20 prohibits cognizance and trial of offences under the Act except when prosecution is instituted by or with the written consent of the State Government or a local authority or a person authorized in this behalf by such Government or authority.
Under the proviso to this section a purchaser referred to in section 12, is, however, empowered to institute a prosecution if he produces in court a copy of the report of the Public Analyst along with the complaint.
Section 21 overrides section 32, Cr.
P.C. in the matter of sentence to be passed under this Act by the Presidency Magistrates or Magistrates of 1 Class, trying offences under the Act.
Section 23 confers on the Central Government wide powers to make rules under the Act after consulting the Central Committee for Food Standards appointed by the Central Government under section 3.
Section 24 empowers the State Government, (after consultation with the Central Committee for Food Standards and with previous publication) to make rules for giving effect to the provisions of the Act in matters not covered by section 23.
Various States have actually framed rules under this section.
We may now briefly refer to the Prevention of Food Adultera tion Rules, 1955 (hereafter called the Adulteration.
Rules).
These rules were made by the Central Government under section 4(2) and section 23(1) of the Adulteration Act and were published in the Official Gazette as per notification dated September 12, 1955.
The rules other than those contained in Part III Appendix B Item A.12 Margarine, Part VI and Part VII came into force on the date of 614 their publication in the Official Gazette : the rules contained in Part III, Appendix B, Item A.12 Margarine came into force on June 1, 1956 and the rules contained in Part VI and Part VII came into force on December 1, 1956 : vide r. 1(3).
Under section 23(2) (prior to its amendment in 1964) all rules made under sub section
(1) had to be laid as soon as possible before both Houses of Parliament.
By Act 49 of 1964 sub section
(2) was amended so as to provide for every rule made under sub section
(1) to be laid before each House of Parliament while in session, for a total period of 30 days in order to afford an opportunity to the two Houses to study and to modify or annul it for, future if both Houses so agree.
We have referred to this amendment as some of the rules were amended thereafter.
The effect of the subsequent amendment of some of the rules will be noticed later.
The Adul teration Rules clearly bring out the anxiety of their authors to see that wholesome food is sold to the citizens.
The duties and powers of Food Inspectors as contained, inter alia, in rr. 9 and 1 3, broadly illustrate this anxiety.
These rules also indicate that the framers of the Rules were not unaware of the different provisions of the Fruit Order.
By way of illustration reference may be made to r. 50 which prescribes conditions of licence to manufacture, sell, stock, distribute or exhibit certain articles of food.
In cl.
(1) of sub r.
(1) of this rule the fruit products covered under the Fruit Order and some other articles have been excluded from the operation of this rule.
This clause was amended twice, once in November, 1956 and again in April, 1960.
Had the Adulteration Act been intended to be impliedly repealed by the Fruit Order (which would also mean implied repeal of the rules) it would have been unnecessary to expressly exclude such fruit products from the operation of this rule.
Rule 5 and Appendix B of these Rules came into force on December 1, 1956 after the promulgation of the Fruit Order.
According to r. 5 the standard of quality of the various articles of food specified in Appendix B are as specified therein.
In Appendix B item at sl.
No. A.16 deals with "fruit products".
But the articles of fruit products dealt with in A. 16.01 to A. 16.12 clearly show that vinegar is not included in the expression "fruit products".
Vinegar is dealt with in A.20 and synthetic vinegar in A.20.01.
Both these items were added in April, 1960.
We may now turn to the Essential Commodities Act, 10 of 1955 and the Fruit Order.
The Essential Commodities Act was enacted in 1955 with the object of providing, in the interests of the general public, for the control of the production, supply and distribution of, and trade and commerce in, certain commodities.
It came into force on April 1, 1956 repealing the Essential Commodities Ordi 615 nance No. 1 of 1955 which had been promulgated with the same object and enforced on January 26,1955, the date of the expiry of the Essential Supplies (Temporary) Powers Act 26 of 1946.
The last named Act had replaced the Essential Supplies (Temporary Powers) Ordinance No. XVIII of 1946 which had come into force on October 1, 1946.
That Ordinance was promulgated with the object of continuing, during a limited period, powers to control the production, supply and distribution of, and trade and commerce in, foodstuffs and certain other commodities.
To empower the Indian Legislature to enact law on this subject matter the British Parliament had passed India (Central Government and Legislation) Act, 1946(9 and 10 Geo.
Vl, c.39).
The lndian Legislature not being in session the Ordinance was promulgated to meet the emergency and this was replaced by Act 26 of 1946.
Reference has been made by us to this past history for the purpose of indicating the different objects and purposes intended to be achieved by the two legislative measures.
Section 2 of the Essential Commodities Act which is the definition section defines in cl.
(a) "essential commodity to mean any of the classes of commodities stated in sub cls.
(i) to (xi).
Sub clause (v) refers to "foodstuffs, including edible oil seeds and oils" and cl.
(xi) confers power on the Central Government to declare by a notified order any other class of commodity to be an essential commodity for the purposes of the Act, being a commodity with respect to which Parliament has power to make laws by virtue of Entry 33 in List III in the 7th Schedule to the Constitution.
Section 3 of the Act confers on the Central Government power to control production, supply, distribution etc., of essential commodities by providing, by an order, for regulating or prohibiting the production, supply and distribution of those commodities and trade and commerce therein.
Every order made under this section has to be laid before both Houses of Parliament as soon as may be after it is made.
By virtue of section 6 Orders made under section 3 have effect notwithstanding anything inconsistent there ,with contained in any enactment other than the Essential Commodities Act.
Section 7 provides for penalties for contravention of orders made under section 3.
Under section 11 courts are prohibited from taking cognizance of offences punishable under this Act except on a report in writing of the facts constituting such an offence made by a person who is a public servant as defined in section 21, I.P.C. Section 12 of this Act vests in the Presidency Magistrates and Magistrates of 1 Class power to pass sentences of fines exceeding Rs. 1,000/ on convicted persons notwithstanding the restriction in this respect imposed on their powers by section 32, Cr.
P.C. As already noticed earlier, an ordinance called the, Essential Corn modifies Ordinance, 1 of 1955 had been promulgated on the expiry of the Essential Commodities (Temporary Powers) Act and the present Act was passed to replace that Ordinance.
6 16 It may appropriately be pointed out at this stage that it was not the respondent 's case that the Essential Commodities Act had the effect of impliedly repealing the Adulteration Act for the purposes of these cases.
The only argument urged was that the Fruit Order had that effect and its overriding effect by virtue of section 3 of the Act was strongly emphasised.
We may now turn to the Fruit Order (S.R.O. 1052 dated 3rd May, 1955 published in the Gazette of India dated 14th May, 1955) which was made by the Central Government in exercise of the powers, conferred on it by section 3 of the Essential Commodities Act.
Clause (2) of this Order, which is the definition clause, defines the expression "fruit product" in sub cl.
(d) and "vinegar, another brewed or synthetic" is included in this expression as per item (ii) of this sub clause. "Licensing Officer" as defined in sub cl.
(g) means the Agricultural Marketing Adviser to the Government of India and it includes any other Officer empowered in this behalf by him with the approval of the Central Government.
"Manufacturer" as defined in sub cl.
(h) means a licensee engaged in the business of manufacturing in fruit products for sale and includes a person purchasing such fruit products in bulk and repacking them for sale either by himself or through someone else.
Clause 4 prohibits all persons from carrying on business of manufacture except and in accordance with the terms of an effective licence granted to him under this Order in Form "B".
Clause 5 prescribes procedure for applications for the grant of a licence under cl. 4.
Clause 7 enjoins the manufacturers to manufacture fruit products in conformity with the sanitary requirements and the appropriate standard of quality and composition specified in the Second Schedule to the Order and cl. 8 lays down the requirements to be complied with by the manufacturers in regard to the packing, marketing and labelling of containers, of fruit products.
Clause 10 prohibits sale, exposure for sale, despatch or delivery to any agent or broker for the purpose of sale, any fruit products which do not conform to the standard of quality and composition specified in the Second Schedule or which are not ,packed, marked and labelled in the manner laid down in the Order: ,the proviso to this clause contains directions for fruit products imported into India.
Clause 12 contains a mandate for every manufacturer to comply with the directions and orders issued to him and failure to do so is to be deemed to be a contravention of the provisions of the Order.
According to cl. 15 no prosecution for contravention of any of the provisions of this Order is to be instituted without the previous sanction of the Licensing Officer.
The object and purpose of the Adulteration Apt is to eliminate the danger to human life and health from the sale of unwholesome articles of food.
It is covered by Entry 18, List III of the 7th Schedule to the Constitution.
The Essential Commodi 617 ties Act on the other hand has for its object the, control of the production, supply and distribution of, and trade and commerce in,.
essential commodities and is covered by Entry 33 of List III.
In spite of this difference in their main objects, control of production and distribution of essential commodities may, to an extent from a. broader point of view include control of the quality of the essential articles of food and, thus considered, it may reasonably be urged that to some extent it covers the same field as is covered by the provisions of the Adulteration Act.
The two provisions may, therefore, have within these narrow limits co terminus fields of operation.
On this premise we have to see if the two provisions can stand together having cumulative effect and in case they cannot, which provision has the overriding or controlling effect.
It is needless to point out that they can stand together if the powers are intended to be exercised for different purposes without fatal inconsistency or repugnancy.
At the bar Shri Daphtary in his usual persuasive manner argued that there is an irreconcilable conflict between the two statutory provisions and the Fruit Order being, not only of a date later than the Adulteration Act but also having, by virtue of section 3(6) of the Essential Commodities Act, overriding effect over all other laws, it must prevail over the Adulteration Act and Rules.
He pointed out that under the Fruit Order the prosecution can be instituted only with the previous sanction of the Licensing Officer whereas under the Adulteration Act even a purchaser may, without any such sanction, institute a prosecution merely by producing along with his complaint a certificate from the Public Analyst.
He also drew our attention to section 20 A of the Adulteration Act according to which, unlike the Fruit Order, the Court trying an offence under that Act is empowered to implead the manufacturer, distributor or dealer of any article of food, it is satisfied that he is also concerned with, that offence, and proceed against him as though the prosecution had been instituted against him under section 20.
We do not think this section in any way reflects the legislative intention of implied repeal of the Adulteration Act by the Fruit Order.
The two statutory provisions can operate within their respective spheres without giving rise to any absurdity or such grave inconvenience as would impel the court to sustain the plea of implied repeal.
, Incidentally it may also be pointed out that this section was added by Act 49 of 1964 which came into force on March 1, 1965 long after 1960 when the present cases were started.
Shri Daphtary developed his argument by adding that if the respondents have manufactured for sale and have sold vinegar in accordance with the terms of the licence granted to them under the Fruit Order then imposition of further restrictions under the Adulteration Act and Rules with a threat of severe penal consequences for violation of those provisions would 618 be in direct conflict with the mandate or directions under the Fruit Order.
The counsel contended that at least the freedom to manufacture and sell vinegar as permitted by the Fruit Order is curtailed or further circumscribed by the Adulteration Act and Rules and this must necessarily cut across the provisions of the Fruit Order.
He illustrated his point by submitting that under the Fruit Order use of colouring matter is more liberal than under the Adulteration Act and Rules.
In view of these conflicting provisions the Adulteration Act and Rules, according to Shri Daphtary must be held to have been impliedly repealed by the Fruit Order.
We are unable to agree with this submission.
The two statutory provisions, for the purpose of effectuating their respective objects, have imposed ,different restrictions on the respondents when they manufacture and sell vinegar whether brewed or synthetic.
We are, however, '.Informed at the bar that in the present case the disputed vinegar is synthetic.
In the interest of public health the respondents have to comply with the provisions of Adulteration Act and Rules and in the interests of equitable distribution of essential commodities including the articles of food covered by Essential Commodities Act and the Fruit Order they have to comply with the provisions of the Fruit Order.
The provisions of the Adulteration Act and of the Fruit Order to which our attention was drawn seem to be supplementary and cumulative in their operation and no provision of the Fruit Order is shown to be destructive of or fatal to any ,provision of the Adulteration Act or the Rules made thereunder So as to compel the court to hold that they cannot stand together.
If the Adulteration Act or Rules impose some restrictions on.
the manufacturer, dealer and seller of vinegar then they have to comply with them irrespective of the fact that the Fruit Order imposes lesser number of restrictions in respect of these matters.
The former do not render compliance with.
the latter impossible, nor does compliance with the former necessarily and automatically involve violation of the latter.
Indeed, our attention was not drawn to any provision of the Adulteration Act and Rules, compliance with which would result in breach of any mandate, whether affirmative or negative, of the Fruit Order.
We are, therefore, unable to find any cogent or convincing reason for holding that the Parliament intended by enacting the Essential Commodities Act or the Fruit Order to implidely repeal the provisions of the adulteration Act and the Rules in respect the statutes can function with full the provisions of the Adultera of the vinegar in dispute.
Both vigour side by side in their own parallel channels.
Even if they happen to some extent to overlap.
section 26 of the General Clauses Act fully protects the guilty parties against double jeopardy or double penalty.
This section lays down that where an Act or omission constitutes an, ' offence under two or more enactments then the offender shall be liable to be prosecuted and punished under either or any of those enactments but shall not 619 be liable to be punished twice for the same offence.
If, therefore, the provisions of the Adulteration Act and those of Fruit Order happen to constitute offences covering the same acts or omissions then it would be, open to the prosecuting authorities to punish the offender under either of them subject to the only condition that a guilty person should not be punished twice over.
There is also another aspect which has to be kept in view.
Both the Adulteration Act and the Essential Commodities Act have been amended from time to time after their enactment.
Being governed by Entries in List III of the 7th Schedule even the States have power to amend these enactments and indeed they have been so amended in some States.
The subsequent amendments of the Adulteration Act and of the Essential Commodities Act by the Parliament and the amendment of the Adulteration Rules would also tend to negative any legislative intendment of implied repeal of the Adulteration Act by the Essential Commodities Act or the Fruit Order.
It may be recalled that cl.
(1) of sub r.
(1) of r. 50 of the Adulteration Rules was amended in 1956 and again in 1960 and the amended clause is indicative of the rule making authority being conscious of both the statutory provisions being operative in their respective fields at the same time, thereby negativing implied repeal.
A.20 dealing with "vinegar" was also added in Appendix B of the Adulteration Rules in 1956 and A. 20.01 dealing with " synthetic vinegar" was added in April, 1960.
A passing reference may also be made to some of the relevant amendments in some rules made subsequent to the enforcement of the amended section 23 (2).
In r. 55 in items at sl.
19 and 20, dealing with pickles and chutnies made from fruit or vegetables and with tomato and other sauces, respectively, the preservatives mentioned in cl. 2 were amended.
Similarly in r. 51(2) the table containing articles like fruit and vegetable juices including tomato juice was amended.
Both the above amendments were made in December, 1965.
It may here be pointed out that pickles, chutnies, tomato products, kutchups, sauces and also other unspecified items relating to fruits or vegetables are included in the definition of "fruit product" under the Fruit Products Order.
These amendments, though made after 1960, do seem to further negative the intendment of implied repeal as argued on behalf of the respondent.
In view of the foregoing discussion it seems to us that the two statutory provisions can harmoniously operate without causing confusion or resulting in absurd consequences ' and the scheme of the Adulteration Act and Rules can without difficulty fit into the scheme of the Fruit Order under the Essential Commodities Act.
The challenge on the ground of implied repeal must, therefore, be rejected.
Incidentally we may note that the view taken by the learned single Judge in this case was later overruled by a Full Bench of the 918 Sup.
C.I./71 620 Delhi High Court in Municipal corporation vs Harnarain (Crl. A. No. 163 of 1967 decided in May, 1969).
Shri Daphtary, as a last resort, tried to press into service article 14 in his challenge to the prosecution of the respondent.
According to him the prosecuting authorities have an unguided licence to prosecute his clients under one or the other statute and since the penalty under the Adulteration Act is more severe than that under the Fruit Order the principle of equality before the law is violated As this point was not taken in any of the courts below we did not permit him to raise it in this Court.
It would, however, be open to the respondent, if so advised, to raise this point in accordance with law in the court below, because the cases have not yet been finally disposed of.
The competence of the prosecution having been challenged at an intermediate stage, the cases will have to go back to the trial court.
As these cases have been pending since 1962 the trial court should dispose them of with due dispatch and without any further avoidable delay.
The appeals are accordingly allowed and the cases remitted to the trial court for further proceedings according.
to law in the light of the observations made above.
R.K.P.S. Appeals allowed.
[/INST]The respondent, who was selling Vinegar under a license granted under the Fruit Products Order, 1955, made by the Central Government under section 3 of the Essential Commodities Act, was prosecuted under the , for selling adulterated vinegar.
He pleaded that vinegar, whether brewed or synthetic, being a food product and standard specification for such vinegar being tabulated in attached to the Second Schedule of the Fruit Order, persecution without the previous sanction of the licensing Officer as required by clause 15 of the said order was incompetent.
The trial judge rejected the contention.
But the High Court quashed the proceedings.
It was observed that the special provisions of the Fruit Order had overriding effect and therefore a manufacturer of fruit products could only be prosecuted under the provisions of the Fruit Order.
In the appeal to this Court it was contended for the respondent that there was an irreconcilable conflict between the two statutory provisions, and the Fruit Order being, not only of a date later than the Adulteration.
Act but also having, by virtue of section 3(6) of the Essential Commodities Act overriding effect over all other laws, it must prevail over the Adulteration Act and the rules.
On the question whether the Fruit Order impliedly repeals the Adulteration Act, HELD : The plea of implied repeal must fail and the appeals must be allowed.
To determine if a later statutory provision repeals by implication an earlier one it is necessary to scrutinise and consider the true meaning and effect both of the earlier and the later statute.
If the objects of the two statutory provisions are different and the language of each statute is restricted to its own object or subject, then they are generally intended to run in parallel lines without meeting and there would be no real conflict though apparently it may appear to be so on surface.
[611 D G] The provisions of the Adulteration Act and the Fruit Order, for effectuating their respective objects, have imposed, different restrictions in the manufacture and sale of vinegar whether brewed or synthetic.
in the interest of public health the respondent has to comply with the provisions of the Adulteration Act and Rules and in the interests of equitable distribution of essential commodities including the articles of food covered by the Essential Commodities Act and the Fruit Order they have to comply with the provisions of the fruit Order.
Both the provisions are supple 608 mentary and cumulative in their operation and no provision of the Fruit Order is shown to be destructive of or fatal to any provision of the Adulteration Act or the Rules made thereunder so as to compel the court to hold that they cannot stand together.
If the Adulteration Act or Rules impose some restrictions on the manufacturer, dealer and seller of vinegar, then they have to comply with them irrespective of the fact that the Fruit ,Order imposes lesser number of restrictions in respect of these matters.
The former do not render compliance with the latter impossible, nor does compliance with the former necessarily and automatically involve violation ,of the latter.
Even if both 'statutes to some extent overlap, section 26 of the General Clauses Act fully protects the guilty parties against double jeopardy or double penalty.
[618 C H] Om Prakash Gupta V., State of U.P.; , , T. section Baliali vs T. section Rengachari, ; , State vs Gurcharan Singh, A.I.R. 1952 Punjab 89, and Paine vs Stater, ,referred to.
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<s>[INST] Summarize the judgement: Criminal Appeal No.106 of 1980.
From the Judgment and Order dated 8.1.1980 of the Delhi High Court in Crl.
A. No. 137 of 1978.
Ms. Neeraja Mehra and I.K. Wadera for the Appellants.
Anil Dev Singh, R.N. Poddar and G.D. Gupta for the Respondent .
The Judgment of the Court was delivered by FAZAL ALI, J.
The appellant in this case was convicted under section 302 IPC and sentenced to imprisonment for life by the High Court.
m e case depends purely on circumstantial evidence and the trial court after considering the evidence was of the opinion that the prosecution case was not proved beyond reasonable doubt and accordingly acquitted the appellant of the charges framed against him.
The State filed an appeal before the High Court which reversed the decision of the trial court and came to the conclusion that the appellant had killed his wife by strangulation.
Hence, this appeal before this Court under section 379 of the Code of Criminal Procedure.
At the very outset we might mention that circumstantial evidence must be complete and conclusive before an accused can be convicted thereon.
This, however, does not mean that there is any particular or special method of proof of circumstantial evidence.
We must, however, guard against the danger of not considering circumstantial evidence in its proper perspective, e.g., where there is a chain of circumstances linked up with one another, lt 511 is not possible for the court to truncate and break the chain of circumstances.
In other words where a series of circumstances are dependent on one another they should be read as one integrated whole and not considered separately, otherwise the very concept of proof of circumstantial evidence would be defeated.
The learned Sessions Judge seems to have fallen into this very error.
In the instant case, instead of taking all the circumstances together, which are undoubtedly circumstantial and closely linked up with one another, the learned Sessions Judge has completely misdirected himself by separately dealing with each circumstance thereby making a wrong approach while appreciating the circumstantial evidence produced in the case.
Let us now recount the circumstances relied upon by the appellant by giving first a brief summary of the same.
The marriage of the accused and the deceased took place on December 6, 1975, i.e., hardly a year before the date of the occurrence.
After about six months of the marriage, the relations between the two spouses started becoming strained.
The evidence clearly shows that the accused neglected the deceased, abused her, teased her, waxed her and even beat her.
All these things were reported to the relatives of both sides as a result of which a panchayat had to be called to bring the two parties together which also was of no avail.
There is further evidence to show that on the night of the occurrence, i.e., between the night of 16th and 17th November 1976, the accused was last seen by some of the witnesses whose evidence we shall refer hereafter.
Secondly, it is also proved that the accused left his house in the morning of 17th November 1976 and went to Muzaffar Nagar and stayed at his sister 's house there and came back to Delhi in the evening of 17th November 1976 but instead of staying in his own house he stayed in Venus Hotel in Paharganj in Delhi under a false and assumed name of Vinod Kumar which, according to the evidence, was written by him while making the entries in the Hotel register.
Furthermore, it appears that there are some letters written by the deceased which show the callous and cruel nature of the accused and his treatment towards her.
He appears to have been completely indifferent towards her and the deceased prayed to her parents for taking her with them immediately.
It is true that despite the conduct of the appellant, the parents in law of the deceased were very kind to her and tried their best to save the situation but the appellant was made of such a stern stuff and stubborn nature that he would not listen to anyone.
512 Moreover, the evidence further shows that certain broken bangles and one pair of cufflinks were recovered from the room where the deceased was strangulated.
The medical evidence also supports that the deceased had died of manual strangulation.
There are some other circumstances which show the role played by the accused and if we take the circumstances together the irresistible inference is that the prosecution has completely proved its case.
We might observe there that the circumstances which have been narrated above are so interlinked in the chain of circumstantial evidence that lt is difficult to truncate them and the learned Sessions Judge ought not to have rejected the circumstances one by one and then acquit the accused.
It is here that the learned Sessions Judge has committed a serious error of law.
If we read the evidence as an integral whole, the inescapable conclusion is that excepting the appellant nobody else could have committed the murder.
With this preface, we now proceed to deal with the chain of circumstances relied upon by the High Court in reversing the judgment of the trial court and convicting the accused.
To begin with, as we have said, within one year of her marriage the deceased died during the night of 16th and 17th November 1976.
A number of prosecution witnesses (PWs 5,6,7,8 and 9) whose evidence has been fully considered by the High Court deposed that the appellant had been ill treating the deceased and their relations were extremely strained.
This is buttressed by the further circumstance that a panchayat had been called to resolve the differences between the two spouses.
In this connection, the prosecution witnesses have spoken thus: The accused had always been maltreating Madhu and used to say that he will not like to keep Madhu with him.
After about 6 months of the marriage a Panchayat was held in Bakhtamal Dharamshala, Delhi for bringing about conciliation.
Before the panchayat the father of the accused had assured that he will ask the accused to behave better.
But there was no change in the attitude of the accused towards the deceased and the accused was bent upon leaving the girl." (PW 5, Ramesh Chand) About 5 or six months prior to the murder of Madhu, her father had complained to me that the accused used 513 to beat her and wanted to leave her.
After 2 or 3 days A of that, a panchayat was held in Bagtamal Dharamshala, Kucha Pati Ram. .
Before the Panchayat, father of the accused had assured that he will make him under stand and see that the accused behaved properly in future with Madhu.
(PW 6, Ram Kishan Dalaya) Accused used to beat Madhu and we were receiving many complaints in this respect.
Myself, Ramesh Chand, Ganga Prasad and Madan Lal had been coming to Delhi and requesting the accused not to do so.
However, the behaviour of the accused towards Madhu did not change.
(PW 7, Chhanu Lal) She was married to Ram Avtar(accused) present in the court.
Madan Lal had started saying after about 20 or 25 days after the marriage that the deceased was being beaten and ill treated by the accused. .
A panchayat was organised.
Radhey Lal was also called and he attended the panchayat.
( PW 8, Ram Pal Singh) There were strained relations between them for a long time.
(PW 9, Gulab Chand) Right from the beginning, accused had been ill treating my daughter.
She had been writing letters to me from which I had come to know that she was not happy and so I came to Delhi.
I beseeched the accused and with folded hands requested him to behave better with my daughter in the presence of his father.
Both of them had assured that nothing will happen in future.
(PW 12, Madan Lal) I had gone to attend its conference at Lucknow from G 5th to 7th Oct. 1976.
There, Chhanu Lal, elder brother of Madan Lal had complained to me that Ram Avtar accused was ill treating Madhu and that I should look into this matter.
Then I told him that in that case Chhanu Lal would not have complained to me.
Then he assured me that he will ask the accused to behave properly and there will be no complaint in future.
(PW 13, Sohan Lal Verma) 514 The above extracts from the evidence of various prosecution witnesses show that the relatives of the two sides tried their best to bring harmony in the relations of the accused and the deceased and the father of the accused had been promised that his son will behave in future in a proper manner.
One outstanding feature of this case is that while the deceased was fully satisfied with the treatment received by her from her parents in law, yet so adamant was the accused that he would hardly listen or pay any heed to the advice of his parents.
Another circumstance which almost conclusively proves the case of the prosecution is the evidence of PW 1, Shri Krishan Avtar, according to which, the accused was seen by him on the fateful night between 9 or 9.30 p.m. in his house and in this connection he says thus: When I returned at about 9 or 9.30 p.m.
I saw the accused in his house.
He was alone in the house at that time.
The room of the accused is situated on the ground floor while mine is situated on the first floor.
When I saw him he was coming down stairs from the first floor and entered his room on the ground floor. . . .
Then I entered the room of the accused where he and his wife used to sleep together and saw the dead body of Madhu.
" PW 1 further testifies to the articles found from the scene of occurrence "exhibit
P8 is the pair of cufflink.
exhibit
P 14 are the broken pieces of bangles collected from the floor of the room.
F PW 2, Nathi Lal, another independent witness, says that at about 12.30 in the night while he was coming from Lal Darwaza to his house, he saw the accused passing that side and the accused told him that he had told the chowkidar that he (appellant) was going away and the door of his house was open.
Another witness (PW 3) though declared hostile, yet so far as the relations between the spouses are concerned, categorically states that the relations between the spouses were extremely strained.
Another circumstance which is of great importance and which seems to have been ignored by the learned Sessions Judge is that after returning from Muzaffar Nagar in the evening of 17th November 1976, the accused instead of staying in his house, stayed in 515 Venus Hotel in Paharganj, New Delhi under a false and assumed name of Vinod Kumar and made the entries in the Hotel register in his own hand.
m is shows the guilty conscience of the accused.
This is proved by exhibit
PW 14/A where it has been stated thus: The aforesaid register contains one entry against serial No.518 dated 18.11.76 recorded at 1.00 a.m. relating to Vinod Kumar, Indian 23/3, Sarafa Bazar, Muzaffar Nagar, for business Muzaffar Nagar, stated to have been made and initialled by accused Ram Avtar S/o Radhey Lal, r/o 2721, Chhatta Girdhar Lal, Gali Arya Samaj, Bazar Sita Ram, Delhi.
Another intrinsic evidence which proves the case against the accused consists of two letters (Ext.
PW 12A and 12B) written by the deceased to her parents wherein she had requested her father to take her away as her husband was ill treating her.
In these letters she had written thus: You (father) take me away from here. . (He) is not on speaking terms with me.
PW 12A) There is always a quarrel in the house about me.
Papa and Mummy have been trying to make him understand.
(He) does not eat and drink anything from my hand and even does not speak to me.
Whenever, I come across him, he scolds me.
Today, he gave me beating and was about to turn me out of the house but Mummy and Pappa pacified him. .
He further said 'I do not want to see the face of this mean girl.
Furthermore that whatever Khurjawallas have done in my interest is good (Taunt).
He says that when I become a widow then at least they (parents) will come to take me away. .
He says that even if God comes, he will not agree and will not keep me with him at any cost. .
You treat this letter as a telegram and please reach here immediately.
I keep weeping here day and night and Mummy also continuous weeping.
He would not keep me with him at any cost and I also do not want to live here any more. .
I am weeping while writing this letter.
Dear Pappa, please come as early as possible.
(exhibit PW 12 B) In addition to Ext.
PW 12 A and 12 B, one more letter was found from the house where the murder took place but which she could not post.
516 In his statement PW 18, Kanshi Ram, S.I., stated that from the personal search of the accused, Rs. 5.50 one ticket from Meerut to Delhi were recovered and the accused was also made to put off his shirt and banian, and that he (PW 18) took into police custody the banian of the accused which had blood stains on the front side.
The last piece of evidence which is also important and which has been completely glossed over by the trial court is the recovery of broken bangles and a pair of cufflinks which show that during the course of strangulation the deceased must have put in stiff resistance.
In view of the circumstances discussed above, it cannot be said that the case against the accused has not been proved.
It is not possible for us to consider the various chains of circumstances, mentioned above, in isolation by divorcing them from the other circumstances which are closely interlinked with them.
This is where the trial court has gone wrong and has made a fundamentally wrong approach.
Having regard to the circumstances mentioned above, we are clearly of the opinion that the judgment of the trial court is not only legally erroneous but also absolutely perverse.
In view of the circumstances and the admissions of the witnesses extracted, the case against the accused is proved beyond reasonable doubt and this is not a case where two views are reasonably Possible.
Before concluding we might observe that where circumstantial evidence consists of a chain of continuous circumstances linked up with one another, the court has to take the cumulative effect of the entire evidence led by the prosecution before acquitting or convicting an accused.
For the reasons given above, we find ourselves in complete agreement with the view taken by the High Court and we see no reason to interfere with the same.
The appeal is accordingly dismissed.
In case the appellant is on bail, he shall now surrender and be taken into custody and sent to prison to serve out the remaining part of the sentence.
N.V.K. Appeal dismissed.
[/INST]In the general election to the State Assembly held in 1982 the appellants and the respondents were the candidates.
The respondent was declared elected to the Assembly.
In their election petition, the appellants alleged that the respondent was guilty of corrupt practice and booth capturing in that he went to two polling booths along with 50 to 60 persons, armed with guns, sticks and swords, threatened and pressurized the voters and as a result of the serious threats held out by the respondent and his men the voters ran away without exercising their franchise; that the respondent and his companions entered the polling booths and terrorized the Polling Officer and polling agents, assaulted the polling agents at gun point, snatched away the ballot papers and marking them in the respondent 's favour, cast the votes in the ballot boxes and thumb marked the counter foil of ballot papers.
They sought a declaration that the respondents election was void under section 100 of the Representation of the People Act 1951.
A large number of witnesses were examined by both sides.
The Deputy Commissioner who was the Returning Officer of the constituency recorded on a tape recorder the statements of same persons including the polling agents, the Polling Officer and the respondent and of himself.
The High Court held that the evidence of the witnesses and the petitioners on these points was not corroborated, no effort was made by the petitioners to connect the respondent with the ownership of vehicles purported to have been used by him, that the witnesses were drawing more upon their imagination to make out stories about the detention of the persons and forcible polling at that polling station by the respondent and that the 400 petitioners failed to prove the charge beyond reasonable doubt.
A The court also held that the role assigned to the respondent by the petitioners has not been proved.
Dismissing the appeal ^ HELD: [Per Fazal Ali J, Sabyasachi Mukharji J concurring and Varadarajan J dissenting] The appellants have failed to prove their case that the respondent was guilty of indulging in corrupt practices.
[446 F] Clear and specific allegations with facts and figures regarding the corrupt practices indulged in by the respondent have not been alleged in the first part of the election petition.
The petitioners should have given definitive and specific allegations regarding the nature of fraud or the corrupt practices committed by the respondent as briefly as possible in the main part of the petition.
[407 E F] The appellants have not established that the respondent was present at the time of the incidents at the two booths.
Once this is not proved, the appellants have failed.
It is settled law that corrupt practices must be committed by the candidate or his polling agent or by others with the implicit or explicit consent of the candidate or his polling agent.
Where the supporters of the candidate indulged in corrupt practices on their own, without the authority from the candidate the election cannot be voided, and this factor is conspicuously absent in this case.
It is also settled law that the charge of corrupt practice has to be proved by convincing evidence and not merely by preponderance of probabilities.
As the charge of corrupt practice is in the nature of a criminal charge, it is for the party who sets up the plea of undue influence to prove it, to the hilt and the manner of proof should be the same as in a criminal case.
[445 F H] As regards the evidence recorded on a tape Recorder or other mechanical process the preponderance of authorities is in favour of the admissibility of the statements subject to certain safeguards viz., (1) the voice of the speaker must be identified by the maker of the record or by others who recognise his voice.
Where the voice is denied by the maker it will require very strict proof to determine whether or not it was really the voice of the speaker.
[414 E] (2) The voice of the speaker should be audible and not distorted by other sounds or disturbances.
[414 E] 401 (3) The accuracy of the tape recorded statement has to be proved by the maker of the record by satisfactory evidence.[414 F] (4) Every possibility of tampering with or erasure of a part of the tape recorded statement must be ruled out; [414 G] (5) The statement must be relevant according to the rules of evidence and [414 H] (6) The recorded cassette must be carefully sealed and kept in safe custody.
[415 A] R. vs Maqsud Ali and B. vs Robson , referred to.
In the instant case, the voices recorded at a number of places are not very clear and there is noise while the statements were being recorded by the Deputy Commissioner.
A good part of the statement recorded on the cassette has been denied not only by the respondent but also the respondent 's witnesses.
No other witness has come forward to depose identification of the voice of the respondent or of witnesses.
[444 E] There are erasures here and there in the tape and besides the voices recorded being not very clear, lt is hazardous to base a decision on such evidence.
The Deputy Commissioner recorded the statements in violation of the instructions or the Government and erred in not placing the recorded cassette in proper custody.
He kept it with himself without authority and therefore the possibility of tampering with the statements cannot be ruled out.
The transcript was prepared in his office by his stenographer and when the transcript was being prepared the Deputy Commissioner himself was absent from his office.
The possibility of its being tampered with by his stenographer or somebody else cannot be ruled out.
Respondents witnesses have denied the identity of their voices.
The recording was done in a haphazard and unsystematic manner.
A conspectus of the evidence of the witnesses shows that the evidence adduced by the respondent in the court is much superior in quality than that adduced by the appellants.
The High Court was right in holding that the petitioners had failed to prove the allegations of corrupt practice or booth capturing beyond reasonable doubt.
[441 E, 442 H 443 E] Sabyasachi Mukharji,J. concurring: While accepting the tape recorded statements the court should proceed cautiously.
The 402 evidence should be examined on the analogy of mutilated documents.
If the tape recording is not coherent or distinct or clear it should not be relied upon.
[502 B,D E] R. V. Maqsud Ali and R. vs Robson , referred to.
In the instant case, the tape recording was misleading and could not be relied on because in most places it was unintelligible and of poor quality.
Therefore, its potential prejudicial effect outweighs the evidentiary value of the recording.
[504 C] Shri N. Sri Rama Reddy etc.
vs Shri V.V. Giri [1971]1 S.C.R. 399 and R.M. Malkani vs State of Maharashtra ; M.Chenna Reddy vs V. Ramachandra Rao & Anr.
[1972] E.L.R. Vol. 40, 390; Ram Sharan Yadav vs Thakur Muneshwar Nath Singh & Ors.
; ; C.A.No. 3419/81 decided on 29.11.84, referred to.
It is settled law that the charge of corrupt practice is in the nature of a criminal charge which if proved entails a heavy penalty in the form of disqualification and that a more cautious approach must be made in order to prove the charge of undue influence levelled by the defeated candidate.
In the instant case, it cannot be said that the appellants had proved their case to the extent required to succeed.
[506 D] Where the question is whether the oral testimony should be believed or not the views of the trial judge should not be lightly brushed aside, because the trial judge has the advantage of judging the manner and demeanour of the witness which advantage the Appellate Court does not enjoy.
In view of the nature of the evidence on record there is no reason to disagree with the appraisal of the evidence by the trial judge.
[506 G] Moti Lal vs Chandra Pratap Tiwari & Ors.
A.I.R. 1975 S.C. 1178 and Raghuvir Singh vs Raghuvir Singh Kushwaha A.I.R. 1970 S.C. 442, referred to.
Varadarajan J. dissenting : It is clear from decided cases that tape recorded evidence is admissible provided the originality and the authenticity of the tape are free from doubt.
In the instant case, there is no valid reason to doubt them.
It is not reasonable to reject the tape merely because some portions thereof 403 could not be made out on account of noise and interference not only outside but also inside the Polling Station.
On the contrary under the circumstances of this case great relevance has to be placed on the tape and its contents not only for corroborating the evidence of the District Commissioner and the Presiding Officer to the extent they go but also as resgestae evidence of the first part of the incident.
The Trial Judge was not justified in rejecting the tape record and transcription.
The appellants have proved satisfactorily and beyond reasonable doubt the first part of the incident in one of the Polling Stations, that the respondent went armed with a rifle with 25 or 30 companions and entered the Polling Station with 4 or 5 armed companions and threatened the Presiding Officer and others who were present there with the use of force and got some ballot papers marked in favour of the respondent polled forcibly by his companions in the ballot box and that they left the Polling Station on seeing the villagers and the police coming towards the Polling Station.
The discrepancy in evidence regarding the time of the incident is not material.
[478 A C, 483 E 484 A] Secondly, the Deputy Commissioner recorded the conversation which he had with the presiding Officer but some portion thereof was erased by his own voice by inadvertence.
After recording, his stenographer prepared the transcript in his office most of it under his supervision and though he was temporarily absent to attend to some other work he compared it with the original tape and found it to be correct.
The tape, the tape recorder and the transcript remained with him throughout and were not deposited by him in the record room and there was not possibility of tampering.
[496 F 497 A] The respondent had managed to keep away from the court material evidence by way of the original report of the Presiding Officer.
He had cited a person as his witness to depose about his case but did not examine him for that purpose and had called him only for the purpose of production of some record, without any oath being administered to him.
He had denied to the appellants the opportunity to cross examine that witness.
The respondent had come forward with a new case of alleged booth capturing and forcible polling of bogus votes after the appellants had completed the examination of their witnesses to whom not such suggestion was made in the cross examination.
From the evidence on record two views are not possible.
The appellants have proved beyond reasonable doubt that the respondent had committed the corrupt practices alleged against him.
No lenient view can be taken in this case merely because the election petition is directed against the returned candidate.
[499 G 500 B] 404
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<s>[INST] Summarize the judgement: Criminal Appeal No. 36 of 1987.
From the Judgment and Order dated 1.9.1986 of the High Court of Madras in Crl.
Appeal No. 893 of 1985.
N. Natarajan, V. Krishnamurthi and V. Balachandran for the Appellants.
U.R. Lalit, A.V. Rangam, V.R. Venkataswami and L. Rajendran for the Respondents.
710 The Judgment of the Court was delivered by SEN, J.
Appellant No. 1, Laxmi Raj Shetty is under sentence of death on his conviction under section 302 of the Indian Penal Code, 1860 for having committed the murder of the deceased P.N. Gnanasambandam, Actg.
Manager of the Karnataka Bank, Main Branch, Madras by the First Additional Sessions Judge, Madras by his judgment and sentence dated October 28, 1985.
He has further been convicted under section 392 for having committed the offence of robbery of Rs.13,97,900 from the strong room of the Bank and also under section 449 for having committed house trespass with intent to commit the said robbery and murder.
He has been sentenced to undergo rigorous imprisonment for a period of seven years on each of these counts and the sentences are directed to merge in the sentence of death.
Appellant No. 2 Shivaram Shetty, father of appellant No. 1, a retired Sergeant Major of the Indian Air Force, re employed as Security Officer, Karnataka Bank, Main Branch, Mangalore has been convicted by the learned Additional Sessions Judge under section 212 for having harboured his son Laxmi Raj Shetty having known or having reason to believe that he had committed the murder of the Bank Manager and disappeared with a very large sum of money from the Bank and also under section 411 for having with dishonest intention retained possession of the huge sum of Rs.12,27,500 knowing the same to be stolen and sentenced to undergo rigorous imprisonment for a period of three years on both counts; the sentences have been ordered to run concurrently.
On a reference by the learned Additional Sessions Judge, a Division Bench of the High Court by its judgment dated September 1, 1986 has confirmed the sentence of death passed on appellant No. 1 Laxmi Raj Shetty under section 366 of the Code of Criminal Procedure, 1973 as also the conviction and sentences passed on him under sections 392 and 449 of the Indian Penal Code and those under sections 212 and 411 on his father Shiva Ram Shetty.
The Karnataka Bank has seven branches in the Metropolitan City of Madras, the main branch being at 171, Thambu Chetty Street.
In each branch there is a strong room for keeping the cash and other valuables.
The main Branch at 171, Thambu Chetty Street is on the first floor and the Regional Development Office at the second floor of the same building which belongs to the Bank, 711 the ground floor being used for a car park and godown.
The strong room in the main branch has a double locking system with two sets of keys.
One set of keys i.e. including the master key remained with the officer next to the Manager and the second set with the officer next to him.
The strong room could not be opened except by the use of both the keys.
The total cash in the strong room on May 20, 1983 as per the entry in the Double Lock Register Exh.P10, was Rs.14,26,113.70 in bundles of currency notes bearing the Bank seal MO 11 Series to MO 169 Series.
This is borne out by the Cash Scroll Register Exh.
The Cash Scroll Register was not kept under lock and key and used to remain on the table of PW 6 Smt.
Shasikala, Officer and she has testified that the total cash at the end of that day was Rs.14,26,113.70 and she handed over the amount to the Double Lock officer.
The assailant would therefore know by a look at the Cash Scroll Register as to the exact amount in the strong room on that day.
The topography of the Main Branch is given in the sketch plan Exh.
The Manager 's cabin is on the first floor at the north eastern corner.
The central hall in the middle is empanelled with different counters and there is a big lounge outside facing the Manager 's cabin.
The Bank officials used to sit in the central hall at their respective places while transacting the business of the Bank.
The bathroom and the W.C. where the murder was committed, are on the south western corner.
For going to the bathroom, one has to cross the central hall, get into a foyer where the water cooler is kept and beyond it is the bathroom and W.C.
Just across the foyer and opposite the bathroom is a flight of steps leading upto a mazzanine floor on which the strong room is located.
It appears that the accused Laxmi Raj Shetty, aged 24 years is a 6 feet tall, fair complexioned young man with curly hair.
He along with PW 9 Govindaraj was recruited as a trainee clerk at the Main Branch in the month of August 1982, placed on probation in October 1982 and thereafter confirmed in the month of April 1983.
It has come in evidence that the accused Laxmi Raj Shetty and the deceased Gnanasambandham were known to PW 18 from before as they both used to leave the Bank premises together at night around 9 or 9.30 p.m.
The accused was a karate expert and always attired in a red T shirt carrying a karate bag on his shoulder.
He was thus a 712 man with distinctive features and would naturally stand out in a crowd.
All the other witnesses examined by the prosecution to prove the various circumstances appearing in the case after the gruesome murder speak of the person involved being a tall, fair complexioned young man with curly hair, aged about 24 or 25 years.
The evidence also shows that PW 50 Deviasigamani, Inspector of Police who was investigating into the crime carried with him a photograph of the accused Laxmi Raj Shetty and when the witnesses were shown the photograph, they identified the accused to be the person in question.
According to the prosecution, on the fateful night i.e. On May 20, 1983 the deceased Gnanasambandham was, as usual, working in the Bank after the normal banking hours.
He used to sit on his table in the central hall next to the Manager 's cabin underneath a fan.
Being the seniormost officer, he had the custody of the first set of keys to the strong room, the second set of keys used to remain with the officer next to him PW 16 K. Chandrasekara Holla.
Apparently, at about 7.30 p.m. appellant No. 1 Laxmi Raj Shetty (hereinafter referred to as the accused), after doing physical exercises at Physical Development Institute, returned to the Bank premises.
The prosecution case is that during the probationery period, the accused used to work late in the evenings and gained the confidence of the deceased by helping him with the work.
They would both leave the Bank together after completing the day 's work roundabout 9 p.m.
The deceased would hand over the keys of the outer door and the shutter to the accused who would lock the same and hand back the keys to the deceased.
The accused would then accompany the deceased some way towards his house.
Shasikala as supported by the entry in the Cash Scroll Register Exh.
P 8 and that in the Double Lock Register Exh.
P10, was Rs.14,26,113.70 in bundles of currency notes of different denomina tions, all bearing Bank seals being Mo 11 Series to MO 169 Series.
From the testimony of PW 16 who had the custody of the second set of keys and was expected to take them home after the day 's business, it appears that he would instead lock the same in the cupboard of his table and take the key of the cupboard with him.
At times, out of forgetfulness, he would leave the key in one of the drawers.
713 On that day, unfortunately, PW 16 left the key of the cupboard on the table which sealed the fate of the deceased.
On the night the deceased was working in the Bank after the normal banking hours.
Presumably some time after 7.30 p.m. he left his seat in the central hall to go to the bathroom and when he was in the toilet he was struck on the head with the iron portion of one of the stitchers as a result of which he slumped.
Thereafter the assailant first roughed him up, then strangulated him with a twisted towel with a knot and stabbed to death by a pair of stitchers on both sides of his neck, ordinarily used as part of official stationery for stitching papers.
He had apparently been done to death to relieve himself of the first set of keys.
At bout 9 p.m. the accused was seen coming out of the building by PW 18 Smt.Kanaka, a flower vendor, sitting on the steps of the Bank.
The accused closed the outer door of the Bank and was seen by PW 18 going towards Burma Bazar.
He returned after some time with a light blue colour suitcase and re entered into the Bank premises.
After about half an hour he came out with a bag on his shoulder, the blue colour suitcase in one hand and a brief case which the deceased used to carry with him, in the other and placed the suitcase on the steps of the Bank.
He again went inside and brought out a large coffee coloured skybag and placed it beside the suitcase.
He then went towards Burma Bazar and came back with an auto rickshaw and with the help of PW 31 Venkatesan, auto rickshaw driver, placed the suitcase and the skybag in the autorickshaw and disappeared into the night.
The testimony of PW 18 is that she repeatedly queried whether the Periya Ayya, meaning the elderly person or the Manager Ayya thereby meaning the deceased had not come but the accused did not respond to her queries.
On the next morning i.e. on May 21, 1983 at about 8.15 a.m. PW 2 Mallaiya, the day watchman opened the Bank premises and when he switched on the lights, he found the fan over the table of the deceased still on and he switched it off.
He also found the Seiko watch of the deceased, his ball pen, pass book and other belongings along with an open ledger lying on the table.
He asked PW 1 Lakshmi, the sweeper, not to touch any of these articles and attend to her work.
His version is that he went out for a cup of tea but shortly thereafter PW 1 came out shouting that there was a dead 714 body lying in the toilet and in the meanwhile the members of the staff had started arriving.
PW 2 along with Venkataraj, Cashier and one Rajaiah went inside and saw the body of the deceased sprawled in the toilet.
He immediately contacted PW 3 P.T. Rajan, Chief Manager of the Bank and asked him to come at once.
PW 3 rushed to the Bank and saw the ghastly sight and got in touch with the police control room.
On the 21st morning which was a Saturday, the accused attended the Bank as usual presumably to allay suspicion.
He was present when the Investigating officer PW 47 Anandam, Inspector of Police, Esplanade, B 2 Police Station came to the Bank along with a Sub Inspector and a Police Constable on receipt of a message flashed by the police control room, as conveyed by PW 46 Manikkam, Sub Inspector of Police attached to B 1 North Beach Police Station.
On his arrival he took cognizance of the offence on the first information report Exh.
P3 lodged by PW 3 and started making investigation and made the usual seizures.
After holding an inquest over the dead body, he sent for the police photographer, the fingerprint expert and the police dog squad.
He also recorded the statements of PW 1 Lakshmi, PW 2 Mallaiya, PW 3 P.T. Rajan and PW 16 K. Chandrasekara Holla and one Ravi Shankar.
He did not interrogate the other Bank officials, including the accused.
The testimony of PW 3 is that immediately on arrival at the Bank he sent for PW 16 and asked for the second set of keys.
He came and told him that the key of his cupboard was missing and therefore it could not be opened.
It had then to be wrenched open and the second set of keys was also found missing.
PW 3 told PW 47 that he would get the duplicate set of keys from the Triplicane Branch and with the help of duplicate set of keys the strong room was opened at about 2.30 p.m. and a sum of Rs.13,97,900 was found missing.
A message was then transmitted by PW 3 to PW 10.
P. Raghuram, Chairman of the Karnataka Bank at the Mangalore Head office about the murder of the Actg.Manager and the theft of Rs.13,97,900 from the strong room.
PW 43 Dr. Cecilia Cyril, Associate Professor, Department of Forensic Medicine, Medical College, Madras performed an autopsy on the dead body of the deceased.
She found that the deceased had been strangulated by a dark colour twisted towel 36x7 c.m. long with knot which completely encircled his neck near the thyroid 715 cartilage.
She found several external injuries.
Underneath the towel there was a faint ligature mark 32x5 c.m. over the front side and back of the neck.
Apart from this, there were also several lacerations, bruises and abrasions on the upper part of the body, particularly on the face and the neck as also on both the hands.
The doctor also found two stitchers measuring 14 c.m. in length thrust into both sides of the neck in the front.
One of the stitchers had been thrust 5 c.m. deep and got stuck in the cartilage and the other was embedded 11 c.m. deep.
On dissection, she found extensive bruising of tissues over both sides of thyroid cartilage 7x5x1/4 c.m.
as also on the front of trachea 7x3x1/2 c.m.
According to the Doctor, each of injuries nos. 1, 2 and 3 was by itself sufficient in the ordinary course of nature to cause death.
She further opined that the cumulative effect of some of the injuries viz. nos.
1 3, 4 10 and 17 was necessarily fatal.
She stated that the blood marks on the walls of the toilet as well as on the floor could be due to sprouting and spillage of blood.
In her opinion, death was not caused by strangulation alone.
For quite a while, the police drew a blank.
At about 6 p.m. PW 47 Anandam, Inspector of Police accompanied by PW 46, Sub Inspector returned to the Bank and started making inquiries in the neighbourhood.
During the course of the inquiry he traced out one Ganesan, a plumber by profession, who used to sleep on the pavement near the Bank.
He furnished a valuable clue which ultimately led to the detection of the murderer.
He revealed that Smt.Kanaka, a flower vendor belonging to village Tharamani, whose husband Neerappan was employed as a cook at the nearby Krishna Bhawan Hotel on Errabalu Chetty Street, might disclose information about the murderer, if she were to be interrogated.
On getting this vital information PW 47 went to village Tharamani but found the house of Smt.Kanaka locked.
On enquiry he learnt that she had gone to the house of her sister at Vyasarpadi.
PW 47 obviously did not realise the importance of this witness.
He states that he did not go to Vyasarpadi that night although the place was only 7 kilo metres from the Police Station as it was very late.
Nor did he personally go to the nearby Krishna Bhawan Hotel, which was only two furlongs away, and instead sent a Sub Inspector to fetch Neerappan, husband of PW 18, but he was not there.
On the next morning i.e. the 22nd, under the orders of the Deputy Commissioner of Police, the case was transferred to the Crime Branch and 716 investigation was taken over by PW 48 Guruvandi, Inspector of Police (Crimes), M 1 Post Trust Police Station, without further progress.
He states that he had been to Tharamani in search of Smt.Kanaka but she was not there and learnt from the neighbours that she had gone to her sister 's house at Vyasarpadi but since her place at Vyasarpadi was not known, he did not proceed to Vyasarpadi and instead left a message that on her return she should report to the police.
He admits that he did not go himself to Krishna Bhawan Hotel but sent a Police Constable but he could not find Neerappan.
On the 23rd morning at 10 a.m. PW 50 Deviasigamani, Inspector of Police (Crimes), B2 Police Station who had taken over investigation in that morning, went to the Bank and further examined PW 2 Mallaiya, PW 3 P.T. Rajan and PW 12 Balasubramaniam, as also the nearby shopowners.
He then went to village Tharamani in search of PW 18 Smt.Kanaka but till then she had not returned from her sister 's house at Vyasarpadi.
He left a message that she should report to the Police Station on her return.
On that day he had also inspected all the relevant records including the attendance register and detected that apart from two others, the accused Laxmi Raj Shetty did not report for duty after the 23rd.
He accordingly went to the Christian Home where the accused was staying in Room No. 4 but found the room locked.
It was revealed that the main gate of the hostel used to be closed at 10.30 p.m. and till then the accused had not returned.
On the 21st morning at about 5 a.m. PW 27 saw the accused going up the stairs to his room.
After his bath he came down for breakfast but did not take any food complaining of stomach disorder and left after a cup of milk.
On the 24th at 11 a.m. PW 50 again went to the Bank and examined some of the Bank employees, namely, PW 5 Rangarajan, PW 6 Smt.Shasikala and PW 9 Govindaraj.
On that day at 4 p.m. he left for Vyasarpadi and remained there till 11 p.m. moving about in different localities making an extensive search in an effort to trace out Smt.Kanaka, but this was of no avail.
On the 25th he went to the Bank at 10 a.m. and further examined PW 16 Chandrasekara Holla and also recorded the statement of PW 17 Smt.Saraswathi Somasundar, an officer of the Bank.
At 4 p.m. PW 50 left for Tharamani where he found PW 18 Smt.Kanaka at her 717 house and recorded her statement which revealed the actual involvement of the accused Laxmi Raj Shetty in the commission of the murder and robbery; till then PW 50 treated him as a prime suspect.
After the disclosure by PW 18 Smt.Kanaka that she had seen the accused Laxmi Raj Shetty coming out of the Bank premises on the night in question after 9 p.m., locking the premises and of his suspicious movements thereafter, PW 50 directed all his energies in tracking down the accused.
He along with PW 49 Selvaraj, Inspector of Police and a police party left in the early hours of 26th morning at 1 a.m . by a police jeep for Mangalore in search of the accused.
They reached Mangalore at 9.30 p.m.
At 11.30 p.m. PW 50 called on the Deputy Superintendent of Police and requested for help of the local police.
With the local police headed by PW 40 Sundar Shetty, Sub Inspector of Police, State Intelligence, PW 50 raided the house of appellant No. 2 Shivaram Shetty at Kodial Bail.
Appellant No. 2 and his wife were present in the house but the accused Laxmi Raj Shetty was not there, he having in the meanwhile left for Madras by the West Coast Express.
The police carried on intensive search of the house till about 2 a.m. but nothing incriminating was found.
When they questioned appellant No. 2 he did not disclose that his son had already left for Madras by train.
As a result of this, the Madras police throughout on the 27th searched for the accused Laxmi Raj Shetty at Mangalore and neighbouring places but could not trace him out.
On the 27th night at about 9 p.m. PW 50 along with the police party left for Madras and reached there in the early hours of 29th morning at 1 a.m. At 7.30 p.m. PW 50 along with PW 49 and the police party went to the Aerodrome, Egmore Railway Station and the Madras Central in search of the accused Laxmi Raj Shetty.
At the Madras Central, PW 50 received information at about 1.45 p.m. that the accused was seen moving about in My Lady 's Park.
He accordingly with the police party rushed to the Park where he arrested the accused Laxmi Raj Shetty and recovered from his person currency notes in bundles of Rs.5 denomination marked MOs Nos. 198 and 199 bearing the Bank seals.
On the 30th morning at 7.15 a.m. PW 50 accompanied by the accused visited the Hotel Chola Sheraton but except for the receptionist the other witnesses were not present.
Apparently during investigation PW 50 derived information from the accused Laxmi Raj Shetty that the money stolen from the Bank was kept in his house at Mangalore.
At about 9.30 a.m. he accordingly went to the Madras Central presum 718 ably because he thought that appellant No. 2 Shivaram Shetty would be arriving by train but he could not be traced there.
At 2 a.m. he obtained police remand of the accused Laxmi Raj Shetty.
At 4.30 a.m. PW 50 along with PW 49 and the accused Laxmi Raj Shetty together with the police party left in a policy jeep for Mangalore.
However, on the way while the jeep was near the Madras Central, the accused Laxmi Raj Shetty pointed out his father Shivaram Shetty coming in a cycle rickshaw from the opposite direction.
PW 50 asked the rickshaw puller to stop and took appellant No. 2 Shivaram Shetty into custody.
Appellant No. 2 was carrying three boxes.
The police party returned to the Flower Bazar Police Station where the boxes were opened.
Of them, two of the boxes marked MOs 176 and 177 contained bundles of currency notes bearing the seal of the Bank totalling Rs.12,27,500 and the same were seized.
The case presents a feature which is rather disturbing and gave rise to a prolonged argument lasting over several days.
The Indian Express, Mangalore edition and the two regional newspapers Malai Murasu and Makkal Kural, both published from Madras bearing the date line 29th May and the regional paper Dina Thanthi, also published from Madras of the 30th, carried a news item that the entire amount stolen from the Bank had been recovered from the residence of appellant No. 2 at Mangalore and that both the accused had been taken into custody.
A similar news item appeared in the regional newspaper Dina Thanthi on the 30th.
If the news item published was true it would falsify the entire prosecution case about the alleged recoveries at Madras.
There is however nothing on record to substantiate the story appearing in the newspapers.
On the 30th, late M.G. Ramachandran, the then Chief Minister of Tamil Nadu, at a public function felicitated PW 18 Smt.Kanaka, the flower vendor, for the exemplary courage shown by her in coming forward to help the police in furnishing the vital clue in solving the crime and presented her with a cash reward of Rs.5,000.
The Hindu published from Madras in all its editions of 31st carried a news item about the function and reported that the Chief Minister used the occasion to caution the newspapers against the danger of conjectural reporting of such crimes during investigation, based on rumours unrelated to facts, which would not only prejudice the case but sometimes pave the way for the offender to escape.
He said that rumours were bound to sidetrack and mislead the public and even police officers concerned in solving the crime.
After the 719 function the Police Commissioner is reported to have told newsmen that the accused Laxmi Raj Shetty had been taken into custody on Sunday afternoon i.e. the 29th and had confessed that the cash removed from the strong room had been secreted out to Mangalore where his father lived.
He informed that a police party was already there and the father Shivaram Shetty was likely to be nabbed anytime.
In the meanwhile, the family of the appellants suffered a great tragedy.
On the 30th Smt.
Madhavi, wife of appellant No. 2, employed as a School Teacher at Mangalore and his daughter Kumari Usha Rani, an employee of the State Bank of Mysore, Hassan Branch out of the sheer shame could not bear the humiliation and committed suicide by walking into the Arabian Sea.
The Indian Express and the Hindu of the 31st carried the news of their suicide and it was reported that their bodies were washed ashore on the Someswar Ullal Beach on the outskirts of Mangalore.
The appellants abjured their guilt and denied the commission of the alleged offences.
When the accused were questioned about the facts and circumstances appearing against them, they denied their complicity in the crime.
Appellant No. 1 asserted that he had left for Mangalore on the 22nd as he was feeling unwell.
When he called upon PW 10, Chairman of the Bank, who enquired as to why he had come to Mangalore, he told him of his ailment.
On his advice he left for Madras to resume his duties.
His version is that on the 27th afternoon when the West Coast Express by which he was travelling, arrived at the platform at the Madras Central, he saw members of the staff of the Bank, namely, PW 9 Govindaraj, Padmanabhan and Ramesh.
When he went near them he was tapped on his shoulder by a stranger who asked him whether he was Laxmi Raj Shetty.
On his giving an affirmative answer he asked him to accompany him.
On his query he disclosed that he was a police officer.
By that time the other members of the staff had stopped him and they advised him to accompany the police.
Appellant No. 2 states that he had on 26th met the Chairman of the Bank and informed that his son had come to Mangalore and the Chairman wanted to speak to him.
He accordingly went with his son who enquired about his ailment and then directed him to proceed to Madras.
He admitted that there was a search made of his house on the night between 26th and 27th at Mangalore but the police did not find 720 anything.
His version is that on the next day i.e. 27th at about 9 p.m. PW 50 accompanied by the Assistant Commissioner of Police Sitaram and PW 10 and Thalithiya, Assistant General Manager visited his house and told him that his son had been arrested and they wanted him to go with them to Madras.
He was advised by PW 10 to accompany the police and he was first taken to the Chairman 's house and from there to the Blue Star Hotel at Mangalore.
Early next morning all of them left for Madras and reached the Flower Bazar Police Station the same evening at 6 p.m. where he was detained for the subsequent days and nights till he was produced before the Court along with his son on the 31st.
The learned Sessions Judge has relied upon the testimony of PW 18, Smt.Kanaka, the flower vendor and the other prosecution witnesses and come to the conclusion that the circumstances from which the conclusion of guilt is to be drawn have been fully established against both the accused and all the facts so established are consistent only with the hypothesis of their guilt and exclude every reasonable possibility of their innocence.
He accordingly convicted the accused with the commission of the offences with which they were charged and sentenced them as above.
Ratnavel Pandian, J. speaking from himself and Singaravelu, J. constituting the Division Bench, in a singularly well written judgment, has carefully marshalled the entire circumstantial evidence and come to the conclusion that the prosecution has established its case against both the accused beyond all reasonable doubt and accordingly maintained the conviction and sentences passed by the learned Additional Sessions Judge.
The prosecution case against the appellants rests purely on circumstantial evidence.
The circumstances relied upon by the prosecution against the principal accused for the charges of murder androbbery which were parts of the same transaction are:
(i) The fact that the accused Laxmi Raj Shetty was seen leaving the building on the fateful night at about 9 p.m. as testified by PW 18 Smt.Kanaka, the flower vendor, sitting on the steps of the Bank after finishing her day 's work and the fact that the deceased was not seen alive thereafter.
The accused had gained knowledge about the mode of operating the strong room in the first week of April 1983 when he entered the strong room along with PW 8 Ananthakrishnan, PW 9 Govindaraj and PW 12 P. Balasubramaniam and got his doubts cleared about the method of opening the strong vault where there were Godrej bureaus, in one of which the currency notes were kept.
The murder and robbery were obviously an inside job by a person who had knowledge about the 721 manner in which access could be had to the safety vault.
(ii) The accused had gained the confidence of the deceased as a sincere and loyal worker by attending to the work every day even after the banking hours and assisting the deceased, leaving the Bank at about 9 or 9.30 p.m. with the deceased as was clear from the evidence of PW 5 Rangarajan, PW 6 Smt.Shasikala, PW 9 Govindaraj, PW 12 P. Balasubramaniam and PW 18 Smt.Kanaka
(iii) The accused had the opportunity of knowing about the cash balance available in the Bank from the cash scroll register Exh.P 8 which was always kept open on the table of PW 6 Smt.Shasikala whose seat was adjacent to that of the accused as is clear from the testimony of PW. 6
(iv) The accused had knowledge about the availability of the first set of keys including the matter key with the deceased and the second set of keys with PW 16 Chandrasekara Holla while he worked in the Bank for a period of about nine months.
He also noticed that PW 16 was in the habit of leaving of second set of keys in the cupboard of his table and at times, used to leave the key of the cupboard in one of the drawers.
(v) The movement and conduct of the accused afterwards.
After he was seen coming out of the Bank premises on that night at 9 p.m., his act of going towards Burma Bazar and returning within half an hour with a light blue colour suitcase, then entering into the Bank, again coming out of the Bank half an hour thereafter with a bag on his shoulder and a suitcase in one hand and a brief case which the deceased used to carry with him in the other, placing the suitcase on the steps of the Bank where PW 18, the flower vendor, was sitting and thereafter bringing out a large coffee colour sky bag and placing the same beside the suitcase, closing the outer door and the shutter and locking the same, then proceeding along Errabalu Chettu Street towards Burma Bazar and bringing an auto rickshaw, placing the suitcase and the sky bag with the help of the auto rickshaw driver in the auto rickshaw and disappearing towards the High Court.
(vi) His act of not responding to the queries put by PW 18 about the deceased whom he used to accompany every night on closing the Bank.
(vii) His act of not returning to the Christian Home where he stayed and instead staying at Hotel Chola Sheraton on the night of 20th and the whole of 21st.
He obviously stayed at the five star hotel for reasons of safety as he was carrying the huge amount of about Rs.14 lakhs.
(viii) His visit to Christian Home early in the morning of 21st at 5 a.m., going to the room, taking bath, collecting his belongings and not taking breakfast saying that his stomach was upset.
(ix) His act of attending to his duties at the Bank on the 21st to allay suspicion, making reservation of a first class berth by train No. 27 and leaving Madras for Mangalore on the morning of the 22nd which was a Sunday (x) On reaching Mangalore 722 on the 23rd morning at 6 a.m., his act of not proceeding to the family house there but instead staying at Hotel Moti Mahal along with the suitcase and the bag containing the stolen money.
(xi) His act of disappearing from Madras on the 23rd morning and not returning till 27th afternoon.
(xii) The fact remains that the currency notes worth Rs,12,32,000 recovered from the accused bear the Bank seal and have been identified to be stolen.
We had the benefit of hearing Shri N. Natarajan, learned counsel for the appellants who argued the appeal with considerable perspicuity and resource and an equally forceful and realistic argument advanced by Shri U.R. Lalit, learned counsel appearing for the State Government.
Apart from questioning the credibility and trustworthiness of PW 18 Smt.Kanaka, the flower vendor, whom the learned counsel for the appellants characterised as a got up witness by the prosecution to furnish the missing links the chain of circumstances, as well as the alleged recoveries of Rs.4,500 effected by PW 50 Deviasigamani, Inspector of Police from the accused Laxmi Raj Shetty at My Lady 's Park, Madras on May 29, 1983 and of the amount of Rs.12,27,500 from appellant No. 2 Shivaram Shetty, he endeavoured to create doubts and difficulties as to the truthfulness of the entire prosecution case.
He contends that the prosecution case regarding the recovery of the stolen amount at Madras stands falsified by the news item carried in the Indian Express, Malai Murasu and Makkal Kural of the 29th and Dina Thanthi of the 30th showing that the entire amount had been recovered from the residence of appellant No. 2 Shivaram Shetty and both the accused had been taken into custody.
The learned counsel also brought out several improbabilities in the prosecuion case.
It was pointed out that the accused had left Madras by the West Coast Express on the 22nd morning and reached Mangalore on the next day i.e. on the 23rd.
If that be so, both the father and the son were freely moving about at Mangalore till the 26th evening.
On the 23rd they paid a visit to the clinic of PW 11 Dr. Madhava Bhandari as the accused was complaining of stomach disorder and thereafter on the 25th evening they called on PW 10 P. Raghuram, Chairman of the Bank who advised the accused to return to Madras at once.
It was not till 26th evening that the accused boarded the West Coast Express.
The learned counsel contends that if really PW 50 became aware from recording of the statement of PW 18 on the 25th evening at 4 p.m. that the accused was the person involved in the commission of murder and robbery, he would have at once flashed a message to the Mangalore police to intercept him particularly in view of the fact that a huge amount of about Rs.14 lakhs was stolen from the Bank.
On their own 723 showing, a police party consisting of PW 50 accompanied by PW 49 instead left for Mangalore in the early hours of 26th morning, reaching there at 9.30 p.m. and contacted the local police and thereafter conducted a raid at the house of appellant No. 2 in the early hours of the 27th at 1 a.m.
The police would necessarily have known from the railway reservation that the accused Laxmi Raj Shetty under the assumed name of his father Shivaram Shetty, had boarded the West Coast Express for Madras on the 26th.
They would have immediately contacted the Madras police and intercepted the accused on his arrival at the Madras Central on the 27th afternoon at 4 p.m.
The submission is that this lends credence to the testimony of PW 9 Govindaraj that the accused arrived by the West Bengal Coast Express on the 27th afternoon and was taken into custody by the police.
We are expected to believe, the learned counsel argues, that the accused was freely roaming about in Madras between the 27th and the 29th till he was taken into custody at My Lady 's Park.
It is therefore submitted that the prosecution evidence of the so called recovery of the incriminating currency notes worth Rs.4,500 from the accused Laxmi Raj Shetty could not be true.
As regards the testimony of PW 18 Smt.
If really PW 47 had derived knowledge from Ganesan, the plumber, that PW 18 might furnish a vital clue which would lead to the detection of the murderer, it was expected from PW 47 and PW 48, who took over the investigation from him, that they would make every effort to track down PW 18 or her husband.
Further, the learned counsel contends that the repeated visits made by PWs 47 and 48 to Tharamani when on their own showing they knew that PW 18 had gone to her sister 's house at Vyasarpadi, creates considerable doubt about his version.
Nor did they take the trouble to track down her husband Neerappan from the Krishna Bhawan Hotel which was just two furlongs from the police station.
According to the learned counsel, the cumulative effect of all these circumstances taken together renders it extremely unsafe to rely on the sole testimony of PW 18 unless it was corroborated in material particulars by evidence of an independent character.
In reply Shri U.R. Lalit, learned counsel for the respondent mainly contends that even if the prosecution evidence regarding the 724 recoveries were to be discarded, there was ample material brought on record which raises an inference of guilt of the appellants.
Broadly stated, the learned counsel, in substance, advanced a two fold submission, namely: (i) The course of investigation during which it was revealed that PW 18 Smt.Kanaka had information which might result in solving the murder, and (ii) The fact as deposed by PW 18 that the accused Laxmi Raj Shetty was the person last seen leaving the Bank premises after locking the front door and the shutter on the fateful night at about 9 p.m. taken in conjunction with the prosecution evidence regarding the conduct and movement afterwards, clearly show that he alone and no one else could have committed the murder because both he and the deceased were the persons working late in that night.
As regards the news item which appeared in the Indian Express and the other regional papers showing that the entire amount stolen from the Bank had been recovered on a search of the house of appellant No. 2 Shivaram Shetty at Mangalore and that they have both been taken into custody, the learned counsel contends that the news items has no evidentialy value and cannot be taken into consideration.
It is pointed out that the defence had not examined the reporters who had gathered the news appearing in the newspapers and authenticate the version though the reporters had been summoned.
Further, in a case of this nature, the Court cannot reject the oher reliable and credible evidence led in accordance with law merely on the publication of this kind of unauthenticated news item in the press.
It is said that if the Court were to act on such news item though not brought into evidence in accordance with law and were inclined to dispose of a case on such news item, then the Court had either to convict a person or acquit him on such publication of news item ignorning the overwhelming legal evidence brought on record.
There is in our opinion, considerable force in his submissions.
The law relating to the proof of a case based purely on circumstantial evidence has been settled by several authorities of this Court as well as of the High Court.
In Earabhadrappa vs State of Karnataka, ; it was observed: "In cases in which the evidence is purely of a circumstantial nature, the facts and circumstances from which the conclusion of guilt is sought to be drawn must be fully established beyond any reasonable doubt and the circumstances so es tablished should not only be consistent with the guilt of the accused but they must in their effect be such as to be entirely incompatible with the innocence of the accused and 725 must exclude a reasonable hypothesis with his innocence."
Shri Natarajan, learned counsel appearing for the appellants rightly points out that in such cases there is always the danger that 'conjecture or suspicion may take the place of legal proof ' and draws our attention to the caution administered by Baron Alderson to the jury in the oft quoted passage in Reg vs Hodge, where it was said: "The mind was apt to take a pleasure in adapting circumstances to one another, and even in straining them a little, if need be, to force them to form parts of one connected whole; and the more ingenious the mind of the individual, the more likely was it, considering such matters, to overreach and mislead itself, to supply some little link that is wanting, to take for granted some fact consistent with its previous theories and necessary to render them complete.
" It is therefore well to remember that in cases where the evidence is of a circumstantial nature, the circumstances from which the conclusion of guilt is to be drawn should in the first intance be fully established, and all the facts so established should be consistent only with the hypothesis of the guilt of the accused.
Again, the circumstances should be of a conclusive nature and tendency and they should be such as to exclude every hypothesis but the one proposed to be proved.
In other words, there must be a chain of evidence so far 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 human probability the act must have been done by the accused.
In spite of the forceful arguments addressed to us by the learned counsel for the appellants, we have not been able to discover any infirmity in the reasoning or the conclusions arrived at by the learned Additional Sessions Judge or the High Court.
Nor can it be said that they have just fallen into an error against which caution was administered by Baron Alderson in Reg vs Hodge.
The learned counsel began his address by stating that if we were to accept the conclusion arrived at by the learned Additional Sessions Judge and the High Court that there was nothing to impeach the credibility of PW 18 Smt.Kanaka, the flower vendor as a truthful witness and that her evidence was such as to accord with the ordinary course of events and human nature, it would 'tend to tilt the balance against the appellants. '
That really furnishes a key to the entire prosecution case.
We have therefore minutely been taken through the testimony of PW 18 Smt.Kanaka by learned counsel for the parties who presented their respective points of view with consummate skill, and after going through her evidence over and over again we have no doubt whatever that the Courts below were perfectly justified in reaching the conclusion that she was a witness of truth and there was no reason to discard her testimony or that of the other prosecution witnesses.
Once the version of PW 18 Smt.Kanaka that the accused was the person last seen leaving the Bank premises on the 20th night at 9 p.m. is accepted with all his subsequent movements, it would be seen that every other circumstance appearing from the evidence of the other prosecution witnesses fits in and it lends support to the irresistible inference drawn from the attendant facts and circumstances by the Courts below that the deceased Gnanasambandham was done to death by no one else except the accused Laxmi Raj Shetty and that both the accused were guilty of the offences with which they were charged.
We shall briefly enumerate the circumstances arising from the evidence adduced by the prosecution along with our findings thereon.
(1) The accused had occasion to learn the method of operating the safety vault.
It transpires from the evidence of PW 3 P.T. Rajan, Chief Manager and Regional Development Officer of the Bank that in that building the Regional Development Office was functioning on the second floor.
The Main Branch was on the first floor and the ground floor was used as a car park and godown.
The strong room was on a mezzanine floor over the first floor and reached by a flight of stairs.
The walls of the strong room were constructed with RCC.
There was an iron door fixed to that room supplied by Godrej company of the thickness of 3" having a dimension of 6 ft x 3 ft.
There was a rotating wheel fitted to the iron door.
It had to be turned to the right and then both the sets of keys inserted in the upper and lower key holes.
On the lever being released the iron door would open outside.
Inside there was another door with a lock attached and it would open inside.
The strong room was divided by a partition wall with a wooden door.
In one portion of the strong room there were safe deposit lockers.
In the other portion there were two Godrej bureaux, of which one was used for keeping currency notes and the other for keeping valuable documents viz. blank term deposit receipts, cheque books, drafts etc.
It is in evidence that there was no night watchman of the Bank.
It appears from the testimony of PW 8 Ananthakrishnan, PW 9 727 Govindaraj, PW 12 Balasubramaniam and PW 16 Chandrasekara Holla that the accused gathered knowledge about the manner in which the strong room could be operated.
It is clear from their evidence that access to the strong room could not be had except by a person acquainted with the manner in which it was operated.
According to these witnesses the accused got an opportunity when in the first week of April, the wife and children of PW 8 Ananthakrishnan, Bank Manager visited the Bank and evinced a desire to see how the safety vault was operated.
While he was going up the stairs along with the members of his family and PW 12 Balasubramaniam, attendant, the accused who was standing with PW 9, expressed a desire to come up and see the strong room.
Although taken aback at the unusual request, PW 8 permitted them to come up.
With his inquisitiveness the accused cleared all his doubts about the mode of operating the safety vault and gained sufficient knowledge.
From the evidence of PWs 5,6,9,12 and 16 it is amply clear that the accused Laxmi Raj Shetty gained the confidence of the deceased as a busy and hard working young man by remaining in the premises and continuing to work even after the banking hours and assisting the deceased in disposing of the day 's work.
He also had knowledge about the availability of the first set of keys of the strong room with the deceased and must have noticed that PW 16 Chandrasekara Holla, who had the custody of the second set of keys, was in the habit of leaving them in the cupboard of his Godrej table.
It appears from the evidence of PW 15 V. Kannan, Manager in the Physical Development Institute that on the 20th at about 6 p.m. the accused left the Institute within half an hour after doing some exercises.
P 8 which was kept open on the table of PW 6, which was adjacent to the table of the accused.
(2) The fact that the accused Laxmi Raj Shetty was last seen leaving the Bank premises.
Kanaka, the flower vendor, tends to show that after finishing the day 's work, she came and sat on the steps of the Bank.
At about 9 p.m. she saw the accused coming out of the Bank premises and locking the outer glass door.
She testifies that she used to sell flowers at the junction of Thambu Chetty Street and Errabalu Chetty Street, not far from the Bank.
According to her, she was originally residing at Vyasarpadi but six months prior to the occurrence she shifted her residence to village Tharamani.
Her version is that every day she used to begin selling 728 flowers in the day from 6 a.m. to 8 p.m. and thereafter return to her house but on Thursdays and Fridays due to rush of customers she was constrained to remain late upto 9 p.m. and since she could not get a bus at that hour, she used to sleep on the raised platform near the outer door of the Bank.
She knew the deceased Gnanasambandham who used to buy flowers from her, as well as the accused Laxmi Raj Shetty as they both used to come out of the Bank together at night.
The deceased would give the keys to the accused who would lock the outer glass door and thereafter pull down the shutters and lock the same and return the keys.
The deceased would then check the locks and thereafter both would leave the premises.
She distinctly remembered that on Friday prior to the incident the deceased while buying flowers enquired from her whether she used to sleep there and she had to explain that on thursdays and Fridays she could not go back home due to late hours as there was no connecting bus.
That was the last when she saw the deceased alive.
On the night in question while she was sitting on the steps of the Bank after finishing her day 's work she saw the accused Laxmi Raj Shetty coming out of the Bank premises alone by opening the glass door, closing the same and proceeding towards Errabalu Chetty Street.
After about half an hour the accused came out of the Bank by opening the glass door with the suitcase in one hand, a bag on his shoulder and the briefcase which the deceased used to carry, in the other.
He kept the suitcase on the steps of the Bank where she was sitting and re entered the premises and brought out a large coffee colour skybag and kept the same beside the suitcase, locked the glass door, pulled down the shutters and locked the same.
She states that when the accused pulled down the shutters she asked him whether the Periya Ayya, evidently referring to the deceased, had not come, the accused did not give any reply.
Thinking that he had not understood her words properly, she repeated the same query to which there was no response.
After locking the shutters the accused went towards Errabalu Chetty Street leaving the suitcase and the skybag on the steps of the Bank.
It was a festival day and the deity of Kaliamman Koil was passing along Thambu Chetty Street.
PW 18 was feeling unwell and wanted to offer camphor to the deity but could not leave the place because the accused had left the suitcases on the steps.
The deity was taken in a procession through the street, Thereafter, according to her, the 729 accused came in an auto rickshaw and with the help of the autorickshaw driver the accused carried and placed the suitcase and the skybag with some difficulty.
When she queried why had he left the suitcase when there were a large number of auto rickshaws passing that way, the accused did not give any reply.
She further states that as she was running temperature she slept on the steps of the Bank.
Early next morning at 6 a.m. she left for her house at Tharamani and from there she went to her sister 's place at Vyasariadi after informing her husband.
She returned to Tharamani 4 5 days later feeling better when the police examined her.
We have no doubt in our mind that PW 18 Smt.Kanaka is a natural witness and there is a ring of truth in her version.
Though she was subjected to a searching and incisive cross examination by learned counsel for the appellants, nothing was brought out to impeach her credibility as a truthful witness.
There was no reason for her to falsely implicate the accused Laxmi Raj Shetty particularly when the vital clue furnished by her led to the unravelling of the crime and recovery of the huge amount of money.
We are not impressed with the submission that merely because PW 18 was given a cash award of Rs.5,000 by the Chief Minister she was a got up witness and must be regarded as 'a witness who springs from a tainted source '.
It is not a phenomenon unknown in the world today for the Government to offer cash rewards to citizens for their act of courage and bravery by coming forward with vital information which results in the ultimate detection of the offender.
In such cases there is no question of impairing the testimonial fidelity of such person as a competent witness.
Learned counsel however drew our attention to the observations of this Court in Lingala Vijay Kumar & Ors vs Public Prosecutor, Andhra Pradesh; , where this Court viewed with concern the practice of offering cash rewards to prosecution witnesses when the case was sub judice.
We may say at once that the Court in that case did not discard the testimony of the prosecution witnesses on that account.
All it did in that case was to endorse the expression of opinion of the learned Sessions Judge that such rewards for bravery may be euphemistic officialese but are apt to be construed by the accused as purchase price for testimonial fidelity and the Government ought not to prejudge the case and award any cash reward to a citizen for his exemplary civic sense since he may figure as a material witness.
We need not say anything more.
The learned Additional Sessions Judge and the High Court were fully aware of this aspect and have scrutinised the testimony of PW 18 with meticulous care and we agree with them 730 that merely because PW 18 was rewarded for her courage in coming forward to help the police her testimony should not be viewed with suspicion.
She withstood a close and searching cross examination but her veracity as a truthful witness remains unshaken.
(3) Purchase of a suitcase and a skybag from Burma Bazar: The testimony of PW 18 Smt.Kanaka finds support from PW 19 Ramaswami, a dealer in suitcases in Burma Bazar.
This witness states that at about 9 or 9.15 p.m. on 20th May a fair complexioned, tall and lean person aged about 24 25 years, meaning the accused, came to his shop and purchased a light blue colour suitcase for a sum of Rs.200 which amount be paid in currency notes of the denomination of Rs.20 and also wanted one skybag.
Since he had no stock he fetched a coffee colour skybag from his brother in law 's shop and showed it to the accused who purchased the same, also for Rs.200 and paid the price again in currency notes of the denomination of Rs.20.
According to him, half an hour later the same person came back and got into an auto rickshaw driven by PW 31 Venkatesan whom he knew.
The testimony of PW 31 Venkatesan, auto rickshaw driver, also corroborates PW 18.
According to him, on the night in question at about 10.15 p.m. a lean and tall person fair in complexion, meaning the accused, engaged his auto rickshaw to go to Hotel Chola Sheraton from Thambu Chetty Street.
He further states that when he had driven that person to Thambu Chetty Street he was asked to stop the auto rickshaw outside the Bank.
On the steps of the Bank there was a light blue colour suitcase together with a coffee colour skybag.
As the suitcases were heavy, he together with that person lifted the same and placed them in the auto.
Thereafter, he drove on straight to Hotel Chola Sheraton and reached there at about 11 p.m.
At the hotel, PW 21 Derick, bell boy placed the luggage in the trolley and took them inside the hotel accompanied by the accused.
PW 31 further states that the hire charges were fixed at Rs.15 and the accused gave him a 20 rupees currency note and he gave back Rs.5 and went away.
His version is supported by the entry in the trip sheet Exh.
It is contended that the evidence of PWs 19 and 31 with regard to the identification of the accused Laxmi Raj Shetty before the Court of Sessions for the first time without any prior test identification parade was not of any value but we are not impressed.
Later both these witnesses saw the photograph of the accused carried by PW 50 Deviasigamani and identified him to be the person involved.
In the world as a whole today, the identification by photographs is the only 731 method generally used by the interpol and other crime detecting agencies for identification of criminals engaged in drug trafficking, narcotics and other economic offences as also in other international crimes.
Such identification must take the place of a test identification.
Further, the evidence of PW 19 that the person concerned purchased a coffee colour skybag along with a light blue colour suitcase stands corroborated by the subsequent recovery of the coffee colour skybag from PW 33 Smt.Justin D 'Costa with whom the accused 's sister Km.Usha Rani used to stay, from a house at Hole Narsipur, District Hassan.
Similarly, the testimony of PW 31 finds support not only from the evidence of PWs 18 and 19 but also from the entry in the trip sheet as well as the entries in the Arrival and Departure register of Hotel Chola Sheraton.
(4) Stay at Hotel Chola Sheraton under the assumed name of Mohanraj: The fact that the accused checked into Hotel Chola Sheraton, a five star hotel, on the night of 20th, stayed the whole of the 21st and his departure therefrom on the 22nd morning at 9 a.m. is brought out from the testimony of PWs 20 25 as also from the hotel register which show that the accused stayed in the hotel under the assumed name of Mohanraj.
PW 21 Derick, bell boy at the hotel, states that a tall person about 6 feet in height with curly hair came to the hotel in an auto rickshaw that night carrying with him a light blue colour suitcase and a brown colour travellers bag.
He states that the luggage was heavy and therefore he brought a trolley and put the suitcase and the skybag in the trolley and took the same to the reception counter.
From there PW 22 Kalyanasundaram, another bell boy, took charge of the luggage.
PW 23 Elizabeth Mitra, receptionist, testifies that she gave him a registration card Exh.
P 24 and asked him to fill in the details.
When that person asked PW 23 to fill up the form she told him that as per the rules only the occupant concerned had to fill up the form.
So the accused filled it up and gave it to her.
He gave his name as 'Mohanraj '.
She allotted room No. 230 and when she wanted an advance of Rs.1,000 the accused told her that he would go up to the room and send the money.
According to her, PW 22 brought an amount of Rs.1,040 in currency notes of the denomination of Rs.20.
She credited Rs.1,000 towards advance and gave receipt for the same and returned the balance amount of Rs.40 to PW 22.
PW 22 went up to room No. 230 and found the accused standing outside.
He told him that the key to the door was inserted from inside and when he came out, the door got automatically locked.
PW 22 accordingly went to the receiptionist and brought the master key with which the room was opened.
He gave back Rs.40 out of which the accused gave him Rs.20 732 as tip.
This witness identified the accused in the Court as the occupant of the room.
When the accused checked out on the 22nd morning he made an entry in the hotel register to that effect.
The testimony of PW 23 is corroborated by the entry in the Arrival and Departure register Exh.
The relevant entry marked Exh.P 27 shows his arrival and Exh.P 28 shows his departure.
PW 24 Alexander Alwyn Fernandez, Cashier at the hotel approved the bill Exh.P 29 relating to Mohanraj who stayed in Hotel Chola Sheraton containing the details with regard to the room rent, advance payment, room service bills etc.
He states that he made the last two entries in Exh.P 29 at the time of departure of the said Mohanraj.
PW 25 Rocky Williams, Senior Lobby Attendant has produced the departure card prepared by him marked Exh.
It is true that they had identified the accused from the photograph shown to them by PW 50 and that was sufficient to lend support to their identification in Court.
Further, the fact remains that the person who came to Hotel Chola Sheraton on the night of the 20th at 11 p.m. and alighted with two heavy suitcases was the person brought by PW 31, auto rickshaw driver, from the Bank and he has been indentified and named by PW 18 as the accused.
P 24 the registration card of Hotel Chola Sheraton gives the address of the occupant of room No. 230 as Mohanraj, Hole Narsipur, Hassan.
The description given is of a 'tourist ' and the date of arrival as 20.5.83 at 23.05 on arrival from Bangalore.
The departure date is given as Bangalore on 22.5.83.
It is somewhat strange that the accused Laxmi Raj Shetty who was merely a Clerk in the Bank should have gone and stayed in Hotel Chola Sheraton, a five star hotel, on the night in question unless it was for purposes of safety as he was carrying the huge amount of about Rs.14 lakhs in the suitcase and the skybag.
There is evidence to show that the accused filled up the application form for reservation of a first class ticket Exh.
P 37 and signed the same as 'K.L.R. Shetty ' giving the name and address as Shivaram Shetty, Kodial Bail, Bangalore i.e. of his father.
The stay of the accused at Hotel Chola Sheraton at Madras on the night of the 20th, the whole of the 21st till his departure on the 22nd morning under the assumed name of Mohanraj, the act of leaving Madras on the 22nd morning by train in a first class compartment under the name of his father Shivaram Shetty, giving a wrong address of Kodial Bail at Bangalore which is not there, are facts which speak for themselves.
(5) Stay at Hotel Moti Mahal at Mangalore: There is unimpeachable evidence to establish that the accused Laxmi Raj Shetty on his 733 arrival at Mangalore by train on the 23rd morning at about 6 a.m.instead of proceeding to his father 's house checked into Hotel Moti Mahal with his luggage.
The testimony of PW 32 William Anchan, Receptionist is that on the 23rd morning a tall, fair complexioned person meaning the accused, came to the hotel and gave his name as 'Kiran Kumar ' and address as Hole Narsipur, Hassan District, saying that he was proceeding to Bangalore.
This is borne out from the entry in the Arrival and Departure register Exh.
The accused was allotted room No. 204 and he made an entry to that effect.
According to him, the said Kiran Kumar left the hotel on the 25th along with two suitcases.
PW 35 Padmanabhan, room boy testifies about the occupation of room No. 204 by the accused from the 23rd to 25th.
He states that the suitcases were heavy and that he carried them from the room and brought them down and put them in an autorickshaw in which the occupant left the hotel and identified the accused Laxmi Raj Shetty as the person who occupied the room.
This witness identified the suitcases M. Os.
176 and 177 which were subsequently seized on the 30th from appellant No. 2 Shivaram Shetty containing currency notes worth Rs.12,27,500 as the suitcases carried by him.
Again, these witnesses on being shown the photograph carried by PW 50 identified him to be the person involved.
Further, the testimony of PW 34 Surendran, Reservation Clerk, Mangalore Railway Station shows that the accused filled in the reservation slip Exh.
P 47 giving his name as Shivaram Shetty with address as Hole Narsipur, Hassan.
On a comparison of the handwriting appearing from the registration card Exh.
P 24 filled up by the accused when he checked into Hotel Chola Sheraton with that appearing on the reservation form Exh.
P 47, with the handwriting of the accused particularly the similarity in describing Bangalore as 'B 'lore ' and Mangalore as 'M 'lore ', the learned Judges have come to the conclusion that both the documents were writting by the one and the same person i.e. the accused Laxmi Raj Shetty.
Justin D 'Costa, the colleague and roommate of the deceased Kumari Usha Rani, sister of the accused Laxmi Raj Shetty.
She states that both of them were working in the State Bank of Mysore and staying together in a room at Hassan.
According to her, on the 21st, she along with Usha Rani and others went to Mangalore after attending to their duties at the Bank.
She states on their return on the 26th Usha Rani brought along with her a coffee colour skybag saying that it had been presented to her by her brother who was working in the Karnataka Bank, Main Branch, Madras.
She further states that on 734 the 29th May the Indian Express, Mangalore edition carried a newsitem relating to the Karnataka Bank, Main Branch 's Manager 's murder at Madras implicating the accused Laxmi Raj Shetty.
Usha Rani tried to contact her parents over the telephone but she could not get the line and thereafter, she told her that she was leaving for Mangalore but never returned.
PW 33 also states that on the 31st she read in the local Kannada newspaper that both Usha Rani and her mother had committed suicide by drowning themselves in the ocean.
On the 6th June, PW 50 came to her house and recovered the coffee colour skybag marked M.O. 175 from her possession.
Recovery of the stolen money belonging to the Bank: The recovery of Rs.4,500 in currency notes of the denomination of Rs.5 bearing the seal of the Bank from the accused Laxmi Raj Shetty on May 29,1983 at 2 p.m. when he was arrested at My Lady 's Park, and the remaining amount of Rs.12,27,500 in bundles of currency notes of the denominations of Rs. 100, 50, 20, 10 and 5 from appellant No. 2 Shivaram Shetty on the 30th opposite the Madras Central while he was on his way in a cycle rickshaw.
These recoveries have been proved by the Investigating Officer PW 50 Deviasigamani as well as the seizure witnesses PW 37 Neelakandan, PW 41 J. Kumar and one Sekar.
There is no reason to disbelieve their testimony particularly when it is an undisputed fact that the amount of Rs.12,32,300 belongs to the Karnataka Bank.
According to learned counsel for the parties, however, the truth of the prosecution case, particularly recoveries at Madras, are rendered improbable for two reasons: (i) The report in the Indian Express, Mangalore edition and the regional newspapers Malai Murasu and Makkal Kural on the 29th and Dina Thanthi on the 30th that both the accused had been taken into custody at Mangalore and the entire money stolen from the Bank recovered from the residence of appellant No. 2 Shivaram Shetty.
(ii) The admission of the prosecution 's own witness PW 9 Govindaraj that the accused Laxmi Raj Shetty arrived at Madras by the West Coast Express on the 27th afternoon at 4 p.m. and was taken into custody by the police at the platform.
Undoubtedly, each of these circumstances by itself was sufficient to falsify the entire prosecution case as regards the alleged recoveries at Madras and therefore we heard learned counsel for the parties at considerable length but nothing really turns on them.
735 Learned counsel for the appellants with consummate skill tried to create, as he was entitled as counsel for the defence, to break the chain of circumstances and to show that there are various missing links in an effort that the Court may give the accused benefit of doubt.
We are afraid, that is not a proper approach for the Court to adopt.
In the present case, the circumstances were closely linked up with one another and the Court would be misdirecting itself and commit serious error of law if it were to separately deal with each circumstance, rejecting the circumstances one by one and then acquitting the accused on the ground that the incriminating circumstances brought out were not consistent with the guilt of the accused.
There can be no doubt whatever that the circumstances enumerated above has been cogently and firmly established by the prosecution which, taken cumulatively, form a chain so complete that there is no escape from the conclusion that within all human probability the crime was committed by the accused Laxmi Raj Shetty and none else.
As to the first the accused Laxmi Raj Shetty was entitled to tender the newspaper report from the Indian Express of the 29th and the regional newspapers of the 30th along with his statement under section 313 of the Code of Criminal Procedure, 1973.
Both the accused at the stage of their defence in denial of the charge had summoned the editors of Tamil dailies Malai Mursau and Makkal Kural and the news reporters of the Indian Express and Dina Thanthi to prove the contents of the facts stated in the news item but they dispensed with their examination on the date fixed for the defence evidence.
We cannot take judicial notice of the facts stated in a news item being in the nature of hearsay secondary evidence, unless proved by evidence aliunde.
A report in a newspapers is only hearsay evidence.
A newspaper is not one of the documents referred to in section 78(2) of the Evidence Act, 1872 by which an allegation of fact can be proved.
The presumption of genuineness attached under section 81 of the Evidence Act to a newspapers report cannot be treated as proved of the facts reported therein.
It is now well settled that a statement of fact contained in a newspapers is merely hearsay and therefore inadmissible in evidence in the absence of the maker of the statement appearing in Court and deposing to have perceived the fact reported.
The accused should have therefore produced the persons in whose presence the seizure of the stolen money from appellant No. 2 's house at Mangalore was effected or examined the press correspondents in proof of the truth of the contents of the news item.
The question as to the admissibility of 736 newspaper reports has been dealt with by this Court in Samant N. Balakrishna vs George Fernandez & Ors.
,[1969] 3 SCR 603.
There the question arose whether Shri George Fernandez, the successful candidate returned to Parliament from the Bombay South Parliamentary Constituency had delivered a speech at Shivaji Park attributed to him as reported in the Maratha, a widely circulated Marathi newspaper in Bombay, and it was said: "A newspaper report without any further proof of what had actually happened through witnesses is of no value.
It is at best a second hand secondary evidence.
It is well known that reporters collect information and pass it on to the editor who edits the news item and then publishes it.
In this process the truth might get perverted or garbled.
Such news items cannot be said to prove themselves although they may be taken into account with other evidence if the other evidence is forcible.
" We need not burden the judgment with many citations.
There is nothing on record to substantiate the facts as reported in the newspapers showing recovery of the stolen amount from the residence of appellant No. 2 at Mangalore.
We have therefore no reason to discard the testimony of PW 50 and the seizure witnesses which go to establish that the amount in question was actually recovered at Madras on the 29th and the 30th as alleged.
As to the second, much emphasis was laid on the statement made by PW 9 Govindaraj showing that the accused Laxmi Raj Shetty was taken into custody at the Railway Station on the 27th when he arrived by the West Coast Express.
It was submitted that the admission of the prosecution 's own witness PW 9 about the arrest of the accused on the 27th was a serious infirmity which shows that the prosecution case about the alleged recoveries was concocted and untrue.
We have gone through the evidence of PW 9 with care.
It cannot be forgotten that this witness and the accused were appointed together as Probationary Clerks and obviously he is trying to help the accused.
We are satisfied that the Courts below were justified in not placing any credence on the statement made by this accused.
It is pertinent to mention that the alleged statement has been brought out during the cross examination of this witness by learned counsel appearing for appellant No. 2.
It would certainly have been better for the Public Prosecutor to have the witness declared hostile with a view to cross examine him and also called witnesses from the Bank to contradict him.
This was unfortu 737 nately not done but that would not have the effect of destroying the entire prosecution case having regard to the fact that the substantial portion of the stolen amount has been recovered from both the accused.
It is not disputed that the money recovered belongs to the Bank.
It is not suggested that such a large amount as Rs.12,32,000 bearing the seal of the Bank would have been planted on the accused.
In the premises, we are satisfied that the finding of guilt reached by the learned Additional Sessions Judge and the High Court after a proper and careful evaluation of the facts and circumstances appearing does not warrant any interference.
In the fact and circumstances of this particular case, we direct that the sentence of death passed on appellant No. 1 Laxmi Raj Shetty be commuted to one of imprisonment for life.
The evidence does not clearly indicate the exact manner in which the murder was committed.
It is noteworthy that appellant No. 1 had not taken with him any weapon for assaulting the deceased but used two stitchers lying in the Bank premises, indicating that the murder was not pre planned.
Looking to the nature of the weapon used, if seems to us that the accused acted under a momentary impulse.
In the circumstances, we direct that the death sentence passed on appellant No. 1 should be converted into one for life imprisonment.
Subject to this modification, the appeal fails and is dismissed.
The judgment and sentences passed on the appellants by the learned Additional Sessions Judge, as affirmed by the High Court in appeal, are upheld being appropriate.
[/INST]This appeal arose out of a case under the Kerala General Sales Tax Act.
The assessee firm (assessee) had been appointed as distributor by the Travancore Cochin Chemicals Ltd. (the "said company") to effect sale of their product under an agreement.
In the assessment of the assessee firm for the period 1967 68 under the Kerala General Sales Tax Act, final assessment was completed and the turnover as reported by the assessee was accepted and tax, levied on that basis.
Later, the assessing authority alleged that certain transactions in the aforesaid period had been wrongly excluded from the turnover reported by the assessee in the return and the turnover had escaped assessment.
The contention of the assessee that the transactions did not constitute sales by the said company to the assessee was rejected by the Assessing Officer and it was held that the said turnover was liable to be included in the taxable turnover as escaped turnover.
An appeal by the assessee to the Appellate Assistant Commissioner was dismissed.
In second appeal to the Tribunal, the Tribunal held that the transactions in question had taken place directly between the said company and the consumers and the assessee was merely an agent of the company, and allowed the appeal.
The High Court on revision held that the Tribunal was wrong in concluding that the assessee was acting only as an agent in respect of the said transactions between the said company and the consumers, and allowed the Revision Application.
The assessee firm appealed to this Court by special leave against the decision of the High Court.
Dismissing the appeal, the Court, ^ HELD: Both the parties proceeded on the footing that the transactions in question were effected pursuant to the agreement, sub clause (a) of clause 2 whereof provided that the distributor had the right of sale 880 of the product within the stipulated area.
Bulk supplies were effected in waggon load or lorry load by the said company direct to the consumer pursuant to orders booked by the assessee firm.
The distributor arranged the payment as per the agreement and also took the responsibility to bear entirely the resultant effects and risk from the said direct dispatches.
It was true that the price at which the goods were to be sold to the customers was fixed by the company but that did not lead to the conclusion that the assessee acted merely as an agent of the said company.
The mere fact that the manufacturer fixes the sale price by itself cannot lead to the conclusion that the distributor is merely an agent.
Under the agreement, what the distributor got was described as a "rebate" and not "Commission", as is normally expected in an agreement of agency.
This is a factor, by no means conclusive, but to a certain extent indicative of the relationship between the said company and the assessee.
More important, the supplies were made to the distributor against payment immediate or deferred as provided in the agreement, and even when the goods were destined directly to the customer, the distributor had to guarantee to arrange the payment, as per clause 8.
Where there was some time lag between the sending of the goods and the payment, the goods were to be insured at the cost of the assessee.
This circumstance clearly showed that in respect of the goods dispatched under orders placed by the distributors, the distributors really acted as purchasers of the goods which they in turn sold to the customers and did not merely act as agents of the said company.
In respect of the goods in question, despatched through public carriers, although the invoices were prepared in the names of the customers of the goods and the goods were consigned to the destination through public carrier booked to self, the bills were endorsed and delivered to the assessee.
In the light of the agreement, these circumstances clearly showed that in respect of these transactions the property in the goods dispatched passed to the distributors on the bills being endorsed and handed over to the distributors.
[884D H;885A D] Although the Court had referred to the assessee being described in the agreement as "distributor" and not as "agent" and to the fact that what they got was described as "rebate" and not "commission", the Court had not treated these circumstances as decisive.
But these descriptions considered in the light of the general tenor of the agreement and the circumstances surrounding the transactions between the parties showed that the assessee was not an agent but really a purchaser from the company in respect of the goods in question, and the transactions were liable to be included in the turnover of the assessee.
[885G H;886A] 881 The Bhopal Sugar Industries Ltd. vs Sales Tax Officer, Bhopal, ; ;and Pollack & Mulla 's Commentary on the Sale of Goods & Partnership Acts, 4th Edition, p. 114, referred to.
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<s>[INST] Summarize the judgementition (Civil) No. 12847 of 1985 & 1081 of 1987.
(Under Article 32 of the Constitution of India).
R.B. Mehrotra, Amicus Curiae, Kishan Patnayak in person, and Ranjan Dwivedi for the Petitioners.
G. Rath, Advocate General, Orissa, R.K. Mehta, Inderjit Roy, Ms. Mona Mehta, K.R. Nagaraja, and Ms. Madhu Moolchan dani for the Respondents.
60 The Judgment of the Court was delivered by DUTT, J.
Writ Petition (Civil) No. 12847 of 1985 has its origin in a letter written by Shri Kishen Pattnayak and Shri Kapil Narayan Tiwary, two social and political workers, addressed to the Hon 'ble the Chief Justice of India.
In this letter, they have brought to the notice of this Court the miserable condition of the inhabitants of the district of Kalahandi in the State of Orissa on account of extreme poverty.
It is alleged that the people of Kalahandi, in order to save themselves from starvation deaths, are com pelled to subject themselves to distress sale of labour on a large scale resulting in exploitation of landless labours by the well to do landlords.
It is alleged that in view of distress sale of labour and paddy, the small peasants are deprived of the legitimate price of paddy and they somehow eke out their daily existence.
Further, their case is that being victims of 'chill penury ', the people of Kalahandi are sometimes forced to sell their children.
It has been prayed that the State Government should be directed to take immedi ate steps for the purpose of ameliorating the misery of the people of the District of Kalahandi.
On receipt of the said letter, this Court directed the same to be treated as a writ petition and it was registered as such.
Another writ petition being Writ Petition (Civil) No. 1081 of 1987 has been filed by the Indian People 's Front.
This writ petition not only relates to the misery of the people of Kalahandi, but also of the people of another district, namely, the district of Koraput.
In this writ petition, it has been alleged that the starvation deaths of the inhabitants of the districts of Koraput and Kalahandi are due to utter negligence and callousness of the adminis tration and the Government of Orissa.
It is alleged that the starvation deaths, drought diseases and famine have been the continuing phenomena in the said two districts since 1985.
The Government of Orissa has been accused of utter failure to protect the lives of the people of the two districts.
The State of Orissa appeared in both these writ peti tions and opposed the same by filing counter affidavits denying the allegations of the petitioners.
The State of Orissa filed two statements one dated October 20, 1986 consisting of 160 pages and the other dated December 1, 1986 consisting of 181 pages.
In these statements, it has been alleged by the State of Orissa that the State Government has implemented the social welfare measures in the district of Kalahandi.
61 In order to ascertain the correct state of affairs, this Court by its order dated January 16, 1987 requested the District Judge of Kalahandi to enquire as to whether the State Government has, in fact, implemented the social wel fare measures in the district of Kalahandi and whether such measures were adequate to meet the needs of the people there.
The learned District Judge was asked to submit a report to this Court.
It was further directed by this Court that the learned District Judge, while preparing his report, would consider the feasibility of the implementation of some suggestions made by the petitioners regarding the steps to be taken for the purpose of ameliorating the condition of the people in the said district.
The learned District Judge has since submitted his report which runs into 36 1 pages.
The petitioners are not at all satisfied with the said report of the learned Dis trict Judge.
They have challenged the correctness of facts found by him, particularly with regard to the question of starvation deaths.
It has been stated by the learned Dis trict Judge that there was hardly any case of starvation death; on the other hand, there has been implementation by the Government of the social welfare measures.
We do not think it necessary to consider the report of the learned District Judge.
It is agreed by the parties including Shri Pattnayak, the petitioner No. 1 in Writ Petition No. 12847 of 1985, who has appeared before us in person, that some steps should be taken for the purpose of alleviating the miseries and sorrows of the poor inhabitants of both the said districts.
It is not disputed that the people of the districts of Kalahandi and Koraput are very poor and most of them have been living below the poverty line.
Although the learned District Judge 's report is against the alleged starvation deaths, we are of the view that the happening of one or two cases of starvation deaths cannot altogether be ruled out.
Shri Pattnayak laid much emphasis in his submissions on the duty of the Government to take immediate steps to prevent starvation deaths.
He has submitted before us some suggestions in writing, So far as prevention of starvation deaths is concerned, his suggestion are inter alia that the Government should constitute a 11 Member Committee, of which the majority should be social workers, for the purpose of supervising matters arising out of drought and other natural calamities.
This committee may be called the Kalahandi Relief Implementation Committee (KRIC).
The nonofficial members should not be members of any political party and should belong to well known organisa tions of social work, such as, Sarvodaya Gandhi Peace Foun dation and registered voluntary agen 62 cies, as contained in the State approved list of voluntary agencies.
He has also enumerated the duties of the Commit tee.
The learned Advocate General of Orissa, appearing on behalf of the State of Orissa, has drawn our attention to paragraph 39 of the Orissa Relief Code which provides as follows: "39.
Reports on starvation: (i) In spite of taking adequate precautions in providing relief works for able bodied persons, and gratuitous relief and feeding programmes for those who cannot under take physical labour and other relief meas ures, reports of starvation cases very often appear in the Press.
Whenever a report of death due to starvation is published and it comes to the notice of the Collector, he shall immediately cause an enquiry into the allega tion.
The enquiry shall be conducted by a gazetted officer in the presence of the Sar panch, Ward Member or some gentlemen of the village and the result of the enquiry reported in the Pro forma in Appendix VI within 48 hours, if possible.
The Pro forma is not exhaustive.
The Collector should include such other information which he considers necessary to give Government a complete picture of the situation in which the alleged death has taken place.
If all the information cannot be col lected forthwith a preliminary report should be furnished immediately to be followed by a complete report soon.
(ii) After the receipt of the enquiry report, the Collector shall review the relief measures undertaken in the area and also if he deems proper, may visit the area himself or depute a senior officer to take stock of the situation and be satisfied about the adequacy of labour employment, food position, and other relief arrangements.
He should take further steps to alleviate distress in the area as far as possible.
In case he considers necessary to further strengthen the relief measures, he shall furnish concrete proposals promptly with necessary justification through the Revenue Divisional Commissioner to the Board of Reve nue/Special Relief Commissioner.
" In this connection, we may also refer to paragraph 40 relat ing to 63 verification of Press reports and issue of contradiction, if any.
Paragraph 40 reads as follows: "40.
Verification of Press reports and issue of contradiction, if any Besides alleging starvation deaths, reports on large scale migration of population on account of lack of work, scarcity of drinking water, outbreak of epidemics etc.
appear in the Press very often.
The Collector shall take steps to get such reports immediately verified by proper enquiry or otherwise and if found true should take immediate remedial action.
Proper publicity relating to the relief measures undertaken should also be given.
If on the other hand, the report is found inaccurate, exaggerated or incor rect a contradiction stating the correct facts may be issued by the Collector immediately.
Copies of such contradictions should be made available to the higher author ities.
" It is apparent from paragraph 39 that ample provision has been made for taking steps as soon as the report of starvation death is published or any starvation death comes to the notice of the Collector.
It is also submitted by the learned Advocate General that there is a district level Natural Calamities Committee consisting of the Collector, other officials and the popular representatives like MPs and MLAs of the district, who are required to review the progress of relief work and the measures taken to meet the drought conditions from time to time.
He submits that instead of constituting another Com mittee, the Natural Calamities Committee will serve the purpose.
Shri Pattnayak also agrees that another separate Committee need not be constituted, but he submits that the Natural Calamities Committee should include at least five non official and non political members belonging to well known organisations of social work, such as, Sarvodaya Gandhi Peace Foundation and registered voluntary agencies, as already suggested by him.
The learned Advocate General states that the Government has no objection to induct into the Committee non officials, such as, representatives of the recognised voluntary organisations as suggested by Shri Pattnayak.
In the circumstances, we direct the Government of Orissa that it shall, within a month from date, nominate the names of at least five persons belonging to the recognised volun tary organisations like Sarvodaya Gandhi Peace Foundation, Ramakrishna Mission, Bharat Sewa Sangha and registered voluntary agencies as members of the said 64 Natural Calamities Committee of the district.
We also accept the suggestion of Shri Pattnayak that the Committee shall hold at least one meeting every two months.
The function of the Committee will not be confined only to the cases of starvation deaths, but it shall be responsible for looking after the welfare of the people of the district.
We are given to understand that there is also such a dis trict level Natural Calamities committee in the district of Koraput.
We make it clear that the Government will also nominate at least five such persons belonging to recognised voluntary organisations within a month from today and the Committee will also perform the same functions.
So far as the district of Kalahandi is concerned, it has been urged by the learned Advocate General that the Govern ment of Orissa has already undertaken appropriate measures for mitigating the miseries of the people of that district.
The steps which have been taken by the Government may be stated in brief.
The State Government has allotted a sum of Rs.8054 lakhs for Kalahandi during the Sixth Plan.
The State Government is fully aware of the situation in Kalahandi and constant vigilance is maintained under the direct supervi sion of the Chief Minister to redress the distress of the people.
The labour intensive work has been undertaken by the government on a massive scale to provide employment opportu nity to the people of the district of Kalahandi.
During the year 1984 85, in areas of acute distress, free feeding pro gramme has been undertaken on a massive scale.
During 1987 88 the coverage under the Normal Feeding Programme was 2,12,800 persons.
Besides, 1,20,000 persons were also cov ered under the Emergency Drought Feeding Programme covering all the drought affected areas of the district.
In 128 Gram Panchayats where crop damage was more than 50%, 1,20,000 persons were covered under the Emergency Feeding Programme during 1987 88.
During the current year, preliminary survey indicated that crop damage was likely to occur in 74 Gram Panchayats and, accordingly, 40,000 persons from the said affected areas have been covered under the Emergency Feeding Programme in addition to the Normal Feeding Programme for 2,12,800 persons.
Under the Area Development Approach Pro gramme for Total Backwardness Scheme covering certain blocks, about 20,000 persons are being fed under the Feeding Programme.
According to the Government, 2,72,000 persons are being covered by the Feeding Programme in Kalahandi district in 1988.
Kalahandi is a drought prone district and Government has, according to the learned Attorney General, already taken a number of 65 major, medium and small Irrigation Projects in the said district to provide irrigation facilities for agricultur ists.
485 tube Wells are stated to have been dug as a major source of drinking water in Kalanandi.
The Government has also started aforestation programme so as to prevent the recurrence of drought conditions.
Much facilities are stated to have been given to the weavers of the district.
Elaborate measures have also been taken for ensuring that poor cultivators are not coerced to sell their surplus paddy at a lower rate on account of their poverty.
The Orissa Agricultural Produce Marketing Act is being strictly implemented.
The entire procurement of paddy has been en trusted to the Food Corporation of India and the State Cooperative Marketing Federation.
These two Organisations specialised in such purchases, are possessed of godowns and have their local centres throughout the State for purchase of surplus paddy.
The FCI at the request of the State Gov ernment, has established purchase centres at Junagarh, Khariar Road and Kesinga in the district of Kalahandi.
The FCI has also made arrangements for direct purchase of paddy at Dharmagarh, Junagarh and Narala.
The State Cooperative Marketing Federation has also opened direct purchase centres at Boden and Sinapalli in the district of Kalahandi.
Fur thermore, when surplus paddy comes to market, additional purchase centres are provided for purchase of the surplus paddy.
The minimum purchase price for paddy is fixed by the Government of India.
Adequate funds are provided to the purchasing agents to purchase the surplus paddy at the rates prescribed by the Government.
State Government also ensures that unscrupulous traders do not coerce the farmers to sell paddy at a distress price.
Assistance to agriculturists is also being given by the Government.
Due to drought conditions, the Kharif crop was damaged in some areas of Kalahandi district in 1987 88.
To enable cultivators to undertake resowing, Government is stated to have supplied seeds free of cost in mini bags.
The measures which have been taken and are being taken, as stated in the written note submitted by the learned Advocate General, have been briefly mentioned.
There is no reason not to accept the statements made on behalf of the State of Orissa that the measures, stated above, are being taken for the purpose of mitigating hunger, 66 poverty, starvation deaths, etc.
of the people of Kalahandi.
If such measures are taken, there can be no doubt that it will alleviate to a great extent the miseries of the people of Kalahandi.
Such measures are also being taken in respect of the district of Koraput.
The Natural Calamities Committee shall also keep a watch over the working of the social welfare measures which are being taken and may be taken in future.
Shri Pattnayak also does not dispute that if such measures are continued to be taken, it will be a great relief to the people of Kalahandi and Koraput.
We hope and trust that in view of the prompt action that has been taken by the Government, soon the miseries of the people of these two districts will be over.
As prayed for by Shri Pattnayak, the petitioners are granted liberty to mention before this Court, if necessary.
The Writ Petitions are disposed of as above.
There will be no order as to costs.
T.N.A. Petitions disposed of.
[/INST]In November 1976, the respondent issued a notice to the appellant under section 11 of the Jammu & Kashmir Houses & Shops Rent Control Act, 1966 calling upon it to pay the arrears of rent.
The notice also terminated the tenancy and called upon the appellant to vacate the demised premises.
The notice sent by registered post was received back by the respondent with the endorsement "left without address, returned to sender".
Thereupon the respondent caused a copy of the notice to be fixed to one of the doors of the premises in question.
No payment of rent was however made by the appellant subsequently.
The respondent, therefore, filed a suit in June 1977 seeking ejectment of the appellant on the ground of default in the payment of rent.
The Trial Court ordered eviction.
and the appellant 's appeals before the District .Judge and the High Court against the order of eviction failed.
Before this Court the appellant contends that (1) the safeguards in sections 11 and 12 of the Act are intended for the benefit and protection of the tenant and therefore, where the Act provides for the service of the notice, by post.
this requirement has to be strictly complied with; (2) such postal service can neither be presumed nor considered to be good service where The latter is returned to the sender due to non availability of the addressee; (3) in the absence of any enabling provision, service by some other mode, such as affixture, cannot be treated as sufficient compliance with the statute; and (4) where a power is given to do a certain thing in a certain way, the thing must be done in that way or not at all and other methods of performance are necessarily forbidden.
Dismissing the appeal, it was, HELD: (1) The proviso to clause (i) of section 11(1) and the proviso to section 12(3) are intended for the protection PG NO 983 PG NO 984 of the tenant.
A Nevertheless, it will be easy to see that too strict and literal a compliance of their language would be impractical and unworkable.
[988H; 989Al (2) The proviso insists that before any amount of rent can be said to be in arrears, a notice has to be served through post.
All that a landlord can do to comply with this provision is to post a prepaid registered letter (acknowledgment due or otherwise) containing the tenant 's correct address.
Once he does this and the letter is delivered to the post office, he has no control over it.
It is then presumed to have been delivered to the addressee under section 27 of the General Clauses Act.
[989A B] (3) To interpret the provision as requiring that the letter must have been actually delivered to the addressee, would be virtually rendering it a dead letter.
[989F] (4) If a registered letter addressed to a person at his residential address does not get served in the normal course and is returned, it can only be attributed to the addressee 's own conduct.
If he is compelled to be away for some time, all that he has to do is to leave necessary instructions with the postal authorities.
[989H; 990A] (5) The more reasonable, effective, equitable and practical interpretation would be to read the words "served" as "sent by post".
correctly and properly addressed to the tenant, and the word "receipt" as the tender of the letter by the postal peon at the address mentioned in the letter.
No other interpretation will fit the situation as it is simply not possible for a landlord to ensure that a registered letter sent by him gets served on, or is received by the tenant.
[990B C] (6) The statute prescribes only one method of service for the notice and none other.
To require service by some other method to be effected over and above the postal service would be to travel outside the statute.
[99OF] (7) Where the statute does not specify any additional or alternative mode of service, there can be no warrant for importing into the statute a method of service on the lines of the provisions of C.P.C.
This Court would therefore not like to hold that a substituted ' ' service.
such as the one effected by the landlord in the present case, is a necessary or permissible requirement of the statute.
[990G] (8) The provision in regard to the notice contemplated by the statute is unsatisfactory and it is hoped that the PG NO 985 legislature would soon set it right.
On the provision as it stands, a landlord must be held to have complied with the statutory requirement by sending a notice correctly addressed to the tenant by registered post.
[991H; 992A] Hare Krishna Das vs Hahnemann Publishing Co. Ltd. 1965 66, ; Surajmull Ghanashamdas vs Samardarshan Sur, ILR ; Taylor vs Taylor, 11875] 1 Ch. D. 426.
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<s>[INST] Summarize the judgementAppeal No. 124 of 1959.
Appeal by special leave from the Award dated February 8, 1957, of the Additional Industrial Tribunal, Delhi, in Misc.
I. D. Case No. 422 of 1956.
Jawala Prasad Chopra and J. K. Haranandani, for the appellants.
C. K. Daphtary, Solicitor General of India, H. J. Umrigar, M. K. Ramamurthi, V. A. Seyid Muhamad and M. R. Krishna Pillai, for the respondent.
March 22.
The Judgment of the Court was delivered by GAJENDRAGADKAR, J.
This appeal by special leave is directed against the order passed by the Additional Industrial Tribunal, Delhi, directing the appellant, M/s. New India Motors Private Ltd., to reinstate its former employee, K. T. Morris, the respondent, in his original post as field service representative and to pay him his back wages from the date of his dismissal till the date of his reinstatement.
This award has been made on a complaint filed by the respondent against the appellant under section 33A of the XIV of 1947 (hereinafter called the Act).
It appears that before joining the appellant the respondent was working with a firm in Calcutta; prior to that he was field service representative of M/s. Premier Automobiles Ltd., Bombay.
The respondent joined the services of the appellant sometime in May 1954 as Works Manager.
Before he joined the services of the appellant he had been told by the appellant by its letter dated March 27, 1954, that the appellant would be willing to pay him Rs. 350 per month and something more by way of certain percentage on business.
He was, however, asked to interview the 352 appellant; an interview followed and the respondent was given a letter of appointment on May 6, 1954.
By this letter he was appointed as Workshop Manager in the appellant 's firm on three months ' probation subject to the terms and conditions specified in the letter of appointment (exhibit W 2).
The respondent continued in this post till February 28, 1955, when he was given the assignment of the appellant 's field service organiser with effect from March 1, 1955.
A letter of appointment given to him on 28 2 1955 set forth the terms and conditions of his new assignment.
It appears that on April 18, 1956, the management of the appellant called for an explanation of the respondent in respect of several complaints.
An explanation was given by the respondent.
It was, however, followed by another communication from the appellant to the respondent setting forth specific instances of the respondent 's conduct for which explanation was demanded.
The respondent again explained and disputed the correctness of the charges.
On June 30, 1956, the respondent 's services were terminated on the ground that the appellant had decided to abolish the post of field service representative.
It is this order which gave rise to the respondent 's complaint under section 33A of the Act.
The complaint was filed on July 18, 1956.
The respondent invoked section 33A because his case was that at the time when his services were terminated an industrial dispute was pending between the appellant and 7 of its employees and the respondent was one of the workmen concerned in the said industrial dispute.
The said industrial dispute had reference to the termination of the services of the said 7 employees who were working with the appellant as apprentices.
On their behalf it was alleged that their termination of service was improper and illegal and that was referred to the industrial tribunal for its adjudication on August 20, 1955.
The said dispute was finally decided on January 2, 1957.
With the merits of the said dispute or the decision thereof we are not concerned in the present appeal.
According to the respondent, since he was a workman concerned in the said dispute section 33(1)(a) applied and it was not open to the appellant to terminate his 353 services save with the express permission in writing of the authority before which the said dispute was pending.
It was on this basis that he made his complaint under section 33A of the Act.
Before the tribunal the appellant urged that the respondent was not a workman as defined by the Act, and on the ' merits it was contended that the appellant had to abolish the post of the field service organiser owing to the fact that a part of the agency work of the appellant had been lost to it.
On the other hand, the respondent contended that he was a workman under the Act and the plea made by the appellant about the necessity to abolish his post was not true and genuine.
His grievance was that his services were terminated solely because he had taken interest in the complaint of the 7 apprentices which had given rise to the main industrial dispute and had in fact given evidence in the said dispute on behalf of the said apprentices.
The tribunal has found that the respondent is a workman under the Act, that there was no evidence to justify the appellant 's contention that it had become necessary for it to abolish the respondent 's post, and that it did appear that the respondent had been discharged because the appellant disapproved of the respondent 's conduct in supporting the 7 apprentices in the main industrial dispute.
As a result of these findings the tribunal has ordered the appellant to reinstate the respondent.
The question as to whether the respondent is a workman as defined by section 2(s) of the Act is a question of fact and the finding recorded by the tribunal on the said question, after considering the relevant evidence adduced by the parties, cannot be successfully challenged before us in the present appeal.
The respondent has given evidence as to the nature of the work he was required to do as field service organiser.
The letter of appointment issued to him in that behalf expressly required, inter alia, that the respondent had, if need be, to check up and carry out necessary adjustments and repairs of the vehicles sold by the appellant to its customers and to obtain signatures of responsible persons on the satisfaction 354 forms which had been provided to him.
The respondent swore that he looked after the working of the workshop and assisted the mechanics and others in their jobs.
He attended to complicated work himself and made the workmen acquainted with Miller 's special tools and equipment needed for repairs and servicing of cars.
He denied the suggestion that he was a member of the supervisory staff.
On this evidence the tribunal has based its finding that the respondent was a workman under section 2(s), and we see no reason to interfere with it.
Then, as to the appellant 's case that it had to abolish the post of the respondent as it had lost the agency of DeSoto cars from Premier Automobiles, there is no reliable evidence to show when this agency was actually lost.
Besides, the fact that the appellant has appointed a Technical Supervisor after discharging the respondent is also not without significance.
Furthermore, the appellant is still the agent for Plymouth and Jeeps and the tribunal is right when it has found that it still needed a field representative to look after servicing of sold cars at outside stations.
On the other hand, the evidence of the respondent clearly shows that he supported the case of the 7 apprentices and that provoked the appellant to take the step of terminating his services.
The process of finding fault with his work appears to have commenced after the appellant disapproved of the respondent 's conduct in that behalf.
We are, therefore, satisfied that the tribunal was right in coming to the conclusion that the dismissal of the respondent is not sup ported on any reasonable ground, and in fact is due to the appellant 's indignation at the conduct of the respondent in the main industrial dispute between the appellant and its 7 employees.
If that be the true position the industrial tribunal was justified in treating the dismissal of the respondent as mala fide.
It has, however, been urged before us by the appellant that the complaint made by the respondent under section 33A is not competent.
It is common ground that a complaint can be made under section 33A only if section 33 has been contravened, and so the appellant 's argument is that B. 33(1)(a) is inapplicable because the respondent 355 was not a workman concerned in the main industrial dispute, and as such his dismissal cannot be said to contravene the provisions of the said section.
Indeed the principal point urged before us by the appellant is in regard to the construction of section 33(1)(a) of the Act.
Was the respondent a workman concerned with the main industrial dispute ? That is the point of law raised for our decision and its decision depends upon the construction of the relevant words used in section 33(1)(a).
Section 33(1)(a) as it stood prior to the amendment of 1956 provided, inter alia, that during the pendency of any proceedings before a tribunal, no employer shall alter to the prejudice of the workmen concerned in the said dispute the conditions of service applicable to them immediately before the commencement of the said proceedings, save with the express permission in writing of the tribunal.
Section 33 has been modified from time to time and its scope has been finally limited by the amendment made by Act 36 of 1956.
With the said amendments we are, however, not con cerned.
The, expression " the workmen concerned in such dispute " which occurred in the earlier section has not been modified and the construction which we would place upon the said expression under the unamended section would govern the construction of the said expression even in the amended section.
What does the expression " workmen concerned in such dispute " mean ? The appellant contends that the main dispute was in regard to the discharge of 7 apprentices employed by the appellant, and it is only the said 7 apprentices who were concerned in the said dispute.
The respondent was not concerned in the said dispute, and so the termination of his services cannot attract the provisions of section 33(1)(a).
Prima facie the argument that " workmen concerned in such dispute " should be limited to the workmen directly or actually concerned in such dispute appears plausible, but if we examine the scheme of the Act and the effect of its material and relevant provisions this limited construction of the clause in question cannot be accepted, 356 Let us first consider the definition of the industrial dispute prescribed by section 2(k).
It means, inter alia, any dispute or difference between employers and workmen which is connected with the employment or non employment, or the terms of employment, or with the conditions of labour, of any person.
It is well settled that before any dispute between the employer and his employee or employees can be said to be an industrial dispute under the Act it must be sponsored by a number of workmen or by a union representing them.
It is not necessary that the number of workmen of the union that sponsors the dispute should represent the majority of workmen.
Even so, an individual dispute cannot become an industrial dispute at the instance of the aggrieved individual himself It must be a dispute between the employer on the one hand and his employees acting collectively on the other.
This essential nature of an industrial dispute must be borne in mind in interpreting the material clause in section 33(1)(a).
Section 18 of the Act is also relevant for this purpose.
It deals with persons on whom awards are binding.
Section 18(3) provides, inter alia, that an award of a tribunal which has become enforceable shall be binding on (a) all parties to the industrial dispute, (b) all other parties summoned to appear in the proceedings as parties to the dispute unless the tribunal records the opinion that they were so summoned without proper cause, and (c) where a party referred to in cl.
(a) or cl.
(b) is composed of workmen all persons who were employed in the establishment or part of the establishment, as the case may be, to which the dispute relates on the date of the dispute, and all persons who subsequently become employed in that establishment or part.
It is thus clear that the award passed in an industrial dispute raised even by a minority union binds not only the parties to the dispute but all employees in the establishment or part of the establishment, as the case may be, at the date of the dispute and even those who may join the establishment or part subsequently.
Thus the circle of persons bound by the award is very much wider than the parties to the industrial dispute.
This aspect of the 357 matter is also relevant in construing the material words in section 33(1)(a).
In this connection the object of section 33 must also be borne in mind.
It is plain that by enacting section 33 the Legislature wanted to ensure a fair and satisfactory enquiry of the industrial dispute undisturbed by any action on the part of the employer or the employee which would create fresh cause for disharmony between them.
During the pendency of an industrial dispute status quo should be maintained and no further element of discord should be introduced.
That being the object of section 33 the narrow construction of the material words used in section 33(1)(a) would tend to defeat the said object.
If it is held that the workmen concerned in the dispute are only those who are directly or immediately concerned with the dispute it would leave liberty to the employer to alter the terms and conditions of the remaining workmen and that would inevitably introduce further complications which it is intended to avoid.
Similarly it would leave liberty to the other employees to raise disputes and that again is not desirable.
That is why the main object underlying section 33 is inconsistent with the narrow construction sought to be placed by the appellant on the material words used in section 33(1)(a).
Even as a matter of construction pure and simple there is no justification for assuming that the workmen concerned in such disputes must be workmen directly or immediately concerned in the said disputes.
We do ' not see any justification for adding the further qualification of direct or immediate concern which the narrow construction necessarily assumes.
In dealing with the question as to which workmen can be said to be concerned in an industrial dispute we have to bear in mind the essential condition for the raising of an industrial dispute itself, and if an industrial dispute can be raised only by a group of workmen acting on their own or through their union then it would be difficult to resist the conclusion that all those who sponsored the dispute are concerned in it.
As we have already pointed out this construction is harmonious with the definition prescribed by section 2(s) and with the provisions contained in section 18 of the Act.
Therefore, 46 358 we are not prepared to hold that the expression " workmen concerned in such dispute " can be limited only to such of the workmen who are directly concerned with the dispute in question.
In our opinion, that expression includes all workmen on whose behalf the dispute has been raised as well as those who would be bound by the award which may be made in the said dispute.
It appears that the construction of the relevant clause had given rise to a divergence of opinion in industrial courts, but it may be stated that on the whole the consensus of opinion appears to be in favour of the construction which we are putting on the said clause.
In Eastern Plywood Manufacturing Co. Ltd. vs Eastern Plywood Manufacturing Workers ' Union (1) the appellate tribunal has referred to the said conflict of views and has.
held that the narrow construction of the clause is not justified.
The High Court of Madras appears to have taken the same view (Vide: Newtone Studios Ltd. vs Ethirajulu (T.R.) (2) ).
On the other hand, in The New Jehangir Vakil Mills Ltd., Bhavnagar vs N.L. Vyas & Ors.
(3), the Bombay High Court has adopted the narrow construction ; but for reasons which we have already explained we must hold that the Bombay view is not justified on a fair and reasonable construction of the relevant clause.
In the result the appeal fails and is dismissed with costs.
Appeal dismissed,.
[/INST]The first appellant was the Managing Director and the second appellant a Director and technical expert of a cloth dyeing concern known as Parikh Dyeing and Printing Mills Ltd. The company entered into a contract with the Textile Commissioner undertaking to dye a large quantity of cloth which was supplied to the company for that purpose.
In pursuance of the contract certain quantity of cloth was dyed and delivered to the Textile Commissioner by the company but it failed to dye and deliver the balance of cloth which remained in its possession and was not returned to the Textile Commissioner in spite of repeated demands.
Ultimately the two appellants were prosecuted for criminal breach of trust under section 409 read with section 34 of the Indian Penal Code and were convicted for the same in a trial by jury.
320 In appeal the High Court reviewed the evidence on the ground of misdirection to the jury but found that the two appellants were liable to account for the cloth over which they had dominion, and having failed to do so each of them was guilty of the offence of criminal breach of trust.
The High Court refused to accept the appellants ' plea that the cloth was old and was eaten up by white ants and moths.
On appeal by the appellants by special leave: Held, that to establish a charge of criminal breach of trust, the prosecution was not bound to prove the precise mode of conversion, misappropriation or misapplication by the accused of the property entrusted to him or over which he had dominion.
The principal ingredient of the offence of criminal breach of trust being dishonest misappropriation the mere failure of the accused to account for the property entrusted to him might not be the foundation of his conviction in all cases but where he was unable to account and rendered an explanation for his failure which was untrue, an inference of misappropriation with dishonest intent might readily be made.
The essence of liability under section 34 of the Indian Penal Code is the existence of a common intention animating the offenders and the participation in a criminal act in furtherance of the common intention.
The physical presence at the scene of offence of the offender sought to be rendered liable under section 34 is not, on the words of the statute, one of the conditions of its applicability in every case.
Barendra Kumar Ghose vs The King Emperor, (1929) L.R. 52 I.A. 40, followed.
Shreekantiah Ramayya Munipalli vs The State of Bombay, ; , explained and distinguished.
</s>
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<s>[INST] Summarize the judgementCivil Appeal No. 656 of 1978.
Appeal by Special Leave from the Award dated 21 9 1977 of the Labour Court, Meerut in Adjudication Case No. 160/74.
G. B. Pia, L. R. Singh, R. P. Singh, R. K. lain, Suman Kapoor and Sukumar Sahu for the Appellant.
R. K. Garg, V. J. Francis and Madan Mohan for Respondent No. l. G. N. Dikshit and o. P. Rana for Respondents 2 3.
The Judgment of the Court was delivered by F DESAI J.
This appeal by special leave, limited to the question of grant of back wages, raises a very humane problem in the field of industrial jurisprudence, namely, where termination of service either by dismissal, discharge or even retrenchment is held invalid and the relief of reinstatement with continuity of service Is awarded what ought to be the criterion for grant of compensation to the extent of full wages or a Part of it ? A few relevant facts will highlight the problem posed.
Appellant is a private limited Company having set up an industrial unit in engineering industry.
The raw material for its manufacturing process is tin plates.
The appellant served notice of retrenchment on 56 workmen in February 1974 alleging non availability or raw material to utilise the full installed capacity, power shedding limiting the 566 working of the Unit to 5 days a week, and the mounting loss.
Subsequently, negotiations took place between the Union and the appellant leading to an agreement dated 1st April 1974 whereby the workmen who were sought to be retrenched were taken back in service with continuity of service by the appellant and the workmen on their part agreed to co operate with the management in implementing certain economy measures and in increasing the productivity so as to make the undertaking economically viable.
Simultaneously, the workmen demanded a revision of the wage scales and the appellant pleaded its inability in view of the mounting losses.
Some negotiations took place and a draft memorandum of settlement was drawn up which provided for revision of wages on the one hand and higher norms of production on the other, but ultimately the settlement fell through.
Appellant thereafter on 1st July, 1974 served a notice of retrenchment on 43 workmen.
The Tin Workers ' Union, Ghaziabad, espoused the cause of such retrenched workmen and ultimately the Government of Uttar Pradesh by its notification dated 9th october 1974, issued in exercise of the power conferred by Section 4 K of the U.P. lndustrial Disputes Act, 1947.
referred the industrial dispute arising out of retrenchment of 43 workmen, between the parties, for adjudication to the Labour Court.
Names of the retrenched workmen were set out in an Annexure to the order of reference.
The Labour Court, after examining the evidence led on both sides and considering various relevant circumstances, held that the reasons stated in the notice dated 1st July, 1974, Ext.
E 2, viz., heavy loss caused by non availability of tin plates, persistent power curbs and mounting cost of production were not the real reasons for affecting retrenchment but the real reason was the annoyance felt by the management consequent upon the refusal of the workmen to agree to the terms of settlement contained in the draft dated 5th April, 1974 and, therefore, the retrenchment was illegal.
The Labour Court by its award directed that all the workmen shall be reinstated in service from 1 st August, 1974 with full back wages, permitting the appellant to deduct any amount paid as retrenchment compensation from the amount payable to the workmen as back wages.
the Appellant challenged the Award in this appeal.
When the special` leave petition came up for admission Court rejected the special leave petition with regard to the relief of reinstatement but limited the leave to the grant of full back wages.
The question whether the workmen who were retrenched were entitled to the relief of reinstatement is no more open to challenge.
Another words.
it would mean that the retrenchment of workmen was invalid for the reasons found by the Labour Court and the workman were 567 entitled to the relief of reinstatement effective from the day on which A they were sought to be retrenched.
The workmen were sought to be retrenched from 1st August, 1974 and the Labour Court has directed their reinstatement effective from that date.
The Labour Court has also awarded full back wages to the workmen on its finding that the retrenchment was not bona fide and that the non availability of the raw material or recurrent power shedding and lack of profitability was a mere pretence or a ruse to torment the workmen by depriving them of their livehood, the real reason being the annoyance of the appellant consequent upon the refusal of the workmen to be a party to a proposed settlement by which work load was sought to be raised(l.
Mr. Pai, learned counsel for the appellant in his attempt to persuade us to give something less than full back wages, attempted to re open the controversy concluded by the order of this Court while granting limited leave that the retrenchment was inevitable in view of the mounting losses and falling production for want OF raw material and persistent power shedding.
It was said that for the limited purpose of arriving at a just decision on the question whether the workmen should be awarded full back wages, we should look into the compelling necessity for m retrenchment of the workmen.
Once leave against relief of reinstatement was rejected, the order of the Labour Court holding that retrenchment was invalid and it was motivated and the relief of reinstatement must follow, has become final.
Under no pretext or guise it could now be re opened.
Before dealing with the contentions in this appeal we must bear in mind the scope of jurisdiction of this Court under Article 136 of the Constitution vis a vis the Awards of the Industrial Tribunals.
Article 136 of the Constitution does not envisage this Court to be a regular Court of appeal but it confers a discretionary power on the Supreme Court to grant special leave to appeal, inter alia, against the Award of any Tribunal in the territory of India.
The scope and ambit of this wide constitutional discretionary power cannot be exhaustively defined.
lt cannot obviously be so construed as to confer a right to a party which he has none under the law.
The Court will entertain a petition for special leave in which a question of general public importance is involved or when the decision would shock the conscience of this Court.
the lndustrial Disputes Act is intended to be a self contained one and it seeks to achieve social justice on the basis of collective bargaining, collaboration and arbitration.
Awards are given on circumstances peculiar to each dispute and the Tribunals are to a large extent free from resrtrictions of technical considerations imposed on courts.
A free and 568 liberal exercise of the power under Article 136 may materially affect the fundamental basis of such decisions, viz., quick solution of such disputes to achieve industrial peace.
Though Article 136 is couched in widest terms, it is necessary for this Court to exercise its discretionary jurisdiction only in cases where Awards are made in violation of the principles of natural justice causing substantial and grave injustice to parties or raises an important principle of industrial law requiring elucidation and final decision by this Court or discloses such other exceptional or special circumstances which merit consideration of this Court (See Bengal Chemical & Pharmaceutical Works Ltd., Calcutta vs Their Workman) (1) The question in controversy which fairly often is raised in this Court is whether even where reinstatement is found to be an appro priate relief, what should be the guiding considerations for awarding full or partial back wages.
This question is neither new nor raised for the first time.
It crops up every time when the workman questions the validity and legality of termination of his service howsoever brought about, to wit, by dismissal, removal, discharge or retrenchment, and the relief of reinstatement is granted.
As a necessary corollary the question immediately is raised as to whether the workman should be awarded full back wages or some sacrifice is expected of him.
Let us steer clear of one controversy whether where termination of service is found to be invalid, reinstatement as a matter of course should be awarded or compensation would be an adequate relief.
That question does not arise in this.
appeal.
Here the relief of reinstatement has been granted and the award has been implemented and the retrenched workmen have been reinstated in service.
The only limited question is whether the Labour Court in the facts and circumstances of this case was justified in awarding full back wages.
It is no more open to debate that in the field of industrial jurisprudence a declaration can be given that the termination of service is bad and the workman continues to be in service.
The spectre of common law doctrine that contract of personal service cannot be specifically enforced or the doctrine of mitigation of damages does not haunt in this branch of law.
The relief of reinstatement with continuity of service can be granted where termination of service is found to be invalid.
It would mean that the employer has taken away illegally the right to the work of the workman contrary to the relevant law or in breach of contract and simultaneously deprived deprived workman of his earnings.
if (1) [1959]] Suppl.
2 SCR 136 at 140.
569 thus the employer is found to be in the wrong as a result of which the workman is directed to be reinstated, the employer could not shirk his responsibility of paying the wages which the workman has been deprived of by the illegal or invalid action of the employer.
Speaking realistically, where termination of service is questioned as invalid or illegal and the workman has to go through the gamut of litigation, his capacity to sustain himself throughout the protracted litigation is itself such an awesome factor that he may not survive to see the day when relief is granted.
More so in our system where the law 's proverbial delay has become stupefying.
If after such a protracted time and energy consuming litigation during which period the workman just sustains himself, ultimately he is to be told that though he will be reinstated, he will be denied the back wages which would be due to him, the workman would be subjected to a sort of penalty for no fault of his and it is wholly undeserved.
Ordinarily, therefore.
a workman whose service has been illegally terminated would be entitled to full back wages except to the extent he was gainfully employed during the enforced idleness.
That is the normal rule.
Any other view would be a premium on the unwarranted litigating activity of the employer.
If the D employer terminates the service illegally and the termination is motivated as in this case, viz ., to resist the workman 's demand for revision of wages.
the termination may well amount to unfair labour practice.
In such circumstances reinstatement being the normal rule, it should be followed(l with full back wages.
Articles 41 and 43 of the Constitution would assist us in reaching a just conclusion in this respect.
By a suitable legislation, to wit, the U.P. , the State has endeavored to secure work to the workmen.
In breach of the statutory obligation the services were terminated and the termination is found to be invalid; the workmen though willing to do the assigned work and earn their livelihood, were kept away therefrom.
On top of it the were forced to litigation upto the apex Court and now they are being told that something less than full back wages should be awarded to them.
If the services were not terminated the workmen ordinarily would have continued to work and would have earned their wages.
When it was held that the termination of services was neither proper nor justified, it would not only show that the workman were always willing to serve but if they rendered service they would legitimately be entitled to the wages for the same.
If the workman were always ready to work but they were kept away therefrom on account of invalid act of the employer, there is no justification for not awarding them full back wages which were very legitimately due to them.
A Division Bench of the Gujarat High Court in Dhari Gram Panchayat vs Safai Kamldar Mandal(1), and a Division Bench of the Allahabad (1) 11 971] I Labour Law Journal 508 570 High Court in Postal Seals Industrial Co operative Society Ltd. vs Labour Court 11, Lucknow & ors.(l), have taken this view and we are of the opinion that the view taken therein is correct.
The view taken by us gets support from the decision of this Court in workman of Calcutta Dock Labour Board & Anr.
Employers in relation to Calcutta Dock Labour Board & ors.(2).
In this case seven workmen had been detained under the Defence of India Rules and one of the disputes was that when they were released and reported for duty, they were not taken in service and the demand was For their reinstatement.
The Tribunal directed reinstatement of five out of seven workmen and this part of the Award was challenged before this Court.
This Court held that the workmen concerned did not have any opportunity of explaining why their services should not be terminated and, therefore, reinstatement was held to be the appropriate relief and Act aside the order of the Tribunal.
It was observed that there was to justification for not awarding full back wages from the day they offered to resume work till their reinstatement.
Almost an identical view was taken in Management of Paniltole Tea Estate vs The Workmen(3).
In the very nature of things there cannot to a straight jacket formula for awarding relief of back wages.
All relevant considerations will enter the verdict.
More or less, it would be a motion addressed to the discretion of the Tribunal.
Full back wages would be the normal rule and the party objecting to it must establish the circumstances necessitating departure.
At that stage the Tribunal will exercise its discretion keeping in view all the relevant circumstances.
But the discretion must be exercised in a judicial and judicious manner.
The reason for exercising discretion must be cogent and convincing and must appear on of the face of.
the record.
When it is said that something is to be done within the discretion of the authority, that something is to be done according to the rules of reason and justice? according to law and not humor.
It is not to be arbitrary, vague and fanciful but legal and regular (See Susannah Sharm v.Workfild(4).
It was, however, very strenuously contended that as the appellant company is suffering loss and its carry forward loss as on 31st March 1978 is Rs. 8,12,416.90, in order to see that the industry survives and the workmen continue to get employment, there must be come sacrifice on the part of workmen.
If the normal rule in a case like this is to award full back wages, the burden will be on the appellant employer (l) [1971] I Law Journal, 327.
(2) (3) ; (1) 31 179.
571 to establish circumstances which would permit a departure from the A normal rule.
To substantiate the contention that this is an exceptional case for departing from the normal rule it was stated that loss is mounting up and if the appellant is called upon to pay full back wages in the aggregate amount of Rs. 2,80,0OO/ , it would shake the financial viability of the company and the burden would be unbearable.
Often when some monetary claim by the workmen is being examined, this financial inability of the company consequent upon the demand being granted is voiced.
Now, undoubtedly an industry is a common venture, the participants being the capital and the labour.
Gone arc the days when labour was considered a factor of production.
Article 43A of the Constitution requires the State to take steps to secure the participation of workmen in the management of the undertaking, establishments or other organisations engaged in any industry.
Thus, from being a factor of production the labour has become a partner in industry.
lt is a common venture in the pursuit of desired goal.
Now? if a Sacrifice is necessary in the overall interest of the industry D or a particular undertaking, it would be both unfair and iniquitous to expect only one partner of the industry to make the sacrifice.
Pragmatism compels common sacrifice on the part of both.
The sacrifice must come from both the partners and we need not state the obvious that the labour is a weaker partner who is more often called upon to make the sacrifice.
Sacrifice for the survival of an industrial undertaking cannot be an unilateral action.
It must be a two way traffic.
The management need not have merry time to itself making the workmen the sacrificial goat.
If sacrifice is necessary, those who can afford and have the cushion and the capacity must bear the greater brunt making the shock of sacrifice as less poignant as possible for those who keep body and soul together with utmost difficulty.
F The appellant wants us to give something less than full back wages in this case which the Labour Court has awarded.
There is nothing to show whether the Managing Director has made any sacrifice; whether his salary and perks have been adversely affected; whether the managerial coterie has reduced some expenses on itself.
If there is no such material on record, how do we expect the workmen, the less affording of the weaker segment of the society, to make the sacrifice, because sacrifice on their part is denial of the very means of livelihood.
We have also found that since 1976 77 the appellant is making profit.
A Statement of Account certified by the Chartered Accountants of the company dated 25th July, 1978 shows that the appellant has been making profit since 1976 77.
The unit is, therefore, looking up.
572 One relevant aspect which would assist us in reaching a just con clusion is that after retrenching 43 workmen effective from 1st August 1974, 36 of them were recalled for service on large number of days in 1975 1976 and 1977, the maximum being the case of Jai Hind who was given work for 724 1/4 days, and the minimum being Harsaran s/o Baldev who was given work for 15 days.
An amount of Rs. 74,587.26 was paid to these 36 workmen for the work rendered by them since the date of retrenchment.
Certainly, the appellant would get credit for the amount so paid plus the retrenchment compensation it must have paid.
Even then we were told that the employer will have to pay Rs. 2,80,OOO/ by way of back wages.
We were also told that the appellant had offered to pay by way of settlement 50% of the back wages.
Therefore, the only question is whether we should confirm the Award for full back wages.
Now, undoubtedly the appellant appears to have turned the corner.
The industrial unit is looking up.
It has started making profits.
The workmen have already been reinstated and therefore, they have started earning their wages.
It may, however, be recalled that the appellant has still not cleared its accumulated loss.
Keeping in view all the facts and circumstances of this case it would be appropriate to award 75% of the back wages to the workmen to be paid in two equal instalments.
It may well be that in appropriate cases the Court may, in the spirit of labour and management being partners in the industry, direct scaling down of back wages with some sacrifice on management 's part too.
We were, even here, inclined to saddle the condition that till the loss is totally wiped out the Managing Director and the Directors shall not charge any fee for the services rendered as Director, no dividend shall be paid to equity shareholders, and the Managing Director shall not be paid any overriding commission, if there be any, on the turnover of the company since this will account for the pragmatic approach of common sacrifice in the interest of the industry.
We indicate the implications of Article 43A in this area of law but do not impose it here for want of fuller facts.
The Award shall stand accordingly modified to the effect that the retrenched workmen who are now reinstated shall be paid 75% of the back wages after deducting the amount paid to them as wages when recalled for work since the date of retrenchment and adjustment of the retrenchment compensation towards the amount found due and pay able.
The appellant shall pay the costs of the respondents as directed while granting special leave.
N.V.K. Appeal dismissed.
[/INST]Awarding full or partial back wages Plinciples for awarding Employee 's financial viability to pay baek wages lf could be a factor for not awarding full back wage,s.
The management (Appellant) retrenched 56 of its worl;tnell alleging nonavailability of raw material to ntilise the fnll installed capacity, power shcdding limiting the working of the unit to 5 days a week and mounting losses.
As a result of negotiations between the parties, the retrenched workmen were taken back in service.
A few days later, however, the workmen demanded revision of wage scales, but the appellant pleaded inability to revise the pay scales in view of the mounting losses.
Thereafter, the employer reternched 43 workmen.
The dispute resulting out of the retrenchment was referred to adjudication under section 4k of the U.P.
The Labour Court held that the real reason for retrenchment was annoyance felt by the management when the employees refused to agree to the terms oil settlement and that it was not for the reasons stated by the employer.
The Labour Court ordered reinstatement of the retrenched workmen with full back wages.
In the Special leave petition the employer questioned the correctness of the Labour Court 's view that the retrenched workmen should be reinstated.
This Court rejected this prayer and limited the special leave to the question of granting back wages to the retrenched workmen ordered to be reinstated.
^ HELD: 1.
Since the emoloyer 's prayer in the special ieave petition that the retrenched workmen should not be reinstated was rejected by this Court it meant that the Labour Court 's view that retrenchment was unjusified was correct.
For the reasons found by the Labour Court retrenchment was motivated and so invalid.
The workmen were entitled to the relief of reinstatement from the date they were sought to be retrenched.
The order of the Labour Court on the question of reinstatement became final.
[567 C E] 2.
Article 136 of the Constitution does not envisage this Court to be a regular Court of Appeal but it confers a discretionary power on it to grant special leave to appeal, inter Ala, against the Award of any Tribunal.
The scope and ambit of this vide constitutional discretionary power cannot be 564 exhaustively defined.
It cannot be so construed as to confer a right to a party when he has none under the law.
The Court will entertain a petition for special leave in which a question of general public importance is involved or when the decisions would shock the conscience of this Court.
The is intended to be a self contained code and it seeks to achieve social justice on the basis of collective bargaining, conciliation and arbitration.
Awards are given on circumstances peculiar to each dispute and the Tribunals are to a large extent free from restrictions of technical consider rations imposed on Courts.
A free and liberal exercise of the power under Article 136 may materially affect the fundamental basis of such decisions, viz., quick solution of such disputes to achieve industrial peace.
[567 F 568 A] Bengal Chemical & Pharmaceutical Works Ltd, Calcutta vs Their Workmen [1959] Suppl.
2 SCR 136 at 140 referred to.
In the field of industrial jurisprudence a declaration can be given that the termination of service is bad and the workman continues to be in service.
The common law doctrine that contract of personal service cannot be specifically enforced or the doctrine of mitigation of damages does not haunt in this branch of law.
The relief of reinstatement with continuity of service can be granted where termination of service is found to be invalid.
[568 G H] 3.
Where termination of service is questioned as being invalid or illegal and the workman has to go through the litigation, his capacity to sustain himself throughout the protracted litigation is itself so precarious that he may not survive to see the day when relief is granted.
If after such prolonged litigation the workman is not paid his back wages it would amount to a penalty for no fault of his.
The workman whose service has been illegally terminated would be entitled to full back wages except to the extent he was gainfully employed during the enforced idleness.
If the termination is illegal or motivated it may amount to unfair labour practice.
Tn such circumstances reinstatement being the normal rule it should be done with full back wages.
[569 B D] Workmen of Calcutta Dock Labour Board & Anr.
vs Employers in relation to Calcutta Dock Labour Board & ors. , referred to.
Management of Panitole Tea Estate vs The Workmen referred to.
Dhari Gram Panchayat vs Safai Kamdar Mandal approved.
Postal Seals Industrial Co operative Society Ltd. vs Labour Court ll Luck now & Ors.
approved.
For awarding relief of back wages all relevant considerations will enter The verdict of the Tribunal.
Full back wages would be the normal rule and the party objecting to it must establish the circumstances necessitating departure.
The Tribunal will then exercise its discretion But the discretion must be exercised in a judicial and judicious manner.
The reason for exercising discre tion must be cogent and convincing and must appear on the face of the record.
It should not be arbitrary, vague and fanciful but legal and regular.
[570 GE] Susannah Sharn vs Wakefield at 179 referred to.
565 on the question of the employer 's financial viability to pay back wages view of mounting losses the Supreme Court held.
Industry is a common venture, the participants being capital and labour Article 43A. requires the State to take steps to secure participation of workman in the management.
From being a factor of production labour has become a partner in industry.
It is a common venture in pursuit of a desired goal.
If sacrifice is necessary in the overall interest of the industry it would be unfair to expect only labour to make the sacrifice.
It should be common sacrifice.
If sacrifice is necessary those who can afford and have the capacity must bear the brunt.
[571 A F] (b) In the present case there is nothing to show that the Managing Director has made any sacrifice.
In the absence such information the weaker section of society cannot be expected to make a greater sacrifice than the directors In an appropriate case it would be appropriate to direct that till the loss is wiped out the managing directors shall not charge any fees for the services rendered and no dividend shall be paid.
[571 G. 572 E F] (c) As the appellant has turned the corner, and the industrial unit is looking up and started making profits, the retrenched workmen having already been reinstated and started earing their wages it would be appropriate to award 75% of the backs wages to the workmen to be paid in two equal instalments.
[572 D]
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<s>[INST] Summarize the judgementCivil Appeal No. 570 of 1976.
Appeal by Certificate from the Judgment and Order dated 9.2.1976 of the Madras High Court in Tax Case No. 104 of 1969.
T.A. Ramachandran, P.N. Ramaligam and A.T.M. Sampath for the Appellant.
628 V.Gauri Shanker, Manoj Arora, section Rajappa and Ms.
A.Subhashini for the Respondent.
The Judgment of the Court was delivered by RANGANATHAN, J.
This is the assessee 's appeal form a judgment of the Madras High Court dated 10.1.1975 answering three questions referred to it by the Income tax Appellate Tribunal in favour of the Revenue and against the assessee.
The reference related to the assessment year 1961 62, the previous year in respect of which commenced on 13.4.1960.
The judgment of the High Court is reported as (1976) 102 I.T.R.622.
The appellant assessee is a partnership firm.
Since 1949, it was carrying on, in Malaya, a money lending business and, as part of and incidental to the said business, a business in the purchase and sale of house properties, gardens and estates.
It had been reconstituted under a deed dated 26.3.1960.
The firm 's accounts for the year 1960 61, which commenced on 13.4.60, would normally have come to a close on or about the 13th April, 1961.
However, the firm closed its accounts as on 13.3.1961 with effect from which date it was dissolved.
Along with its income tax return for the assessment year 1961 62 filed on 10th April 1962, the assessee filed a profit and loss account and certain other statements.
In the profit and loss account, a sum of $ 1,01,248 was shown as "difference on revaluation of estates, gardens and house properties" on the dissolution of the firm on 13.3.61, such difference being $ 70,500 in respect of "house properties" and $ 30,748 in respect of estates and gardens.
In the memo of adjustment for income tax purposes, however, the above sum was deducted on the ground that it was not assessable either as revenue or capital.
A statement was also made before the officer that partner Ramanathan Chettiar, forming one group and the other partners forming another group, were carrying on business separately with the assets and liabilities that fell to their shares on the dissolution of the firm.
The Income tax Officer (I.T.O.) issued a notice under section 23(2) on the same day (10.4.1962) posting the hearing for the same day and completed the assessment also on the same day, after making a petty addition of Rs. 2083 paid as property tax in Malaya, and recording the following note: "Audit assessment Lakshmanan appears return filed I.T. 86 acknowledged in list of books scrutinised order dictated".
629 For the subsequent assessment year 1962 63, the assessee filed a return showing nil income along with a letter pointing out that the firm had been dissolved on 13.3.1961.
Thereafter, on 3.9.63, the I.T.O. wrote a letter to the assessee to the effect that the revaluation difference of $ 1,01,248 should have been brought to tax in the assessment year 1961 62 in view of the decision of the Madras High Court in Ramachari & Co. vs C.I.T., He called for the basis for the valuation and also for the assessee 's objections.
The assessee sent a reply stating that no profit or loss could be assessed on a revaluation of assets.
Relying on a circular of the Central Board of Revenue dated 21.6.1956, it was urged that the assessee was gradually winding up its business in Malaya and that therefore, the surplus would only be capital gains.
It was urged that the revaluation had been at a market price prevalent since 1.1.1954 and that, therefore, no capital gains were chargeable to tax.
The I.T.O. followed up his letter by a notice under section 148 read with section 147(b).
The assessee objected to the reassessment on two grounds: (1) that the circumstances did not justify the initiation of proceedings under section 147(b); and (2) that no assessable profits arose to the firm on the revaluation of assets on the eve of the dissolution of the firm.
Overruling these objections, the I.T.O. completed a reassessment on the firm after adding back the sum of Rs.1,58,057 (the equivalent of $ 1,01,248) to the previously assessed income.
The assessee 's successive appeals to the Appellate Assistant Commissioner and the Appellate Tribunal and reference, at its instance, to the High Court having failed,the assessee is before us.
Three questions of law were referred to the High Court by the Tribunal.
These were: "1.
Whether, on the facts and circumstances of the case, the reassessment made on the assessee firm for the assessment year 1961 62 under section 147 of the Income tax Act is valid in Law? 2.
Whether, on the facts and circumstances of the case, assessment of the sum of $ 1,01,248 as revenue profit of the assessee firm chargeable to tax for the assessment year 1961 62 is justified in law? 3.
Whether, on the facts, and circumstances of the case, the Appellate Tribunal is right in law in sustaining the assessment of the sum of $ 1,01,348 after having found that the Department Officers are bound by the Circular of the Central Board of Revenue?" 630 We may deal at the outset with the third question.
Though the High Court has dealt with this question at some length, we do not think any answer to this question can or need be furnished by us for the following reasons.
First, the assessee has not been able to place before us the circular of the Board on which reliance is placed.
It is not clear whether it is a circular or a communication of some other nature.
Second, the circular, to judge from its purport set out in the High Court 's judgment, seems to have been to the effect that the surplus arising from the sale of properties acquired by a money lender in the course of his business would be in the nature of capital gains and not of income.
Obviously such a proposition could not have been intended as a broad or general proposition of law, for the nature of the surplus on sale of assets would depend on the nature of the asset sold and this, in turn, would depend on the facts and circumstances of each case.
In this case, no material was placed at any stage to show that the assets in question constituted the capital assets of the firm and not its stock in trade.
Third, the plea of the assessee which was in issue all through was that there was no sale of assets by the firm when its assets are distributed among its partners and that no profits whether capital or revenue could be said to arise to the firm merely because, at the time of the dissolution, the firm revalued its assets on the basis of market value or any other basis, for adjusting the mutual rights and liabilities of the partners on the dissolution of the firm.
The terms of the circular, as set out in the order of the High Court, cannot therefore be of any assistance to the assessee in answering the issues in this case.
We, therefore, do not answer the third question posed by the Tribunal.
Turning now to the first question, the relevant facts have already been noticed.
The following relevant and material facts viz. (i) the dissolution of the firm, (ii) the revaluation of its assets, (iii) the distribution thereof among two groups of its partners, and (iv) the division and crediting of the surplus on revaluation to the partner 's accounts were not only reflected in the balance sheet, the profit and loss account and the profit and loss adjustment account but were also mentioned in the statement filed before the I.T.O. along with the return.
Clearly, action u/s 148 read with clause (a) of s.147 could not be initiated in these circumstances but is action under clause (b) of that section also impermissible? That is the question.
We may now set out the provisions of clause (b) of section 147 for purposes of easy reference.
This clause which corresponds to section 34(1)(b) of the Indian Income tax Act, 1922 (`the 1922 Act ') permits initiation of reassessment of proceedings, "notwithstanding 631 that there has been no omission or failure as mentioned in clause (a) on the part of the assessee" provided "the Income tax Officer has, in consequence of information in his possession, reason to believe that income chargeable to tax has escaped assessment".
In the present case, on the information already on record and in view of the decision in Ramachari & Co. vs C.I.T., , there can be no doubt that the I.T.O. could reasonably come to the conclusion that income, profits and gains assessable for the assessment year 1961 62 had escaped assessment.
But is that belief reached "in consequence of information in his posession"? The assessee 's counsel says "no", for, says he, it is settled law that the "information" referred to in clause (b) above, should be "information" received by the I.T.O. after he had completed the original assessment.
Here it is pointed out that all the relevant facts as well as the decision in Ramachari (supra) had been available when the original assessment was completed on 10.4.1962.
Action cannot be taken under this clause merely because the I.T.O., who originally considered the surplus to be not assessable, has on the same facts and the same case law which had been available to him when he completed the assessment originally, changed his opinion and now thinks that the surplus should have been charged to tax.
The validity of the assessee 's argument has to be tested in the light of the decisions of this Court which have interpreted section 147(b) of the 1961 Act or its predecessor section 34(1)(b) of the 1922 Act and expounded its parameters.
We may start with the decision in Maharaj Kumar Kamal Singh vs I.T.O., S.C.
In this case it was held that the word "information" would include information as to the true and correct state of the law and would also cover information as to relevant judicial decisions.
In that case the I.T.O. had re opened the assessment on the basis of a subsequent decision of the Privy Council and this was upheld.
Referring to the use of the word "escape" in the section, the Court observed.
"In our opinion, even in a case where a return has been submitted, if the income tax Officer erroneously fails to tax a part of asessable income, it is a case where the said part of the income has escaped assessment.
The appellant 's attempt to put a very narrow and artificial limitation on the meaning of the word "escape" in section 34(1)(b) cannot, therefore, succeed." (underlining ours) 632 The meaning of the word "information" was again explained thus in C.I.T. vs A. Raman & Co., [1968] 67 I.T.R. 11 SC: "The expression `information ' in the context in which it occurs must, in our judgment, mean instruction or knowledge derived from an external source concerning facts or particulars, or as to law relating to a matter bearing on the assessment. .
Jurisdiction of the Income tax Officer to reassess income arises if he has in consequence of information in his possession reason to believe that income chargeable to tax has escaped assessment.
That information, must, it is true, have come into the possession of the Income tax Officer after the previous assessment, but even if the information be such that it could have been obtained during the previous assessment from an investigation of the materials on the record, or the facts disclosed thereby or from other enquiry or research into facts or law, but was not in fact obtained, the jurisdiction of the Income tax Officer is not affected." (underlining ours) We may next refer to Kalyanji Mavji & Co. vs C.I.T., [1976 102] I.T.R. 287.
It is unnecessary to set out the facts of this case.
It is sufficient to refer to the enunciation of the law regarding the scope of section 34(1)(b) as culled out from the earlier decisions of this Court on the subject.
At page 296 the Court observed: "On a combined review of the decisions of this Court the following tests and principles would apply to determine the applicability of section 34(1)(b) to the following categories of cases: (1) where the information is as to the true and correct state of the law derived from relevant judicial decisions; (2) where in the original assessment the income liable to tax has escaped assessment due to oversight, inadvertence or a mistake committed by the Income tax Officer.
This is obviously based on the principle that the taxpayer would not be allowed to take advantage of an oversight or mistake committed by the taxing authority; 633 (3) where the information is derived from an external source of any kind.
Such external source would include discovery of new and important matters or knowledge of fresh facts which were not present at the time of the original assessment; (4) where the information may be obtained even from the record of the original assessment from an investigation of the materials on the record, or the facts disclosed thereby or from other enquiry or research into facts or law." Before applying the above principles to the facts of the present case, we may refer to two earlier decisions of the Madras High Court which have been followed in the judgment under appeal.
In Salem Provident Fund Society Ltd. vs C.I.T., , the Income tax officer, in calculating the annual profits of an insurance company, had, under the statute to work out the difference between the deficiencies as shown in the actuarial valuation of the company in respect of two successive valuation periods.
At the time of original assessment, the Income tax Officer, by mistake, added the two deficiencies instead of subtracting one from the another.
This mistake he committed not in one assessment year but in two assessment years.
Subsequently, he discovered his mistake and initiated proceedings under section 34(1)(b).
The contention urged on behalf of the assessee was that all the statements, on the basis of which the re assessment proceedings were taken, were already on record and that, in such a case, there was no `information ' which would justify the reassessment.
An argument was also raised that the rectification, if any, could have been carried out only under section 35 and not under section 34.
These contentions were repelled.
In regard to the former objection, the High Court pointed out: "We are unable to accept the extreme proposition that nothing that can be found in the record of the assessment, which itself would show escape of assessment or under assessment, can be viewed as information which led to the belief that there has been escape from assessment or under assessment.
Suppose a mistake in the original order of assessment is not discovered by the Income tax Officer himself on further scrutiny but it is brought to this notice by another assessee or even by a subordinate or a superior officer, that would appear to be information disclosed to the Income tax Officer.
if the mistake itself is not extraneous 634 to the record and the informant gathered the information from the record, the immediate source of information to the Income tax Officer in such circumstances is in one sense extraneous to the record.
It is difficult to accept the position that while what is seen by another in the record is `information ' what is seen by the Income tax Officer himself is not information to him.
In the latter case he just informs himself.
It will be information in his possession within the meaning of section 34.
In such cases of obvious mistakes apparent on the face of the record of assessment that record itself can be a source of information, if that information leads to a discovery or belief that there has been an escape of assessment or under assessment.
A similar question arose in CIT vs Rathinasabapathy Mudaliar, In that case the assessee, who was a partner in a firm, did not include in his return the income of his minor son admitted to the benefits of the partnership as required by section 16(3) of the 1922 Act.
The minor son submitted a separate return and was assessed on this income.
Subsequently, the Income tax Officer "discovered" his error in not assessing the father thereon and started re assessment proceedings.
The re assessment was upheld by the Madras High Court on the same logic as had been applied in Salem Provident Fund Society Ltd. case (supra).
The above line of thinking has not only held the field for about thirty years now but has also received approval in Anandji Haridas and Co. (P) Ltd. vs S.P. Kushare, Sales Tax Officer, [1968] 21 S.T.C. 326.
This issue has further been considered in the decision of this Court in the case of Indian and Eastern Newspaper Society vs C.I.T. (the IENS case, for short) [1979] I.T.R. 996.
In this case the income of the assessee derived by letting out certain portions of the building owned by it to its members as well as to outsiders was being assessed as business income.
In the course of audit, an internal audit party expressed the view that the money realised by the assessee on account of the occupation of its conference hall and rooms should have been assessed under the head "income from property" and not as business income.
The Income tax Officer thereupon initiated re assessment proceedings and this was upheld by the Tribunal.
On a direct reference under s.257 of the Act, this Court held that the opinion of the audit party on a point of law could not be regarded as "information" and that the initiation of the reassessment proceedings was not justified.
It was contended for the Revenue, that the reassessment proceedings would 635 be valid even on this premise.
Dealing with this argument, the Court observed: "Now, in the case before us, the ITO had, when he made the original assessment, considered the provisions of sections 9 and 10.
Any different view taken by him afterwards on the application of those provisions would amount to a change of opinion on material already considered by him.
The revenue contends that it is open to him to do so, and on that basis to reopen the assessment under section 147(b).
Reliance is placed on Kalyanji Mavji & Co. vs CIT, , where a Bench of two learned, Judges of this Court observed that a case where income had escaped assessment due to the "oversight, inadvertence or mistake" of the ITO must fall within section 34(1)(b) of the Indian Income Tax Act, 1922.
It appears to us, with respect, that the proposition is stated too widely and travels farther than the statute warrants in so far as it can be said to lay down that if, on re appraising the material considered by him during the original assessment, the ITO discovers that he has committed an error inconsequence of which income has escaped assessment, it is open to him to reopen the assessment.
In our opinion, an error discovere on a reconsideration of the same material (and no more) does not give him that power.
That was the view taken by this Court in Maharaj Kumar Kamal Singh vs CIT, [1959] 35 I.T.R. 1; CIT vs A. Raman & Co., and Bankipur Club Ltd. vs CIT and we do not believe that the law has since taken a different course.
Any observation in Kalyanji Mavji & Co. vs CIT, suggesting the contrary do not, we say with respect, lay down the correct law." (underlining ours) The Court proceeded further to observe: "A further submission raised by the revenue on section 147(b) of the Act may be considered at this stage.
It is urged that the expression "information" in section 147(b) refers to the realisation by the ITO that he has committed an error when making the original assessment.
It is said that, when upon receipt of the audit note the ITO discovers or realizes that a mistake has been committed in the original 636 assessment, the discovery of the mistake would be "information" within the meaning of section 147(b).
The submission appears to us inconsistent with the terms of section 147(b) Plainly, the statutory provision envisages that the ITO must first have information in his possession, and then in consequence of such information he must have reason to believe that income has escaped assessment.
The realisation that income has escaped assessment is covered by the words "reason to believe", and it follows from the "information" received by the ITO.
The information is not the realisation, the information gives birth to the realisation.
" Sri Ramachandran submits that these decisions support his contention that reassessment proceeding can be validly initiated only if there is some information received by the I.T.O. from an external source after the completion of the original assessment but not in a case like the present where there is nothing more before the I.T.O. than what was available to him when the original assessment was completed.
He also submits that the observations in the IENS case have cast doubts on the propositions enunciated in Kalyanji Mavji 's case (supra) and reiterates the proposition that reassessment proceedings cannot be availed of to revise, on the same material, the opinion formed or conclusion arrived at earlier in favour of the assessee.
On the other hand, Dr. Gaurisankar, appearing for the Revenue, mentioned that the decision in the IENS case holding that the opinion of an audit party would not constitute `information ' and qualifying the principles enunciated in Kalyanji Mavji is pending consideration by a larger Bench of this Court.
He, however, submitted that the reassessment in this case would be valid even on the strength of the observations in the IENS case.
We shall proceed to consider the correctness of this submission.
We have pointed out earlier that Kalyanji Mavji (supra) outlines four situations in which action under S.34(1)(b) can be validly initiated.
The IENS case has only indicated that proposition (2) outlined in this case and extracted earlier may have been somewhat widely stated; it has not cast any doubt on the other three propositions set out in Kalyanji Mavji 's case.
The facts of the present case squarely fall within the scope of propositions 2 and 4 enunciated in Kalyanji Mavji 's case.
Proposition (2) may be briefly summarised as permitting action even on a "mere change of opinion".
This is what has been doubted in the IENS case (supra) and we shall discuss its application to this case a 637 little later.
But, even leaving this out of consideration, there can be no doubt that the present case is squarely covered by proposition (4) set out in Kalyanji Mavji & Co. (supra).
This proposition clearly envisages a formation of opinion by the Income tax Officer on the basis of material already on record provided the formation of such opinion is consequent on "information" in the shape of some light thrown on aspects of facts or law which the I.T.O. had not earlier been conscious of.
To give a couple of illustrations, suppose an I.T.O., in the original assessment, which is a voluminous one involving several contentions, accepts a plea of the assessee in regard to one of the items that the profits realised on the sale of a house is a capital realisation not chargeable to tax.
Subsequently he finds, in the forest of papers filed in connection with the assessment, several instances of earlier sales of house property by the assessee.
That would be a case where the I.T.O. derives information from the record on an investigation or enquiry into facts not originally undertaken.
Again, suppose if I.T.O. accepts the plea of an assessee that a particular receipt is not income liable to tax.
But, on further research into law he finds that there was a direct decision holding that category of receipt to be an income receipt.
He would be entitled to reopen the assessment under s.147(b) by virtue of proposition (4) of Kalyanji Mavji.
The fact that the details of sales of house properties were already in the file or that the decision subsequently come across by him was already there would not affect the position because the information that such facts or decision existed comes to him only much later.
What then, is the difference between the situations envisaged in propositions (2) and (4) of Kalyanji Mavji (supra)? The difference, if one keeps in mind the trend of the judicial decisions, is this.
Proposition (4) refers to a case where the I.T.O. initiates reassessment proceedings in the light of "information" obtained by him by an investigation into material already on record or by research into the law applicable thereto which has brought out an angle or aspect that had been missed earlier, for e.g., as in the two Madras decisions referred to earlier.
Proposition (2) no doubt covers this situation also but it is so widely expressed as to include also cases in which the I.T.O., having considered all the facts and law, arrives at a particular conclusion, but reinitiates proceedings because, on a reappraisal of the same material which had been considered earlier and in the light of the same legal aspects to which his attention had been drawn earlier, he comes to a conclusion that an item of income which he had earlier consciously left out from the earlier assessment should have been brought to tax.
In other words, as pointed out in IENS case, it also 638 ropes in cases of a "bare or mere change of opinion" where the I.T.O. (very often a successor officer) attempts to reopen the assessment because the opinion formed earlier by himself (or, more often, by a predecessor I.T.O.) was, in his opinion, incorrect.
Judicial decisions had consistently held that this could not be done and the IENS case (supra) has warned that this line of cases cannot be taken to have been overruled by Kalyanji Mavji (supra).
The second paragraph from the judgment in the IENS case earlier extracted has also reference only to this situation and insists upon the necessity of some information which make the ITO realise that he has committed an error in the earlier assessment.
This paragraph does not in any way affect the principle enumerated in the two Madras cases cited with approval in Anandji Haridas, [1986] 21 S.T.C. 326.
Even making allowances for this limitation placed on the observations in Kalyanji Mavji, the position as summarised by the High Court in the following words represents, in our view, the correct position in law: "The result of these decisions is that the statute does not require that the information must be extraneous to the record.
It is enough if the material, on the basis of which the reassessment proceedings are sought to be initiated, came to the notice of the Income tax Officer subsequent to the original assessment.
If the Income tax Officer had considered and formed an opinion on the said material in the original assessment itself, then he would be powerless to start the proceedings for the reassessment.
Where, however, the Income tax Officer had not considered the material and subsequently come by the material from the record itself, then such a case would fall within the scope of section 147(b) of the Act.
" Let us now examine the position in the present case keeping in mind the narrow but real distinction pointed out above.
On behalf of the assessee, it is emphasised (a) that the amount of surplus is a very substantial amount,(b) that full details of the manner in which it had resulted had been disclosed, (c) that the profit and loss account, the profit and loss adjustment account and statement made before the I.T.O. had brought into focus the question of taxability of the surplus and (d) that decision in Ramachari 's case had been reported by 10.4.1962.
No Income tax Officer can be presumed to have completed the assessment without looking at all this material and the said decision.
No doubt, some doubt had been thrown as to whether a statement had been given at the time of original assessment that the amount 639 of surplus was not taxable as an income or a capital gain but the case has proceeded on the footing that such a statement was there before the officer.
This, therefore, is nothing but a case of "change of opinion".
On the other hand, the authorities and the Tribunal have drawn attention to the fact that the return, the section 143(2) notice and assessment were all on the same day and counsel for the Revenue urged that obviously, in his haste, the I.T.O. had not looked into the facts at all.
It is urged that no Income tax Officer who had looked into the facts and the law could have failed to bring the surplus to tax in view of then recent pronouncement in Ramachari 's case.
Dr. Gaurishankar submitted that the Tribunal has found that the I.T.O. "had acted mechanically in accepting the return without bringing his mind to play upon the entry in the statement with reference to the distribution of the assets".
He pointed out that there is no evidence of any enquiry with reference to this aspect and that, the amount involved being sufficiently large, the I.T.O., if he had been aware of the existence of the entry would certainly have discussed it.
He urged that the question whether the I.T.O. had considered this matter at the time of the original assessment or not is purely a question of fact and the Tribunal 's conclusion thereon having been endorsed by the High Court, there is no justification to interfere with it at this stage.
We think there is force in the argument on behalf of the assessee that, in the face of all the details and statement placed before the I.T.O. at the time of the original assessment, it is difficult to take the view that the Income tax Officer had not at all applied his mind to the question whether the surplus is taxable or not.
It is true that the return was filed and the assessment was completed on the same date.
Nevertheless, it is opposed to normal human conduct that an officer would complete the assessment without looking at the material placed before him.
It is not as if the assessment record contained a large number of documents or the case raised complicated issues rendering it probable that the I.T.O. had missed these facts.
It is a case where there is only one contention raised before the I.T.O. and it is, we think, impossible to hold that the Income tax Officer did not at all look at the return filed by the assessee or the statements accompanying it.
The more reasonable view to take would, in our opinion, be that the Income tax Officer looked at the facts and accepted the assessee 's contention that the surplus was not taxable.
But, in doing so, he obviously missed to take note of the law laid down in Ramachari which there is nothing to show, had been brought to his notice.
When he subsequently became aware of the decision, he initiated proceedings under section 147(b).
The material which constituted information and on 640 the basis of which the assessment was reopened was the decision in Ramachari.
This material was not considered at the time of the original assessment.
Though it was a decision of 1961 and the I.T.O. could have known of it had he been diligent, the obvious fact is that he was not aware of the existence of the decision then and, when he came to know about it, he rightly initiated proceedings for assessment.
We may point out that the position here is more favorable to the Revenue than that which prevailed in the Madras cases referred to earlier.
There, what the I.T.O. had missed earlier was the true purport of the relevant statutory provisions.
It seems somewhat difficult to believe that the I.T.O. could have failed to read properly the statutory provisions applicable directly to facts before him (though that is what seems to have happened).
Perhaps an equally plausible view, on the facts, could have been taken that he had considered them and decided, in one case, not to apply them and, in the other, on a wrong construction thereof.
In the present case, on the other hand, the material on which the I.T.O. has taken action is a judicial decision.
This had been pronounced just a few months earlier to the original assessment and it is not difficult to see that the I.T.O. must have missed it or else he could not have completed the assessment as he did.
Indeed it has not been suggested that he was aware of it and yet chose not to apply it.
It is therefore much easier to see that the initiation of reassessment proceedings here is based on definite material not considered at the time of the original assessment.
In the above view of the matter, we uphold the High Court 's view on the first question.
The second question raises a more difficult problem.
There can be no doubt that the decision of the Madras High Court in Ramachari squarely covers the situation.
Ramachari holds that the principle of valuing the closing stock of a business at cost or market at the option of the assessee is a principle that would hold good only so long as there is a continuing business and that where a business is discontinued, whether on account of dissolution or closure or otherwise, by the assessee, then the profits cannot be ascertained except by taking the closing stock at market value.
Ramachari has subsequently been followed by the Kerala High Court in Popular Workshops vs Commissioner of Income Tax, and in Popular Automobiles vs Commissioner of Income Tax, Shri Ramachandran contends that the decision in Ramachari 641 does not lay down the correct law.
He submits than, while it is no doubt true that the closing stock has to be valued, the well settled principle is that it should be valued, at cost or market whichever is lower and there is no justification for laying down a different principle for valuation of the closing stock at the point of discontinuance of business unless the goods are actually sold by the assessee at the time of discontinuance.
Further, it has been held by a series of decisions of this Court that when a firm is dissolved and the assets are distributed among the partners, there is no sale or transfer of the assets of the firm to the various partners: vide, Addanki Narayanppa vs Bhaskara Krishnappa, ; ; CIT vs Dewas Cine Corporation, ; CIT vs 2Bankey Lal Vaidya, ; Malabar Fisheries Co. vs C.I.T., and in Sunil Siddharthbhai vs C.I.T., He submits that, in logical sequence, dissolution comes first and distribution of assets comes later.
Therefore, revaluation of the assets of a firm, which is only for the division of the assets among the partners on a real and not a notional basis, is part of the division of the assets and therefore logically, in point of time, subsequent to the dissolution of the firm.
Since the revaluation takes place after the dissolution no profits can be said to have accrued to the firm by the process of revaluation.
The revaluation of the assets is not in the course of business and is not an activity which can partake of the nature of trade.
Assuming but not conceding that it is possible to have a revaluation of the assets, for example, stock in trade before dissolution, any excess which arises on the revaluation is only an imaginary or notional profit and cannot be brought to tax for the following reasons: (i) As a result of such revaluation, there can be no profit, because the firm cannot make a profit out of itself: Vide Kikabhai Premchand vs C.I.T., (ii) The process of revaluation of stock by itself cannot bring in any real profits: vide C.I.T. vs K.A.R.K. Firm, [1934]2 I.T.R. 183; Chainrup Sampatram vs C.I.T., [1953) and C.I.T. V. Hind Construction ltd., [1972] 83 I.T.R. 211; and (iii) It is well settled that what is taxable under the income tax law is only real income vide C.I.T. vs M/s Shoorji Vallabhdas and Co., [1962] 46 I.T.R. 144 and C.I.T. vs Birla Gwalior (P) Ltd., There is, therefor, no principle by which the stock in trade can be valued at market price so as to bring to tax the notional profits which might in future be realised as a result of the sale of the stock in trade.
642 The question posed before us is a difficult one.
We think, however, that the High Court was right in pointing out that the several decisions relied upon for the assessee as to the nature of the transaction by which a firm, on dissolution, distributes its assets among its partners, have no relevance in the present case.
As the High Court rightly observed, those cases relate to what happens after or in consequence of the dissolution of a firm whereas we are here concerned with a question that arises before or at the time of dissolution.
What we have to decide is the basis on which, in making up the accounts of a firm upto the date of dissolution, the closing stock with the firm as at a point of time immediately prior to the dissolution is to be valued.
It is this principle that has been decided in Ramachari and the High Court decisions following it (including the one under appeal) and the question is whether they lay down the correct law.
In the first place, it is settled law that the true trading results of a business for an accounting period cannot be ascertained without taking into account the value of the stock in trade remaining at the end of the period.
Though, as pointed out by this Court in Chainrup Sempatram vs C.I.T., it is a misconception to think that any profit arises out of the valuation of closing stock, it is equally true that such valuation is a necessary element in the process of determining the trading results of the period.
This is true in respect of any method of accounting and in C.I.T. vs Krishnaswamy Mudaliar, this Court pointed out that, even where the assessee is following the cash system of accounting, the valuation of closing stock cannot be dispensed with.
In this decision, this Court quoted with approval the following observations in C.I.R. vs Cock, Russel & Co. Ltd. "There is no word in the statutes or rules which deals with this question of valuing stock in trade.
There is nothing in the relevant legislation which indicates that in computing the profits and gains of a commercial concern the stock in trade at the start of the accounting period should be taken in and that the amount of the stock in trade at the end of the period should also be taken in.
It would be fantastic not to do it: it would be utterly impossible accurately to assess profits and gains merely on a statement of receipts and payments or on the basis of turnover.
It has long been recognised that the right method of assessing profits and gains is to take into account the value of the stock in trade at the beginning and the value of the stock in trade at the 643 end as two of the items in the computation.
I need not cite authority for the general proposition, which is admitted at the Bar, that for the purposes of ascertaining profits and gains the ordinary principles of commercial accounting should be applied, so long as they do not conflict with any express provision of the relevant statutes.
" Next the principles as to the method of valuation of the closing stock are equally well settled.
Lord President Clyde set these out in Whimster & Co. vs C.I.R., in the following words: "In computing the balance of profits and gains for the purposes of income tax,. two general and fundamental commonplaces have always to be kept in mind.
In the first place, the profits of any particular year or accounting period must be taken to consist of the difference between the receipts from the trade or business during such year or accounting period and the expenditure laid out to earn those receipts.
In the second place, the account of profit and loss to be made up for the purpose of ascertaining that difference must be framed consistently with the ordinary principles of commercial accounting, so far as applicable, and in conformity with the rules of the Income tax Act, or of that Act as modified by the provisions and schedules of the Acts regulating excess profits duty, as the case may be.
For example, the ordinary principles of commercial accounting require that in the profit and loss account of a merchant 's manufacturer 's business the values of the stock in trade at the beginning and at the end of the period covered by the account should be entered at cost or market price, whichever is the lower; although there is nothing about this in the taxing statutes.
" The principle behind permitting the assessee to value the stock at cost is very simple.
In the words of Bose, J. In Kikabhai Premchand vs C.I.T., [1953] 24 I.T.R. 506 S.C. it is this: "The appellant 's method of book keeping reflects the true position.
As he makes his purchases he enters his stock at the cost price on one side of the accounts.
At the close of the year he enters the value of any unsold stock at cost on the other side of the accounts thus cancelling out the entries relating to the sum unsold stock earlier in the 644 accounts; and then that is carried forward as the opening balance in the next year 's account.
This cancelling out of the unsold stock from both sides of the accounts leaves only the transactions on which there have been actual sales and gives the true and actual profit or loss on his year 's dealings.
" As against this, the valuation of the closing stock at market value invariably will create a problem.
For if the market value is higher than cost, the accounts will reflect notional profits not actually realised.
On the other hand, if the market value is less, the assessee will get the benefit of a notional loss he has not incurred.
Nevertheless, as mentioned earlier, the ordinary principles of commercial accounting permit valuation "at cost or market, whichever is the lower".
The rationale behind this has been explained by Patanjali Sastri, C.J. in Chainrup Sampatram vs C.I.T., , S.C. where an attempt was made to value the closing stock at a market value higher than cost.
The learned Chief Justice observed: "It is wrong to assume that the valuation of the closing stock at market rate has, for its object, the bringing into charge any appreciation in the value of such stock.
The true purpose of crediting the value of unsold stock is to balance the cost of those goods entered on the other side of the account at the time of their purchase, so that the cancelling out of the entries relating to the same stock from both sides of the account would leave only the transactions on which there have been actual sales in the course of the year showing the profit or loss actually realised on the year 's trading.
As pointed out in paragraph 8 of the Report of the Committee on Financial Risks attaching to the holding of Trading Stocks, 1919, "As the entry for stock which appears in a trading account is merely intended to cancel the charge for the goods purchased which have not been sold, it should necessarily represent the cost of the goods.
If it is more or less than the cost, then the effect is to state the profit on the goods which actually have been sold at the incorrect figure. .
From this rigid doctrine one exception is very generally recognised on prudential grounds and is now fully sanctioned by custom, viz., the adoption of market value at the date of making up accounts, if that value is less, than cost.
It is of course an anticipation of the loss that may be made on those goods in 645 the following year, and may even have the effect, if prices rise again, of attributing to the following year 's results a greater amount of profit than the difference between the actual sale price and the actual cost price of the goods in question" (extracted in paragraph 281 of the Report of the Committee on the Taxation of Trading Profits presented to British Parliament in April 1951).
While anticipated loss is thus taken into account, anticipated profit in the shape of appreciated value of the closing stock is not brought into the account, as no prudent trader would care to show increased profit before its actual realisation.
This is the theory underlying the rule that the closing stock is to be valued at cost or market price whichever is the lower, and it is now generally accepted as an established rule of commercial practice and accountancy.
" From the above passage, it will be seen that the proper practice is to value the closing stock at cost.
That will eliminate entries relating to the same stock from both sides of the account.
To this rule custom recognises only one exception and that is to value the stock at market value if that is lower.
But on no principle can one justify the valuation of the closing stock at a market value higher than cost as that will result in the taxation of notional profits the assessee has not realised.
The High Court in Ramachari has, however, outlined another exception and seems to have rested this on two considerations.
The first is the observation of Lord Buckmaster in C.I.T. vs Ahmedabad New Cotton Mills Co. Ltd., [1930] L.R. 57 I.A. 21 to the following effect: "The method of introducing stock into each side of a profit and loss account for the purpose of determining the annual profits is a method well understood in commercial circles and does not necessarily depend upon exact trade valuations being given to each article of stock that is so introduced.
The one thing that is essential is that there should be a definite method of valuation adopted which should be carried through from year to year, so that in case of any division from strict market values in the entry of the stock at the close of one year it will be rectified by the accounts in the next year.
" From these observations, the High Court inferred: "It is obvious from the above that the privilege of valuing 646 the opening and closing stock in a consistent manner is available only to continuing business and that it cannot be adopted where the business comes to an end and the stock in trade has to be the disposed of in order to determine the exact position of the business on the date of closure. " The second consideration which prevailed with the High Court is reflected in the following passage from the judgment: "It seems to us that none of these cases has any application to the facts of the present case .
There is no authority directly in point dealing with this question, where a partnership concern dissolves its business in the course of the accounting year, what is the basis on which the stock in trade has to be valued as on the date of dissolution.
We have accordingly to deal with the matter on first principles.
The case of a firm which goes into liquidation forms a close parallel to the present case.
In such a case all the stock in trade and other assets of the business will have to be sold and their value realised.
It cannot be controverted that it is only by doing so that the true state of the profits or losses of the business can be arrived at.
The position is not very different when the partnership ceases to exist in the course of the accounting year.
The fact that Ramachari, one of the ex partners, took over the entire stock and continued to run the business on his own, is not relevant at all, when we consider the profits or losses of the partnership ' which has come to an end.
It should, therefore, follow that in order to arrive at the correct picture of the trading results of the partnership on the date when it ceases to function, the valuation of the stock in hand should be made on the basis of the prevailing market price.
" We are not quite sure that the first of the considerations that prevailed with the High Court is relevant in the present case.
Even in a continuing business, the valuation at market value is permissible only when it is less than cost; it is not quite certain whether the rules permit an assessee if he so desires to value closing stock at market value where it is higher than cost.
But, in either event, it is allowed to be done because its effect can be offset over a period of time.
But here, where the business comes to a close, no future adjustment of an over 647 or under valuation is possible, In this context, it is difficult to see how valuation, at other than cost, can be justified on the principle of Ahmedabad Advance Mills case (supra).
We, however, find substance in the second consideration that prevailed with the High Court.
The decision in Muhammad Hussain Sahib vs Abdul Gaffor Sahib, [1950] 1 M.L.J.81 correctly sets out the mode of taking accounts regarding the assets of a firm.
While the valuation of assets during the subsistence of the partnership would be immaterial and could even be notional, the position at the point of dissolution is totally different: "But the situation is totally different when the firm is dissolved or when a partner retires.
The settlement of his account must be not on a notional basis but on a real basis, that is every asset of the partnership should be converted into money and the account of each partner settled on that basis. .
The assets have to be valued, of course, on the basis of the market value on the date of the dissolution . " This applies equally well to assets which constitute stock in trade.
There can be no manner of doubt that, in taking accounts for purposes of dissolution, the firm and the partners, being commercial man, would value the assets only on a real basis and not at cost or at their other value appearing in the books.
A short passage from Pickles on Accountancy (Third Edn), p. 650 will make this clear: "In the event of the accounts being drawn up to the date of death or retirement, no departure from the normal procedure arises, but it will be necessary to see that every revaluation required by the terms of the partnership agreement is made.
It has been laid down judicially that, in the absence of contrary agreement, all assets and liabilities must be taken at a "fair value," not merely a "book value" basis, thus involving recording entries for both appreciation and depreciation of assets and liabilities.
This rule is applicable, notwithstanding the omission of a particular item from the books, e.g. investments, goodwill (Cruikshank vs Sutherland).
Obviously, the net effect of the revaluation will be a profit or loss divisible in the agreed profit or loss sharing ratios.
" 648 The real rights of the partners cannot be mutually adjusted on any other basis.
This is what happened in Ramachari.
Indeed, this is exactly what the partners in this case have done and, having done so, it is untenable for them to contend that the valuation should be on some other basis.
Once this principle is applied and the stock in trade is valued at market price, the surplus, if any, has to get reflected as the profits of the firm and has to be charged to tax.
The view taken by the High Court has held the field for about thirty years now and we see no reason to disagree even if a different view were possible.
For these reasons, we agree with the answer given by the High Court to the second question as well.
The appeal fails and is dismissed.
But we would make no order regarding costs.
R.N.J. Appeal dismissed.
[/INST]The appellants are high ranking officers in Rajasthan Administrative Service governed by the Rajasthan Administrative Service Rules, 1954.
Consequent upon the amendment caused to the said rules on July 17, 1987, they felt that the amendment had affected their further promotional chances.
They therefore filed writ petitions before the High court challenging the vires of the amendment dated 17.7.1987 contending that the creation of Super time scale did not have the automatic effect of creating highest post/posts to be filled by merit alone, and that the posts to which Super Time Scale was attracted remained `higher posts ' in contrast to `highest posts ' available to the members of the Rajasthan Administrative Service on the prescribed percentage of 50 per cent on merit and the remaining fifty per cent on seniority cum merit.
Their case was that section to the highest posts made under the amended rule solely on the basis of the merit was bad in law.
Before the High Court challenge to the vires of the amendment was abandoned and the High Court considered the question (i) whether the Super time scale is/are the highest post/posts in the service and (ii) if it is so, whether the post/posts is/are to be filled on the basis of seniority cum merit in the proportion of 50:50 or on merit alone in accordance with sub rule (7) of /Rule 28 B of the Rules: The High Court rejected the writ petitions opening that the Super Time Scale post/posts was/were the highest post/posts in the service and those are required to be filled on merit alone and not in the proportion of 50:50 on the basis of merit and seniority cum merit.
Hence these appeals by the appellants.
Dismissing the appeals this Court HELD: The terms `higher post ' and `highest post ' occurring in 580 Rules 28 B and 32 by all means are relative ones expected to be created in singular or plural terms under rule 6 whereunder the strength of posts in each grade was determinable by the government from time to time.
Sub rule (7) even before the amendment of 17.7.1987 postulated a highest post/post capable of being filled on the basis of merit alone.
[590 G H] Super Time Scale posts are the highest posts in the service and selection for promotion and appointment on that basis in the service has to be made on the basis of merit alone and not on the basis of seniority cum merit in the proportion of 50:50.[591 G] J.K. Cotton Spinning & Weaving Mills Co. Ltd. vs State of U. P. and Ors. ; ; Lt. Col. Prithi Pal Singh Bedi etc.
vs Union of India and Ors.
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<s>[INST] Summarize the judgementCivil Appeal No. 2 of 1982.
From the Judgment and order dated 16.
10.1981 of the Kerala High Court in C. R. P. No. 1927 of 1987.
N. Sudhakaran for the Appellants.
E.M.S. Anam for the Respondents.
83 The Judgment of the Court was delivered by A SABYASACHI MUKHARJI, J.
This appeal by special leave is directed against the order of the High Court of Kerala at Ernakulam dated the 16th October 1981 in Civil Revision Petition No. 1927 of 1981.
The appellants are the heirs of the original tenant.
The original appellant died and his heirs have been substituted in his place.
The landlord being the respondent herein wanted the premises in question for his own use and occupation.
He accordingly applied to the Rent Controller for permission.
The Rent Controller after hearing the parties granted such permission The Appellate Authority upholding the order of the Rent Controller, maintained the order of eviction.
There was a revision before the learned District Judge.
The learned District Judge dismissed the revision petition holding that it was difficult to interfere with the concurrent findings of facts of the Courts below on the bona fide need of the landlord for his own use and occupation.
The tenant came up before the High Court in second revision and the High Court after hearing the parties and considering the contentions urged before it, dismissed the revision upholding the order of Rent Controller, the Appellate Authority and the District Court under Section 20 of the Kerala Building (Lease and Rent Control) Act, 1965 that the landlord required the premises for his bona fide need and for self occupation.
The only contention that was urged in the matter was that the landlord was not entitled to eviction under sub section (3) of Section 11.
Sub section (3) of Section l l provides as under: "A landlord may apply to the Rent Control Court for an order directing the tenant to put in possession of the building if he bona fide needs the building for his own occupation or for the occupation be any member of his family dependent on him.
" The contention urged before the Courts below including the High Court was that the second proviso to Sub section (3) of Section 11 had not been fulfilled and the second proviso provides as under: "That the Rent Control Court shall not give any direction to a tenant to put the landlord in possession, if such tenant is depending for his livelihood mainly on the 84 income derived from any trade or business carried on in A such building and there is no other suitable building available in the locality for such person to carry on such trade or business.
" All the Courts have found against the tenant 's contention on this aspect of the matter.
As this is a question of fact, the High Court in our opinion has rightly declined to interfere with that findings of fact.
Before we proceed further it was pointed out by the counsel for the respondents that in view of the provisions of the said Act and in view of the decision of this Court in the case of Aundal Ammal vs Sadasivan Pillai, ; the second revision before the High Court in the facts and circumstances of this case did not lie.
For the purpose of this appeal, we are not proceeding with on that basis but have examined the facts found by the courts below to find out if there is any infirmity in their findings as mentioned hereinbefore.
It is found as a fact that the landlord bona fide needed the premises in question for his own use and occupation.
Therefore, Section 11(3) has been complied with.
The only contention raised was whether on the second proviso to Section 11(3) of the Act the landlord was not entitled to eviction.
That was rejected by the High Court on the ground that this was a question of fact and all the Courts have found in favour of the landlord.
We agree with this.
Even if a second revision lay the scope of interference by the High Court in the second revision is very limited.
This has been so held by this Court in M/s Sri Raja Lakshmi Dyeing Works and others, vs Rangaswamy Chettiar, A.I.R. 1980 S.C. 1253.
We adhere to this principle.
It was urged before us that the building in question was used for non residential purpose by the tenant and the bona fide need of the landlord was said to be for the use and occupation of the landlord and his family which is a residential purpose.
It was submitted that such a need cannot justify in this case the eviction of the tenant.
It was also submitted that Section 17 of the Act prohibited such conversion.
Sub section (1) of Section 17 which is relevant for the present purpose provides as follows: "Section 17.
Conversion of buildings and failure by land 85 lord to make necessary repairs: (1) No residential buildings shall be converted into a nonresidential building or vice versa and no such building shall be divided into separate portions for letting on rent or for other purposes except with the permission in writing of the Accommodation Controller: Provided that where such conversion involves structural alteration of the building, the consent of the landlord shall also be necessary.
" It appears clear that this conversion as contemplated for which permission was required is conversion by the tenant and cannot be a conversion by the landlord.
Quite apart from the fact that in this case there was no conversion of the building sought.
The building was used for non residential purpose and the purpose for which the building was sought was for residential purpose.
It appears to us that putting to a different purpose the user of the building is not a conversion of the building as such.
It has been found that the building as it is without any structural change can be put to residential purpose.
There was no conversion of the building as such is involved in this case but a change of user of the building.
Furthermore, in any event the proviso to Section ( I) makes it clear, in our opinion, that such conversion as contemplated by Section 17 of the Act for which permission in writing by the Accommodation Controller required is in case of change of the user of the premises by the tenant and not by the landlord.
The use of the expression "such conversion" in the proviso indicates that in case of conversion by the tenant permission is required on the consent of the landlord.
Therefore the absence of permission in writing of the Accommodation Controller in this case does in our opinion affect the position.
This appears to be the view of the Kerala High Court on this aspect of the matter.
See in this connection Muhammed vs Abdul Rahiman, and Das Naik vs Narayanan, This appears to be the correct view of law.
Our attention was also not drawn to any decision of the Kerala High Court which has taken any contrary view.
The view held by the Kerala High Court in this aspect has been relied by the High Court in the judgment under appeal.
It seems to be logical view.
We would therefore follow that view.
In view of the proviso explaining the ambit of that requirement that permission sought for or mentioned in Section 17(1) is in respect of the different user by the tenant and not by the landlord.
The High Court has also observed in term 86 "convert" does not denote a mere change in the mode of occupation, but covers only alterations of the physical features, the prescriptions of Section 17 are not attracted to the present case at all.
Admittedly the building in question has rooms which can be used as bed rooms, sitting room etc.
and it has a kitchen and dining hall.
No alteration or conversion is required if the building is to be used for residential purposes.
In the aforesaid view of the matter there was hardly any scope for interference by the District Judge and he declined to do so on this basis.
In our opinion he was right.
Similar was the position of the High Court on these facts and it declined to interfere with the findings of fact.
In the aforesaid view there is no merit in this appeal.
The appeal fails and is dismissed accordingly.
Parties will pay and bear their own costs.
Since the tenants have been in possession of the premises for some time we direct that the decree for eviction shall not be executed till 30.9.1988 provided all the heirs of deceased appellant file an usual undertaking in this Court within four weeks from today stating inter alia.
as follows; 1.
That the appellant will hand over vacant and peaceful possession of the suit premises to the respondent on or before 30.9.1988 from today.
That the appellants will pay to the respondent arrears of rent, if any, within one month from today.
That the appellants will pay to the respondent future compensation for use and occupation of the suit premises month by month before 10th of every month.
That the appellants will not induct any other person in the suit premises.
It is further directed that in default of compliance with any one or more of these conditions or if the undertaking is not filed as required within the stipulated time, the decree shall become executable forthwith.
P.S.S. Appeal dismissed .
[/INST]% The petitioner, the Association of the U.P. Income tax Department Contingen.
Paid Staff is aggrieved that even though its members have been rendering service as class IV employees in the U.P. Incometax Department for a large number of years, the Department is not regularising their services and absorbing them in the class lV services, and they are being paid wages as daily rated labourers, lower than the salary and allowances paid to the class IV employees of the Department.
The petitioner filed a Writ Petition in this Court, praying for a writ of mandamus for the relief above mentioned.
Allowing the petition, the Court, ^ HELD: The questions involved in this case are almost the same as in the Writ Petitions Nos. 373 and 302 of 1986, decided by this Court by its judgment dated October 27, 1987, reported in Daily Rated Casual Labour Employed under P
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<s>[INST] Summarize the judgementAPPEAL NO. 691 of 1976.
(From the Judgment & Order dated the 16th December 1975 of the Gujarat High Court in Special Civil Appln.
No. 572 of 1975).
G.L. Sanghi and Girish Chandra, for the Appellants.
480 V.M. Tarkunde, K.L. Hathi and Mrs. P.C. Kapur, for respondent No. 1.
The Judgment of the Court was delivered by GOSWAMI, J.
This appeal on certificate is from the judgment of the High Court of Gujarat.
The appellants 1 and 2 are respectively the Union of India and the Regional Provident Fund Commissioner.
Dhrangadhra Chemical Works Kamdar Sangh (hereinafter to be described as the union) is the first respondent.
The second respondent is Dhrangadhra Chemical Works (hereinafter to be described as the employer).
With respect to the dearness allowance (D.A.) of the workers under the employer there was a reference No. 70/70 before the Industrial Tribunal at Ahmedabad.
The parties arrived at a settlement of the said industrial dispute and an award was passed in terms of the settlement.
According to the award the employer was to pay D.A. to its employees at the rate of the quarterly average cost of living index as settled by the Simla Bureau, popularly known as "All India Consumers Price Index" for the relevant quarter.
Thus for the 'months of January, February and March, 1974, the rate of D.A. was on the basis of the average cost of living index for the months of July, August and September 1973 as pub lished by the said Bureau and this was to follow for every quarter.
It is the accepted position that for the months of April, May and June 1974 the D.A. worked out at Rs. 78/ per month, but for the quarter.
commencing on 1st July, 1974, and ending on 30th September, 1974, it worked out at Rs. 88.50 per month.
In other words, it was an agreed position between the union and the employer that the rate of D.A. payable to all the workers from 1st July, 1974, was at the rate of Rs. 88.50 per month.
With effect from 6th July, 1974, The Additional Emolu ments (Compulsory Deposit) Ordinance 1974 came into force.
This Ordinance was replaced by The .
(Act No. 37 of 1974) (briefly the Act) and the Act is deemed to have come into force on the 6th day of July 1974.
We have already made a detailed reference to the aim and object of the Act and also dealt with the material provi sions thereof in dealing with a similar question in Civil Appeal No. 690 of 1976 in which we have delivered our judg ment to day(1).
It is, therefore, not necessary to repeat those observations here.
The short question that arises in this particular appeal turns on the Explanation I to section 2(b) of the Act.
We will, therefore, read that provision: "2(b) 'additional dearness allowance ' means such dearness allowance as may be sanc tioned from time to time, after the appointed day, over and above the amount of dearness allowance payable in accordance with the rate in force immediately before the date from which such sanction of additional dearness allowance is to take effect.
(1) [1977] 2 S.C.R.472.
481 Explanation I.
Where payment of dearness allowance is linked to a cost of living index or any other factor, any automatic payment, after the appointed day, of dearness allowance in consequence of any rise in such cost of living index or in consequence of any change in such other factor shall, notwithstanding the provisions of this clause, be deemed to be the additional dearness allowance.
" It is clear under section 2(b) that additional D.A. has to be sanctioned after the appointed day. "Sanctioned" is the heart of the definition clause.
Since additional D.A. is defined to mean such D.A. as may be sanctioned from time to time after the appointed day, Explanation I 'to the definition is inserted to.
deal with a situation to avoid any controversy about the sanction while there is an auto matic rise in D.A. linked to a cost of living index.
Where D.A. is linked to a cost of living index any automatic payment, after the appointed day, of D.A. in consequence of any rise in such cost of living index shall be deemed to be the additional D.A.
In the absence of Explanation I there would have been scope for controversy whether additional D.A. which is paid automatically with the rise in the cost of living index, as agreed upon, can be said to be D.A. sanctioned from time to time.
Such a controversy is set at rest by insertion of Explanation I which is a deeming clause.
The question that arises for consideration in this appeal is whether the rise in the cost of living index has also got to be after the appointed day.
The union contends that the D.A. of Rs. 88.50 which is payable from 1st of July, 1974, for the quarter 1st July, 1974 to 30th Septem ber, 1974 is an pursuance of the rise of cost of living index between January to March 1974 which is prior to the appointed day, namely, 6th July, 1974.
It is, therefore, submitted that no additional D.A. is deductible under the Act.
The High Court has accepted the contention of the union and allowed the application under Article 226 of the.
Con stitution granting a Mandamus restraining the employer from deducting additional D.A. from the emoluments of the em ployees.
The High Court also granted certificate to appeal to this Court.
it is common knowledge that when D.A. is linked to a cost of living index, actual determination of the D.A. takes place after the index is published and known.
The index, therefore, is always of a past period by the yardstick of which D.A. is adjusted.
This being the concept about link age of D.A. to cost of living index, Explanation I makes it clear that when payment of D.A. is linked to a cost of living index any automatic payment after the appointed day of D.A. in consequence of any rise in the cost of living index shall.
notwithstanding the provisions of this clause, be deemed to be the additional D.A.
The non obstante clause in the Explanation takes note of the definition clause where sanction after the appointed day has been mentioned.
Explanation I therefore, plays its role, not withstanding whatever is stated in section 2(b), the definition clause.
We do not find anything in Explana tion I to warrant the conclusion that rise of the cost of living index should be after the appointed day.
What is to be after the appointed day is "any automatic payment of D.A. in consequence of any 482 rise . "and not that any rise in the cost of living index should be after the appointed day.
We are, therefore, unable to agree with the High Court that the rise of cost of living index also should be after the appointed day.
It is sufficient for the purpose of Explanation I if payment of D.A., in consequence of rise of cost of living index, takes place after the appointed day on account of rise in the cost of living index even prior to the appointed day.
The nexus for the purpose of Explana tion I is with the payment after the appointed day and not with the rise in the cost of living index.
The specified percentage of additional D.A. which is 50% of the rise, being the difference, between Rs. 78/ and Rs. 88.50 is, therefore, deductible under section 6(2)(b) of the Act and the High Court was not correct in holding to the contrary.
The appeal is allowed and the judgment of the High Court is set aside.
There will be, however, no order as to costs.
P.B.R. Appeal allowed.
[/INST]100(1) (d)(iii) of the Jammu & Kashmir Representation of the People Act, 1957 provides that if the High Court is of opinion that the result of the election in so far as it concerns a returned candidate, has been materially affected by the improper reception, refusal or rejection of any vote or the reception of any vote which is void, the High Court shall declare the election of the returned candidates to be void.
The appellant was declared elected to the State Assembly in the General Elections.
In his election petition the respondent, a defeated candidate, contended that improper rejection at the time of counting of votes cast in his favour and improper reception of votes at the time of poll ing in favour of the appellant had materially affected the result and that therefore the appellant 's election should be declared void.
The High Court held that certain votes had been improp erly received in favour of the appellant, certain votes validly polled in favour of the respondent were improperly rejected at the time of counting; and in respect of 550 votes which were found to have been improperly received, the High Court held that the appellant was the greatest benefi ciary of those votes although the precise number by which he was benefited could not be easily ascertained.
In appeal, this Court directed the Registrar to scruti nise the 550 ballot papers to find out as to how many of those votes were cast in favour of the appellant and the other candidates.
The result of the investigation showed that the appellant had a lead of 38 votes over the respond ent.
Allowing the appeal HELD: There is no escape from the conclusion that the election of the appellant should be upheld.
[303H] (1) In an election petition founded upon the ground that the result of the election was materially affected by the improper reception or rejection of votes, the Court has first to decide whether certain ballot papers were improperly received or were improperly rejected.
Once that controversy is resolved, the rest is purely a matter of arithmetical calculation.
If the result of arithmetical calculation is that the returned candidate has still a lead over his nearest rival, his election would not be declared to be void on the ground of improper reception or improper rejection of votes.
Improper reception or improper rejec tion of votes can result in invalidating the election only if such improper reception or improper rejection materially affects the result of the election.
[303H] In the instant case, even after excluding all the votes found to have been improperly received by the appellant and also giving credit to the respondent for the votes found by the High Court to have been improperly rejected at the time of counting, the net result still was that the appellant had a lead over the respondent.
(2) As it is not permissible to widen the scope of an election petition, the respondent could not seek relief on grounds which were not taken by him in the election peti tion.
The respondent could not derive any benefit on the irregularities committed in the conduct of election.
The election was not challenged on the ground of any irregulari ty or non compliance with the provisions of the Constitution or of the Representation of the People Act nor was the election assailed on the ground of corrupt practice.
[304D & C] 298 (3) The contention of the respondent that if the ballot papers which bore the initials and not the full signatures of the presiding officer are rejected, the appellant 's election should be declared void, is without force.
The ballot papers bore the distinguishing marks as required by r. 38(1).
The fact that the returning officer did not reject the ballot papers on the ground that they bore only the initials and not the full signatures of the presiding officer showed that the returning officer was satisfied that the alleged defect was caused by the mistake or failure on the part of the presiding officer.
There can be no doubt that the mistake occurred because of the mistake or failure of the presiding officer.
The first proviso to r. 56(2) of the Rules provides that where the returning officer is satisfied that any defect mentioned in cl.
(g) or cl.
(h) of this Rule has been caused by any mistake or failure on the part of a presiding officer or polling officer, the ballot paper shall not be rejected merely on the ground of such defect.
[305B C]
</s>
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<s>[INST] Summarize the judgementAppeal Nos.
& 1511 of 1974.
(Appeals by certificate./Special Leave from the Judg ment and Order dated 23 4 1974 of the Madhya Pradesh High Court in Misc.
Petition No. 136/73).
Criminal Appeal No. 255 of 1974.
(From the Judgment and Order dated 23 4 1974 of the Madhya Pradesh High Court in Criminal Revision No. 159/71) and Civil Appeal NOs.
344 346 of 1976.
(Appeals by Special Leave from the Judgment and.
Order dated 24 10 1972 of the Orissa High Court in C.J.C. 185, 186 and 217 of 1969).
Frank Anthony, in CA 1489, CrI. A. 255/74 and CA 346/76 for the appellant in CAs 1489 and 1511/74 and Crl.
A. No. 255/74 and RR. 1 and 2 in CAs 346/76.
Soli J. Sorabiee in CA 1511, Crl.
A. 255/74 1.
B. Dadac hanji, K. J. John O.C. Mathur and Ravinder Narain for the appellant in CAs 1489 and 1511/74 and Crl.
A. No. 255/74 and RR. 1 and 2 in CAs 346/76.
Gobind Das (In CAs 344 346/76) B. Parthasarthi, for the appellants in CAs 344 346/76.
Soli J. Sorabjee, B.P. Maheshwari and Suresh Sethi, for R. 3 in CA 346/76.
Brijbans Kishore, B.R. Sabharwal, for RR.
in CA 345/76.
Gobind Das,Raj Kumar Mehta,for the Intervener (State of Orissa) in C.A. 1489/74.
The Judgment of the Court was delivered by RAY, C.J.
These appeals were heard together because they raise common questions of law relating to the interpre tation of the Constitution.
Civil Appeals No. 1489 and 1511 of 1974 and Criminal Appeal No. 255 of 1974 are directed against a judgment of the Madhya Pradesh High Court dated 23 April, 1974.
We shall refer to these as the Madhya Pradesh cases.
Civil Appeals No. 344 346 of 1976 relate to a judgment.
of the orissa High Court dated 24 October, 1972.
We shall refer to these appeals as the Orissa cases.
613 The controversy in the Madhya Pradesh cases relates to the Madhya Pradesh Dharma Swatantraya Adhiniyam, 1968, hereinafter referred to as the Madhya Pradesh Act.
The controversy in the Orissa cases arises out of the Orissa Freedom of Religion Act, 1967 hereinafter referred to as the Orissa Act.
The provisions of the 'two Acts in so far as they relate to.
prohibition of forcible conversion and punishment there for, are similar and the questions which have been raised before us are common to both of them.
It will, therefore, be enough, for the purpose of appreciating the controversy, to make a somewhat detailed mention of the facts of the Madhya Pradesh case.
The Sub Divisional Magistrate of Baloda Bazar sanctioned the prosecution of Rev. Stainislaus for the commission of offences under sections 3, 4 and 5(2) of the Madhya Pradesh Act.
When the case came up before Magistrate, First Class, Baloda Bazar, the appellant Rev. Stainislaus raised a preliminary objection that the State Legislature did not have the necessary legislative competence and the Madhya Pradesh Act was ultra vires the Constitution as it did not fall within the purview of Entry I of List II and Entry I of List III of the Seventh Schedule.
The appellant 's conten tion was that it was covered by Entry 97 of List I so that Parliament alone had the power to make the law and not the State Legislature.
An objection was also raised that the provisions of sections 3, 4 and 5(2) of the Act contra vened Article 25 of the Constitution and were void.
The Magistrate took the view that there was no force in the. objection and did not refer the case to the High Court under section 432 of the Code of Criminal Procedure, 1898.
The appellant applied to the Additional Sessions Judge for a revision of the Magistrate 's order refusing to make a reference to the High Court.
The Additional Sessions Judge also took the view that no question of constitutional impor tance arose in the case and he did not think it necessary to make a reference to the High Court.
The appellant thereupon applied to the High Court for revision under section 439 of the Code of Criminal Procedure and he also filed a petition under Articles 226 and 227 of the Constitution.
The High Court heard both the revision and the writ petition together.
The appellant raised the following three questions in the High Court : (i) that sections 3, 4, 5(2) and 6 of the M.P. Dharma Swatantraya Adhiniyam, 1968 are viola tive of the petitioner 's fundamental rights guaranteed by Article 25 ( 1 ) of the Consti tution of India; (ii) that in exercise of powers conferred by Entry No. 1 of List II, read with Entry No. 1 of List III of the Seventh Schedule the Madhya Pradesh Legislature in the name of public order could not have enacted 614 the said legislation.
But the matter would fail within the scope of Entry No. 97 of List I of the Seventh Schedule, which confers residuary powers on Parliament to legislate in respect of any matters not covered by List I, List I1 or List III.
Therefore, it is contended that Parliament alone had the power to legislate on this subject and the legisla tion enacted by the State Legislature is ultra vires the powers of the State legislature; (iii) that section 5(1) and section 5(2) of the M.P. Dharma Swatantraya Adhiniyam, 1968 amount to testimonial compulsion and, therefore, the said provisions are violative of Article 20(3) of the Constitution of India.
The High Court examined the controversy with reference to the relevant provisions of the Madhya Pradesh Act and the Madhya Pradesh Dharma Swatantraya Rules, 1969 and held as follows : "What is penalised is conversion by force, fraud or by allurement.
The other element is that.
every person has a right to profess his own religion and to act according to it.
Any interference with that right of the other person by resorting to conversion by force, fraud or allurement cannot, in our opinion, be said to contravene Article 25(1) of the Con stitution of India, as the Article g uarantees religious freedom subject to public health.
As such, we do not find that the provisions of sections 3, 4 and 5 of the M.P. Dharma Swatantraya Adhiniyam, 1968 are violative of Article 25(1) of the Constitution of India.
On the other hand, it guarantees that religious freedom to one and all includ ing those who might be amenable to conversion by force, fraud or allurement.
As such, the Act, in our opinion, guarantees equality of religious freedom to all, much less can it be said to encroach upon the religious freedom of any particular individual.
" The High Court therefore held that there was no justi fication for the argument that sections 3, 4 and 5 of the Madhya Pradesh Act were violative of Article 25(1) of the Constitution.
The High Court in fact went on to hold that those sections "establish the equality of religious freedom for all citizens by prohibiting conversion by objec tionable activities such, as conversion by force, fraud and by allurement".
As regards the question of legislative competence, the High Court took note of some judgments of this Court and held that as "the phrase 'public order ' conveys a wider connotation as laid down by their Lordships! of the Supreme Court in the different cases.
We are of the opinion that the subject matter of the Madhya Pradesh Dharma Swatantraya Adhiniyam, 1968 fails within the scope of Entry No. I of List II of the Seventh Schedule relating to the State List regarding public order".
615 On the remaining point relating to testimonial compul sion with reference to Article 20(3)of the Constitution, the High Court held that section 5 of the Madhya Pradesh Act read with Form A, prescribed by the Rules, merely made provision for the giving of intimation to the District Magistrate about conversion and did not require its maker to make a confession of any offence as to whether the conver sion had been made on account of fraud, force or allurement, 'which had been penalised by the Act.
The High Court thus held that mere giving of such information was not violative of Article 30(1) of 'the Constitution.
But the question of testimonial compulsion within the meaning of Article 20(3) of the Constitution has not been raised for our considera tion.
The Orissa cases arose out of petitions under Article 226 of the Constitution challenging the vires of the Orissa Act.
The High ,Court stated its conclusions in those cases as follows: (1) Article 25(1) guarantees propagation of religion and conversion is a part of the Christian religion.
(2) Prohibition of conversion by 'force ' or by 'fraud ' as defined by the Act would be covered by the limitation subject to which the right is guaranteed under Article 25 (1).
(3) The definition of the term 'inducement ' is vague and many proselytizing activities may be covered by the definition and the restriction in Article 25 (1) cannot be said to cover the wide definition. ' (4) The State LegisLature has no power to enact the impugned legislation which in pith and substance is a law relating to religion.
Entry No. 1 of either List II or List III does not authorise the impugned legislation.
(5) Entry 97 of List I applies.
The High Court has therefore declared the Orissa Act to be ultra vires the Constitution and directed the issue of mandamus to the State Government not to give effect to it.
The criminal cases which were pending have been quashed.
The common questions which, have been raised for our consideration are (1) whether the two Acts were violative of the fundamental right guaranteed under Article 25(1) of the Constitution, and (2) whether the State Legislatures were competent to enact them ? Article 25(1) of the Constitution reads as follows: "25(1) Subject to public order, ' morality and health and to the other provisions of this Part, all persons are equally entitled to freedom of conscience and the right freely to profess, practise and propagate religion.
" 616 Counsel for the appellant has argued that the right to 'propagate ' one 's religion means the right to convert a person to one 's own religion.
On that basis, counsel has argued further that the right to convert a person to one 's own religion is a fundamental right guaranteed by Article 25 (1) of the Constitu tion.
The expression 'propagate ' has a number of meanings, including "to multiply specimens of (a plant, animal, disease etc.) by any process of natural reproduction from the parent stock", but that cannot, for obvious reasons, be the meaning for purposes of Arti cle 25 (1) of the Constitution.
The Article guarantees a right to freedom of religion, and the expression 'propagate ' cannot there fore be said to have been used in a biologi cal sense.
The expression 'propagate ' has been de fined in the Shorter Oxford Dictionary to mean "to spread from person to person, or from place to place, to disseminate, diffuse (a statement, belief, practice, etc.)" According to the Century Dictionary (which is an Encylopaedic Lexicon of the English Language) Vol.
VI, 'propagate ' means as follows : "To transmit or spread from person to person or from place to place; carry forward or onward; diffuse; extend; as propagate a report; to propagate the Christian religion".
We have no doubt that it is in this sense.
that the word 'propagate ' has been used in Article 25 (1), for what the Article grants is not the right to convert another person to one 's own religion, but to transmit or spread one 's religion by an exposition of its tenets.
It has to be remembered that Article 25 (1) guarantees "freedom of conscience" to every citizen, and not merely to the follow ers of one particular religion, and that, in turn, postu lates that there is no fundamental right to convert another person to one 's own religion because if a person purposely undertakes the conversion of another person to his religion, as distinguished from his effort to transmit or spread the tenets of his religion, that would impinge on the "freedom of conscience" guaranteed to all the citizens of the coun try alike.
The meaning of guarantee under Article 25 of the Con stitution came up for consideration in this Court in Ratilal Panachand Gandhi vs The State of Bombay & Ors.
(1) and it was held as follows : "Thus, subject to the restrictions which this Article imposes, every person has a fundamental right under our Constitution not merely to entertain such, religious belief as may be approved of by his judgment or con science but to exhibit his belief and ideas in such overt acts as are enjoined or sanctioned by his religion and further to propagate his religious views for the edification of others." (1) [1954]S.C.R. 1055.
617 This Court has given the correct meaning of the Article, and we find no justification for the view that it grants.
a fundamental right to convert persons to one 's own reli gion.
It has to be appreciated that the freedom of religion enshrined in the Article is not guaranteed in respect of one religion only, but covers all religions alike, and it can be properly enjoyed by a person if he exercises his right in a manner commensurate with the like freedom of persons follow ing the other religions.
What is freedom for one, is free dom for the other, in equal measure, and there can there fore be no such thing as a fundamental right to convert any person to one 's own religion.
It was next been argued by counsel that the Legislatures of Madhya Pradesh, and Orissa States did not have legisla tive competence to pass the Madhya Pradesh Act and the Orissa Act respectively, because their laws regulate 'rel igion ' and fall under the Residuary Entry 97 in List 1 of the Seventh Schedule to the Constitution.
It is not in controversy that the Madhya Pradesh Act provides for the prohibition of conversion from one religion to.
another by use of force or allurement, or by fraudulent means, and matters incidental thereto.
The expressions "allurement" and 'fraud ' have been defined by the.
Section 3 of the Act prohibits conversion by use of force or by allurement or by fraudulent means and section 4 pena lises such forcible conversion.
Similarly, section 3 of the Orissa Act prohibits forcible conversion by the use of force or by inducement or by any.
fraudulent means, and section 4 penalises such forcible conversion.
The Acts therefore dearly provide for the maintenance of public order for, if forcible conversion had not been prohibited, that would have created public disorder in the States.
The expression "Public order" is of wide conno tation.
It must have the connotation which it is meant to provide as the very first Entry in List II.
It has been held by this Court in Ramesh Thapper vs The State of Madras(1) that "public order" is an expression of wide connotation and signifies state of tranquility which pre vails among the members of a political society as a result of internal regulations enforced by the Government which they have established".
Reference may also be made to the decision in Ramjilal Modi vs State of U.P. (2) where this Court has held that the right of freedom religion guaranteed by Articles 25 and 26 of the Constitution is expressly made subject to public order, morality and health, and that "it cannot be predicat ed that freedom of religion can have no bearing whatever on the maintenance of public order or that a law creating an offence relating to religion cannot under any circumstances be said to have been enacted in the interests of public order".
It has been held that these two Articles in terms contemplate that restrictions may be imposed on the rights guaranteed by them in the interests of public order.
Refer ence may as well be made to the decision in Arun Ghosh vs State of WeSt Bengal(a) where it has been held that if a thing disturbs the current of the life of the community, (1) ; (2) ; (3) ; 618 and does not merely affect an individual, it would amount to disturbance of the public order.
Thus if an attempt is made to raise communal passions, e.g. on the ground that some one has been "forcibly" converted to anoth er religion, it would, in all probability, give rise to an apprehension of a breach of the public order, affecting the community at large.
The impugned Acts therefore fall within: the purview of Entry I of List II of the Seventh Schedule as they are meant to avoid disturbances to the public order by prohibiting conversion from one religion to another in a manner reprehensible to the conscience of the community.
The two Acts do not provide for the regulation of religion and! we do not find any justification for the argument that they fall under Entry 97 of List I of the Seventh Schedule.
In the result Civil Appeals No. 1489 and 1511 of 1974 and Criminal Appeal No. 255 of 1974 fall and are dismissed while Civil Appeals No. 344 346 of 1976 are allowed and the impugned judgment of the Orissa High Court dated 24 October, 1972 is set aside.
The parties shall pay and bear their own costs, in Madhya Pradesh appeals.
The State shall pay the respondent costs in the Orissa appeal according to previous direction.
P.H.P. C.As.
1489 & 1511 of 1974 and Cr.
A. No. 255 of 1974 dismissed.
344 346 of 1976 allowed.
[/INST]The appellants contended that the Forward Market Commis sion under the Forward Contract (Regulation) Act 1952 cannot impose conditions under sections 14A and 14B on the commodities in respect of which business can be carried out by persons who apply for registration.
Secondly, the provisions.
contained in section 4 of the Act do not confer power on the Commission to impose conditions.
Thirdly, in respect of recognised associations, the Commission had no power to impose conditions with regard to commodities in which they deal.
Dismissing the appeal, HELD: All the 3 conditions raised in the present appeal are covered against the appellant by the decision of this Court in the case of Union India vs M/s Rajdhani Grain and Jaggery Exchange Ltd. reported in [1975], Supp, SCR 1.
[605 B F]
</s>
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<s>[INST] Summarize the judgementON: Cases Nos. 11 and 12 of 1950.
Appeals under article 132 (1) of the Constitution of India from the Judgment and Order dated April 5, 1950, of the High Court of Judicature for the State of Punjab at Simla (Khosla J.) in Criminal Revision Nos, 1144 and 1147 of 1949.
Achhru Ram (Gopal Singh, with him) for the appellant in Case No. 11.
H. J. Umrigar for the appellant in Case No. 12.
section M. Sikri (Advocate General of Punjab) (H. section Gujral, with him) for the respondent, the State of Punjab.
M. C. Setalvad (Attorney General for India) (B. Sen, with him) for the Intervener. 1952.
December 5.
The Judgment of the Court was delivered by MUKHERJEA J.
The facts giving rise to these two connected appeals may be briefly narrated as follows: Darshan Singh, the appellant in Case No. 1 1, and Attar Singh who is the appellant in Case No. 12, along with three other persons were tried by the Special Magistrate, Ambala, East Punjab, on charges under section 120 B of the Indian Penal Code, read with section 3/10 of the East Punjab Cotton Cloth and Yarn (Regulation of ' Movement) Order, 1947, and section 7 of the Essential Supplies Act, 1946.
There wets a further charge under section, 8 of the Essential Supplies Act against three of these accused, Darshan Singh begning on of them.
321 The allegation against all the accused, in substance, was that they conspired to export 76 bags of mill made cloth to Pakistan without a permit, by smuggling them through the customs barrier near Wagha, on the morning of the 26th ,May, 1948.
Wagha is., about 18 miles from Amritsar, and at a distance of nearly half a mile from this place lies the actual Indo Pakistan border.
Between the customs barrier and the border there is a small Police Post and almost opposite the Police Post is the customs office which is located in a tent.
The prosecution case ' is that at about 7 a. m. on the 26th of May, 1948, a truck, loaded with a large quantity of millmade cloth owned by the accused Ram Singh, arrived at the customs barrier near Wagha.
Rajendra Singh, another accused, who was on duty at that time as the Customs Supervisor, allowed the truck to pass through and the truck stopped near the customs office on the side of the Police Post.
As soon as the truck stopped, Darshan Singh, who was the Deputy Superintendent in charge of the customs barrier, and Attar Singh, who was a Customs Preventive Officer at Amritsar and was then under order of transfer to some other place, went to the Police Station and asked Kulraj, the Sub Inspector in charge of the same, to allow the lorry to pass through upto the border.
Kulraj did not accede to this request and thereupon both Darshan Singh and Attar Singh went back to the customs tent.
The truck was then unloaded and the goods were handed over to a large number of coolies who began carrying them towards the border, being followed by both Attar Singh and Ram Singh.
A little later, Kailash Chandra, a Police Sub Inspector of Amritsar who was at that time on special duty in connection with checking and detec tion of smuggling cases, arrived at the place on a motor bicycle and being informed by Kulraj of what had happened before, both he and Kulraj proceeded in his motor cycle towards the border and overtook the coolies who were carrying the goods.
The coolies were rounded up and brought back to the border along 322 with Attar Singh, though Ram Singh managed to Slip away.
Kailash Chandra made a report of the occurrence to Inder Singh, who was the head of the Special Police Establishment at Delhi dealing with smuggling cases, and after a detailed investigation, the five accused were sent up to take their trial.
The trying Magistrate convicted all of them under section 120 B of the Indian Penal Code, read with section 3/10 of the East 'Punjab Cotton Cloth and Yarn Order, 1947, and sentenced them to rigorous imprisonment for a period of one year each.
Attar Singh was further convicted under section 7 of the Essential Supplies Act and Darshan Singh under section 8 of the said Act, and there was a sentence of one year 's rigorous imprisonment and a fine of Rs. 1,000 upon each one of them under these sections, the sentence of rigorous imprisonment to run concurrently with that on the previous charges.
Against this judgment there was an appeal taken by all the accused to the Court of the Sessions Judge at Amritsar.
The Additional Sessions Judge, who heard the appeal, acquitted two of the accused but maintained the conviction of the other three, namely, Attar Singh, Ram Singh and Darshan Singh, though their sentences were reduced.
Thereupon these three persons presented three separate revision petitions to the High Court of East Punjab at Simla which were heard and disposed of by Mr. Justice Khosla sitting singly.
The learned Judge dismissed the revision petitions but granted a certificate under article 132 of the Constitution on the ground that the cases involved a substantial question of low as to the interpretation of the Constitution.
It is on the strength of this certificate that these two appeals have come before us, one being filed by Darshan Singh and the other by Attar Singh.
No appeal has been preferred by the accused Ram Singh.
The constitutional point involved in these appeals has been presented before us very lucidly by Mr. Achhru Ram who appeared on behalf of Darslian 323 Singh, the appellant in Case No. II, and his contention, in substance, is that the East Punjab Cotton Cloth and Yarn Order, 1947, which was promulgated by the Governor of East Punjab by notification dated 15th November, 1647, and under the provisions of which the prosecution was launched against the accused, was ultra vires the authority of the Governor, in so far as it purported to legislate on matters of export and import across the customs frontier, and consequently the accused could not be held guilty of any offence for having violated such provisions.
For a proper appreciation of raised by the learned counsel, it would be necessary to refer to certain provisions of the Government of India Act, 1935, as well as to those of a number of later enactments.
Under entries 27 and 29 of List II of the Government of India Act, 1935, " trade and commerce within the province " and " produc tion. supply and distribution of goods " were provincial subjects, while " import and export across the customs frontier " was a central subject being covered by item 19 in List I. Section 102 of the Government of India Act, 1935, gave the Central Legislature the power to legislate on provincial subjects if and when a proclamation was issued by the Governor General that a state of emergency existed in the country, and such legislation would, under sub section (4) 'of the section, cease to have effect on the expiration of a. period of ' six months after the proclamation had ceased to operate.
It appears that these extraordinary powers were assumed by the Central Legislature during the period of the last war when there was a Proclamation of Emergency by the Governor General, and the Defence of India Rules promulgated during this period dealt with various ' provincial matters.
The Proclamation of Emergency was revoked by the Governor General under section 102, clause (3), of the Constitution Act on 1st April, 1946, and the result of the revocation was that all orders passed on the basis of the Defence of India Act or the Defence of India Rules ceased to be 42 324 operative after the 30th of September, 1946.
The (state of the country, however, was at that time far from normal and it was considered necessary that the control of the Central Legislature over the production, supply and distribution of goods should not be discontinued.
To meet this situation, the British Parliament passed a temporary Act (9 and 10 Geo.
6 chapter 39) which gave the Indian Legislature, during the period specified in the Act, the power to make laws with regard to certain provincial subjects.
The provision of section 2 of the Act, so far as is necessary for our present purpose, stood as follows: "(1) Notwithstanding anything in the Government of India Act, 1935, the Indian Legislature shall, during the period mentioned in section 4 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, paper, petroleum products, spare parts of mechanically propelled vehicles, coal, iron, steel and mica; ".
Armed with this authority, the Indian Legislature passed the Essential Supplies (Temporary Powers) Act of 1946, sections 3 and 4 of which are in these terms: " 3.
The Central Government so far as it appears to it necessary or expedient for maintaining or increasing supplies of any essential commodity or for securing their equitable distribution and availability at fair prices may, by notified order provide for regulating and prohibiting the production, supply and distribution thereof and trade and commerce therein.
* * * * 4.The Central Government may by notified order direct that the power to make orders under section 3 shall in relation to such matters and subject to such conditions,, if any, as may be specified in the direction, be exercisable also by 326 (a) * * * * (b)such Provincial Government or such officer or authority subordinate to a Provincial Government as may be specified in the direction.
" By a notification dated 20th of December, 1946, issued under section 4 mentioned above, the Central Government delegated to the Governor of Punjab the powers under section 3 of the Act.
On the 15th of November, 1947, the Governor of East Punjab, in exercise of the powers delegated by the said notification, passed the East Punjab Cotton Cloth and Yarn (Regulation of Movement) Order, 1947, and sections 2, 3 and 10 of the Order are material for our present purpose.
Section 2 is in these terms: "In this Order unless there is anything repugnant in the subject or context, (a) " export " means to take out of the Province of the East Punjab or the said land by rail, road or river to any Province or State of the Dominions of India and Pakistan and includes taking out of the Province of East Punjab to any place, situated in the said lands as well as out of the said lands to any place situated in the East Punjab.
" Section 3 runs as follows: " No person shall export or attempt to export cotton cloth or yarn except under the authority and in accordance with the conditions of a permit, issued by a permit issuing authority. .
The permit shall be in form IV, specified in Schedule 'A ' annexed to this Order ".
Section 10 provides: "If any person contravenes any provision of this Order, he shall be punishable with imprisonment which may extend to 3 years, with fine or both and without prejudice to any other general punishment which may be imposed by any court trying such contravention may direct that any cotton cloth and/,or yarn in respect of which the court is satisfied that this order, has been contravened together with the 326 covering and packing of such cloth shall be forfeited to His Majesty.
" The point for our consideration is, whether the above provisions which prohibit inter alia the export of certain essential commodities to any country outside India without a permit and make the violation of such provisions an offence, were validly made by the Governor in exercise of the powers delegated to him under section 4 of the Essential Supplies (Temporary Powers) Act 1946 ? It is not suggested by the learned counsel that there was anything improper in the Central Government 's delegating its powers to the Governor of East Punjab under section 4 of the Essential Supplies (Temporary Powers) Act.
His contention is that the Governor, in making the order, acted in excess of is delegated authority by prohibiting the export of cotton cloth and yarn to any I place outside India.
Matters of export and import, it is said, were not within the scope of section 3 of the Essential Supplies and :the notification tinder section 4 could only delegate to the Governor such powers as the Central Government could itself 'exercise under section 3.
Section 3 of the Essential Supplies Act, it is true, authorised the Central Government to make provisions for regulating and prohibiting the production, supply and distribution of the essential commodities specified in the Act and also trade and commerce therein; but it is argued by the learned counsel that the expression, " trade and commerce ", as used in the section, must be taken to mean trade and commerce within a province or at the most between provinces inter se, but it cannot include any transaction by way of exporting goods outside India.
This interpretation, somewhat restricted as it appears to us, is sought to be supported by a two fold argument.
In the first Place, it, is said, that the Essential Supplies Act, as its, Preamble shows, was passed by the Central Legislature in exercise of the authority conferred upon it by the India (Central Government and Legislature) Act, 1946, (9 and, 10 Geo.
6, c. 39) and that statute 327 conferred, only for a short period of time, a, power in the Central Indian.
Legislature to legislate on certain provincial matters, which it could not do after the revocation of the Proclamation of Emergency on the termination of the war.
It is said, therefore, that the Essential Supplies Act purported to deal exclusively with provincial matters, and import and export of goods outside the Indian territory, being a central subject, could not reasonably be brought within the purview of the Act.
The other line of reasoning that is put forward in support of the argument is, that the intention of the Central Legis lature not to include export and import within the provisions of the Essential Supplies Act is evidenced by the fact, that the Central Legislature dealt with export and import of goods separately, and by an, altogether different set of enactments which exist side by side with the Essential Supplies Act and other legislation of the same type preceding it.
It is pointed out that there was an order made under the Defence of India Rules on 3rd November, 1945, (being Order No. 91 c. w. (1) 45) imposing prohibitions on export of various descriptions of goods specified therein.
The Defence of India Rules were due to expire on the 30th September, 1946.
On the 26th September, 1946, the Essential Supplies Ordinance was passed and this was later replaced by the Essential Supplies Act.
On the very day that this Ordinance ,was passed, another Ordinance, being Ordinance No. XX of 1946, was promulgated, which inter alia continued the provisions of the Defence of India Rules relating to prohibition and restriction of import and export of goods.
Subsequently on the 26th of March, 1947, the Im ports and Exports (Control) Act was passed, which dealt comprehensively with the subject of control over exports and imports.
As it would be unnatural to suppose that the legislature was legislating on the same subject simultaneously by two parallel sets of legislation existing side by side, it is argued that export and import of goods were not within the scope and intendment of the Essential Supplies Act.
328 These arguments though somewhat plausible at first sight, do not appear to us to be sound or convincing.
It is a cardinal rule of interpretation that the language used by the legislature is the true depository of the legislative intent, and that words and phrases occurring in a statute are to be taken not in an isolated or detached manner dissociated from the context, but are to be read together and construed in the light of the purpose and object of the Act itself.
The object of the Essential Supplies Act, as set out in the preamble, was to provide for the continuance, during a limited period of time, of the power to control the production, supply and distribution of, and trade and commerce in, foodstuffs, cotton and woollen textiles, petroleum, iron and other essential commodities, a list of which appeared in the Act itself.
Section 3, which is the most material part of the Act,, authorised the Central Government, whenever it considered expedient or necessary, for maintaining or increasing supplies of any essential commodity or for securing their equitable distribution and availability at fair prices, to provide by notified order, for regulating or prohibiting, the production, supply and distribution thereof or trade and commerce therein.
Keeping this object in view and reading the words" trade and commerce " in the light of the context, there appears to be no reason why these words should not be taken in their ordinary or natural sense and why restriction on the export of goods to any place outside a province, including a neighbouring foreign State should be deemed to be outside their scope and ambit.
For maintenance or increase of supply of essential commodities within a province and to secure their equitable distribution and availability at fair prices, it might certainly be necessary to restrict export of the goods outside the province, and Pakistan being a foreign State abutting on the very borders of East Punjab, it was quite natural for the East Punjab Governor to mention Pakistan as one of the places to which export of goods from his province should not be allowed without a proper permit.
As 329 the main object of the legislation was the continuance of control over the production, supply and distribution of commodities considered essential to the community and as these are provincial subjects, the Central Legislature in legislating on them must have to invoke the powers conferred upon it by the India (Central Government and Legislature) Act, 1946 (9 & 10 Geo.
6, c. 39) spoken of above; and that is plainly the reason why a reference to that statute was made in the second paragraph, of the preamble.
But from this it cannot be argued that the Central Legislature was legislating only in exercise of the powers which it derived from the British Parliament and that it did not exercise the powers which it itself had under the Government of India Act.
It is not disputed that the Central Legislature was fully competent to legislate on exports and imports which are central subjects and in making any provision relating thereto, it cannot be said that it acted in excess of its authority.
Even taking the legislation to be purely on the provincial subjects of production, distribution and supply of goods, restriction of export as ancillary to production and supply of essential commodities would, in our opinion, be quite within the scope and ambit of such legislation and in pith and substance it would be an enactment dealing exclusively with these provincial matters.
Looked at from this standpoint, the other argument advanced by Mr. Achhru Ram would also be found to be without any substance.
The imports and Exports Act or the earlier Order and Ordinance, referred to by the learned counsel, were legislation essentially on the subject of exports and imports.
Their object was to regulate or control imports and exports generally and they dealt with a large variety of articles far outnumbering those enumerated in the Essential Supplies Act.
The object of the imports and Exports Act was not to regulate production and distribution of commodities considered essential to the community 330 and it was not as a means to secure that object that it purported to prohibit or restrict exporting of goods.
Thus the scope and purpose of the two sets of legislation were totally different and there was nothing wrong if they existed side by the side and were in operation at one and the same time, We are not told that there was any overlapping of the provisions of these two statutes; and as the competency of the legislature to enact both these sets of provisions is not disputed, we do not think that any occasional overlapping, even if it is assumed to exist, would be at all material.
In our opinion, therefore, the contentions raised in regard to the constitutional point involved in these appeals are unsupportable and could not be accepted.
As the appeals have come up before us on the strength of a certificate granted under article.
132(1) of the Constitution, the appellants are not entitled to challenge the propriety of the decision appealed against on a ground other than that on which the certificate was given except with the leave of this court as provided for by clause (3) of article 132 of the Constitution.
At the close of the arguments of the parties in regard to the constitutional point referred, to above.
, we made it clear to the learned counsel appearing for both the appellants that we would not allow any question relating to the merits of the cases to be raised before us which turned merely on appreciation of evidence by the courts below.
Mr. Umrigar, who appeared for Attar Singh the appellant in Case No. 12, however stated to us that he would crave leave to bring to our notice one important matter which, according to him, resulted in grave miscarriage of Justice at least so far as his client was concerned.
He pointed out that both the Additional Sessions judge and the learned Judge of the High Court in deciding the case against his client relied upon an admission alleged to have been made by the latter that he was present at the customs barrier at Wagha on the morning of the day of occurrence and had gone there to say good bye to the customs staff, he 331 being under an order of transfer from Amritsar to Gurdaspur.
It is said by the learned counsel that his client never admitted his presence at the customs barrier on the morning of 26th May, 1948, and that he neither did nor had any occasion to put forward any explanation regarding his presence there at that time.
The whole thing, it is said, is based upon sheer misapprehension and is not warranted by anything appearing on the record.
There is no doubt that the Additional Sessions Judge as well as the High Court did refer in their respective judgments to the alleged admission of Attar Singh and rely upon the same to arrive at their decision in the case.
The Additional Sessions Judge said in his judgment: " The next important man is Attar Singh accused.
He admits his presence at the barrier on that morning, when he says that he had gone to bid good bye to the customs staff on his transfer to Gurdaspur According to the leave obtained by him he had yet to remain at Amritsar till 28th and in view of illness of his wife he need not have been in hurry to go to the barrier for this purpose so soon.
I am not convinced with his explanation.
" The High Court in referring to the said admission observed as follows: " Attar Singh admitted that he was present at the barrier on that morning but the explanation he gave was this.
His office is at Amritsar but be had received orders of transfer to Gurdaspur.
His wife was ill and, therefore, he could not move immediately.
So he applied for a few days leave, and on the morning of the 26th of May he went to the barrier to say goodbye to his colleagues in the Customs Department and while he was there this incident took place without his knowledge. .
Attar Singh 's explanation of his presence at the spot does not convince me at all.
" It appears that in course of the examination of the accused Attar Singh under section 342 of the Criminal 43 332 Procedure Code before the trial Magistrate a specific question was put to him as to whether he could explain his presence on the scene of occurrence on the 26th May, 1948, although it was alleged that he was on leave.
To this question he replied categorically that he was not present as alleged.
In this state of the records, we asked the learned Advocate General, who appeared for the State of East Punjab, as to when and how was the admission referred to above made by Attar Singh.
The Advocate General, answered that the admission might be in the written statement which Attar Singh said he would file when he was interrogated under section 342 of the Criminal Procedure Code.
In order to clear up the matter we had the further hearing of the case adjourned to enable the Advocate General to produce before us the written statement, if any, that was filed by Attar Singh in the trial court.
The case was again taken up for hearing on the 26th of November last and the Advocate General frankly stated to us that no written statement by Attar Singh 'was on the records at all.
It is clear, therefore, that both the courts below in coming to their decision regarding the guilt of the accused did rely to a considerable extent on the so called admission of Attar Singh which, it must be held, had no existence in fact.
The Advocate General contends that even if there was an error committed by the courts below in this respect, we should nevertheless dismiss the appeal inasmuch as there is sufficient evidence to support the conviction of the accused independently of the so called admission of Attar Singh; and he invited us to examine the evidence ourselves and come to our own decision on the point.
Without in any way disputing our right to adopt this course in cases where it may be considered necessary, we think that in the circumstances of the present case the proper order to make will be to direct a rehearing of the appeal by the Session& Court on the evidence as it actually stands after excluding from consideration the alleged Admission of Attar Singh.
There can be no doubt 333 that the supposed admission was of a very damaging character and was highly prejudicial to the accused.
It is quite,, problematic to value its effect upon the minds of the Judges in the courts below and it is difficult for us to say that had it been excluded from consideration the courts would have come to the same decision of guilt or that conversely a verdict of acquittal would have been a perverse one.
In such cases, the function of this court, which is not an ordinary court of criminal appeal, is not so much to weigh and appraise the evidence again to find out the guilt or innocence of the accused as to see that the accused gets a fair trial on proper evidence.
It has been argued by Mr. Achhru Ram, and in our opinion quite rightly, that if the case of Attar Singh is to be heard afresh, the same order should be made in the case of Darshan Singh as well.
Not only are the two cases closely interconnected, but so far as Darshan Singh is concerned the prosecution sought to establish his complicity.
in the affair primarily by adducing evidence to show that he was in the company of Attar Singh when both of them approached Kulraj, the officer in charge of the police station, and requested him to allow the truck to pass through.
The Additional Sessions Judge observed in his judgment that the only motive of Darshan Singh was to help his colleague, namely Attar Singh, who was about to leave the district.
It is necessary, therefore, that the case of Darshan Singh should also be reheard and the whole evidence against him reconsidered with a view to find out whether he is guilty or innocent.
The result, therefore, is that both the appeals are allowed.
The judgment of the High Court as well as that of the Additional Sessions Judge are set aside and the cases remitted to the Sessions Court in order that they may be heard afresh on the evidence on record in the light of the observations made above after excluding from consideration the supposed admission of Attar Singh., Pending the decision of the Session a Court, the accused would remain on bail 7 on the same terms as before.
Appeals allowed.
Agent for the appellant in Case No. 11: Naunit Lal.
Agent for the appellant in Case No. 12: A. D. Mathur.
Agent for the respondent and the intervener G. H. Rajadhyaksha.
[/INST]Section 3 of the Essential Supplies (Temporary Powers) Act, 1946, which was passed by the Indian Legislature in 1946 empowered the Central Government by notified order to provide for regulating and prohibiting the production, supply and distribution of any essential commodity and trade and commerce therein; section 4 of the Act empowered the Central Government to delegate its powers under section 3 to the Provincial Government or any officer thereof.
The Governor of the Punjab to whom such powers had been delegated under section 4 passed the East Punjab Cotton Cloth and Yarn Control Order, 1947, which prohibited the export of cotton cloth and yarn to any country outside India except under a permit, and made export without permit an offence.
The validity of this order was questioned on the ground that the Governor had acted in excess of his powers in so far as lie prohibited export outside India without a permit: Held, (i) that, keeping the object of the Essential Supplies Act, 1946, in view and reading the words " trade and commerce " in a. 3 of the Act in the light of the context, these words could be interpreted as including the export of goods outside the Province including a neighbouring foreign State and the Governor in passing the impugned Order did not act in excess of the powers delegated to him; (ii)that as the Central Legislature was fully competent to legislate on exports and imports and making any provision relating thereto under the Government of India Act, 1935, it had power to make a law prohibiting export to a foreign State, even &part from the powers conferred on it by the India (Central Government and and Legislature) Act, 1946 (9 320 (iii) even taking the legislation to be purely on the provincial subjects of production, distribution and supply of goods, restriction of import as ancillary to production and supply of essential commodities would be quite within the scope and ambit of such legislation and in pith and substance the enactment would be one dealing exclusively with these provincial matters.
It is a cardinal rule of interpretation that the language used 'by the legislature is the true depository of the legislative intent, and that words and phrases occurring in a statute are to be taken not in an isolated or detached manner dissociated from the context, but are to be read together and construed in the light of the purpose and object of the Act itself.
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<s>[INST] Summarize the judgementSpecial LeaVe Petition (Civil) No. 6765 of 1985.
From the Judgment and Order dated 11.12.
1984 of the Andhra Pradesh High Court in C.M.A. No. 244 of 1981.
D .N. Gupta and Vijay Kumar Verma for the Petitioner.
The Order of the Court was delivered by VENKATARAMIAH, J.
This petition is filed under Arti cle 136 of the Constitution for special leave to appeal against the judgment of the High Court of Andhra Pradesh dated 11.12.84 allowing an appeal filed against the judgment dated 31.12.80 in E.I. case No. 4 of 1980 on the file of the Employees ' Insurance Court at Hyderabad.
The petitioner is a limited company carrying on busi ness at Secunderabad and at some other places in India.
The petitioner is engaged in the business of importing fertiliz ers.
It represents some foreign principals for the sale of their products in India.
The petitioner imports fertilizers into India which is an item purchased by the Central Government through the State Trading Corporation/Minerals and Metals Trading 'Corporation of India.
In the course of its business the petitioner obtains the tenders from the State Trading Corporation Minerals and Metals Trading Corporation of India and passes them on to its principals abroad.
Thereafter negotiations are carried on directly between the State Trading Corporation/Minerals Metals and Trading Corporation of India and the foreign principals.
After the deal is completed and the fertilizers arrive at the Indian ports the fertilizers are delivered to the Cen tral Government at the ports.
Before delivering the goods to the Central Government the petitioner supervises the 984 unloading of the goods and conducts the survey of the goods imported to ascertain the condition of the goods and to find out whether there are any shortages in the consignments so that there may be no disputes later on about the quality and quantity of the goods delivered.
The petitioner company has its branch offices in Bombay, Calcutta and Madras for super vising its work at the ports and to attend to other matters relating to clearing of shipments and in Delhi for securing payments of bills.
Its central office is at Secunderabad.
The Government of Andhra Pradesh after giving six months notice vide its gazette notification No. 788 Health dated 25.9.74 as required under section 1(5) of the (hereinafter referred to as 'the Act ') extended the provisions of the Act with effect from 30.3.75 among others to the establishments mentioned therein in which 20 or more persons were employed for wages on any day of the preceding 12 months by Notification G.O.M. section No. 297, Health dated 25th March, 1975 published in the Andhra Pradesh Gazette dated March 26, 1975.
Item 3(iii) in the list of establishments in that notification to which the Act was so extended by the State Government was "shops".
On inspection by the Insurance Inspector of the premises in which the petitioner was carrying on its business at Secun derabad it was found on 28.4.75 that the petitioner had employed persons ranging from 27 to 29 for wages within the relevant period and was carrying on the business of import of fertilizers.
On being asked by the Employees ' State Insurance Corporation to comply with the provisions of the Act the petitioner agreed that its business was covered by the Act in view of the notification issued by the State Government as it happened to be a "shop" and submitted contribution forms of its employees to the office of the Employees ' State Insurance Corporation.
After complying with the provisions of the Act for a period of four years the petitioner raised a dispute about its liability to pay the contributions payable under the Act and instituted under section 75 of the Act the case out of which this petition arises before the Employees ' Insurance Court at Hyderabad for a declaration that the establishment in which the peti tioner was carrying on its business was not a "shop" and therefore it was not covered by the notification issued by the State Government and that the petitioner was not liable to comply with the provisions of the Act.
The above petition was resisted by the Regional Director, Employees ' State Insurance Corporation.
It was pleaded on his behalf that the establishment which was being run by the petitioner was a "shop" and therefore it was liable to comply with the provi sions of the Act.
The Employees ' Insurance Court upheld the plea of the petitioner and 985 declared that the establishment of the petitioner was not covered by the Act.
Aggrieved by the decision of the Employ ees ' Insurance Court, the Regional Director of the Employ ees ' State Insurance Corporation filed an appeal before the High Court under section 82 of the Act.
The High Court allowed the appeal, reversed the decision of the Employees ' Insurance Court and dismissed the petition filed by the petitioner under section 75 of the Act.
The High Court was of the view that the establishment of the petitioner at Secunderabad was a "shop" to which the Act was applicable by virtue of the notification issued by the State Government.
Aggrieved by the decision of the High Court the petitioner has filed this petition under Article 136 of the Constitu tion requesting this Court to grant special leave to appeal against the decision of the High Court.
On behalf of the petitioner it is urged before us that since no goods were actually being delivered in the premises in which the petitioner was having its establishment the said establishment could not be treated as a shop which is referred to in item 3(iii) of the Government 's notification.
The word "shop" is not defined in the Act or in the notifi cation issued by the State Government.
According to the Shorter Oxford English Dictionary the expression "shop" means "a house or building where goods are made Or prepared for sale and sold".
It also means a "place of business" or "place where one 's ordinary occupation is carried on".
In ordinary parlance a "shop" is a place where the activities connected with the buying and selling of goods are carried on.
The evidence produced in the case shows that the peti tioner is carrying on its business at its business premises in Secunderabad.
At that place the petitioner carries on the commercial activity facilitating the emergence of contracts of sale of goods between its foreign principals and the State Trading Corporation ' Minerals and Metals Trading Corporation of India.
It arranges for the unloading of the goods under its supervision and for the survey of the goods despatched by its foreign principals at the ports on behalf of its foreign principals and on the goods being delivered to the Central Government it collects the price payable by the Government and remits it to its foreign principals.
All these activities are directed and controlled from its prem ises at Secunderabad.
It is thus clear that the activities carried on by the petitioner constitute trading activities although the goods imported from abroad are not actually brought to the said premises and delivered to the purchaser there.
In our opinion it is not actually necessary that the delivery of the goods to the purchaser should take place at the premises in which the business of buying or selling is carried on to constitute the said premises into a "shop".
986 The delivery 0f the goods sold to the purchaser is only one aspect of trading activities.
Negotiation of the terms of sale, carrying on of the survey of the goods imported, arranging for the delivery of the goods sold, collection of the price of the goods sold etc.
are all trading activities.
The premises where business is carried on by the petitioner is undoubtedly a shop as the activities that are carried on there relate only to the sale of goods which are imported into India.
The petitioner acts as the agent of its foreign principals who are the sellers.
The petitioner directs and controls all its activities from the premises in question.
If orders are received at a place which ultimately fructify into sales and the resulting trading activity is directed from there that place comes to be known as a "shop".
In our view the Employees ' Insurance Court placed a very narrow interpretation on the expression "shop" white upholding the contention of the petitioner by confining "shop" to a place where goods are actually stored and delivered pursuant to a sale.
We agree with the decision of the High Court that while construing a welfare legislation like the Act and the notification issued thereunder a liberal construction should be placed on their provisions so that the purpose of the legislation may be allowed to be achieved rather than frus trated or stultified.
There is no doubt that the establish ment of the petitioner at Secunderabad is a "shop" where selling activity is carried on and by virtue of the notifi cation issued by the State Government the Act became ap plicable to it.
The petitioner is bound to comply with the provisions of the Act as admittedly at all relevant times the petitioner had engaged more than 20 persons for wages at its place of business.
There is no ground to interfere with the judgment of the High Court.
In the result this petition fails and is dismissed.
N.P.V. Petition dis missed.
[/INST]The assessee company, which derived its income from the manufacture and sale of sugar and confectionery, was as sessed for the years 1958 59 by the Income Tax Officer under the Income Tax Act, 1922 by making additions of Rs.48,500 for cane cost, Rs.67,500 for shortage in cane, and Rs.21,700 for salary of outstation staff.
The assessee did not chal lenge the said assessment order.
Later in the year 1963 the Income Tax Officer issued notice under section 274 read with section 271 of the Income Tax Act, 1961 in respect of the assessment year 1958 59 for imposing penalty.
Before the Inspecting Assistant Commissioner the assessee admitted that these amounts, which were not included in the return by the compa ny, represented income.
On finding that there was deliberate understatement of income he imposed a penalty of Rs.70,000.
On appeal the Tribunal held that the mere fact that the amounts were agreed to be taken into account by the assessee did not ipsofacto indicate any criminality in its action to conceal any portion of the income, and that the assessee could very well have argued against the additions of the two sums, namely, Rs.67,500 and Rs.21,700.
As regards the sum of Rs.48,500 it found that the assessee had agreed to similar addition in the earlier years and so the penalty was war ranted in similar amount for this year and taking into consideration that the sum involved was Rs.48,500, it con sidered that a smaller penalty of Rs.5,000 was imposable.
The High Court took the view that the onus of proving concealment was on the Revenue because proceedings for penalty were penal in character, and held that so far as the sum of Rs.48,500 was concerned it was not proved that there was any deliberate concealment, that the Tribunal had not set aside the finding of the Assistant Inspecting Com 693 missioner that the assessee surrendered the amount of Rs.67,500 when it was faced with facts which clearly estab lished concealment, that the assessee in fact had surren dered the amount only after the Income Tax Officer had conclusive evidence in his possession that the amount repre sented its income, that acceptance by the assessee was material to give proper weight to judge the criminality of the action which in its opinion was not given, and that the Tribunal omitted to take into account the fact that the assessee had admitted that the amount of Rs.21,700 repre sented its income.
In the appeal by special leave on the question as to how far the High Court in a reference could interfere with a finding of fact and transform the same into a question of law on the ground that there has been non consideration of all relevant facts.
Allowing the appeal, HELD: 1.1 In an income tax reference a finding on a question of pure fact could be reviewed by the High Court only on the ground that there was no evidence to support it or that it was perverse.
If the High Court found that there was no such evidence, those circumstances would give rise to question of law and could be agitated in a reference.
[700G 701A, 702H 703A] 1.2 When a conclusion has been reached on an apprecia tion of a number of facts established by the evidence, whether that is sound or not must be determined not by considering the weight to be attached to each single fact in isolation, but by assessing the cumulative effect of all the facts in their setting as a whole.
Where an ultimate finding on an issue is an inference to be drawn from the facts found, on the application of any principles of law, there would be a mixed question of law and fact, and the inference from the facts found in such a case would be a question of law.
But where the final determination of the issue equally with the finding or ascertainment of the basic facts did not involve the application of any principle of law, an infer ence from the facts could not be regarded as one of law.
The proposition that an inference from.
facts is one of law is, therefore, correct in its application to mixed questions of law and fact, but not to pure questions of fact.
In the case of pure questions of fact an inference from the facts is as much a question of fact as the evidence of the facts.
[701A D] In the instant case, it is not said that the Tribunal had acted on material which was irrelevant to the enquiry or considered material 694 which was partly relevant and partly irrelevant or based its decision partly on conjectures, surmises and suspicions.
It took into account all the relevant facts in a proper light in rendering a finding of fact.
Therefore, no question of law arises.
[703BC, 701DE] Sree Meenakshi Mills Limited vs Commissioner of Income tax, Madras, ; Omar Salay Mohamed Sait vs Com missioner of Income tax, Madras, ; Udhavdas Kewalram vs Commissioner of Income tax Bombay City 1, and Remeshwar Prasad Bagla vs Commissioner of Income tax, U.P., , referred to.
2.1 The High Court was wrong in saying that proper weight had not been given to all the evidence and admissions made by the assessee.
The Tribunal had taken into considera tion the fact that the assessee had admitted the additions as its income when faced with non disclosure in assessment proceedings.
The time when the assessee admitted the addi tions was also considered.
But to admit that there has been excess claim or disallowance is not the same thing as delib erate concealment or furnishing inaccurate particulars.
There may he hundred and one reasons for such admissions, i.e., when the assessee realises the true position it does not dispute certain disallowances but that does not absolve the Revenue to prove the mens rea of quasi criminal offence.
[703BC, 702AB, 701A, 702BC] 2.2 It is for the Income tax authority to prove that a particular receipt is taxable.
If however, the receipt is accepted and certain amount is accepted as taxable, it could be added.
But in the instant case, it was not accepted by the assessee that it had deliberately furnished inaccurate particulars or concealed any income.
[702EF] 3.
The High Court observed that the time of admission was not noted by the Tribunal and this fact had not been properly appreciated by the Tribunal.
That is not correct.
The Tribunal had made additions during the assessment pro ceedings.
In any event that would be appreciation of evi dence in a certain way, unless in such misappreciation which amounted to non appreciation no question of law would arise.
Nonappreciation may give rise to the question of law but not mere misappreciation even if there he any from certain angle.
Change of perspective in viewing a thing does not transform a question of fact into a question of law.
[703CD] The High Court in preferring one view to another view of factual 695 appreciation in the instant case, has therefore, trans gressed the limits of its.
jurisdiction under the Income Tax Reference in answering the question of law.
[703F]
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<s>[INST] Summarize the judgementtition Nos. 434 435 of 1980.
(Under Article 32 of the Constitution) Ramjethmalani, H. Jagtiani, S.K. Dhingra and L.P. Daulat for the Petitioner.
M.N. Phadke and M.N. Shroff for the Respondent (State).
Abdul Kedar and Miss A. Subhashini for the Respondent (Union of India).
The Judgment of the Court was delivered by: SARKARIA, J.
This judgment deals with two writ petitions for the issue of a writ of habeas corpus, which were allowed by us by a short Order, dated April 23, 1980.
In Writ Petition 434 of 1980, the detenu is one Indru 's Ramchand Bharvani; while in Writ Petition 435 of 1980, the detenu is Indru 's father, Ram Chand Bharvani.
The two detenus Indru 's and Ram Chand, along with others, are carrying on business in diamonds and precious stones in partnership under the style of "M/s. Gems Impex Corporation".
35, New Marine Lines, Bombay, since 1971.
On November 16, 1979, the Customs Officers at Bombay raided the premises of the said firm and in the course of the raid, seized diamonds and pearls worth about Rs. 55 lakhs and, also, some jewellery and Rs. 1,40,000 in Indian currency and two gold sovereign coins.
On the following day, the Customs raided the residential premises of the son, Indru 's, and seized two cameras and three wrist watches worth about Rs. 1.50 lakhs.
The detenus were arrested on November 23, 1979 and interrogated.
During interrogation, the detenus claimed that the gems and other articles seized were not smuggled goods but were local materials, locally acquired.
They also gave the names of four persons from whom these gems had been acquired.
Both the father and the son were arrested and were produced before a Magistrate.
They were released on heavy bail subject to the condition that they 346 would attend daily before the Customs Officers and cooperate in the investigation.
This condition was later on related.
On February 16, 1980, an order of detention, dated February 15, 1980, purporting to have been made under Section 3(1) of the (for short called COFEPOSA) by the State Government was served on the detenus.
This order was authenticated by the Under Secretary to the State Government.
The grounds of detention were also served on the detenus alongwith the order of detention on February 16, 1980.
On February 18, 1980, the wife of the detenu, Ram Chand, addressed a letter to the first respondent (Under Secretary to the Government of Maharashtra), requesting him to furnish the detenus with the material relied upon by the detaining authority in the grounds of detention.
On March 25, 1980, detenu received a letter, dated March 14, 1980 from the State Government, declining the request for supply of copies to the detenu.
Prior to that on March 12, 1980, the detenus moved this Court by petitions under Article 32 of the Constitution, for the issue of a writ of habeas corpus.
On March 11, 1980, the detenu had also sent a petition through the Central Government, complaining of the non supply of copies of the necessary documents.
They also made, by that petition, such representations) as they could, praying for revocation of the order of their detention.
On April 3, 1980, the Central Government wrote to the detenus that their request for revocation had been rejected.
The Central Government, however, advised the State Government to furnish the detenus with the copies of the required documents.
As a result, on April 3, 1980 copies were received by the detenus from the State Government under their covering letter, dated March 31, 1980.
On March 24, 1980, the detenu also made a representation to the State Government which, according to the information furnished at the Bar by Mr. Phadke appearing for respondent 1, was declined.
Shri Ram Jethmalani, appearing for the detenus, challenges the detention mainly on these grounds: (1) The order of detention, purporting to have been signed by Shri Salvi, Secretary in the Home Department, to the Government of Maharashtra, is void because the concerned Minister of the State Government never, in fact, passed any such order and under the rules of business framed by the Governor under Article 166 of the 347 Constitution, Shri Salvi had no authority to pass the order of detention.
(2) The detaining authority never applied its mind to the earlier statements of four persons from whom the detenus claimed to have acquired the gems in question, and in which they had on the basis of documentary evidence supported the contention of the detenus.
Further, there was no evidence of smuggling in this case at all and the detaining authority committed illegality inasmuch as it relied on presumption under Section 123 of the Customs Act.
The use of this presumption was not available to the detaining authority in the exercise of its jurisdiction under COFEPOSA.
This shows that there was total non application of mind on the part of the detaining authority.
(3) The detenus made a written request to the detaining authority on February 18, 1980 for supply of the copies of the statements and documents relied upon in the grounds of detention, to enable them to make an effective representation.
The detaining authority, however, callously and deliberately refused to supply the copies and conveyed rejection of this request by a letter, dated February 14, 1980, which, in fact, was received by the detenus on March 25, 1980.
It was on the direction of the Central Government that the State Government supplied the copies of some of the statements to the detenus on April 3, 1980.
The detenu had a constitutional right to be afforded a fair and full opportunity of making an effective representation against his detention.
The refusal and the belated supply of these copies had violated that right of the detenu.
Even how, copies of the earliest statements of the four persons, as is apparent from their statements, have not been supplied to the detenus.
On account of this delay, the detention is vitiated.
(4) The detenu 's representation, dated March 11, 1980, made to the Central Government for revocation of the detention under Section 11 of the COFEPOSA has been wrongly rejected by an unauthorised person.
Under the Rules of Business, only the Revenue Minister of the Union Government was authorised to deal with and reject that representation.
But it seems that the representation was never put up before the Minister.
(5) The representation, dated March 24, 1980, made by the detenus to the detaining authority is now reported to have been rejected on April 8, 1980.
But the question still remains as to who passed the order of rejection.
If this representation was rejected by a person other than the Minister who alone was competent to do so, under the Maharashtra Rules of Business framed under Article 166 of the Constitution, then such rejection would be illegal.
348 As regards (1), Shri Phadke, appearing for the respondent State, has submitted for the perusal of the Court the original record from which it is apparent that the matter was put up by the Secretary.
Shri P.G. Salvi to the Minister concerned and the order of detention was in fact, passed by the Minister.
The first contention is therefore, devoid of merit.
Similarly, it is clear from the police records that the representation, dated March 24, 1980, of the detenus was considered by the Adviser to the Governor of Maharashtra, the State then being under President 's rule.
The Adviser was competent under the Rules of Business framed under Article 166 to deal with and reject such representation.
We therefore, do not find any force in Contention (5), either.
Indeed, Shri Jethmalani has concentrated mainly on Contention (3).
In reply to this contention, Shri Phadke submits that the grounds of detention were as elaborate as possible, that the substance of the statements, of which copies were asked for by the detenus, had been incorporated in those 'grounds ' which were served on the detenus, that in such a situation, the 'grounds ' served on the detenu, were more than sufficient to enable him to make an effective representation.
It is contended that under the Constitution, the detenu has got a right to be furnished only with the grounds of detention, that is, conclusions drawn from facts and not matters of detail or any other matter which is not referred to or relied upon in the grounds of detention.
This, according to Shri Phadke, was one of the reasons that impelled the State Government to refuse the supply of the copies to the detenu.
The second reason, according to the counsel was that the supply of the further information would have exposed the informants to bodily harm at the hands of the agents of the detenus, that the matter being still under investigation, the disclosure at that stage of the information would have adversely affected the investigation and harmed public interest.
Let us at the outset be very clear about the precise factual position.
The request for copies was made by the detenus on February 18, 1980.
After a delay of more than three weeks, this request was rejected by the State Government and that rejection was communicated to the detenu, by letter dated March 14, 1980.
This letter was received by the detenu only on March 25, 1980.
This delay in transit, also, was unusual and inordinate.
On March 27, 1980, the Central Government advised the State Government to supply the copies.
Thereupon, it seems, that within three days the copies 349 were put in a course of communication to the detenus by the State Government under their covering letter, dated March 31, 1980, and were actually received by the detenus on April 3, 1980.
The very fact that soon after the directions of the Central Government copies were ready and despatched to the detenus within three days thereof, shows that there was no physical difficulty in preparing and supplying the copies to the detenus, with due promptitude.
To justify the refusal to supply the copies the stand taken by the State Government in the affidavit filed on their behalf by Shri P.G. Salvi, Secretary to the Government, Home Department, is as follows: "(a) Looking at the exhaustive grounds furnished to the detenu and also the fact that the four persons named therein had denied before the Customs Officers that they sold the diamonds in question or gave them on 'jhangad ' basis was communicated to the detenu it was not necessary to furnish any copies of statements and documents to the detenu to enable him to make an effective representation against his detention.
(b) After the application on behalf of the detenu dated 18th February 1980 was received, a communication dated 27th February 1980 was received from the Collector of Customs (Preventive), Bombay.
This letter clearly suggested that copies should not be given Annexure "A".
" Annexure "A" to the affidavit is a letter, dated February 27, 1980, from the Collector of Customs, Bombay, addressed to the Secretary to the Government of Maharashtra, Home Department, in reply to the latter 's letter, dated February 19.
In para 2 of this letter, the Collector has stated: "In the case in which the captioned detenus are involved, investigation to unearth the conspiracy and find out the other persons involved in it, are in progress.
It appears from the material under seizure that the case has wide ramifications, which need to be investigated from various angles.
Hence, furnishing copies of the statements and documents at this stage would be detrimental to the investigation in progress from prosecution point of view and might even endanger the life of such of those witnesses who have either deposed against the detenus or provided clues.
Under these circumstances, furnishing of copies of statements and documents relied upon in the grounds for detaining the aforesaid accused at this stage, would not be in public interest.
However, we have no objection for furnishing copies of the panchanamas.
" 350 In this affidavit, Shri Salvi has not stated that he had personally applied his mind to what the Collector had said in his letter, dated February 27, 1980, nor has he affirmed that he had intimated to the detenu that the copies had been refused in exercise of the discretion under Article 22(6) of the Constitution, on the ground that the disclosure of that information was, in the opinion, of the Government, not in the public interest.
It is well settled that "the constitutional imperatives enacted in Article 22(5) of the Constitution are two fold: (i) the detaining authority must, as soon as may be, that is, as soon as practicable after the detention, communicate to the detenu the grounds on which the order has been made; and (ii) the detaining authority must afford the detenu the earliest opportunity of making a representation against the detention order.
In the context, 'grounds ' does not merely mean a recital or reproduction of a ground of satisfaction of the authority in the language of Section 3; nor is its connotation restricted to a bare statement of conclusion of fact.
"Nothing less than all the basic facts and materials which influenced the detaining authority in making the order of detention must be communicated to the detenu".
This is the ratio of the decision in Khudiram Das vs The State of West Bengal & Ors., to which one of us (Sarkaria, J.) was a party.
This principle was enunciated after an exhaustive survey of the authorities by Bhagwati, J. who delivered the opinion of the Court.
It is, therefore, not necessary to burden this judgment by noticing all the other decisions which were examined in that case.
The mere fact that the grounds of detention served on the detenu are elaborate, does not absolve the detaining authority from its constitutional responsibility to supply all the basic facts and materials relied upon in the grounds to the detenu.
In the instant case, the grounds contain only the substance of the statements, while the detenu had asked for copies of the full text of those statements.
It is submitted by the learned counsel for the petitioner that in the absence of the full texts of these statements which had been referred to and relied upon in the 'grounds ' of detention, the detenus could not make an effective representation and there is disobedience of the second constitutional imperative pointed out in Khudiram 's case.
There is merit in this submission.
The second reason for non supply of the copies given by Shri Salvi, it may be recalled, is that the Collector had said that the supply of the copies at that stage would be detrimental to the investigation and public interest.
This "so called" reason also was unsustainable 351 in law.
Shri Salvi does not appear to have applied his mind to the question whether or not the supply of these copies would be injurious to public interest.
He appears to have mechanically endorsed what had been written to him by the Collector in his letter, dated February 27, 1980.
The detenu had asked for copies of three kinds of documents: (a) His own statements which according to the grounds of detention, were in consistent and contradictory to each other, (b) Copies of the statements of his father, who is the detenu in Writ Petition No. 435/80.
These statements.
also, according to the grounds of detention, were mutually inconsistent.
(c) The full texts of the statements made by the four persons, whose names, particulars and substance of their statements were mentioned in the grounds of detention.
As regards the first two categories of statements the substance of which was already in the knowledge of the deponents, no question of their disclosure being harmful to the public interest could arise.
Nor could the supply of the full text of those statements, by any stretch of imagination, be said to be such that it might endanger the lives of the deponents.
Regarding category (c), the substance of the statements of the four persons mentioned in the grounds of detention had already been disclosed to the detenus.
It was therefore, not reasonably possible to say that the disclosure of the full texts of their statements would endanger their safety or harm public interest.
In the copies of the statements of those persons which was ultimately supplied to the detenus after undue delay on the direction of the Central Government, there is a reference to the earlier statements of these four persons in which they had, on the basis of some account books and documents, supported the contention of the detenus that the latter had acquired the gems in question from those persons.
The statements supplied to the detenus are their subsequent statements in which they have completely resiled from their earlier statements.
It is obvious that the supply of the earlier statements which were entirely in favour of the detenus and the full texts of which have been with held, could not, by any reckoning, expose those persons to any alarm or danger at the hands of the agents or partisans of the detenus.
Be that as it may, if any part of the statements of those witnesses had to be withheld in public interest, the appropriate authority could, after due application of its own mind, make an order under clause (6) of Article 22 of the Constitution withholding the supply of those portions of statements after satisfying itself that their disclosure would be against the public interest.
In the instant case, the detaining authority, without applying its mind to the nature of the documents, the copies of which were asked for by the detenus, mechanically 352 refused as desired by the Collector, to supply the copies of all the documents.
Indeed, it was on receiving a direction from the Central Government that the copies were supplied.
On account of this chill indifference and arbitrary refusal, the detenu, who had applied for copies on February 18, 1980, could get the same only on March 27, 1980, i.e., after more than one month.
Thus, there was unreasonable delay of more than a month in supplying the copies to the detenus, of the material that had been relied upon or referred to in the "grounds" of detention.
There was thus an infraction of the constitutional imperative that in addition to the supply of the grounds of detention, all the basic material relied upon or referred to in those "grounds" must be supplied to the detenu with reasonable expedition to enable him to make a full and effective representation at the earliest.
Of course, what is "reasonable expedition" is a question of fact depending upon the circumstances of the particular case.
In the peculiar facts of the instant case, we are of opinion that the delay of more than a month, in supplying the copies of the basic materials and documents to the detenus has vitiated the detention.
It was on this short ground, we, by our order, dated April 23.
had allowed the writ petitions and directed the release of the detention.
N.K.A. Petition allowed.
[/INST]Minerva Mills Ltd. is a limited company dealing in textiles.
On August 20, 1970 the Central Government appointed a committee under section IS of the Industries (Development Regulation) Act, 1951 to make a full and complete investigation of the affairs of the Minerva Mills Ltd as it was of the opinion that there had been or was likely to be substantial fall in the volume of production.
The said Committee submitted its report to the Central Government in January 1971, on the basis of which the Central Government passed an order dated October 19, 1971 under section 18A of the 1951 Act, authorising the National Textile Corporation Ltd., to take over the management of the Mills on the ground that its affairs are being managed in a manner highly detrimental to public interest.
This undertaking was nationalised and taken over by the Central Government under the provisions of the Sick Textile Undertakings (Nationalisation) Act, 1974.
The petitioners challenged the constitutional validity of certain provisions of the Sick Textile Undertakings (Nationalisation) Act, 1974 and of the order dated October 19, 1971, the constitutionality of the Constitution (Thirty Ninth Amendment) Act which inserted the impugned Nationalisation Act as Entry 105 in the Ninth Schedule to the Constitution, the validity of Article 31B of the Constitution and finally the constitutionality of sections 4 and 55 of the Constitution (Forty Second Amendment) Act, 1976 on the ratio of the majority judgment in Kesavananda Bharati 's case, namely, though by Article 368 of the Constitution Parliament is given the power to amend the Constitution, that power cannot be exercised so as to damage the basic features of the Constitution or so as to destroy its basic structure.
Opining that sections 4 and 55 of the Constitution (Forty Second Amendment) Act are void and beyond the amending power of the Parliament, the Court by majority (Per Chandrachud.
C.J., on behalf of himself, A. Gupta.
N.L. Untwalia & P.S. Kailasam, JJ.) ^ HELD: (1) The newly introduced clause S of Article 368 transgresses the limitations on the amending power of Parliament and is hence unconstitutional.
It demolishes the very pillars on which the preamble rests by empowering the Parliament to exercise its constituent power without any "limitation whatever".
No constituent power can conceivably go higher than the sky high power conferred by clause (5), for it even empowers the Parliament to "repeal the provisions of this Constitution", that is to say, to abrogate the democracy.
207 and substitute for it a totally antithetical form of Government.
That can most effectively be achieved, without calling a democracy by any other name, by a total denial of social, economic and political justice to the people, by emasculating liberty of thought, expression, belief, faith and worship and by abjuring commitment to the magnificent ideal of a society of equals.
The power to destroy is not a power to amend.
[240C E] Since the Constitution had conferred a limited amending power on the Parliament, the Parliament cannot under the exercise of that limited power enlarge that very power into an absolute power.
Indeed, a limited amending power is one of the basic features of Indian Constitution and therefore, the limitations on that power cannot be destroyed.
In other words, Parliament cannot, under Article 368, expand its amending power so as to acquire for itself the right to repeal or abrogate the Constitution or to destroy its basic and essential features.
The donee of a limited power cannot by the exercise of that power convert the limited power into an unlimited one.
[240E G] Smt.
Indira Nehru Gandhi vs Raj Narain, , followed.
(2) The newly introduced clause (4) of Article 368 is equally unconstitutional and void because clauses (4) and (5) are inter linked.
While clause (5) purports to remove all limitations on the amending power, clause (4) deprives the courts of their power to call in question any amendment of the Constitution.
[241E F] Indian Constitution is founded on a nice balance of power among the three wings of the State namely, the Executive, the Legislature and the Judiciary.
It is the function of the Judges, may their duty, to pronounce upon the validity of laws.
If courts are totally deprived of that power, the fundamental rights conferred upon the people will become a mere adornment because rights without remedies are as writ in water.
A controlled Constitution will then become uncontrolled.
Clause (4) of Article 368 totally deprives the citizens of one of the most valuable modes of redress which is guaranteed by Article 32.
The conferment of the right to destroy the identity of the Constitution coupled with the provision that no court of law shall pronounce upon the validity of such destruction is a transparent case of transgression of the limitations on the amending power.
[241H, 242A] If a constitutional amendment cannot be pronounced to be invalid even if it destroys the basic structure of the Constitution, a law passed in pursuance of such an amendment will be beyond the pale of judicial review because it will receive the protection of the constitutional amendment which the courts will be powerless to strike down.
Article 13 of Constitution will then become a dead letter because even ordinary laws will escape the scrutiny of the courts on the ground that they are passed on the strength of a constitutional amendment which is not open to challenge.
[242A C] (3) Though it is the settled practice of the Supreme Court not to decide academic questions and the Court has consistently taken the view that it will not formulate a rule of constitutional law broader than is required by the precise facts to which it is to be applied, it is difficult to uphold the preliminary objection to the consideration of the question raised by the petitioners as regards the validity of sections 4 and 55 of the Forty second Amendment.
In the instant case, the question raised as regards the constitutionality of sections 4 and 55 of the Forty Second Amendment is not an academic or a hypothetical question.
Further an order has been passed against the petitioners under section 18A of the Industries (Development and Regulation) Act, 1951, by which the petitioners are aggrieved.
[248C, E G] 208 Besides, there is no constitutional or statutory inhibition against the decision of questions before they actually arise for consideration.
Here, in view of the importance of the question raised and in view of the fact that the question has been raised in many a petition, it is expedient in the interest of Justice to settle the true position.
Secondly, what the court is dealing with is not an ordinary law which may or may not be passed so that it could be said that the court 's jurisdiction is being invoked on the hypothetical consideration that a law may be passed in future which will injure the rights of the petitioners.
What the court is dealing with is a constitutional amendment which has been brought into operation and which, of its own force, permits the violation of certain freedoms through laws passed for certain purposes.
[248G, 249A B] Commonwealth of Massachusetts vs Andrew W. Mellon, 67 Lawyers ' Edition, 1078, 1084; George Ashwander vs Tennessee Valley Authority, 80 Lawyers ' Edition, 688, 711, quoted with approval.
(4) The answer to the question whether in view of the majority decision in Kesavananda Bharati it is permissible to the Parliament to so amend the Constitution as to give a position of precedence to directive principles over the fundamental rights, must necessarily depend upon whether Articles 14 and 19, which must now give way to laws passed in order to effectuate the policy of the State towards securing all or any of the principles of Directive Policy, are essential features of the basic structure of the Constitution.
It is only if the rights conferred by these two articles are not a part of the basic structure of the Constitution that they can be allowed to be abrogated by a constitutional amendment.
If they are a part of the basic structure, they cannot be obliterated.
out of existence in relation tn a category of laws described in Article 31C or, for the matter of that, in relation to laws of any description whatsoever, passed in order to achieve any object or policy whatsoever.
This will serve to bring out the point that a total emasculation of the essential features of the Constitution is, by the ratio in Keshavananda Bharati, not permissible to the Parliament.
[249E H] (5) The importance of Directive Principles in the scheme of our Constitution cannot ever be over emphasized.
Those principles project the high ideal which the Constitution aims to achieve.
In fact Directive Principles of State Policy are fundamental in governance of the country and there is no sphere of public life where delay can defeat justice with more telling effect than the one in which the common man seeks the realisation of his aspirations.
But to destroy the guarantees given by Part III in order purportedly to achieve the goals of Part IV is plainly to subvert the Constitution by destroying its basic structure.
Fundamental rights occupy a unique place in the lives.
of civilized societies and have been variously described as "transcendental", "inalienable" and "primordial" and as said in Kesavananda Bharati they constitute the ark of the Constitution.
[250B C, 254H, 255A] The significance of the perception that Parts III and IV together constitute the core of commitment to social revolution and they, together, are the conscience of the Constitution is to be traced to a deep understanding of the scheme of the Indian Constitution.
Parts III and IV are like two wheels of a chariot, one no less important than the other.
Snap one and the other will lose its efficacy.
They are like a twin formula for achieving the social revolution which is the ideal which the visionary founders of the Constitution set 209 before themselves.
In other words, the Indian Constitution is founded on the bed rock of the balance between Parts III and IV.
To give absolute primacy to one over the other is to disturb the harmony of the Constitution.
This harmony and balance between fundamental rights and directive principles is an essential feature of the basic structure of the Constitution.
[255B D] The edifice of Indian Constitution is built upon the concepts crystallized in the Preamble.
Having resolved to constitute ourselves into a Socialist State which carried with it the obligation to secure to our people justice social, economic and political, Part IV has been put into our Constitution containing directive principles of State Policy which specify the socialistic goal to be achieved.
Having promised the people a democratic polity which carries with it the obligation of securing to the people liberty of thought, expression, belief, faith and worship, equality of status and of opportunity and the assurance that the dignity of the individual will at all costs be preserved, Part III has been put in our Constitution, conferring those rights on the people.
Those rights are not an end in themselves but are the means to an end.
The end is specified in Part IV.
Therefore, the rights conferred by Part III are subject to reasonable restrictions and the Constitution provides that enforcement of some of them may, in stated uncommon circumstances, be suspended.
But just as the rights conferred by Part III would be without a radar and a compass if they were not geared to an ideal, in the same manner the attainment of the ideals set out in Part IV would become a pretence for tyranny if tho price to be paid for achieving that ideal is human freedoms.
One of the faiths of our founding fathers was the purity of means.
The goals set out in Part IV have, therefore, to be achieved without the abrogation of the means provided for by Part III.
It is in this sense that Parts III and IV together constitute the core of our Constitution and combine to form its conscience.
Anything that destroys the balance between the two parts will ipso facto destroy an essential element of the basic structure of our Constitution.
[253D H, 256A B] (5A) on any reasonable interpretation, there can be no doubt that by the amendment introduced by section 4 of the Forty Second Amendment, Articles 14 and 19 stand abrogated at least in regard to the category of laws described in Article 31C. The startling consequence which the amendment has produced is that even if a law is in total defiance of the mandate of Article 13 read with Articles 14 and 19, its validity will not be open to question so long as its object is to secure a directive principle of State Policy.
[256D E] (6) No doubt, it is possible to conceive of laws which will not attract Article 31C, since they may not bear direct and reasonable nexus with the provisions of Part IV.
However, a large majority of laws, the bulk of them, can at any rate be easily justified as having been passed for the purpose of giving effect to the policy of the State towards securing some principle or the other laid down in Part IV.
In respect of all such laws, which will cover an extensive gamut of the relevant legislative activity, the protection of Articles 14 and 19 will stand wholly withdrawn.
It is then no answer to say, while determining whether the basic structure of the Constitution is altered, that at least some laws will fall outside the scope of Article 31C. [256E H] (7) A total deprivation of fundamental rights, even in a limited area, can amount to abrogation of a fundamental right just as partial deprivation in every area can.
The fact, therefore that some laws may fall outside the scope of Article 31C is no answer to the contention that the withdrawal of protection of Articles 14 and 19 from a large number of laws destroys the basic structure of the Constitution.
[256H, 257A B] 210 (8) Article 38 provides that the State shall strive to promote the welfare of the people by securing and protecting as effectively as it may a social order in which justice, social, economic and political, shall inform all the institutions of the national life.
It is not correct that all the Directive Principles of State Policy contained in Part TV eventually verge upon Article 38.
Article 38 undoubtedly contains a broad guideline, but the other Directive Principles are not mere illustrations of the principle contained in Article 38.
Secondly, if it be true that no law passed for the purpose of giving effect to the Directive principle in Article 38 can damage or destroy the basic structure of the Constitution, there was no necessity and more so the justification, for providing by a Constitutional amendment that no law which is passed for giving effect to the policy of the State towards securing any principle laid down in Part IV shall be deemed to be void on the ground that it is inconsistent with or takes away or abridges the rights conferred by Articles 14 and 19.
[257C F] The object and purpose of the amendment of Article 31C is really to save laws which cannot be saved under Article 19(2) to (6).
Laws which fall under those provisions are in the nature of reasonable restrictions on the fundamental rights in public interest and therefore they abridge but do not abrogate the fundamental rights.
It was in order to deal with laws which do not get the protection of Article 19(2) to (6) that Article 31C was amended to say that the provisions of Article 19, inter alia cannot be invoked for voiding the laws of the description mentioned in Article 31C. [257F G] (9) Articles 14 and 19 do not confer any fanciful rights.
They confer rights which are elementary for the proper and effective functioning of a democracy They are universally so regarded, as is evident from the Universal Declaration of Human Rights.
If Articles 14 and 19 are put out of operation in regard to the bulk of laws which the legislatures are empowered to pass Article 32 will be drained of its life blood.
[257G H, 258A] Section 4 of the Forty Second Amendment found an easy way to circumvent Article 32(4) by withdrawing totally the protection of Articles 14 and 19 in respect of a large category of laws, so that there will be no violation to complain of in regard to which redress can be sought under Article 32.
The power to take away the protection of Article 14 is the power to discriminate without a valid basis for classification.
By a long series of decisions the Supreme Court has held that Article 14 forbids class legislation but it does not forbid classification.
The purpose of withdrawing the protection of Article 14, therefore, can only be to acquire the power to enact class legislation.
Then again, regional chauvinism will have a field day if Article 19(1)(d) is not available to the citizens.
Already, there are disturbing trends on a part of the Indian horizon.
Those trends will receive strength and encouragement if laws can be passed with immunity, preventing the citizens from exercising their right to move freely throughout the territory of India.
The nature and quality of the amendment introduced by section 4 of the Forty Second Amendment is, therefore, such that it virtually tears away the heart of basic fundamental freedoms.
[258B E] Article 31C speaks of laws giving effect to the policy of the "State".
Article 12 which governs the interpretation of Article 31C provides that the word "State" in Part III includes the Government and Parliament of India and the Government and the Legislature of each of the States and all local or other 211 authorities within the territory of India or under the control of the Government of India.
Wide as the language of Article 31C is, the definition of the word "State" in Article 12 gives to Article 31C an operation of the widest amplitude.
Even if a State Legislature passes a law for the purpose of giving effect to the policy by a local authority towards securing a directive principle, the law will enjoy immunity from the provisions of Articles 14 and 19.
The State Legislatures are thus given an almost unfettered discretion to deprive the people of their civil liberties.
[258E G] (10) The principles enunciated in Part IV are not the proclaimed monopoly of democracies alone.
They are common to all polities, democratic or authoritarian.
Every State is goal oriented and claims to strive for securing the welfare of its people.
The distinction between the different forms of Government consists in that a real democracy will endeavour to achieve its objectives through the discipline of fundamental freedoms like those conferred by Articles 14 and 19.
Those are the most elementary freedoms without which a free democracy is impossible and which must, therefore, be preserved at all costs.
If the discipline of Article 14 is withdrawn and if immunity from the operation of that article is conferred, not only on laws passed by the Parliament but on laws passed by the State Legislatures also, the political pressures exercised by numerically large groups can tear the country asunder by leaving it to the legislature to pick and choose favoured areas and favourite classes for preferential treatment.
[259A D] (11) The device of reading down the provisions of a law for the purpose of saving it from a constitutional challenge is not to be resorted to in order to save the susceptibilities of the law makers, nor indeed to imagine a law of one 's liking to have been passed.
Article 31C cannot be read down so as to save it from the challenge of unconstitutionality because to do so will involve a gross distortion of the principle of reading down depriving that doctrine of its only or true rationale when words of width are used inadvertently one must at least take the Parliament at its word when, especially, it undertakes a constitutional amendment.
[259E G] If the Parliament has manifested a clear intention to exercise an unlimited power, it is impermissible to read down the amplitude of that power so as to make it limited.
The principle of reading down cannot be invoked or applied in opposition to the clear intention of the legislature.
In the history of the constitutional law, no constitutional amendment has ever been read down to mean the exact opposite of what it says and intends.
In fact, reading down Article 31C so as to make it conform to the ratio of the majority decision in Kesavananda Bharati is to destroy the avowed purpose of Article 31C as indicated by the very heading "Saving of certain laws" under which Articles 31A, 31B and 31C are grouped.
Since the amendment to Article 31C was unquestionably made with a view to empowering the legislatures to pass laws of a particular description even if those laws violate the discipline of Articles 14 and 19, it is impossible to hold that the court should still save Article 31C from the challenge of unconstitutionality by reading into that Article words which destroy the rationale of that Article and an intendment which is plainly contrary to its proclaimed purpose.
[259H, 280A C] (12) Reading the existence of an extensive judicial review into Article 31C is really to permit the distortion of the very purpose of that Article.
It provides expressly that no law of a particular description shall be deemed to be void on the ground that it violates Article 14 or Article 19.
It would be sheer 212 adventurism of a most extraordinary nature to undertake such a kind of judicial enquiry.
[260F G] (13) In the very nature of things it is difficult for a court to determine whether a particular law gives effect to a particular policy.
Whether a law is adequate enough to give effect to the policy of the State towards securing a directive principle is always a debatable question and the courts cannot set aside the law as invalid merely because, in their opinion, tho law is not adequate enough to give effect to a certain policy.
The power to enquire into the question whether there is a direct and reasonable nexus between the provisions of a law and a Directive Principle cannot confer upon the Courts the power to sit in Judgment over the policy itself of the State.
At the highest, courts can, under Article 31C, satisfy themselves as to the identity of the law in the sense whether it bears direct and reasonable nexus with a Directive Principle.
If the court is satisfied as to the existence of such nexus, the inevitable consequence provided for by Article 31C must follow.
Indeed, if there is one topic on which all the 13 Judges in Kesavananda Bharti were agreed, it is this: that the only question open to judicial review under tho unamended Article 31C was whether there is a direct and reasonable nexus.
between the impugned law and tho provisions of Articles 39(b) and (c).
Reasonableness is evidently regarding the nexus and not regarding the law.
The. attempt therefore to drape Article 31C into a democratic outfit under which an extensive judicial review would be permissible must fail.
[260H, 261A E] (14) The avowed purpose of clauses (4) and (5) of Article 368 is to confer power upon the Parliament to amend the Constitution without any "limitation whatever".
Provisions of this nature cannot be saved by reading into them words and intendment of a diametrically opposite meaning and content.
[261F G] (15) Article 31A(1) can be looked upon as a contemporaneous practical exposition of the intendment of the Constitution, but the same cannot be said of Article 31C.
Besides there is a significant qualitative difference between the two Articles.
Article 31A, the validity of which has been recognised over the years, excludes the challenge under Articles 14 and 19 in regard to a specified category of laws.
If by a constitutional amendment, the application of Articles 14 and 19 is withdrawn from a defined field of legislative activity, which is reasonable in public interest, the basic framework of the constitution may remain unimpaired.
If the protection of those articles is withdrawn in respect of an uncatalogued variety of laws, fundamental freedoms will become a 'parchment in a glass case ' to be viewed as a matter of historical curiosity [262A C] (16) There is no merit in the contention that since article 31A was also upheld on the ground of state decisis.
article 31C can be upheld on the same ground.
The five matters which are specified in Article 31A are of such quality, nature, content and character that at least a debate can reasonably arise whether abrogation of fundamental rights in respect of those matters will damage or destroy the basic structure of the Constitution.
Article 31C does not deal with specific subjects.
The directive principles are couched in broad and ' general terms for the simple reason that they specify the goals to be achieved.
The principle of state decisis cannot be treated as a fruitful source of perpetuating curtailment of human freedoms.
No court has upheld the validity of Article 31A on the ground that it does not violate the basic structure of the Constitution.
There is no decision on the validity of Article 31A which can be looked upon as a measuring rod of the extent of the amending power.
To 213 hark back to Article 31A every time that a new constitutional amendment is challenged is the surest means of ensuring a drastic erosion of the Fundamental Rights conferred by Part III.
Such a process will insidiously undermine the efficacy of the ratio of the majority judgment in Kesavananda Bharati regarding the inviolability of the basic structure.
That ratio requires that the validity of each new constitutional amendment must be judged on its own merits.
[262C G] (17) It is not correct to say that when Article 31A was upheld on the ground of state decisis, what was upheld was a constitutional device by which a class of subject oriented laws was considered to be valid.
The simple ground on which Article 31A was upheld, apart from the ground of contemporaneous practical exposition, was that its validity was accepted and recognised over the years and, therefore, it was not permissible to challenge its constitutionality.
The principle of stare decisis does not imply the approval of the device.
Or mechanism which is employed for the purpose of framing a legal or constitutional provision.
[262G H, 263A B] (18) Under clauses (2) to (6) of Article 19, restrictions can be imposed only if they are reasonable and then again, they can be imposed in the interest of a stated class of subjects only.
It is for the courts to decide whether restrictions are reasonable and whether they are in the interest of the particular subject.
Apart from other basic dissimilarities, Article 31C takes away the power of judicial review to an extent which destroys even the semblance of a comparison between its provisions and those of clauses (2) to (6) of Article 19.
Human ingenuity, limitless though it may be, has yet not devised a system by which the liberty of the people can be protected except through the intervention of courts of law.
[263B D] Three Articles of the Indian Constitution and only three stand between the heaven of freedom into which Tagore wanted his country to awake and the abyss of unrestrained power.
They are Articles 14, 19 and 21.
Article 31C has removed two sides of that golden triangle which affords to the people of this country an assurance that the promise held forth by the Preamble will be performed by ushering an egalitarian era through the discipline of fundamental rights, that is, without emasculation of the rights to liberty and equality which alone can help preserve the dignity of the individual.
[263D E] Per Bhagwati, J. (concurring) (1) Since the question in regard to the constitutional validity of the amendment made in Article 31C did not arise in the writ petitions and the counter affidavits, it was wholly academic and superfluous to decide it.
Once it is conceded that Articles 31A, 31B and the unamended Article 31C are constitutionally valid it became wholly unnecessary to rely on the unamended Article 31 in support of the validity of Sick Textiles Undertaking (Nationalisation) Act, 1974 because Article 31B would, in any event, save it from invalidation on the ground of infraction of any of the fundamental rights.
[268F H] (2) Now either the Nationalisation Act was really and truly a law for giving effect to the Directive Principles set out in Article 39 clause (b) as declared in section 39 of the Act or it was not such a law and the legislative declaration contained in section 39 was a colourable device If it was the 214 former then the unamended Article 31C would be sufficient to protect the Nationalisation Act from attack on the ground of violation of Articles 14, 19 and 31 and it would be unnecessary to involve the amended Article 31C and if it was the latter, then neither the unamended nor the amended Article 31C would have any application.
Thus in either event, the amended Article 31C would have no relevance at all in adjudicating upon the constitutional validity of the Nationalisation Act.
In these circumstances, the court could not be called upon to examine the constitutionality of the amendment made in Article 31C. [269B E] Dattatraya Govind Mahajan v State of Maharashtra, ; , followed.
(3) Clause (4) of Article 368 of the Constitution is unconstitutional and void as damaging the basic structure of the Constitution.
[288E] The words "on any ground" in clause (4) of Article 368 are of the widest amplitude and they would obviously cover even a ground that the procedure prescribed in clause (2) and its proviso has not been followed.
The result is that even if an amendment is purported to have been made without complying with the procedure prescribed in sub clause (2) including its proviso, and is therefore unconstitutional, it would still be immune from challenge.
[284F F] As per Kesavananda Bharati 's case any amendment of the Constitution which did not conform to the procedure prescribed by sub clause (2) and its proviso was no amendment at all and a court would declare it invalid.
Thus if an amendment was passed by a simple majority in the House of the People and the Council of States and the President assented to the amendment, it would, in law, be no amendment at all because the requirement of clause (2) is that it should be passed by a majority of each of the Houses separately and by not less than two third of the Members present and voting.
But if clause (4) was valid it would become difficult to challenge the validity of such an amendment and it would prevail though made in defiance of a mandatory constitutional requirement.
Clause (2) including its proviso would be rendered completely superfluous and meaningless and its prescription would become merely a paper requirement.
Moreover, apart from nullifying the requirements of clause (2) and its proviso, clause (4) has also the effect of rendering an amendment immune from challenge even if it damages or destroys the basic structure of the Constitution and is, therefore, outside the amending power of Parliament.
So long as clause (4) stands, an amendment of the Constitution, though unconstitutional and void as transgressing the limitation on the amending power of Parliament as laid down in Kesavananda Bharati 's case, would be unchallengeable in a court of law.
The consequence of this exclusion of the power of judicial review would be that, in effect and substance, the limitation on the amending power of Parliament would, from a practical point of view, become non existent and it would not be incorrect to say, for covertly and indirectly by the exclusion of judicial review the amending power of Parliament would stand enlarged contrary to the decision of this Court in Kesavananda Bharati 's case.
This would, undoubtedly, damage the basic structure of the Constitution because there are two essential features of the basic structure which would be violated, namely, the limited amending power of the Parliament and the power of judicial review with a view to examining whether any authority under the Constitution has exceeded the limits of its powers.
[284F H, 285A D] Our Constitution is a controlled constitution which confers powers on the various authorities created and recognised by it and defines the limits of those 215 powers.
The Constitution is suprema lex, the paramount law of the land and there is no authority, no department or branch of the State which is above or beyond the Constitution or has powers unfettered and unrestricted by the Constitution.
The Constitution has devised a structure of power relationship which checks and balances and limits are placed on the powers of every authority of instrumentality under the Constitution.
Every organ of the State, be it the Executive or the Legislature or the Judiciary, derives its authority from the Constitution and it has to act within the limits of such authority.
Parliament too is a creature of the Constitution and it can only have such powers as are given to it under the Constitution.
It has no inherent power of amendment of the Constitution and being an authority created by the Constitution, it cannot have such inherent power but the power of amendment is conferred upon it by the Constitution and it is a limited power which is so conferred.
Parliament cannot in exercise of this power so amend the Constitution as to alter its basic structure or to change its identity.
Now, if by constitutional amendment, Parliament was granted unlimited power of amendment, it would cease to be an authority under the Constitution, but would become supreme over it because it would have power to alter the entire Constitution including its basic structure and even to put an end to it by totally changing its identity.
Therefore, the limited amending power of Parliament is itself an essential feature of the Constitution, a part of its basic structure, for if the limited power of amendment was enlarged into an unlimited power the entire character of the Constitution would be changed.
It must follow as a necessary corollary that any amendment of the Constitution which seeks, directly or indirectly, to enlarge the amending power of Parliament by freeing it from the limitation of unamendability of the basic structure would be violative of the basic structure and, hence, outside the amendatory power of Parliament.
[285E H, 286A C] It is a fundamental principle of our Constitution that every organ of the State, every authority under the Constitution derives its powers from the Constitution and has to act within the limits of such power.
The three main departments of the State amongst which the powers of Government are divided are: the Executive, the Legislature and the Judiciary.
Under our Constitution there is no rigid separation of powers but there is a broad demarcation though, having regard to the complex nature of governmental functions, certain degree of overlapping is inevitable.
The Constitution has created an independent machinery, namely, the judiciary which is vested with the power of judicial review to determine the legality of executive action and the validity of legislation passed by the Legislature.
It is a solemn duty of the judiciary under the Constitution to keep the different organs of the State, such as the Executive and the Legislature, within the limits of the power conferred upon them by the Constitution.
This power of judicial review is conferred on the judiciary by Articles 32 and 226 of the Constitution.
[286D, E, 287B C].
It is a cardinal principle of our Constitution that no one, howsoever highly placed and no authority however lofty, can claim to be the sole judge of its power under the Constitution or whether its actions are within the confines of such power laid down by the Constitution.
The judiciary is the interpreter of the Constitution and the judiciary is assigned the delicate task to determine what is the power conferred on each branch of Government, whether it is limited, and if so, what are the limits and whether any action of that branch transgresses such limits.
It is for the judiciary to uphold the constitutional values and to enforce the constitutional limitations.
That is the essence of the rule of law, which inter alia requires that "the exercise of powers by 216 the Government whether it be the legislature or the executive or any other authority, be conditioned by the Constitution and the law".
The power of the judicial review is an integral part of our constitutional system and without it, there will be no Government of Laws and the rule of law would become a teasing illusion and a promise of unreality.
If there is one feature of our Constitution which, more than any other, is basic and fundamental to the maintenance of democracy and the rule of law, it is the power of judicial review and it is unquestionably a part of the basic structure of the Constitution.
However, effective alternative institutional mechanism arrangements for judicial review cannot be made by Parliament.
Judicial review is a vital principle of our Constitution and it cannot be abrogated without affecting the basic structure of the Constitution.
If by a constitutional amendment, the power of judicial review is taken away and it is provided that the validity of any law made by the legislature shall not be liable to be called in question on any ground, even if it is outside the legislative competence of the legislature or is violative of any fundamental rights, it would be nothing short of subversion of the Constitution, for it would make a mockery of the distribution of legislative powers between the Union and the States and render the fundamental rights meaningless and futile.
So also if a constitutional amendment is made which has the effect of taking away the power of judicial review and providing that no amendment made in the Constitution shall be liable to be questioned on any ground, even if such amendment is violative of the basic structure and, therefore, outside the amendatory power of Parliament, it would be making Parliament sole judge of the constitutional validity of what it has done and that would, in effect and substance, nullify the limitation on the amending power of Parliament and effect the basic constructure of the Constitution.
[287F H, 288A E] (4) Clause (5) of Article 368 of the Constitution is unconstitutional and void.
[289E F] After the decisions of Kesavananda Bharati 's case and Smt.
Indira Gandhi 's case there was no doubt at all that the amendatory power of Parliament was limited and it was not competent to Parliament to alter the basic structure of the Constitution and clause (5) could not remove the doubt which did not exist.
What clause (5) really sought to do was to remove the limitation on the amending power of Parliament and correct it from a limited power into an unlimited one.
This was clearly and indubitably a futile exercise on the part of the Parliament.
[288G H, 289A] The Constitution has conferred only a limited amending power on Parliament, so that it cannot damage or destroy the basic structure of the Constitution and Parliament by exercise of that limited amending power convert that very power into an absolute and unlimited power.
If it were permissible to Parliament to enlarge the limited amending power conferred upon it into an absolute power of amendment, then it was meaningless to place a limitation on the original power of amendment.
Parliament having a limited power of amendment cannot get rid of the limitation of exercising that very power and convert it into an absolute power.
Clause (5) of Article 368 which sought to remove the limitation on the amending power of Parliament by making it absolute, therefore, is outside the amending power of Parliament.
However, clause (5) seeks to convert a controlled Constitution into an uncontrolled one by removing the limitation on the amending power of Parliament which is itself an essential feature of the Constitution and it is, therefore, violative of the basic structure.
[289B E] 217 Per contra: (5) Section 4 of the Constitution (Forty second Amendment) Act, 1976 making amendments in Article 31C and giving primacy to Directive Principles over Fundamental Rights, in case of conflict between them, does not damage or destroy the basic structure of the Constitution and is within the amending power of Parliament and therefore amended Article 31C is constitutional and valid.
[342E F].
(i) It is not correct to say that Fundamental Rights alone are based on Human Rights while Directive Principles fall in some category other than Human Rights.
Fundamental Rights and Directive Principles cannot be fitted in two distinct and strictly defined categories.
Broadly stated, Fundamental Rights represent civil and political rights, while Directive Principles embody social and economic rights.
Both are clearly part of broad spectrum of human rights.
Even, the universal Declaration of Human Rights adopted by the General Assembly of the United Nations on 10th December, 1948 contains not only rights protecting individual freedom (Articles 1 to 21) but also social and economic rights intended to ensure socio economic justice to every one (Articles 22 to 29).
The two other International Covenants adopted by the General Assembly for securing human rights, namely, the International Covenant on Civil and Political Rights and the International Covenant on Economic, Social and Cultural Rights are also to the same effect.
The socio economic rights embodied in the Directive Principles are as much a part of human rights as the Fundamental Rights.
Together, they are intended to carry out the objectives set out in the preamble of the Constitution and to establish an egalitarian social order informed with political, social and economic justice and ensuring dignity of the individual not only to a few privileged persons but to the entire people of the country including the have nots and the handicapped, the lowliest and the lost.
[320C H] Kesavananda Bharati vs State of Kerala, [1973] Supp.
SCR, referred to.
(ii) Although Fundamental Rights and Directive Principles appear in the Constitution as distinct entities, there was no such demarcation made between them during the period prior to the framing of the Constitution.
From the point of view of importance and significance, no distinction was drawn between justiciable and non justiciable rights by the Fathers of the Constitution and both were treated as forming part of the rubric of Fundamental Rights, the only difference being that whereas the Fundamental Rights were enforceable in Courts of Law, the Directive Principles of social policy were not to be enforceable.
[321A B, 322C D] (iii) To limit the potential of Fundamental Rights on the ground that they are merely negative obligations requiring the State to abstain as distinct from taking positive action is impermissible.
[323D C] No doubt, it is said that the Fundamental Rights deal with negative obligations of the State not to encroach on individual freedom, while the Directive principles impose positive obligations on the State to take certain kind of actions.
Though the latter part may be true that the Directive Principles require positive action to be taken by the State, it is not wholly correct that the Fundamental Rights impose only negative obligations on the State.
There are a few Fundamental Rights which have also a positive content, with the result that new dimensions of the Fundamental Rights are being opened up by the Supreme Court and the entire jurisprudence of Fundamental Rights is in a 218 stage of resurgent evaluation.
Moreover, there are three Articles, namely, Article 15(2), Article 17 and Article 23 within the category of Fundamental Rights which are designed to protect the individual against the action of other private citizens and seem to impose positive obligations on the State to ensure this protection to the individual.
[322 F H, 323 A B].
Hussainara Khatoon vs State of Bihar, ; Madhav Hayawadanrao Hoskot vs State of Maharashtra, ; and Sunil Batra etc.
vs Delhi Administration & Ors.
; , , followed.
(iv) The only distinguishing feature between Fundamental Rights and Directive Principles of State Policy is that whereas the former are made enforceable in a Court of Law the latter are not.
They are not justiciable be cause the social and economic rights and other matters dealt with in the Directive Principles are by their very nature incapable of judicial enforcement and moreover, the implementation of many of those rights would depend on the.
state of economic development in the country, the availability.
Of necessary finances and the government 's assessment of priority of objectives and values.
But merely because the Directive Principles are non justiciable, it does not follow that they are in any way subservient or inferior to the Fundamental Rights.
[323 B C, E F].
(v) The Indian Constitution is first and foremost a social document.
The majority of its provisions are either directly aimed at furthering the goals cf the socio economic revolution or attempt to foster this revolution by establishing the conditions necessary for its achievement.
The Fundamental Rights are no doubt important and valuable in a democracy, but there can be no real democracy without social and economic justice to the common man and to create socio economic conditions in which there can be social and economic justice to everyone, is the theme of the Directive Principles.
It is the Directive Principles which nourish the roots of a democracy, provide strength and vigour to it and attempt to make it a real participatory democracy which does not remain merely a political democracy but also becomes a social and economic democracy with Fundamental Rights available to all irrespective of their power, position or wealth.
The dynamic provisions of the Directive Principles fertilise the static provisions of the Fundamental Rights.
The object of the Fundamental Rights is to protect individual liberty, but individual liberty cannot be considered in isolation from the socio economic structure in which it is to operate.
There is a real connection between individual liberty and the shape and form of the social and economic structure of the society.
There cannot be any individual liberty at all for the large masses of people who are suffering from want and privation and who are cheated out of their individual rights by the exploitative economic system.
Their individual liberty would come in conflict with the liberty of the socially and economically more powerful class and in the process get mutilated or destroyed.
The real controversies in the present day society are not between power and freedom but between one form of liberty and another.
Under the present socio economic system, it is the liberty of the few which is in conflict with the liberty of the many.
The Directive Principles, therefore, impose an obligation on the State to take positive action for creating socio economic conditions in which there will be an egalitarian social order with social and economic justice to all so that individual liberty will become a cherished value and the dignity of the individual a living reality, not only for a few privileged persons but for the entire people of the 219 country.
Thus, the Directive Principles enjoy a very high place in the constitutional scheme and it is only in the framework of the socio economic structure envisaged in the Directive Principles that the Fundamental Rights are intended to operate, for it is only then they can become meaningful and significant for the millions of our poor and deprived people, who do not have even the bare necessities of life and who are living below the poverty level.
[323F G, 324C H, 325A B].
(vi) Article 37 of the Constitution is an Article of crucial importance unlike the Irish Constitution which provided the inspiration for introducing Directive Principles in our Constitution.
Article 37 says that the Directive Principles shall not be enforceable by any court, makes the Directive Principles fundamental in the governance of the country and enacts that it shall be the duty of the State to apply the Directive Principles in making laws.
The changes made by the framers of the Constitution are vital and they have the effect of bringing about a total transformation or metamorphosis of this provision, fundamentally altering the significance and efficacy.
The Directive Principle are not excluded from the cognizance of the court, as under the Irish Constitution; they are merely made non enforceable by a court of law.
Merely because the Directive Principles are not enforceable in a court of law, it does not mean that they are of subordinate importance to any part of the Constitution or that they cannot create obligations or duties binding on the State.
The crucial test which has to be applied is whether the Directive Principles impose any obligations or duties on the State, if they do, the State would be bound by a constitutional mandate to carry out such obligations or duties, even though no corresponding right is created in any one which can be enforced in a court of law.
On this question Article 37 is emphatic and make the point in no uncertain terms There could not have been more explicit language used by the Constitution makers to make the Directive Principles binding on the State and there can be no doubt that the State is under a constitutional obligation to carry out this mandate contained in Article 37.
In fact, non compliance with the Directive Principles would be unconstitutional on the part of the State and it would not only constitute a breach of faith with the people who imposed this constitutional obligation on the State but it would also render a vital part of the Constitution meaningless and futile.
For the purpose of the Directive Principles, the "State" has the same, meaning as given to it under Article 13 for the purpose of the Fundamental Rights.
This would mean that the same State which is injuncted from taking any action in infringement of the Fundamental Rights is told in no uncertain terms that it must regard the Directive Principles as fundamental in the governance of the country and is positively mandated to apply them in making laws.
This gives rise to a paradoxical situation and its implications are far reaching.
The State is on the one hand prohibited by the constitutional injunction in Article 13 from making any law or taking any executive action which would infringe any Fundamental Right and at the same time it is directed by the constitutional mandate in Article 37 to apply the Directive Principles in the governance of the country and to make laws for giving effect to the Directive Principles.
Both are constitutional obligations of the State.
When the State makes a law for giving effect to a Directive Principle, it is carrying out a constitutional obligation under Article 37 and if it were to be said that the State cannot make such a law because it comes into conflict with a Fundamental Right, it can only be on the basis that Fundamental Rights stand on a higher pedestal and have precedence over Directive Principles.
But it is not correct to say that under 220 our constitutional scheme Fundamental Rights are superior to Directive Principles or that Directive Principles must yield to Fundamental Rights.
Both are in fact equally fundamental and the courts have, therefore, tried to harmonise them by importing the Directive Principles in the construction of the Fundamental Rights.
For the purpose of determining the reasonableness of the restriction imposed on Fundamental Rights the court may legitimately take into account the Directive Principles and where executive action is taken or legislation enacted for the purpose of giving effect to a Directive Principle, the restriction imposed by it on a Fundamental Right may be presumed to be reasonable.
[325C, E H, 326A D, 327H, 328A H, 329A B].
State of Bihar vs Kameshwar Singh, ; Pathumma vs State of Kerala, ; ; M/s. Kasturi Lal Lakshmi Reddy etc.
vs The State of Jammu & Kashmir & Anr., [1980] 3 SCR p. 1338, applied.
State of Madras vs Champkam Dorairajan, dissented from.
In Re Kerala Education Bill, [1959] SCR 995, Referred to.
(vii) If a law is enacted for the purpose of giving effect to a Directive Principle and it imposes a restriction on a Fundamental Right, it would be difficult to condemn such restriction as unreasonable or not in public interest.
So also where a law is enacted for giving effect to a Directive Principle in furtherance of the constitutional goal of social and economic justice it may conflict with a formalistic and doctrinaire view of equality before the law, but it would almost always conform to the principle of equality before the law in its total magnitude and dimension, because the equality clause in the Constitution does not speak of mere formal equality before the law but embodies the concept of real and substantive equality which strikes at inequalities arising on account of vast social and economic differentials and is consequently an essential ingredient of social and economic justice.
The dynamic principle of egalitarianism fertilises the concept of social and economic justice; it is one of its essential elements and there can be no real social and economic justice where there is a breach of the egalitarian principle.
If, therefore, there is a law enacted by the legislature which is really and genuinely for giving effect to a Directive Principle with a view to promoting social and economic justice, such law does not violate the principle of egalitarianism and is in accord with the principle of equality before the law as understood not in its strict and formalistic sense, but in its dynamic and activist magnitude.
In the circumstances, the Court would not be unjustified in making the presumption that a law enacted really and genuinely for giving effect to a Directive Principle in furtherance of the cause of social and economic justice, would not infringe any Fundamental Right under Article 14 or 19.
This being the correct interpretation of the constitutional provisions, the amended Article 31C does no more than codify the existing position under the constitutional scheme by providing immunity to a law enacted really and genuinely for giving effect to a Directive Principle, so that needlessly futile and time consuming controversy whether such law contravenes Article 14 or 19 is eliminated.
The amended Article 31C cannot in the circumstances be regarded as violative of the basic structure of the Constitution.
[329F H, 330A F].
(viia) A law enacted really and genuinely for giving effect to a Directive Principle, in discharge of the constitutional obligation laid down upon the State under Article 37, would not be invalid, because it infringes a fundamental right.
If the Court takes the view that it is invalid, it would be placing Fundamental Rights above Directive Principles, a position not supported at all by 221 the history of their enactment as also by the constitutional scheme.
The two A constitutional obligations, one in regard to Fundamental Rights and the other in regard to Directive Principles, are of equal strength and merit and there is no reason why, in case of conflict, the former should be given precedence over the latter.
Whether or not a particular mandate of the Constitution is justiciable has no bearing at all on its importance and significance and justiciability by itself can never be a ground for placing one constitutional mandate on a higher pedestal than the other.
The effect of giving greater weightage to the constitutional mandate in regard to Fundamental Rights would be to relegate the Directive Principles to a secondary position and emasculate the constitutional command that the Directive Principles shall be fundamental in the governance of the country and it shall be the duty of the State to apply them in making laws.
It would amount to refusal to give effect to the words fundamental in the governance of the country" and a constitutional command which has been declared by the Constitution to be fundamental would be rendered non fundamental.
The result would be that a positive mandate of the constitution commanding the State to make a law would be defeated by a negative constitutional obligation not to encroach upon a Fundamental Right and the law made by the legislature pursuant to a positive constitutional command would be delegitimised and declared unconstitutional.
This plainly would be contrary to the constitutional scheme because the Constitution does not accord higher place to the constitutional obligation in regard to Fundamental Rights over the constitutional obligation in regard to Directive Principles and does not say that the implementation of the Directive Principles shall only be within the permissible limits laid down in the Chapter on Fundamental Rights.
[330A, 331A F].
Karimbil Kunhikoman vs State of Kerala, [1962] I SCR 319 (supra) referred to.
(viii) It is not correct to say that consequent to the amendment of Article 31C the Constitution is now made to stand 'on its head and not on its legs. ' Prior to the amendments, Fundamental Rights had a superior or a higher position in the constitutional scheme than Directive Principles and there is accordingly no question at all of any subversion of the constitutional structure by the amendment.
There can be no doubt that the intention of the Constitution makers was that the Fundamental Rights should operate within the socioeconomic structure or a wider continuum envisaged by the Directive Principle, for then only would the Fundamental Rights become exercisable by all and a proper balance and harmony between Fundamental Rights and Directive Principles secured.
The Constitution makers, therefore, never contemplated that a conflict would arise between the constitutional obligation in regard to Fundamental Rights and the constitutional mandate in regard to Directive Principles.
But if a conflict does arise between these two constitutional mandates of equal fundamental character, since the Constitution did not provide any answer and perhaps for the reason that such a situation was not anticipated, the problem had to be solved by Parliament and some modus operandi had to be evolved in order to eliminate the possibility of conflict howsoever remote it might be.
[331G H, 332A D].
Parliament took the view that the constitutional obligation in regard to Directive Principles should have precedence over the constitutional obligation in regard to the Fundamental Rights in Articles 14 and 19, because Fundamental Rights though precious and valuable for maintaining the democratic way of life, have absolutely no meaning for the poor, down trodden and economically 222 backward classes of people who unfortunately constitute the bulk of the people of India and the only way in which Fundamental Rights can be made meaningful for them is by implementing the Directive Principles, for the Directive Principles are intended to bring about a socio economic revolution and to create a new socio economic order where there will be social and economic justice for all and every one, not only a fortunate few but the teeming millions of India, would be able to participate in the fruits of freedom and development and exercise the Fundamental Rights.
Parliament, therefore, amended Article 31C with a view to providing that in case of conflict Directive Principles shall have precedence over the Fundamental Rights in Articles 14 and 19 and the latter shall yield place to the former.
The positive constitutional command to make laws for giving effect to the Directive Principles shall prevail over the negative constitutional obligation not to encroach on the Fundamental Rights embodied in Articles 14 and 19.
[333C F].
Parliament made the amendment in Article 31C because it realised that "if the State fails to create conditions in which the fundamental freedoms could be enjoyed by all, the freedom of the few will be at the mercy of the man and then all freedoms will vanish" and "in order, therefore, to preserve their freedom, the privileged few must part with a portion of it." Therefore, it cannot at all be said that the basic structure af the Constitution is affected when for evolving a modus vivandi for resolving a possible remote conflict between two constitutional mandates of equally fundamental character, Parliament decides by way of amendment of Article 31C that in case of such conflict the constitutional mandate in regard to Directive Principles shall prevail over the constitutional mandate in regard to the Fundamental Rights under Articles 14 and 19.
The amendment in Article 31C far from damaging the basic structure of the Constitution strengthens and re enforces it by giving fundamental importance to the rights of the members of the community as against the rights of a few individuals and furthering the objective of the Constitution to build an egalitarian social order where there will be social and economic justice for all, every one including the low visibility areas of humanity in the country will be able to exercise Fundamental Rights and the dignity of the individual and the worth of the human person which are cherished values will not remain merely the exclusive privileges of a few but become a living reality for the many [334H, 335A D].
(ix) The principle of egalitarianism is an essential element of social and economic justice and, therefore, where a law is enacted for giving effect to a Directive Principle with a view to promoting social and economic justice, it would not run counter to the egalitarian principle and would not therefore be violative of the basic structure, even if it infringes equality before the law in its narrow and formalistic sense.
No law which is really and genuinely for giving effect to a Directive Principle can be inconsistent with the egalitarian principle and therefore the protection granted to it under the amended Article 31C against violation of Article 14 cannot have the effect of damaging the basic structure.
Therefore, there is no violation of the basic structure involved in the amendment of Article 31C.
In fact, one it is accepted that the unamended Article 31C was constitutionally valid, it could only be on the basis that it did not damage or destroy the basic structure of the Constitution, it cannot be said that the amended Article 31C is violative of the basic structure.
If the exclusion of the Fundamental Rights embodied in Articles 14 and 19 could be legitimately made for giving effect to the Directive Principles set out in clauses (b) and (e) of Article 39 without affecting the basic structure.
these 223 Fundamental Rights cannot be excluded for giving effect to the other Directive Principles.
If the constitutional obligation in regard to the Directive Principles set out in clauses (b) and (c) of Article 39 could be given precedence over the constitutional obligation in regard to the Fundamental Rights under Articles 14 and 19, there is no reason in principles why such precedence cannot be given to the constitutional obligation in regard to the other Directive Principles which stand on the same footing.
It would be incongruous to hold tho amended Article 31C invalid when the unamended Article 31C has been held to be valid by the majority decision in Kesavananda Bharati 's and by the order, in Waman Rao 's case, dated 9th May, 1980.
[335E H, 336A C].
(x) It is clear from the language of the amended Article 31C that the law which is protected from challenge under Articles 14 and 19 is law giving effect to the policy of the State towards securing or any of the Directive Principles.
Whenever, therefore, any protection is claimed for a law under the amended Article 31C, it is necessary for the Court to examine whether the law has been enacted for giving effect to the policy of the State towards securing any one or more of the Directive Principles and it is only if the court is so satisfied as a result of judicial scrutiny that the court would accord the protection of the amended Article 31C to such law.
Now it is undoubtedly true that the words used in the amended Article are "law giving effect to the policy of the State" but the policy of the State which is contemplated there is the policy towards securing one or more of the Directive Principles it is the constitutional obligation of the State to secure the Directive Principles and that is the policy which the State is required to adopt and when a law is enacted in pursuance of this policy of implementing the Directive Principles and it seeks to give effect to a Directive Principle, it would both from the point of grammar and language, be correct to say that it is made for giving effect to the policy of the State towards securing such Directive Principle.
The words "law giving effect to the policy of the State" are not so wide but in the context and collocation in which they occur, they are intended to refer only to a law enacted for the purpose of implementing or giving effect to one or more of the Directive Principles.
[337A F].
(xi) The Court before which protection for a particular law is claimed under the amended Article 31C would, therefore, have to examine whether such law is enacted for giving effect to a Directive Principle, for genuinely it would have the protection of the amended Article 31C.
A claim that a particular law is enacted for giving effect to Directive Principles put forward by the State would have no meaning or value; it is the court which would have to determine the question.
Again it is not enough that there may be some connection between a provision of the law and a Directive Principle.
The connection has to be between the law and the Directive Principle and it must G be a real and substantial connection.
To determine whether a law satisfies this test, the court would have to examine the pith and substance, the true nature and character of the law as also its design and the subject matter dealt with by it together with its object and scope.
If on such examination, the court finds that the dominant object of the law is to give effect to the Directive Principle, it would accord protection to the law under the amended Article 31C.
But if the court finds that the law though passed seemingly for giving effect to a Directive Principle, is, in pith and substance, one for accomplishing an unauthorised purpose unauthorised in the sense of not being covered by any Directive Principle such law would not have the protection of the amended Article 31C.
The amended Article 31C does not give protection to 224 a law which has merely some remote or tenuous connection with a Directive.
Principle.
What is necessary is that there must be a real and substantial connection and the dominant object of the law must be to give effect to the Directive Principle, and that is a matter which the court would have to decide before any claim for protection under the amended Article 31C can be allowed.
[337F H, 338A B, F G].
The words used in the amended Article 31C are: "law giving effect to the policy of the State towards securing all or any of the principles laid down in Part IV" and these words on a plain natural construction do not include all the provisions of law but only those which give effect to the Directive Principle.
Therefore, it is not every provision of a statute which has been enacted with the dominant ' object of giving effect to a Directive Principle that is entitled to protection but only those provisions of the statute which are basically and essentially necessary for giving effect to the Directive Principles are protected under the amended Article 31C. If there are any other provisions in the statute which do not fall within this category, they would not be entitled to protection and their validity would have to be judged by reference to Articles 14 and 19.
Where, therefore, protection is claimed in respect of a statute under the amended Article 31C, the court would have first to determine whether there is real and substantial connection between the law and a Directive Principle and the predominant object of the law is to give effect to such Directive Principle and if the answer to this question is in the affirmative, the court would then have to consider which are the provisions of the law basically and essentially necessary for giving effect to the Directive Principle and give protection of the amended Article 31C only to those provisions.
The question whether any particular provision of the law is basically and essentially necessary for giving effect to the Directive Principle, would depend, to a large extent, on how closely and integrally such provision is connected with the implementation of the Directive Principle.
If the court finds that a particular provision is subsidiary or incidental or not essentially and integrally connected with the implementation of the Directive Principle or is of such a nature that though seemingly a part of the general design of the main provisions of the statute, the dominant object is to achieve an unauthorised purpose, it would not enjoy the protection of amended Article 31C and would be liable to be struck down as invalid if it violates Article 14 or 19.
[338 G H, 339A, D H, 340A D] Akadasi Padhan vs State of Orissa, [1963] 2 Supp.
SCR 691; Rashbihari Panda etc.
vs State of orissa; , ; M/s. Vrailal Manilal & Co. & ors.
vs State of Madhya Pradesh & Ors.
, ; and R. C. Cooper vs Union of India, ; , followed.
(xii) If the Court finds that even in a statute enacted for giving effect to a Directive Principle, there is a provision which is not essentially and integrally connected with the implementation of the Directive Principle or the dominant object of which is to achieve an unauthorised purpose it would be outside the protection of the amended Article 31C and would have to meet the challenge of Articles 14 and 19.
[340F H] (xiii) Articles 39 to 51 contain Directive Principles referring to certain specific objectives and in order that a law should be for giving effect to one of those Directive Principles, there would be a real and substantial connection between the law and the specific objective set out in such Directive Principle.
Obviously, the objectives set out in these Directive Principles being specific and limited, every law made by a legislature in the country cannot possibly have a real and substantial connection with one or the other of these specific 225 objectives.
It is only a limited number of laws which would have a real A and substantial connection with one or the other of the specific objectives contained in these Directive Principles and any and every law would not come within this category.
[341A C].
(xiv) Article 38 is a general article which stresses the obligation of the State to establish a social order in which justice social, economic and political shall inform all the institutions of national life.
It no doubt talks of the duty of the State to promote the welfare of the people and there can be no doubt that standing by itself this might cover a fairly wide area but the objective set out in the Article is not merely promotion of the welfare of the people? but there is a further requirement that the welfare of the people is to be promoted by the State, not in any manner it likes, not according to its whim and fancy, but for securing and protecting a particular type of social order and that social order should be such as would ensure social, economic and political justice for all.
Social, economic and political justice is the objective set out in the Directive Principle in Article 38 and it is this objective which is made fundamental in the governance of the country and which the State is laid under an obligation to realise.
This Directive Principle forms the base on which the entire structure of the Directive Principles is reared and social, economic and political justice is the signature tune of the other Directive Principles.
The Directive Principles set out in the subsequent Articles following upon Article 38 merely particularise and set out facets and aspects of the ideal of social, economic and political justice articulated in Article 38.
[341C G].
(xv) The concept of social and economic justice may not be very easy of definition but its broad contours are to be found in some of the provisions of the Fundamental Rights and in the Directive Principles and whenever a question arises whether a legislation is for giving effect to social and economic justice, it is with reference to these provisions that the question would have to be determined.
There is nothing so vague or indefinite about the concept of social or economic justice that almost any kind of legislation could be justified under it.
Moreover, where a claim for protection is made in respect of a legislation on the ground that it is enacted for giving effect to a Directive Principle, the Directive Principle to which it is claimed to be related would not ordinarily be the general Directive Principle set out in Article 38, but could be one of the specific Directive Principles set out in the succeeding Articles because these latter particularise the concept of social and economic justice referred to in Article 38.
Therefore, it is not correct to say that if the amendment in Article 31C were held valid, it would have the effect of protecting every possible legislation under the sun and that would in effect and substance wipe out Articles 14 and 19 from the Constitution.
This is a tall and extreme argument, not justified in the provisions of the Constitution.
[341H, 342A D].
HELD further (concurring with the majority): 6. Clause (a) of Article 31A is constitutionally valid even on the application of the basic structure test.
[290D].
Where any law is enacted for giving effect to a Directive Principle with the view to furthering the constitutional goal of social and economic justice, there would be no violation of the basic structure, even if it infringes formal equality before the law under Article 14 or any fundamental right under Article 19.
Here, clause (a) of Article 31A protects a law of agrarian reform which is clearly in the context of the socio economic conditions prevailing in 226 India, a basic requirement of social and economic justice and 15 covered by the Directive Principals set out in clause (b) and (c) of Article 39 and it cannot be regarded as violating the basic structure of the Constitution.
On the contrary, agrarian reforms leading to social and economic justice to the . rural population is an objective which strengthens the basic structure of the Constitution.
[290B D].
Even on the basis of the doctrine of stare decisions the whole of Article 31A is constitutionally valid.
The view that Article 31A is constitutionally valid has been fallen in atleast three decisions of the Supreme Court, namely, Shankri Prasad 's case, Sajjan Singh 's case and Golaknath 's case and it has hold the field for over 28 years and on the faith of its correctness millions of acres of agricultural land have changed hands and now agrarian relations have come into being transferring the entire rural economy.
Even though the constitutional .
validity of Article 31A was not tested in these decisions by reference to the basic structure doctrine, the court would not be justified in allowing the earlier decisions to be reconsidered and the question of constitutional validity of Article 31A re opened.
These decisions have given a quietus to the constitutional challenge against the validity of Article 31A and this quietus should not now be allowed to be disturbed.
[290E, 292D, 294G H 295A].
Shankri Prasad vs Union of India, [19621 2 SCR 89; Sajjan Singh vs State of Rajasthan, [1965] I SCR 933; I.C. Golaknath vs Union of India, ; ; Ambika Prasad Mishra vs State of U.P. and Ors., [1980] 3 SCR .
followed It is no doubt true that the Supreme Court has power to review its earlier decisions or even depart from them and the doctrine of stare decisions cannot be permitted to perpetuate erroneous decisions of the court to the detriment of the general welfare of the public.
Certainty and continuity are essential ingredients of rule of law.
Certainty and applicability of law would be considerably eroded and suffer a serious set back if the highest court in the land were ready to overrule the views expressed by it in! earlier decisions even though that view has held the field for a number of years.
It is obvious that when constitutional problems are brought before the Supreme Court for its decision, complete and difficult questions are bound to arise and since the decision of many of such questions may depend upon choice between competing values, two views may be possible depending upon the value judgment or the choice of values made by the individual judge.
Therefore.
if one view has been taken by the court after mature deliberation the fact that another Bench is inclined to take another view would not justify the court in reconsidering the earlier decision and overrule it.
The law laid down by the Supreme Court is binding on all the courts in the country and numerous questions all over the country are decided in accordance with the view taken by the Supreme Court.
Many people arrange their affairs and large number of transactions also take place on the faith of the correctness of the decision given by the Supreme Court.
It would create uncertainty, unstability and confusion if the law propounded by the Supreme Court on the face of which numerous cases have been decided and many transactions have taken place is held to be not the correct law after a number of years.
The doctrine of stare decisions is evolved from the maxim "stare decisions et non quita movere" meaning "adhere to the decision and not unsettle things which are established" and it is a useful doctrine intended to bring about certainty and uniformity in the law.
But the doctrine of stare decisions cannot be regarded as a rigid 227 and inevitable doctrine which must be applied at the cost of justice There may be cases where it may be necessary to rid the doctrine of its petrifying rigidity.
The court may in an appropriate case overrule a previous decision taken by it, but that should be done only for substantial and compelling reasons.
The power of review must be exercised with due care and caution and only for advancing the public well being and not merely because it may appear that the previous decision was based on an erroneous view of the law.
It is only where the perpetuation of the earlier decision would be productive of mischief or inconvenience or would have the effect of deflecting the nation from the course which has been set by the Constitution makers or "where national crisis of great moment to the life, liberty and safety of this country and its millions are at stake or the basic direction of the nation itself is in peril of a shake up", that the court would be justified in reconsidering its earlier decision and departing from it.
It is fundamental that the nation 's constitution should not be kept in constant uncertainty by judicial review every now and then, because otherwise it would paralyse by perennial suspense all legislative and administrative action on vital issues.
The court should not indulge in judicial stabilisation of State action and a view which has been accepted for a long period of time in a series of decisions and on tho faith of which millions of people have acted and a large number of transactions have been effected should not be disturbed.
[292G H, 293A H, 294A D].
Ambika Prasad Mishra vs State of U.P. and Anr., [1980] 3 SCR p. 1159.
followed.
(7) Article 31B was conceived together with Article 31A as part of the same design adopted to give protection to legislation providing for acquisition of an estate or extinguishment or modification of any rights in an estate.
[295E F].
The Ninth Schedule of Article 31B was not intended to include laws other than those covered by Article 31A. Articles 31A and 31B were thus intended to serve the same purpose of protecting the legislation falling within a certain category.
It was a double barreled protection which was intended to be provided to this category of legislation, since it was designed to carry out agrarian reform which was so essential for bringing about a revolution in the socio economic structure of the country: [295F, H, 296A] Since all the earlier constitutional amendments were held valid on the basis of unlimited amending power of Parliament recognised in Shankri Prasad 's case and Sajjan Singh 's case and were accepted as valid in Golakhnath 's case and the Twenty Ninth Amendment Act was also held valid in Kesavananda Bharati 's case, though not on the application of the basic structure test and these constitutional amendments have been recognised as valid over a number of years and moreover, the statutes intended to be protected by them are all falling within Article 31A with the possible exception of only four Acts, it would not be justified in re opening the question of validity of these constitutional amendment and hence these amendments are valid.
[297F H].
But all constitutional amendments made after the decision in Kesavananda Bharati 's case would have to be decided by reference to the basic structure doctrine, for Parliament would then have no excuse for saying that it did not known the limitation on its amending power.
Now out of the statutes which are or may in future be included in the Ninth Schedule by subsequent constitutional amendments, if there are any which fall within a category covered 228 by Article 31A or 31C, they would be protected from challenge under Articles 14 and 19 and it would not be necessary to consider whether their inclusion.
in the Ninth Schedule is constitutionally valid, except in those rare cases where protection may be claimed for them against violation of any other.
fundamental rights.
This question would primarily arise only in regard to statutes not covered by Article 31A or 31C and in case of such statutes, the Court would have to consider whether the constitutional amendments including such statutes in the Ninth Schedule violate the basic structure of the Constitution in granting them immunity from challenge of the fundamental rights.
It is possible that in a given case even an abridgement of a fundamental right may involve violation of the basic structure.
It would all depend on the nature of the nature of the fundamental right, the extent and depth of the infringement, the purpose for which the infringement is made and its impact on the basic values of the Constitution.
For example, right to life and personal liberty enshrined in Article 21, stands on an altogether different footing from other fundamental rights.
If this fundamental right is violated by any legislation, it may be difficult to sustain a constitutional amendment which seeks to protect such legislation against challenge under Article 21.
So also where a legislation which has nothing to do with agrarian reform or any Directive Principles infringes the equality clause contained in Article 14 and such legislation is sought to be protected by a constitutional amendment by including it in the Ninth Schedule, it may be possible to contend that such constitutional amendment is violative of the egalitarian principle which forms part of the basic structure.
However, other situations may arise where infarction of a fundamental right by a statute, is sought to be constitutionally protected might effect the basic structure of the Constitution.
In every case, therefore, where a constitutional amendment includes a statute or statutes in the.
Ninth Schedule, its constitutional validity would have to be considered by E. reference to the basic structured doctrine and such constitutional amendment would be liable to be declared invalid to the extent to which it damages or destroys the basic structure of the Constitution by according protection against violation of any particular fundamental right.
[297H, 298C H, 299A B].
(8) Even on principle, the first part of the unamended Article 31C is constitutionally valid.
In view of the fact that the first part of the unamended Article 31C was held to be constitutionally valid by the majority decision in Keshavananda Bharati 's case, the question of its constitutional validity cannot be again reopened.
It is true, that the ratio decidendi of Keshavananda Bharati 's case was that the amending power of Parliament is limited and Parliament cannot in exercise of the power m f amendment alter the basic structure of the Constitution and the validity of every constitutional amendment has, therefore, to be judged by applying the test whether or not it alters the basic structure of the Constitution and this test was not applied by the six learned Judges, though their conclusion regarding constitutionality of the first part of the unamended Article 31C is valid.
Irrespective of the reasons which weighed with each one of the Judges who upheld the validity of the first part of the unamended Article 31C, the reasons for reaching the said conclusion would certainly have a bearing on the determination of the ratio decidendi of the case and the ratio decidendi would certainly be important for the decision of future cases where the validity of the first part or the unamended Article 31C is concerned, it was in so many terms determined by the majority decision in Keshavananda Bharati 's case, and that decision binds.
[300E H, 301A D, 302C] 229 What the first part of the unamended Article 31C does is merely to abridge the fundamental rights in Articles 14 and 19 by excluding the applicability to legislation giving effect to the policy towards securing the principles specified in clauses (b) and (c) of Article 39.
The first part of the unamended Article 31C is basically of the same genre as Article 31A with only this difference that whereas Article 31A protects laws relating to certain subjects, the first part of the unamended Article 31C deals with laws having certain objectives.
There is no qualitative difference between Article 31A and the first part of the unamended Article 31C in so far as the exclusion of Articles 14 and 19 is concerned.
The fact that the provisions to the first part of the unamended Article 31C are more comprehensive and have greater width compared to those of Article 31A does not make any difference in principle.
If Article 31A is constitutionally valid, the first part of the unamended Article cannot be held to be unconstitutional.
The first part of the unamended Article 31C, in fact, stands on a more secure footing because it accords protection against infraction of Articles 14 and 19 to legislation enacted for giving effect to the Directive Principles set out in clauses (b) and (c) of Article 39.
The legislature in enacting such legislation acts upon the constitutional mandate contained in Article 37 according to which the Directive Principles are fundamental in the governance of the country and it is the duty of the State to apply those principles in making laws.
It is for the purpose of giving effect to the Directive Principles set out in clauses (b) and (c) of Article 39 in discharge of the constitutional obligation laid upon the State under Article 37 that fundamental rights in Articles 14 and 19 are allowed to be abridged.
A constitutional amendment, therefore, making such a provision cannot be condemned as violative of the basic structure of the Constitution.
[301E H, 302A C].
(9) Even if the Constitution (Fortieth Amendment Act, 1976 is unconstitutional and void and the Maharashtra Agricultural Lands (Lowering of Ceiling on Holdings) and (Amendment) Act, 1972 (Act 11 of 1975), the .
Maharashtra Agricultural Lands (Lowering of Ceiling on Holdings) and (Amendment) Act, 1975, (Act XLVII of 1945) and the Maharashtra Lands (Ceiling on holdings) Amendment Act, 1975, (Act II of 1976) have not been validly included in the Ninth Schedule so as to earn the protection of Article 31B, they are still saved from invalidation by Article 31A and so far as the Constitution (Forty Second Amendment) Act, 1976, is concerned, it is outside the constituent power of Parliament in so far as it seeks to include clauses (4) and (S) in Article 368.
[302C D, G H].
It is clear on a plain natural construction of its language that under the proviso to Article 83(2) the duration of the Lok Sabha could be extended only during the operation of a proclamation of emergency and if, therefore, no proclamation of emergency was in operation at the relevant time, the House of People (Extension of Duration) Act, 1976 would be outside the competence of Parliament under the proviso to Article 83(2).
Again the language of Article 352 (1) makes it clear that the President can take action under this clause only if he satisfies that a grave emergency exists whereby the security of India or any part of the territory thereof is threatened, whether by war or external aggression or internal disturbance.
The satisfaction of the President "that a grave emergency exists whereby the security of India. is threatened whether by war or external aggression or internal disturbance" is a condition precedent which must be fulfilled before the President can issue a proclamation under Article 352 clause (1).
When this condition precedent is satisfied, the President may exercise the power under clause (1) of Article 352 and issue a proclamation of emergency.
The constitutional implications of a 230 declaration of emergency.
under Article 352 clause (1) are vast and they are provided in Articles 83(2), 250, 353, 358 and 359.
The emergency being an exceptional situation arising out of a national crisis certain wide and sweeping powers have been conferred on the Central Government and Parliament with a view to combat the situation and restore normal conditions.
One such power is that given by Article 83(2) which provides that while a proclamation of emergency is in operation, Parliament may by law extend its duration for a period not exceeding one year at a time.
Further several drastic consequences ensue upon the making of a declaration of emergency.
The issue of a proclamation of emergency makes serious inroads into the principle of federalism and emasculates the operation and efficacy of the Fundamental Rights.
The power of declaring an emergency is, therefore, a power fraught with grave consequences and it has the effect of disturbing the entire power structure under the Constitution.
But it is a necessary power given to the Central Government with a view to arming it adequately to meet an exceptional situation arising out of threat to the security of the country on account of war or external aggression or internal disturbance or imminent danger of any such calamity.
It is, therefore, a power which has to be exercised with the greatest care and caution and utmost responsibility [303A B 306E H, 307E G].
(10) There is no bar to the judicial review of the validity of a proclamation of emergency issued by the President under Article 352 clause (1).
[308B C].
If a question brought before the court is purely a political question not involving determination of any legal or constitutional right or obligation, the court would not entertain it, since the court is concerned only with adjudication of legal rights and liabilities.
Merely because a question has a political colour the court cannot fold its hands in despair and declare "judicial hands off".
So long as the question is whether an authority under the Constitution has acted within the limits of its power or exceeded it, it can certainly be decided by the court.
Indeed it would be its constitutional obligation to do so.
The court is the ultimate interpreter of the Constitution and when there is manifestly unauthorised exercise of power under the Constitution, it is the duty of the court to intervene.
In fact, to this Court as much as to other Branches of Government is committed the conservation and furtherance of constitutional values.
The Court 's task is to identify those values in the constitutional plan and to work them into life in the cases that reach the Court.
"Tact and wise restraint ought to temper any power but courage and the acceptance of responsibility have their place too '.
The Court cannot and should not shirk this responsibility because it has sworn the oath of allegiance to the Constitution and is also accountable to the people of this country.
It would not, therefore, be right for the Court to decline to examine whether in a given case there is any constitutional violation involved in the President issuing a proclamation of emergency under clause (1) of Article 352.
The constitutional jurisdiction of this Court does not extend further than saying whether the limits on the power conferred by the Constitution on the President have been observed or there is transgression of such limits.
The only limit on the power of the President under Article 352 clause (1) is that the President should be satisfied that a grave emergency exists whereby the security of India or any part thereof is threatened whether by war or external aggression or internal disturbance.
The satisfaction of the President is a subjective one and cannot be decided by reference to any objective tests.
It is deliberately and advisedly subjective because the matter in respect ' to 231 which he is to be satisfied is of such a nature that its decision must necessarily be left to the Executive Branch of Government.
There may be a wide range of situations which may arise and their political implications and consequences may have to .
be evaluated in order to decide whether there is a situation of grave emergency by reason of the security of the country being threatened by war or external aggression or internal disturbance.
It would largely be a political judgment based on assessment of diverse and varied factors, fast changing situations, potential consequences and a host of other imponderables.
It cannot, therefore, by its very nature, be a fit subject matter for adjudication by judicial methods and materials and hence it is left to the subjective satisfaction of the Central Government which is best in a position to decide it.
The Court cannot go into the question of correctness or adequacy of the facts and circumstances on which the satisfaction of the Central Government is based.
That would ba a dangerous exercise for the Court, both because it is not a fit instrument for determining a question of this land and also because the Court would.
thereby usurp the function of the executive and in doing so enter the "political thicket" which it must avoid if it is to retain its legitimacy with the people.
But, if the satisfaction is mala fide or is based on wholly extraneous and irrelevant ground, the Court would have jurisdiction to examine it because in that case there would be no satisfaction of the President in regard to the matter on which he is required to be satisfied The satisfaction of the President is a condition precedent to the exercise of power under Article 352 clause (1) and if it can be shown that there is no satisfaction of the President at all, the exercise of the power would be constitutionally invalid.
[309C H, 310A B].
It is true that by reason of clause (5)(a) of Article 352, the satisfaction of the President is made final and conclusive and cannot be assailed on any ground, but, the power of judicial review is a part of the basic structure of the Constitution and hence this provision debarring judicial review would be open to attack on the ground that it is unconstitutional and void as damaging or destroying the basic structure.
This attack against constitutionality can, however, be averted by reading the provision to mean that the immunity from challenge granted by it does not apply whore the challenge is not that the satisfaction is improper or unjustified but that there is no satisfaction at all.
In such a case it is not the satisfaction arrived at by the President which is challenged but the existence of the satisfaction itself.
Where, therefore, the satisfaction is absurd or perverse or mala fide or based on a wholly extraneous and irrelevant ground it would be no satisfaction at all and it would be liable to be challenged before a court notwithstanding clause (5)(a) of Article 352.
No doubt, in most cases it would be difficult if not impossible to challenge the exercise of ' power under Article 352 clause (1) even on this limited ground because the facts and circumstances on which the satisfaction is based would not be known, but where it is possible the existence of the satisfaction can always be challenged on the ground that it is mala fide or based on a wholly extraneous or irrelevant ground.
[310C F].
Gormallion vs Lightfoot, ; ; Backer vs Carr; , , quoted with approval.
State of Rajasthan vs Union of India, ; , followed.
Gulam Sarwant vs Union of India, ; ; Bhutnath Mato vs State of West Bengal, ; , explained.
232 (11) on a plain natural interpreation of the language of sub clauses (a) to (c) of clause (2) that so long as the proclamation of emergency is not revoked by another proclamation under sub clause (2)(a), it would continue to be in operation irrespective of change of circumstances.
[312C].
Lakhan Pal vs Union of India, [1966] Supp.
SCR 209, applied.
It is true that the power to revoke a proclamation of emergency is vested only in the Central Government and it is possible that the Central Government may abuse this power by refusing to revoke a Proclamation of Emergency even though the circumstances justifying the issue of Proclamation have ceased to exist and thus prolong baselessly the state of emergency obliterating the Fundamental Rights and this may encourage totalitarian trend.
But the primary and real safeguard of the citizen against such abuse of power lies in "the good sense of the people and in the system of representative and responsible Government" which is provided in the Constitution.
Additionally, it may be possible for the citizen in a given case to move the court for issuing a writ of mandamus for revoking Proclamation of Emergency, if he is able to show by placing clear and cogent material before the court that there is no justification at all for the continuance of the Proclamation of Emergency.
But this would be a very heavy onus because it would be entirely for the Executive Government to be satisfied whether a situation has arisen where the Proclamation of Emergency can be revoked.
There would be so many facts and circumstances and such diverse considerations to be taken into account by the Executive Government before it can be satisfied that there is no longer any grave Emergency whereby the security of India is threatened by war or external aggression or internal disturbance.
This is not a matter which is fit for judicial determination and the court would not interfere with the satisfaction of the Executive Government in this regard unless it is clear on the material on record that there is absolutely no justification for the continuance of the Proclamation of Emergency and the Proclamation is being continued mala fide or for a collateral purpose.
The court may in such a case, if satisfied, beyond doubt grant a writ of mandamus directing the Central Government to revoke the Proclamation of Emergency.
But until that is done the Proclamation of Emergency would continue in operation and it cannot be said that though not revoked by another Proclamation it has still ceased to be in force.
In the present case, it was common ground that the first Proclamation of Emergency issued on 3rd December, 1971 was not revoked by another Proclamation under clause (2)(a) of Article 352 until 21st March, 1977 and hence at the material lime when the House of People (Extension of Duration) Act, 1976, was passed the first Proclamation of Emergency was in operation.
[312F H, 313A F.].
If the first Proclamation of Emergency was in operation at the relevant time it would be sufficient compliance with the requirement of the proviso to clause (2) of Article 83 and it would be unnecessary to consider whether the second Proclamation of Emergency was validly issued by the President.
[313E F].
(12) The House of People (Extension of Duration) Act, 1976, was enacted under the proviso to clause (2) of Article 83 for the purpose of extending the duration of the Lok Sabha and it was a condition precedent to the exercise of this power by Parliament that there should be a Proclamation of Emergency in operation at the date when the Act was enacted.
The words "while the Proclamation of Emergency issued on the 3rd day of December, 1971 233 and on the 25th day of June, 1975 are both in operation" were introduced , merely by way of recital of the satisfaction of the condition precedent for justifying the exercise of the power under the proviso to clause (2) of Article 83 and they were not intended to lay down a condition for the operation of section 2 of the Act.
Section 2 clearly and in so many terms extended the duration of the Lok Sabha for a period of one year and extension was not made dependent on both the Proclamations of Emergency being in operation at the date of the enactment of the Act.
It was for a definite period of one year that the extension was effected and it was not co extensive with the operation of both the Proclamations of Emergency.
The extension for a period of one year was made once for all by the enactment of section 2 and the reference to both the Proclamations of Emergency being in operation was merely for the purpose of indicating that both the Proclamations of Emergency being in operation, Parliament had competence to make the extension.
It was, therefore, not at all necessary for the efficacy of the extension that both the Proclamations of Emergency should be in operation at the date of enactment of the Act.
Even if one Proclamation of Emergency was in operation at the material date it would be sufficient to attract the power of Parliament under the proviso to Article 83 clause (2) to enact the Act extending the duration of the Lok Sabha.
No doubt, Parliament proceeded on the assumption that both the Proclamations of Emergency were in force at the relevant date and they invested Parliament with power to enact the Act.
but even if this legislative assumption were unfounded it would not make any difference to the validity of the exercise of the power so long as there was one Proclamation of Emergency in operation which authorised Parliament to extend the duration of the Lok Sabha under the proviso to clause (2) of Article 83.
It is true that the proviso to section 2 enacted that if both or either of the Proclamations of Emergency cease or ceases to operate before the expiration of the extended period of one year, the Lok Sabha shall continue until six months after the ceaser of operation of the said Proclamations or Proclamation, not going beyond the period of one year, but the opening part of this proviso can have application only in relation to a Proclamation of Emergency which was in operation at the date of enactment of the Act.
If such a Proclamation of Emergency which was in operation at the material date ceased to operate before the expiration of the extended period of one year, then the term of the Lok Sabha would not immediately come to an end, but it would continue for a further period of six months but not so to exceed the extended period of one year.
This provision obviously could have no application in relation to the second Proclamation of Emergency if it was void when issued.
In such a case, the second Proclamation not being valid at all at the date of issue would not be in operation at all and it would not cease to operate after the date of.
enactment of the Act.
The proviso would in that event have to be read as relating only to the first Proclamation of Emergency, and since the Proclamation of Emergency continued until it was revoked on 21st March, 1977, the duration of the Lok Sabha was validly extended for a period of one year from 18th March, 1976 and hence there was a validly constituted Lok Sabha on the dates when the Constitution (Fortieth Amendment) Act, 1976 and the Constitution (Forty second Amendment) Act, 1976, were.
passed by Parliament.
(314G H, 315A H, 316A C].
(In view of the settled practice of the Supreme Court not to say any more than is necessary to get a safe resting place for the decision, His Lordship did not consider whether the second Proclamation of Emergency was validly issued.)
</s>
|
<s>[INST] Summarize the judgementAppeals Nos. 711 713 of 1962.
Appeals by special leave from the judgments and order dated May 27, 25, 1960, of the Assam High Court in Civil Rule Nos. 3 and 25 of 1960 respectively and December 15, 1959 of the Allahabad High Court in Special Appeal No. 502 of 1958.
CIVIL APPEAL No. 614 OF 1962.
Appeal by special leave from the order dated April 6, 1961 of the Punjab High Court in Letters Patent Appeal No. 81/1961.
CIVIL APPEALS Nos. 837 To 839 of 1963.
Appeals from the judgment and order date January 18, 1963 of the Assam High Court in Civil Rule 386 to 388 of 1961.
B.C. Ghose and P.K. Chatterjee, for the appellants (in C. A. Nos. 711 to 713/1962).
I.M. Lall and V.D. Mahajan, for the appellant (in C.A. Nos. 714 of 1962).
S.V. Gupte, Additional Solicitor General, Naunit Lal and R.H. Dhebar, for the respondents (in C.A. Nos.
711 714/1962).
C.K. Daphtary, Attorney General, R. Ganapathy Iyar and R.H. Dhebar, for the appellants (in C.A. Nos. 837 839/1963).
B.C. Ghosh and P.K. Chatterjee, for the respondents (in C.A. Nos. 837 839/1963).
R.K. Garg, M.K. Ramamurthi, S.C. Agarwal and D.P. Singh, for the intervener (in C.A. No. 711/ 1962.) 689 R.K. Garg and P.K. Chatterjee, for the intervener ,(in C.A. Nos. 837 839./1963).
December 5, 1963.
The Judgment of P.B. Gajendragadkar, K. N. Wanchoo, M. Hidayatullah and N. Rajagopala lyyangar, JJ. was delivered by Gajendragadkar J. K. Subba Rao, and K.C. Das Gupta JJ.
delivered separate Opinion section J.C. Shah J. delivered a dissenting Opinion.
GAJENDRAGADKAR J.
These two groups of appeals have been placed before us for hearing together, because they raise a common question of law in regard to the Constitutional validity of Rules 148(3) and 149(3) contained in the Indian Railway Establishment Code, Vol.
(hereafter called the Code).
The first group consists of four appeals.
C.A. Nos. 711 & 712 of 1962 arise from two petitions filed by the appellants Moti Ram Deka and Sudhir Kumar Das respectively in the Assam High Court.
Deka was a peon employed by the North East Frontier Railway, whereas Das was a confirmed clerk.
They alleged that purporting to exercise its power under Rule 148 of the Code, the respondent, the General Manager North East Frontier ' Railway, terminated their ser vices and according to them, the said termination was illegal inasmuch as the Rule under which the impugned orders of termination had been passed, was invalid.
This plea has been rejected by the Assam High Court and the writ petitions filed by the two appellants have been dismissed.
It is against these orders of dismissal that they have come to this Court by special leave.
Civil Appeal No. 713 of 1962 arises out of a petition filed by the appellant Priya Gupta who was an Assistant Electrical Foreman employed by the North Eastern Railway, Gorakhpur.
His services having been terminated by the respondent General Manager of the said Railway, he moved the Allahabad High Court under article 226 of the Constitution and challenged the validity of the order terminating his services on the ground that Rule 148 of the Code was invalid.
The appellant 's plea has been rejected 1/SCI/64 44 690 by the said High Court both by the learned single Judge who heard his petition in the first instance and by the Division Bench which heard his Letters Patent Appeal.
That is how the appellant has come to this Court by special leave.
Civil Appeal No. 714/1962 arises out of a writ petition filed by Tirath Ram Lakhanpal who was a Class A Guard employed by the Northern Railway, New Delhi.
His services were terminated by the Respondent General Manager of the said Railway r under Rule 148 of the Code and his writ petition to quash the said order has been dismissed by the Punjab High Court.
The learned single Judge who heard this writ petition rejected the pleas raised by the appellant, and the Division Bench which the appellant moved by way of Letters Patent Appeal summarily dismissed his Appeal.
It is this dismissal of his Letters Patent Appeal which has brought the appellant to this Court by Special Leave.
That is how this group of four appeals raises a common question about the validity of Rule 148.
The next group consists of three appeals which challenge the decision of the Assam High Court holding that the orders of dismissal passed by appellant No. 2, the General Manager, North East Frontier Railway, against the three respective respondents S.B. Tewari, Parimal Gupta and Prem Chand Thakur, under Rule 149 of the Code, were invalid.
These three respondents had moved the Assam High Court for quashing the impugned orders terminating their services, and the writ petitions having been heard by a special Bench of the said High Court consisting of three learned Judges, the majority opinion was that the impugned orders were orders of dismissal and as such, were outside the purview of Rule 149.
According to this view, though Rule 149 may not be invalid, the impugned orders were bad because as orders of dismissal they were not justified by Rule: 149.
The minority view was that Rule 149 itself is invalid, and so, the impugned orders were automatically invalid.
In the result, the three writ petitions 691 filed by the three respondents respectively were allowed.
That is why the Union of India and the General Manager, N.E.F. Railway, appellants 1 & 2 respectively, have come to this Court with a certificate granted by the Assam High Court,.
and they challenge the correctness of both the majority and the minority views.
Thus, in these three appeals, the question about the validity of Rule 149 falls to be considered.
The first group of four appeals was first heard by a Constitution Bench of five Judges for some time.
At the hearing before the said Bench, the learned Addl.
Solicitor General conceded that the question about the validity of Rule 148 had not been directly considered by this Court on any occasion, and so, it could not be said that it was covered by any previous decision.
After the hearing of the arguments before the said Bench had made some progress, the learned Addl.
Solicitor General suggested that he was strongly relying on certain observations made in the previous decisions of this Court and his argument was going to be that the said observations are consistent with his contention that Rule 148 is valid and in fact, they would logically lead to that inference.
That is why the Bench took the view that it would be appropriate if a larger Bench is constituted to hear the said group of appeals, and so, the matter was referred to the learned Chief Justice for his directions.
Thereafter, the learned Chief Justice ordered that the said group should be heard by a larger Bench of seven Judges of this Court.
At that time, direction was also issued that the second group of three appeals which raised the question about the validity of Rule 149 should be placed for hearing along with the first group.
In fact, the learned counsel appearing for both the parties in the said group themselves thought that it would be appropriate if the two groups of appeals are heard together.
That is how the two groups of appeals have come for disposal before a larger Bench; and so, the main question which we have to consider is whether Rule 148(3), and Rule 149(3) which has superseded it are valid.
The contention of the 692 railway employees concerned is that these Rules contravene the Constitutional safeguard guaranteed to civil servants by article 311(2).
It is common ground that if it is held that the Constitutional guarantee prescribed by article 311(12) is violated by the Rules, they would be invalid; on the other hand the Union of India and the Railway Administration contend that the said Rules do not contravene article 311(2), but are wholly consistent with it.
At this stage, it would be.
convenient to refer r to the two Rules.
Rule 148 deals with the termination of service and periods of notice.
Rule 148(1) deals with temporary railway servants; R. 148(2) deals with apprentices, and R. 148(3) deals with other (non pensionable) railway servants.
It is with R. 148(3) that we are concerned in the present appeals.
It reads thus: "(3) Other (non pensionable) railway servants: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." "Note: The appointing authorities are empower ed to reduce or waive, at their discretion, the stipulated period of notice to be given by an employee, but the reason justifying their action should be recorded.
This power cannot be re delegated.
" Then follow the respective periods for which notice has to be given.
It is unnecessary to refer to these periods.
We may incidentally cite Rule 148(4) as well which reads thus: 693 "In lieu of the notice prescribed in this rule, it shall be permissible on the part of the Railway Administration to terminate the service of a railway servant by paying him the pay for the period of notice.
" It is thus clear that R. 148(3) empowers the appropriate authority to terminate the services of other nonpensionable railway servants after giving them notice for the specified period, or paying them their salary for the said period in lieu of notice under R. 148(4).
The non pensionable services were brought to an end in November, 1957 and an option was given to the non pensionable servants either to opt for pension.
able service or to continue on their previous terms and conditions of service.
Thereafter, Rule 149 was framed in place of R. 148.
Rule 149(1) & (2) like Rule 148(1) & (2) deal with the temporary railway servants and apprentices respectively.
Rule 149(3) deals with other railway servants; it reads thus: "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 Rule then specifies the different periods for which notice has to be given in regard to the different categories of servants, It is unnecessary to refer to these periods.
Then follow sub rule (4).
The same may be conveniently set out at this place: "(4) In lieu of the notice prescribed in this rule, it shall be permissible on the part of the Railway Administration to terminate the service of a railway servant by paying him the pay for the period of notice.
Note: The appointing authorites are empowered to reduce or waive, at their discretion, the stipulated period of notice to be given by an employee, but the reason justifying their action should be recorded.
This power cannot be re delegated.
" Just as under ' Rule 148(3) the services of the railway employees to which it applied could be terminated after giving them notice for the period specified, so under R. 149(3) termination of services of the employees concerned can be brought about by serving them with a notice for the requisite period, or paying them their salary for the said period in lieu of notice under R. 149(4).
Rule 149(3) applies to all servants other than temporary servants and apprentices.
The distinction between pensionable and non pensionable servants no longer prevails.
The question which we have to consider in the present appeals is whether the termination,of services of a permanent railway servant under Rule 148(3) or Rule 149(3)amounts to his removal under article 311(2) of the Constitution.
If it does,the impugned Rules are invalid; if it does not, the said Rules are valid.
That takes us to the question as to the true scope and effect of the provisions contained in Art.311(2),and the decision of this question naturally involves the construction of article 311(2) read in the light of Articles 309 and 310.
In considering this point, if may be useful to refer very briefly to the genesis of these provisions and their legislative background.
In this connection, it would be enough for our purpose if we begin with the Government of India Act, 1833.
Section 74 of the said Act made the tenure of all Services under the East India Company subject to His Majesty 's pleasure.
These servants were also made subject to the pleasure of the Court of Directors with a proviso which excepted from the said rule those who had been appointed directly by His Majesty.
In due course, when the Crown took over the government of this country by the Government of India Act, 1858, section 3 conferred on the Secretary of 695 State all powers which has till then vested in the Court of Directors, while the powers in relation to the servants of the Company which had till then vested in the Director were, by section 37, delegated to the Secretary of State.
This position continued until we reach the Government of India Act, 1915.
This Act repealed all the earlier Parliamentary legislation and was in the nature of a consolidating Act.
There was, however a saving clause contained in section 130 of the said Act which preserved the earlier tenures of servants and continued the rules and regulations applicable to them.
Section 96B of this Act which was enacted in 1919 brought about a change in the constitutional position of the civil servants. ' Section 96B(1) in substance, provided that "subject to the provisions of this Act and the rules made thereunder, every person in the civil service of the Crown in India holds office during His Majesty 's pleasures and it added that no person in that service may be dismissed by any authority subordinate to that by which he was appointed.
It also empowered the Secretary of State in Council to reinstate any person in that service who had been dismissed, except so far as the Secretary of State in Council may, by rules, provide to the contrary.
Section 96B(2) conferred power on the Secretary of State in Council to make rules for regulating the classification of the Civil Services in India, the method of recruitment, the conditions of service, pay and allowances and discipline and conduct while sub section (4) declared that all service rules then in force had been duly made and confirmed the same.
In 1935, the Government of India Act 1935 was passed and section 96B( 1) was reproduced in subsection (1) and (2) of section 240, and a new sub section was added as sections (3).
By this new sub section, protection was given to the civil servant by providing that he shall not be dismissed or reduced in rank until he had be en given a reasonable opportunity of showing cause against the action proposed to be taken in regard to him.
The definition contained in section 277 of the said 596 act shows that the expression "dismissal" included removal from service.
That continued to be the position until the Constitution was adopted in 1950.
The Constitution has dealt with this topic in Articles 309, 310 and 311.
Art.310 deals with the tenure of office of persons serving the Union or a State, and provides that such office is held during the pleasure of the President if the post is under the Union, or during the pleasure of the Governor if the post is under a State.
The doctrine of pleasure is thus embodied by article 310(1).
article 310(2) deals with cases of persons appointed under contract, and it provides that if the President or the Governor deems it necessary in order to secure the services of a person having special qualifications, he may appoint him under a special contract and the said contract may 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.
it is significant that article 310(1) begins with a clause "except as expressly provided by this Constitution" '.
In other words,if there are any other provisions in the Constitution which impinge upon it, the provisions of article 310(1) must be read subject to them.
The exceptions thus contemplated may be illustrated by ,reference to Articles 124, 148, 218 and 324.
Another exception is also provided by article 31 1.
In other words, article 311 has to be read as a proviso to article 310, and so, there can be no doubt that the pleasure contemplated by article 310(1) must be exercised subject to the limitations prescribed by article 31 1.
article 309 provides that subject to the provisions of the constitution, Acts of the appropriate Legislative may regulate the recruitment, and conditions of service of persons appointed, to public services and posts in connection with the affairs of the Union or of any State.
This clearly means that the appropriate Legislature may pass Acts in respect of the terms and conditions of service of persons appointed to public 697 services and posts, but that must be subject to the provisions of the constitution which inevitably brings in article 310(1).
The proviso to article 309 makes it clear that it would be competent for the President or such person as he may direct in the case of services and posts in connection with the affairs of the Union, and for the Governor of a State or such person as he may.
direct in the case of services and posts in connection with the affairs of the State, to make rules regulating the recruitment, and prescribing the conditions of service of persons respectively appointed to services and posts under the Union or the State The pleasure of the President or the Governor mentioned in article 310(1) can thus be exercised by such person as the President or the Governor may respectively direct in that behalf, and the pleasure thus exercised has to be exercised in accordance with the rules made in that behalf.
These rules, and indeed the exercise of the powers conferred on the delegate must be subject to article 310, and so article 309 cannot impair or affect the pleasure of the President or the Governor therein specified.
There is thus no doubt that article 309 has to be read subject to Articles 310 and 31 1, and article 310 has to be read subject to Art 311.
It is significant that the provisions contained in article 311 are not subject to any other provision of the Constitution.
Within the field covered by them they are absolute and paramount.
What then is the effect of the provisions contained in article 311(2)? article 311(2) reads thus: "No such person as aforesaid shall be dis missed or removed or reduced in rank until he has been given a reasonable opportunity of showing cause against the action propo sed to be taken in regard to him.
" We are not concerned with the cases covered by the proviso to this article in the present appeals.
It may be taken to be settled by the decisions of this Court that since article 311 makes no distinction between permanent and temporary posts, its protection must be held to extend to all government servants holding 698 permanent or temporary posts or officiating in any of them.
The protection afforded by article 311(2) is limited to the imposition of three major penalties contemplated by the service Rules, viz., dismissal, removal or reduction in rank.
It is true that the consequences of dismissal are more serious than those of removal and in that sense, there is a technical distinction between the two; but in the context, dismissal, removal and reduction in rank which are specified by article 311 (2) represent actions taken by way of penalty.
In regard to temporary servants, or servants on probation, every case of termination of service may not amount to removal.
In cases falling under these categories, the terms of contract or service rules may provide for the termination of the services on notice of a specified period, or on payment of salary for the said period, and if in exercise of the power thus conferred on the employer, the services of a temporary or probationary servant are terminated, it may not necessarily amount to removal.
In every such case, courts examine the substance of the matter, and if it is shown that the termination of services is no more than discharge simpliciter effected by virtue of the contract or the relevant rules, article 311(2) may not be applicable to such a case.
If, however, the termination of a temporary servant 's services in substance represents a penalty imposed on him or punitive action taken against him, then such termination would amount to removal and article 311(2) would be attracted.
Similar would be the position in regard to the reduction in rank of an officiating servant.
This aspect of the matter has been considered by this Court in several recent decisions, vide Jagdish Mitter vs Union of India(1) State of Bihar vs Gopi Kishore ' Prasad(2) State of Orissa & Anr.
vs Ram Narayan Das(3) section Sukhbans Singh vs The State of Punjab(4) and Madan Gopal vs The State of Punjab & Qrs.
(5) (1) A. 1.
R. (3) ; (2) ; (4) ; (5) [1963] 3 section C. R. 716.
699 This branch of the law must, therefore, be taken to be well settled.
In regard to servants holding substantively a permanent post who may conveniently be describe hereafter as permanent servants, it is similarly wellsettled that if they are compulsorily retired under the relevant service rules, such compulsory retirement does not amount to removal under article 311 (2).
Similarly, there can be no doubt that the retire ment of a permanent servant on his attaining the age of superannuation does not amount to his removal within the meaning of article 311(2).
The question which arises for our decision in the present appeals is: if the service of a permanent civil servant is terminated otherwise than by operation of the rule of superannuation, or the rule of compulsory retirement does such termination amount to removal under article 311(2) or not ? It is on the aspect of the question that the controversy between the parties arises before us.
Before dealing with this problem, it is necessary to refer to the relevant.
Railway Rules themselves Speaking historically, it appears that even while the affairs of the country were in charge of the East India Company, there used to be some regulations which were substantially in the nature of administrative instructions in regard to the conditions of service of the Company 's employees.
These regulations were continued by section 130(c) of the Government of India Act, 1915 which provided, inter alia that the repeal shall not affect the tenure of office, conditions of service, terms of remuneration or right to pension of any officer appointed before the commencement of this Act.
Section 96B(2) which was inserted in the said Act in 1919, however, provided that the said regulations could be modified or superseded by rules framed by the Secretary of State.
In due course, the Secretary of State framed certain rules The first batch of rules was framed in December 1920.
They applied to all officers in the All India Provincial as well as Subordinate Services and governed 700 even officers holding special posts.
The Local Government had a limited power in respect of officers in the All India Services under their employment and this power was confined to imposing on them punishments of censure, reduction, withholding of promotion and suspension (vide Rule 10); in the case of Provincial Services, however, the powers of the Local Government were plenary They could not only impose the penalties to which we have just referred, but also remove or dismiss them (vide Rule 13).
It appears that Rule 14 prescribed the procedure which had to be followed in imposing the penalty of dismissal, removal or reduction; and so, it may be said that for the first time these three major punishments were collated together and a special procedure prescribed in that behalf.
No definition of removal was, however, prescribed.
Incidentally, we may refer to Rule XX which is included in the group of rules relating to appeals.
Under this rule, an appeal would not lie against; (1) the discharge of a person appointed on probation before the end of his probation, and (2) the dismissal and removal of a person appointed by an authority in India to hold a temporary appointment.
It would be permissible to point out that this provision would show that the termination of the services of a person permanently employed would not have fallen within the ambit of this rule.
The Rules thus framed in 1920 were amended from time to time and were re issued in June, 1924.
It appears that subsequent to 1924, fresh rules were made under the Governors Provinces Civil Services (Control and Appeal) Rules and Governors Provinces Civil Services (Delegation) Rules of 1926 which were published in March, 1926.
Then followed the Rules framed by the Secretary of State in 1930.
These Rules were in force when the Government of India Act, 1935 was enacted, and they continue in force even now by reason of Article 313.
We ought to add that these Rules superseded all the earlier rules and constitute an exhaustive code as regards disciplinary matters.
Rule 3(b) of these rules excluded the 701 Railway Servants from the application of said rules, and that furnishes the historical background why separate Fundamental Rules for Railway corresponding to the Fundamental Rules in other public services, came to be framed.
Before we proceed to the relevant Railway Rule we may incidentally mention Rule 49 of the Rules framed by the Secretary of State in 1930.
This provides that penalties may, for good and sufficient reason and as hereinafter provided, be imposed upon members of the services comprised in any of the clauses (1) to (5) specified in Rule 14.
These penalties.
number seven in all.
Amongst them are mentioned reduction to a lower post, dismissal and removal.
Then follows an explanation which is useful for our purpose.
Before quoting that explanation it may be.
pointed out that the said explanation which was originally introduced under Rule 49, was subsequently amended once in 1948, then in 1950 lastly in 1955 when explanation No. 2 was added Thus amended, the two explanations read as follows: "Explanation 1 The termination of employment (a) of a person appointed on probation during or at the end of the period of probation, in accordance with the terms of the appointment and the rules governing the probationary service; or (b) of a temporary Government servant appointed otherwise than under contract, in accordance with rule 5 of the Central Civil Services (Temporary Service) Rules, 1949; or (c) of a person engaged under a contract, does not amount to removal or dismissal within the meaning of this rule or of rule 55.
Explanation II: Stopping a Government Servant at an efficiency bar in the time scale of his pay on the ground of his unfitness to cross the bar does not amount to withholding of increments or promotions within the meaning of this rule.
" 702 Looking at clauses (a), (b) and (c) of Explanation 1, it would be apparent that these clauses deal with persons appointed on probation, or appointed as temporary servants, or engaged on a contract, and the effect of the said explanation is that the termination of the services of such persons does not amount to removal or dismissal within the meaning of Rule 49 or Rule 55.
In other words, R. 49 read along with explanation 1, would,prima facie, inferentially support the contention that in regard to a permanent civil servant, the termination of his services otherwise than under the rule of superannuation or compulsory retirement would amount to removal.
Let us then consider the relevant Railway Fundamental Rules which have a bearing on the point with which we are concerned.
Paragraph 2003 of the Code, Vol. 11 which corresponds to Fundamental Rule 9 contains definitions.
Fundamental Rule 9(14) defines a lien as meaning the title of a Railway servant to hold substantively, either immediately or on the termination of a period or periods of absence, a permanent post, including a tenure post, to which he has been appointed substantively.
An officiating servant is defined by F.R. 9(19) as one who performs the duties of a post on which another person holds a lien, or when a competent authority appoints him to officiate in a vacant post on which no other railway servant holds a lien.
There is a proviso to this definition which is not relevant for our purpose.
That takes us to the definition of a permanent post which under F.R. 9(22) means a post carrying a definite rate of pay sanctioned without limit of time.
A, temporary post, on the other hand, means under F.R. 9 (29) a post carrying a definite rate of pay sanctioned for a limited time, and a tenure post means under F. R. 9 (30) a permanent post which an individual railway servant may not hold for more than a limited period.
It is thus clear that as a result of the relevant definitions, a permanent post carries a definite ate of pay without a limit of time and a servant who substantively holds a permanent post has 703 a title to hold the post to which he is substantively appointed, and that, in terms, means that a permanent servant has a right to hold the post until, of course he reaches the age of superannuation, or until he is compulsorily retired under the relevant rule.
It is in the light of this position that we must now proceed to examine the question as to whether the termination of the permanent servant 's services either under Rule 148(3) or R. 149(3) amounts to his removal or not.
On this point, two extreme contentions have been raised before us by the parties The learned Addl.
Solicitor General contends that in dealing with the present controversy, we must bear in mind the doctrine of pleasure which has been enshrined in article 310(1).
He argues that every civil servant holds his office during the pleasure the President or the Governor.
It is true that in the present cases, we are dealing with rules framed under the proviso to article 309 and in that sense, the question of pleasure on which so much stress is laid by the learned Addl.
Solicitor General may not directly arise; but it must be conceded that the point raised for our decision may have some impact on the doctrine of pleasure, and so it needs to be examined.
The argument is that all civil service is strictly speaking precarious in character.
There is no guarantee of any security of tenure, because the pleasure of the President or the Governor can be exercised at any time against the civil servant.
It is true that this pleasure would not be exercised capriciously, unjustly or unfairly, but the existence of the doctrine of pleasure inevitably imposes a stamp of precarious character on the tenure enjoyed by the civil servant, and so it is urged whether Rule 148 or R. 149 is made or not, it would be open to the President or the Governor to terminate the services of any civil servant to whose case article 110(1) applies.
The learned Addl.
Solicitor General has also impressed upon us the necessity to construe article 310(1) and article 311 in such a manner that the pleasure contemplated by article 310(1) does not become illusory or is not completely obliterated.
He, therefore, suggests that article 311(2) which is in the nature of a proviso or an exception to article 310(1) must be strictly construed and in all cases falling outside the scope of the said provision, the pleasure of the President or the Governor must be allowed to rule supreme.
On the other hand, it has been urged by the learned counsel appearing for the railway servants concerned before us that the pleasure of the President is controlled by article 311 and if the argument of the learned Addl.
Solicitor General is accepted and full scope given to the exercise of the said pleasure, article 311 itself would become otiose.
It is urged that the employment in civil service can be terminated only after complying with article 311 and any rule which violates the guarantee provided by the said Article would be invalid.
In fact, the argument on the other side is that the word "removal" should receive a much wider denotation than has been accepted by this Court in its decisions bearing on the point, and that all terminations of services in respect of all categories of public servants should be held to constitute removal within article 311(2).
We are inclined to hold that the two extreme contentions raised by both the parties must be rejected.
There is no doubt that the pleasure of the President on which the learned Addl.
Solicitor General so strongly relies has lost some of its majesty and power, because it is clearly controlled by the provisions of article 31 1, and so, the field that is covered by article 311 on a fair and reasonable construction of the re levant words used in that article, would be excluded from the operation of the absolute doctrine of pleasure.
The pleasure of the President would still be there, but it has to be exercised in accordance with the requirements of article 311.
Besides, as this Court has held in the State of Bihar vs Abdul Majid(1), the rule of English Law pithily expressed in the latin phrase "duranto bene placito" ("during pleasure") has not been fully adopted either (1) ; , 799. 705 by section 240 of the Government of India Act, 1935, or by article 3 1 0(1).
To the extent to which that rule has been modified by the relevant provisions of: section 240 of the Government of India Act, 1935, or article 311 the Government servants are entitled to relief like any other person under the ordinary law and that relief must be regulated by the Code of Civil Procedure.
It is mainly on the basis of this principle that this Court refused to apply the doctrine against abdul Majid that a civil servant cannot maintain suit against a State or against the Crown for the recovery of arrears of salary due to him.
Thus, the extreme contention based on the doctrine of pleasure enshrined in article 310(1) cannot be sustained.
Similarly, we do not think it would be possible to accept the argument that the word "removal" in article 311(2) should receive the widest interpretation.
Apart from the fact that the said provision is in the nature of a proviso to article 3 1 0(1) and must, therefore, be strictly construed, the point raised by the contention is concluded by the decisions of this Court and we propose to deal with the present appeals on the basis that the word " removal" like the two other words "dismissal" and "reduction in rank" used in article 311(2) refer to cases of major penalties which were specified by the relevant service rules.
Therefore, the true position is that Articles 310 and 311 must no doubt be read together, but once the true scope and effect of article 311 is determined, the scope and effect of article 310(1) must be limited in the sense that in regard to cases falling under article 311(2) the pleasure mentioned in article 310(1) must be exercised in accordance with the requirements of article 311.
It is then urged by the learned Addl.
Solicitor General that article 310 does not permit of the concept of tenure during good behaviour.
According to him, in spite of the rule of superannuation, the services of a civil servant can be terminated by the President exercising his pleasure at any time.
The rule of superannuation on this contention merely gives an indication to the civil servant as to the length of time 1/SCI/64 45 706 he may expect to serve, but it gives him no right to continue during the whole of the said period.
In fact, the learned Addl.
Solicitor General did not disguise the 'act that according to his argument Whether or not a rule of superannuation is framed and whether or not Rule 148 or R. 149 is issued, the President 's pleasure can, be exercised independently of these Rules and the action taken by the President in exercise of his pleasure cannot be "questioned under article 311(2).
Alternatively,_ he contends that if article 311(2) is read in a very general and wide sense, even the rule as to the age of superannuation may be questioned as being invalid, because it does put an end to the service of a civil servant.
We are not impressed by this argument.
We will no doubt have to decide what cases of termination of services of permanent civil servants amount to removal; but once that question is determined, wherever it is shown that a permanent civil servant is removed from his service, article 311(2) will apply and article 310(1) cannot be invoked independently with the object of justifying the contravention of the provisions of article 311(2).
In regard to the age of superannuation, it may be said prima facie that rules of superannuation which are prescribed in respect of public services in all modem States are based on considerations of life expectation, mental capacity of the civil servants having regard to the climatic conditions under which they work, and the nature of the work they do.
They are not fixed on any ad hoc basis and do not involve the exercise of any discretion.
They apply uniformly to all public servants falling under the category in respect of which they are framed.
Therefore, no analogy can be suggested between the rule of superannuation and .Rule 148(3) or Rule 149(3).
Besides., nobody has questioned the validity of the rule of superannuation, and so, it would be fruitless and idle to consider whether such a rule can be challenged at all.
Reverting then to the nature of the right which a permanent servant has under the relevant Railway Rules, what is the true position? A person Who 707 substantively holds a permanent post has a right to continue in service, subject, of course, to the rule of superannuation and the rule as to compulsory retirement.
If for any other reason that right is invaded and he is asked to leave his service, the termination of his service must inevitably mean the defeat of his right to continue in service and as such, it is, in the nature of a penalty and amounts to removal.
In other words, termination of the services of a permanent servant otherwise than on the ground of superannuation or compulsory retirement, must per se amount to his removal, and so, if by R. 148(3) or IC.
149(3) such a termination is brought about, the Rule clearly contravenes article 311(2) and must be held to be invalid.
It is common ground that neither of the two Rules contemplates an enquiry and in none of the cases before us has the procedure prescribed by article 311(2) been followed.
We appreciate the argument urged by the learned Addl.
Solicitor General about the pleasure of the President and its significance; but since the pleasure has to be exercised subject to the provisions of article 31 1, there would be no escape from the conclusion that in respect of cases falling under article 311(2), the procedure prescribed by the said Article must be complied with and the exercise of pleasure regulated accordingly.
In this connection, it is necessary to emphasise that the rule making authority contemplated by article 309 cannot be validly exercised so as to curtail or affect the rights guaranteed to public servants under article 311(1).
article 311(1) is intended to afford a sense of security to public servants who are substantively appointed to a permanent post and one of the principal benefits which they are entitled to expect is the benefit of pension after rendering public service for the period prescribed by the Rules.
It would, we think, not be legitimate to contend that the right to earn a pension to which a servant substantively appointed to a permanent post is entitled can be curtailed by Rules framed under article 309 so as to make the said right either ineffective or illusory.
Once the scope of article 311(1) and (2) is duly determined, it must be held that no Rule 708 framed under article 309 can trespass on the rights guaranteed by article 311.
This position is of basic importance and must be borne in mind in dealing with the controversy in the present appeals.
At this stage, we ought to add that in a modern democratic State the efficiency and incorruptibility of public administration is of such importance that it is essential to afford to civil servants adequate protection against capricious action from their superior authority.
If a permanent civil servant is guilty of misconduct, he should no doubt be proceeded against promptly under the relevant disciplinary rules, subject, of course, to the safeguard prescribed by article 311(2); but in regard to honest, straightforward and efficient permanent civil servants, it is of utmost importance even from the point of view of the State that they should enjoy a sense of security which alone can make them independent and truly efficient.
In our opinion, the sword of Damocles hanging over the heads of permanent railway servants in the form of R. 148(3) or R. 149(3) would inevitably create a sense of insecurity in the minds of such servants and would invest appropriate authorities with very wide powers which may conceivably be abused.
In this connection, no distinction can be made between pensionable and non pensionable service.
Even if a person is holding a post which does not carry any pension, he has a right to continue in service until he reaches the age of superannuation and the said right is a very valuable right.
That is why the invasion of this right must inevitably mean that the termination of his service is, in substance, and in law, removal from service.
It appears that after Rule 149 was brought into force in 1957, another provision has been made by Rule 321 which seems to contemplate the award of some kind of pension to the employees whose services are terminated under Rule 149(3).
But it is significant that the application of R. 149(3) does not require, as normal rules of compulsory retirement do "that the power conferred by the said Rule can be exercised in respect of servants who have 709 put in a prescribed minimum period of service.
Therefore, the fact that some kind of proportionate pension is awardable to railway servants whose services are terminated under R. 149(3) would not assimilate the cases dealt with under the ' said Rule to cases of compulsory retirement.
As we Will presently point out, cases of compulsory retirement which have been considered by this Court were all cases where the rule as to compulsory retirement came into operation before the age of superannuation was reached and after a Prescribed minimum period of service had been put in by the servant.
It is true that the termination of service authorised by R. 148(3) or R. 149(3) contemplates the right to terminate on either side.
For all practical purposes, the right conferred on the servant to terminate his services after giving due notice to the employer does not mean much in the present position of unemployment in this country; but apart from it, the fact that a servant has been given a corresponding right cannot detract from the position that the right which is conferred on the railway authorities by the impugned Rules is inconsistent with article 311(2), and so, it ha to be struck down in spite of the fact that a simila right is given to the servant concerned.
It has, however, been urged that the railway servants who entered service with the full knowledge of these Rules cannot be allowed to complain that the Rules contravene article 311 and are, therefore invalid.
It appears that under Rule 144 (which was originally Rule 143), it was obligatory on railway servants to execute a contract in terms of the re levant Railway Rules.
That is how the argument based on the contract and its binding character arise If a person while entering service executes a contract containing the relevant Rule in that behalf with open eyes, how can he be heard to challenge the validity of the said Rule, or the said contract? In our opinion this approach may be relevant in dealing with purely commercial cases governed by rules of contract but it is wholly inappropriate in dealing with a case 710 where the contract or the Rule is alleged to violate a constitutional guarantee afforded by article 311(2); land even as to commercial transactions, it is wellknown that if the contract is void, as for instance, under section 23 of the Indian Contract Act, the plea that it was executed by the party would be of no avail.
In any case, we do not think that the argument of contract and its binding character can have validity in dealing with the question about the constitutionality of the impugned Rules.
Let us then test this argument by reference to the provisions of article 311(1).
article 311(1) provides that no person to whom the said article applies shall be dismissed or removed by an authority subordinate to that by which he was appointed.
Can it be suggested that the Railway Administration can enter into a contract with its employees by which authority to dismiss or remove the employees can be delegated to persons other than those contemplated by article 311 (1)? The answer to this question is obviously in the negative, and the same answer must be given to the conten tion that as a result of the contract which embodies the impugned Rules, the termination of the railway servant 's services would not attract the provisions of article 311(2), though, in law, it amounts to removal.
If the said termination does not amount to removal, then, of course, article 311(2) would be inapplicable and the challenge to the validity of the impugned Rules would fail; but if the termination in question amounts to a removal, the challenge to the validity of the impugned Rules must succeed notwithstanding the fact that the Rule has been included in a contract signed by the railway servant.
There is one more point which still remains to be considered and that is the point of construction.
The learned Add1.
Solicitor General argued that in construing the impugned Rule 148(3) as well as R. 149(3), we ought to take into account the fact that the Rule as amended has been so framed as to avoid conflict with, or non compliance of, the provisions of article 311(2), and so, he suggests that we should 711 adopt that interpretation of the Rule which would be consistent with article 311(2).
The argument is that the termination of services permissible under the impugned Rules really proceeds on administrative grounds or considerations of exigencies of service.
If, for instance, the post held by a permanent servant is abolished, or the whole of the cadre to which the post belonged is brought to an end and the railway servant 's services are terminated in consequence, that cannot amount to his removal because the termination of his services is not based on any consi deration personal to the servant.
In support ' of this argument, the Addl.
Solicitor General wants us to test the provision contained in the latter portion of the impugned Rules.
We are not impressed by this argument.
What the latter portion of the impugned Rules provides is that in case a railway servant is dealt with under that portion, no notice need be served on him.
The first part of the Rules can reason ably and legitimately take in all cases and may be used even in respect of cases falling under the latter category, provided, of course, notice for the specified period or salary in lieu of such notice is give to the railway servant.
There is no doubt that on a fair construction, the impugned Rules authorise the Railway Administration to terminate the services of all the permanent servants to, whom the Rules apply merely on giving notice for the specified period, or on payment of salary in lieu thereof, and that clearly amounts to the removal of the servant in question, we are satisfied that the impugned Rules are invalid in as much as they are inconsistent with the provision contained in article 311(2).
The termination of the permanent servants" tenure Which is authorised the said Rules is no more and no less than, their removal from service, and so, article 311(2) must come into play in respect of such cases, 'That being so.
the Rule which does not require compliance with the procedure prescribed by article 311(2) must be struck down as invalid.
It is now necessary to examine some of the cases on which the learned Addl.
Solicitor General has 712 relied.
In fact, as we have already indicated, his main argument was that some of the observations made in some of the decisions to which we will presently refer support his contention and logically lead to the conclusion that the impugned Rules are valid.
That naturally makes it necessary for us to examine the said cases very carefully.
In Satish Chandra Anand vs The Union of India(1), this Court was dealing with the case of a person who had been employed by the Government of India on a five year contract in the Resettlement and Employment Directorate of the Ministry of Labour.
When his contract was due to expire, a new offer was made to him to continue him in service in his post temporarily for the period of the Resettlement and Employment Organization on the condition that he would be governed by the Central Civil Services (Temporary Service) Rules, 1949.
The relevant rule in that behalf authorised the termination of the contract on either side by one month 's notice.
Subsequently, his services were terminated after giving him one month 's notice.
He challenged the validity of the said order, but did not succeed for the reason that neither article 14 nor article 16 on which he relied really applied.
This Court held that it is competent to the State to enter into contracts of temporary employment subject to the term that the contract would be terminated on one month 's notice on either side.
Such a contract was not inconsistent with article 311(2).
This case, therefore, is of no assistance in the present appeals.
In Gopal Krishna Potnay vs Union of India & Anr.
(2) a permanent railway employee who was discharged from service after one month notice brought a suit challenging the validity of the order terminating his services.
The point about the validity of the Rule was not agitated before the Court.
Questions which were raised for the decision of the Court were, inter alia, whether the agreement in question lad been executed by the servant and whether the (1) ; (2) A.I.R. 1954 S.C. 632.
713 termination of his services amounted to a discharge or not.
In that connection, reference was made to Rules 1504 and 1505 and it was held that the conduct of the parties showed that the termination of the servant 's services was not more than a discharge in terms of the agreement.
This case again is of no assistance.
That takes us to the decision in the case of Shyam Lal vs The State of U.P. and the Union of India(1) Shyam Lal 's services were terminated under article 465 A of the Civil Service Regulations and Note I appended thereto.
Shyam Lal alleged that his compulsory retirement offended the provisions of article 311(2) on the ground that compulsory retirement was in substance removal from service.
This Court considered the scheme of the relevant Rule and held that compulsory retirement did not amount to removal within the meaning of article 311(2).
In dealing with this question, this Court observed that removal was almost synonymous with dismissal and that in the case of removal as in the case of dismissal, some ground personal to the servant which was blameworthy was involved.
There was a stigma attached to the servant who was removed and it involved a loss of benefit already earned by him.
It is in the light of these tests that this Court held that compulsory retirement did not amount to removal.
It is true that in dealing with the argument about the loss of benefit, this Court observed that a distinction must be made between the loss of benefit already earned and the loss of prospect of earning something more, and it proceeded to add that in the first case, it is a present and certain loss and is certainly a punishment, but the loss of future prospect is too uncertain, for the officer may die of be otherwise incapacitated from serving a day long and cannot, therefore, be regarded in the eye of law as a punishment.
It appears that in dealing with the point, the attention of the Court was drawn to Rule 49 of the Civil Services (Classification, Control and Appeal) Rules, and presumably the explanation (1) ; 713 termination of his services amounted to a discharge or not.
In that connection, reference was made to Rules 1504 and 1505 and it was held that the conduct of the parties showed that the termination of the servant 's services was not more than a discharge in terms of the agreement.
This case again is of no assistance.
That takes us to the decision in the case of Shyam Lal vs The State of U.P. and the Union of India( ) Shyam Lal 's services were terminated under article 465 A of the Civil Service Regulations and Note I appended thereto.
Shyam Lal alleged that his compulsory retirement offended the provisions of article 311(2) on the ground that compulsory retirement was in substance removal from service.
This Court considered the scheme of the relevant Rule and held that compulsory retirement did not amount to removal within the meaning of article 311(2).
In dealing with this question, this Court observed that removal was almost synonymous with dismissal and that in the case of removal as in the case of dismissal, some ground personal to the servant which was blameworthy was involved.
There was a stigma attached to the servant who was removed and it involved a loss of benefit already earned by him.
It is in the light of these tests that this Court held that compulsory retirement did no amount to removal.
It is true that in dealing with th argument about the loss of benefit, this Court observe that a distinction must be made between the loss of benefit already earned and the loss of prospect of earning something more, and it preceded to add that in the first case, it is a present and certain loss and is certainly a punishment, but the loss of future prospect is too uncertain, for the officer may die or be otherwise incapacitated from serving a day longer and cannot, therefore, be regarded in the eye of the law as a punishment.
It appears that in dealing with the point, the attention of the Court was drawn to Rule 49 of the Civil Services (Classification, Control and Appeal) Rules, and presumably the explanation (1) ; 714 to the said Rule to which we have already referred, was taken into account in rejecting the argument a that a loss of future service cannot be said to be a relevant factor in determining the question as to whether compulsory retirement is removal or not.
The judgment does not show that the invasion of the right which a permanent servant has, to remain in service until he reaches the age of superannuation, was pressed before the Court, and naturally the same has not been examined.
Confining itself to the special features of compulsory retirement which was effected under article 465 A and Note I appended thereto, the Court came to the conclusion that compulsory retirement was not removal, We may add that subsequent decisions show that the same view has been taken in respect of compulsory retirement throughout and so, that branch of the law must be held to be concluded by the series of decisions to which we shall presently refer.
We would, however, like to make it clear that the observation made in the judgment that every termination of service does not amount to dismissal or removal should, in the context, be confined to the case of compulsory retirement and should not be read as a decision of the question with which we are directly concerned in the present appeals.
That problem did not arise before the Court in that case, was not argued before it, and cannot,therefore, be deemed to have been decided by this decision.
Then we have a batch of four decisions reported in 1958 which are relevant for our purpose.
In Hartwell Prescott Singh vs The Uttar Pradesh Government & Ors.(1) a civil servant held a post in a temporary capacity in the Subordinate Agriculture Service, Uttar Pradesh, and was shown in the gradation list as on probation.
He was later appointed with the approval of the Public Service Commission of the United Provinces to officiate in Class II of the said Service.
After about 10 years, he was reverted to his original temporary appointment and his services were there after terminated under Rule 25(4) of the Subordinate 1) ; 715 Agriculture Service Rules.
Dealing with the said civil servant 's objection that the termination of his services contravened article 311(2), this Court held that reversion from a temporary post held by a person does not per se amount to reduction in rank.
To decide whether the reversion is a reduction in rank, the post held must be of a substantive rank and further it must be established that the order of reversion was by way of penalty.
As we have already discussed, the cases of temporary servants, probationers and servants holding posts in officiating capacities stand on a different footing and the principles applicable to them are now firmly established and need not detain us.
The next decision in the same volume is the State of Bombay vs Saubhagchand M. Doshi(1).
This was a case of compulsory retirement under Rule 165 A of the Bombay Civil Services Rules as amended by the Saurashtra Government.
In I so far as, this case dealt with the compulsory retirement of a civil servant,, it is unnecessary to consider the Rule in question or the facts relating to the compulsory retirement of the civil servant.
It is of interest to note that in dealing with the question as to whether compulsory retirement amounted to removal or not the tests which were applied were in regard to the loss of benefit already accrued and stigma attached to the civil servant.
It is, however, significant that in considering the objection based on the contravention of article 311(2), Venkatarama Aiyar J. took the precaution of adding that "questions of the said character could arise only when the rules fix both an age of superannuation and an age for compulsory 'retirement and the services of a civil servant are terminated between these two points of time.
But where there is no rule fixing the age of compulsory retirement, or if there is one and the servant is retired before the age prescribed therein, then that can be regarded only as dismissal or removal within article 311 (2).
" It would be noticed that the rule providing (1) 716 for compulsory retirement was upheld on the ground that such compulsory retirement does not amount to ,removal under article 311(2) because it was another mode of retirement and it could be enforced only between the period of age of superannuation prescribed and after the minimum period of service indicated in the rule had been put in.
If, however, no such minimum period is prescribed by the rule of compulsory retirement, that according to the judgment, would violate article 311(2) and though the termination of a servant 's services may be described as compulsory retirement, it would amount to dismissal or removal within the meaning of article 311(2).
With respect, we think that this statement correctly represents the true position in law.
The third case in the said volume is the case of parshotam Lal Dhingra vs Union of India.(1) In this case, Das C.J. who spoke for the Bench considered comprehensively the scope and effect of the relevant constitutional provisions, service rules and their impact on the question as to whether reversion of Dhingra offended the provisions of article 311(2).
Dhingra was appointed as a Signaller in 1924 and promoted to the post of Chief Controller in 1950.
Both these posts were in Class III Service.
In 1951, he was appointed to officiate in Class 11 Service as Asstt.
Superintendent, Railway Telegraphs.
On certain adverse remarks having been made against him, he was reverted as a subordinate till he made good the short comings.
Then, Dhingra made a representation.
This was followed by a notice issued by the General Manager reverting him to Class III appointment.
It was this order of reversion which was challenged by Dhingra by a writ petition.
It would thus be seen that the point with which the Court was directly concerned was whether the reversion of an officiating officer to his permanent post constituted reduction in rank or removal under article 311(2).
The decision of this question was somewhat complicated by the fact that certain defects were noticed in the work of Dhingra (1) ; 717 and the argument was that his reversion was in the nature of a penalty, and so, it should be treated as reduction under article 311(2).
This Court rejected Dhingra 's contention and held that the reversion of an officiating officer to his substantive post did not attract the provisions of article 311(2).
Though the decision of the question which directly arose before this Court thus lay within a very narrow compass, it appears that the matter was elaborately argued before the Court and the learned Chief Justice has exhaustively considered all the points raised by the parties.
For our present purpose, it is unnecessary to summaries the reasons given by the learned Chief Justice for holding that the reversion of Dhingra did not amount to reduction in rank.
The only point which has to be considered by us is whether the observations made in the course of this judgment in regard to permanent servants assist the learned Addl.
Solicitor General and if they do, what is their effect? Broadly stated, this decision widened the scope of article 311 by including within its purview not only permanent servants, but temporary servants and servants holding officiating posts also.
The decision further held that dismissal, removal and reduction represent the three major penalties contemplated by the relevant service rules and it is only where the.
impugned orders partake of the character of one or the other of the said penalties that article 311(2) can be invoked.
In the course of his judgment the learned Chief Justice has referred to Rule 49 and the explanation attached thereto.
The explanation to the Rule clearly shows that it refers to persons appointed on probation, or persons holding temporary appointments and contractual posts.
It is in the light of this explanation that the learned Chief Justice proceeded to examine the contention raised by Dhingra that his reversion amounted to reduction in rank and so, it became necessary to examine whether any loss of benefit already accrued had been incurred or any stigma had been attached to the servant before he was reverted.
It is in that connection that the Court also held that though a kind of enquiry may have 718 been held and the short comings in the work of Dhingra may have weighed in the mind of the authority who reverted him, the said motive could not alter the character of reversion which was not reduction within the meaning of article 311(2).
All those points have been considered and decided and so far as the temporary servants probationers, or contractual servants are concerned, they are no longer in doubt.
In regard to permanent servants, the learned Chief Justice has made some observations which it is now necessary to consider very carefully.
"The appointment of a government servant to a permanent post," observed the learned C.J., "may be substantive or on probation or on an officiating basis.
A substantive appointment to a permanent post in public service confers normally on the servant so appointed a substantive right to the post and he becomes entitled to hold a lien on the post.
"(p. 841) On the same subject, the learned C.J has later added that "in the absence of any special contract, the substantive appointment to a permanent post gives the servant so appointed a right to hold the post until, under the rules, he attains the age of superannuation or is compulsorily retired after having put in the prescribed number of years ' service, or the post is abolished and his service cannot be terminated except by way of punishment for misconduct, negligence, inefficiency or any other disqualification found against him on proper enquiry after due notice to him." (p. 843).
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 reached the age of superannuation or was compulsorily retired, 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 719 referred do not leave any room for doubt on this point.
Later during the course of the judgment, learned C.J. proceeded to examine Rule 49 and the explanations added to it, and then reverting to the question of permanent servants once again, he observed that "it has already been said that where a 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).
Termination of service of such a servant so appointed must per se be a punishment, for it operates as a forfeiture of the servant 's rights and brings about a premature end of his employment." (pp. 857 58).
With respect we ought to point out that though the learned C. J at this place purports to reproduce what had already been stated in the judgment, he has made two significant additions because in the present statement he refers to a contract or service rules which may permit the authority to terminate the services of a permanent servant without taking the case under article 311(2), though such termination may not amount to ordinary or compulsory retirement.
The absence of contract, express or implied, or a service rule, which has been introduced in the present statement are not to be found in the earlier statements to which we have already referred, and addition of these two Clauses apparently is due to the fact that the learned C.J. considered Rule 49 and the explanations attached thereto and brought them into the discussion of a permanent servant, and that, we venture to think is not strictly correct.
As we have already seen Explanation No. 1 to R. 49 is confined to the through categories of officers specified by it in its clauses (a) 720 (b) and (c), and it has no relevance or application to the cases of permanent servants.
Similarly, the same statement is repeated with the observation "as already stated, if the servant has got a right to continue in the post, then, unless ,the contract of employment or the rules provide to the contrary, his services cannot be terminated otherwise than for misconduct, negligence, inefficiency or other good and sufficient cause.
A termination of the service of such a servant on such grounds must be a punishment and, therefore, a dismissal or removal within article 31 1, for it operates as a forfeiture of his right and he is visited with the evil consequences of loss of pay and allowances." (p. 862).
With respect, we wish to make the same comment about this statement which we have already made about the statement just cited.
In this connection, it may be relevant to add that in the paragraph where this statement occurs, the learned C.J. was summing up the position and the cases there considered are cases of Satish Chandra Anand, (1) and Shyam Lal(2).
These two cases were concerned with the termination of a temporary servant 's services and the compulsory retirement of a permanent servant respectively, and strictly speaking, they do not justify the broader proposition enunciated at the end of the paragraph.
At the conclusion of his judgment, the learned C.J. has observed that "in every case, the Court has to apply the two tests mentioned above, namely, (1) whether the servant had a right to the post or the rank or (2) whether he has been visited with evil consequences of the kind hereinbefore referred to." (p. 863) It would be noticed that the two tests are not cumulative, but are alternative, so that if the first test is satisfied, termination of a permanent servant 's services would amount to removal because his right to the post has been prematurely invaded.
The learned C.J. himself makes it clear by adding (1) ; (2) ; 721.
that if the case satisfies either of the two tests, the it must be held that the servant had been punished and the termination of his services must be held to be wrongful and in violation of the constitutional rights of the servant.
It would thus be noticed that the first test would be applicable to the cases of permanent servants, whereas the second test would be relevant in the cases of temporary servants, probationers and the like.
Therefore, we do not think the learned Addl.
Solicitor General is justified in contending that all the observations made in the course of this judgment in regard to permanent servant considered together support his contention.
Besides if we may say so, with respect, these observations are in the nature of obiter dicta and the learned Add1 Solicitor General cannot rely solely upon them for the purpose of showing that R. 148(3) or R. 149(3) should be held to be valid as a result of the said observations.
The last decision on this point rendered by this Court in 1958 (vide P. Balakotaiah vs The Union of India & Others(1) dealt with the case of Balakotaiah who was a permanent railway servant and whose services had been terminated for reasons of national security under section 3 of the Railway Services (Safe guarding of National Security) Rules, 1949.It appears that in this case, Balakotaiah who challenged the order terminating his services before the High Court of Nagpur, failed because the High Court held that the said order was justified under Rule 148(3) of the Railway Rules.
In his appeal before this Court, it was urged on his behalf that the High Court was in error in sustaining the impugned order under the said Rule when the Union of India had not attempted to rely on the said Rule, and the impugned order did not purport to have been passed under it.
The argument was that the impugned order had been passed under R. 3 of the Security Rules and the High Court should have considered the matter by reference to the said Rule and not to R. 148(3).
This plea was (1) ; 1/SCI/64 46 722 upheld by this Court, and so, Balakotaiah 's challenge to the validity of the impugned order was examined by reference to security rule 3.
The scheme of the relevant Security Rules was then considered by this Court and it was held that the said Rules did not contravene either article 14 or article 19(1)(c) of the Constitution as contended by the appellant.
Having held that the impugned rule was not unconstitutional, this Court proceeded to examine the further contention that the procedure prescribed by the said rules for hearing of the charges does not satisfy the requirement of article 311 and as such, the said Rules are invalid.
Rules, 3, 4 and 5 of the Security Rules which dealt with this point do contemplate some kind of an enquiry at which an opportunity is given to the railway servant concerned to show cause against the action proposed to be taken against him.
Rule 7 also provides that a person who is compulsorily retired or whose service is terminated under Rule 3, shall be entitled to such compensation, pension, gratuity and/or Provident Fund benefits as would have been admissible to him under the Rules applicable to his service if he had been discharged from service due to the abolition of his post without any alternative suitable employment being provided.
The contention was that the nature of the enquiry contem plated by the relevant Rules did not satisfy the re quirements of article 311(2), and so, the Rules should be struck down as being invalid and the order terminating the services of Balakotaiah should therefore, be held to be invalid.
This argument was rejected by this Court, and relying upon the earlier decisions in the cases of Satish Chandra Anand(1), Shyam Lal(2) Saubhagchand M. Doshi(3) and Parshotam Lal Dhingra (4) it was held that the order terminating the services of the railway, employee which can be (1) ; (3) ; (2) ; (4) ; 723 passed under R. 3 is not an order of dismissal or removal, and so, article 311(2) is inapplicable.
On that view, the validity of R. 3 was sustained.
In recording its conclusion on this point, this Court observed that the order terminating the services under R. 3 stands on the same footing as an order of discharge under Rule 148 and it is neither one of dismissal nor of removal within the meaning of Art 311.
Naturally, the learned Addl.
Solicitor General relies on this statement of the law.
In appreciating the effect of this observation, it is necessary to bear in mind that in the earlier portion of the Judgment, this Court has specifically referred to the argument that the Security Rules had an independent operation of their own quite apart from Rule 148, and has observed that the Court did not desire to express any final opinion on that question "as Mr. Ganapathy Iyer is willing that the validity of the orders in question might be determined on the footing that they were passed under R. 3 of the Security Rules without reference to R. 148.
That renders it necessary to decide whether the Security Rules are unconstitutional as contended by the appellant.
" It would thus be noticed that having upheld the contention of the appellant Balakotaiah that the High Court was in error in referring to and relying upon R. 148(3) for the purpose of sustaining the impugned order terminating his services, this Court had naturally no occasion to consider the validity, the effect or the applicability of the said Rule to the case before it, and so, the attention of the Court centered round the question as to whether the relevant security rule was valid and whether it justified the order passed against the appellant.
In dealing with this aspect of the matter, this Court no doubt came to the conclusion that the termination of Balakotaiah 's services under R. 3 did not amount to his removal or dismissal; but since no argument was urged before the Court in respect of R. 148(3), the reference to the said Rule made by the judgment is purely in the nature of an obiter, and so, we are not prepared to 724 read that statement as a decision that R. 148(3) is valid.
To read the said statement in that manner would be to ignore the fact that this Court had reversed the conclusion of the High Court that the impugned order was valid under R. 148(3) specifically on the ground that case had not been made out by the Union of India and should not have been adopted by the High Court.
It is thus clear that as, the case was argued before this Court and considered, R. 148(3) was outside the controversy between the parties.
That is why it would be unreasonable to rely on the reference to R. 148 in the statement made in the judgment on which the learned Addl.
Solicitor General relies.
There is another aspect of this question to which we may incidentally refer before we part with this case.
We have already quoted the observation of Veinkatarama Aiyar J.; in the case of Subhagchand M. Doshi (1) to the ' effect that if compulsory retirement is permitted by any service rule without fixing the minimum period of service after which the Rule can be invoked, termination of the services of a permanent civil servant by the application of such a Rule would be dismissal or removal under article 311(2), and we have indicated that we regard that statement as correctly representing the true legal position in the matter.
It appears that when this Court decided the case of Balakotaiah, this aspect of the matter 'was not argued before the Court and the observation to which we have just referred was not brought to its notice.
One more case which still remains to be considered in this context is the decision in Dalip Singh vs The State of Punjab (2).
In this case, Dalip Singh was compulsorily retired from service by the Rajpramukh of Pepsu exercising his power under Rule 278 of the Patiala State Regulations, 1931.
In the quit from which the appeal before this Court arose he alleged that the order of retirement passed against him amoun (1) ; (2) 725 ted to his dismissal, and so, he claimed to recover Rs. 26,699 13 0 on that basis.
The validity of R. 278 was not put in issue in the proceedings at any stage.
The only point raised, 'was that the said Rule was not applicable to his case, and it was urged that in the circumstances, the order was an ' order of dismissal.
This Court.
held that R. 278 applied to the case, And so, the preliminary objection against the applicability of the Rule was rejected.
Dealing with the main contention raised before this Court that the compulsory retirement of Dalip Singh was removal from service within the meaning of article 311(2), this Court applied the tests laid down in the case of Shyam Lal(1) and Saubhagchand Doshi(2) and held that the said retirement did not amount to removal.
Dalip Singh had not lost the benefit which he earned and though considerations of alleged misconduct or inefficiency may have weighed with the Government in compulsorily retiring him that did not affect the character of the order;in fact full pension had been paid to the officer, and so, it was held that the order of retirement is clearly not by way of punishment.
At the end of this judgment, this Court added that the observations made in the case of Doshi(2) which we have already cited, should not be read as laying down the law that retirement under R. 278 would be invalid for the reason that a minimum period of service had not been prescribed before the said Rule could be enforced against the civil servant.
It would be recalled that in the case of Doshi(2) Venkatarama Aiyar J. had observed that if the two periods are not prescribed one for superannuation and the other for enforcing the rule of compulsory retirement, compulsory retirement of the officer would amount to dismissal or removal under article 311(2).
In Dalip Singh 's case (2), it was stated that the said observation should not be taken to have laid down any rule of universal application in that behalf.
The (1) (1955] 1 S.C.R. 26 (2) (1958] 1 S.C.R. (3) 726 learned Addl.
Solicitor General has naturally relied on these observations.
It is however, necessary to point out that the said observations were made on the assumption that the Patiala Rules did not lay down any minimum period of service which had to be put in by civil servant 'before he could be compulsorily retired under Rule 278.
We have already seen that the validity of R. 278 was not challenged before the Court in Dalip Singh 's case; besides, we have now been referred to the relevant Patiala Rules, and it appears that the combined operation of Rules 53, 54, 125, 236, 239, 240, 243 and 278 would tend to show that no officer ,could have been compulsorily retired under R. 278 unless he had put in at least 12 years ' service.
We are referring to this aspect of the matter for the purpose of showing that the assumption made by this Court in making the observations to which we have just referred may not be well founded in fact.
Apart from that, we think that if any Rule permits the appropriate authority to retire compulsorily a civil servant without imposing a limitation in that behalf that such civil servant should have put in a minimum period of service, that Rule would be invalid and the so called retirement ordered under the said Rule would amount to removal of the civil servant within the meaning of article 311(2).
At this stage, we ought to make it clear that in the present appeals, we are not called upon to consider whether a rule of compulsory retirement would be valid, if, having fixed a proper age of superannuation,, it permits a permanent servant to be retired at a very early stage of his career.
We have referred to the decisions dealing with cases of compulsory retirement only for the purpose of ascertaining the effect of the obiter observations made in some of those decisions in relation to the question with which we are directly concerned.
The question raised by the orders of compulsory retirement so far as it is covered by the said decisions must be deemed to be concluded.
Our conclusion, therefore, is that rules 127 148(3) and 149(3) which permit the termination of a permanent railway servant 's services in the manner provided by them, are invalid because the termination of services which the said Rules authorise is removal of the said railway permanent servant and it contravenes the constitutional safeguard provided by article 311(2).
After this Court pronounced its decision in the case of Shyam Lal(1) the question about the validity of Rule 148(3) has been considered by several High Courts and it must be conceded that with the exception of two decisions of the Calcutta High Court in Union of India vs Someswar Banerjee(2) and Fakir Chandra Chiki vs section Chakravarti & Ors(3) which have held that R. 1709 and R. 148(3) of the Railway Rules are respectively invalid, the consensus of judicial opinion is in favour of the contention raised by the learned Add1.
Solicitor General.
These decision have held that R. 148(3) is constitutionally valid (vide Biswanath Singh vs District Traffic Supdt.
, N.E Railway, Sonepur(4), The Union of India vs Askaran (5) Hardwari Lal vs General Manager, North Eastern Railway, Gorakhpur(6) and Anr., Kishan Prasad vs The Union of India (7) and D.S. Srinath vs General Manager Southern Railway, Madras(8).
In fairness, we ought to add that all these decisions proceeded on the basis that the observations made by this Court either in the case of Shyam Lal (1) or in the case of Dhingra(9) in respect of permanent servants amounted to a decision on that point and were, therefore, binding on the High Courts.
Some decisions purport to adopt the said observations and extend them logically in dealing with the question about the validity of Rule 148(3).
With respect, we must hold that these decisions do not correctly represent the true legal position in regard to the character of R. 148(3).
(1) ; (3) A.I.R. 1954 Cal.
(5) A.I.R. 1957 Rajastban 836.
(7) A.I.R. 1960 Cal.
(2) A.I.R. 1954 Cal.
(4) A.I.R. 1956 Patna 221 (6) A.I.R. 1959 All. 439.
(8) A.I.R. 1962 Mad 379.
(9) ; 728 There is still one more point which must be considered and that is the challenge to the validity of Rules 148(3) and 149(3 on the ground that they contravene article 14 of the Constitution.
The pleadings on this part of the case filed by both the parties are not very satisfactory; but as to the broad features '.of the Rules on which the challenge rests, there is no serious dispute.
We have already seen the Rules; it is urged that they purport to give no guidance to the authority which would operate the said Rules.
No principle is laid down which should guide the decision of the authority in exercising its power under the said Rules.
Discretion is left in the authority completely unguided in the matter and the Rules are so worded that the power conferred by them can be capriciously exercised without offending the Rules.
It is also not disputed by the learned Addl.
Solicitor General that no other branch of public services either under the States or under the Union contains any rule which corresponds to the impugned Rules.
Therefore, basing themselves on these two features of the impugned Rules it is argued by the Railway employees before us that the Rules offend article 14.
In support of the first argument, it is suggested that though the impugned Rule may not in terms enact a discriminatory rule and in that sense may not patently infringe article 14, it may, nevertheless, contravene the said article if it is so framed as to enable an unequal or discriminatory treatment to be meted out to persons or things similarly situated; and in support of this point, reliance is placed on the decision of this Court in Jyoti Pershad vs The Administrator for the Union Territory of Delhi(1).
Such a result, it is said, would inevitably follow where the rule vests a discretion in an authority as an executive officer and does not lay down any policy and fails to disclose any tangible, intelligible, or rational purpose which the power conferred by it is intended to serve.
(1) ; at P. 137.
729 On the other hand, the Addl.
Solicitor General has contended that the very purpose of the Rule gives guidance to the appropriate authority exercising its power under it; in exercising the said power the appropriate authority will have to take into account all the relevant circumstances in regard to the nature and quality of the work of the railway servant in question and will have to decide whether there are circumstances which require that the services of the said servant should be terminated.
In dealing with such a question, it is plain that the appropriate authority would naturally have regard for consideration of public interest and the interest of the Railway Administration.
Therefore, it is suggested that the Rule cannot be struck down on the ground that it confers absolute, unguided and uncanalised power on the appropriate authority.
Since we have come to the conclusion that the second attack made against the validity of the Rule under article 14 ought to be sustained we do not propose to express any opinion on this part of the controversy between the parties.
The other aspect of the matter arises from the fact that no other branch of public service contains such a rule for its civil servants.
The true scope and effect of article 14 has been considered by this Court on several occasions.
It may, however, be sufficient to refer to the decision of this Court in Shri Ram Krishna Dalmia vs Shri Justice S.R. Tendolker & Ors.(1) After examining the Article and the relevant decisions of this Court bearing on it, Das C.J. who spoke for the Court stated the position in the form of propositions, (a) to (f).
Propositions (a) and are relevant for our purpose.
"The decisions of this Court establish," said Das C.J., "(a) that a law may be constitutional even though it relates to a single individual if, on account of some special circumstances or: reasons applicable to him and not applicable to others, that single individual may be treated as a class by himself; and (f) that while good faith and knowledge of the existing conditions on the part (1) ; at P. 297.
730 of a legislature are to be presumed, if there is nothing on the face of the law or the surrounding circumstances brought to the notice of the court on Which the classification may reasonably be regarded as based, the presumption of constitutionality cannot be carried to the extent of always holding that there must be some undisclosed and unknown reasons for subjecting certain individuals or corporations to hostile or discriminating legislation.
" Applying these two principles, it is difficult to understand on what ground employment by the Railways alone can be said to constitute a class by itself for the purpose of framing the impugned Rules.
If considerations of administrative efficiency or exigencies of service justify the making of such a rule, why should such a Rule not have been framed in the Posts & Telegraph Department to take only one instance.
The learned Additional Solicitor Generaf frankly conceded that the ' affidavits filed by the Railway Administration or the Union of India afforded no material on which the framing of the Rule only in respect of one sector of public service can be justified.
We appreciate the argument that the nature of services rendered by employees in different sectors of public service may differ and the terms and conditions governing employment in all public sectors may not necessarily be the same or uniform; but in regard to the question of terminating the services of a civil servant after serving him with a notice for a specified period, we are unable to see how the Railways can be regarded as constituting a separate and distinct class by reference to which the impugned Rule can be justified in the light of article 14.
If there is any rational connection between the making of such a Rule and the object intended to be achieved by it, that connection would clearly be in existence in several other sectors of public service.
What has happened is that a provision like R. 148(3) pr R. 149(3) was first made by the Railway Companies when employment with the Railways was a purely commercial matter governed by the ordinary rules of contract.
After the Railways were taken over by the State, that position has essen 731 tially altered, and so, the validity of the Rule is now exposed to the challenge under article 14.
Therefore we are satisfied that the challenge to the validity of the impugned Rules on the ground that they contravene article 14 must also succeed.
There is one more point which we ought to mention before we part with these appeals.
In dealing with the validity of R. 149, Nayudu J. of the Assam High Court who has delivered the minority judgment in the case of Shyam Behari Tewari & Ors V. Union of India & Anr.(1), has observed that the Rule would be invalid for the additional reason that it purports to give power to the Railway Administration to terminate the services of any person in permanent employment in railway service on notice at the sweetwill and pleasure of the Railway Administration Such a power, said the learned Judge, can only be exercised by the President in the instant cases where the service is under the Union and not by any other whereas the Rule in question purports to give that power to the Railway Administration.
In support of this conclusion, the learned Judge has relied on the observations made in the majority judgment delivered by this Court in The State of Uttar Pradesh and ors (2) vs Babu Ram Upadhya.
We ought to point out that the learned Judge has misconstrued the effect of the observations on which he relies.
What the said Judgment has held is that while article 310 provides for a tenure at pleasure of the President or the Governor, article 309 enables the legislature or the executive as the case may be, to make any law or rule in regard inter alia, to conditions of service without impinging upon the overriding power recognised under article 310.
In other words, in exercising the power conferred by article 309, the extent of the pleasure recognised by article 310 cannot be affected, or impaired In fact, while stating the conclusions in the form of propositions, the said judgment has observed that the Parliament or the Legislature can make a law regulating the conditions of service without affecting (1) A.I.R. 1963 Assam 94 (2) 732 the powers of the President or the Governor under article 310 read with article 311.
It has also been stated at the same place that the power to dismiss a public servant at pleasure is outside the scope of article 154 and, therefore, cannot be delegated by the Governor to a subordinate officer and can be exercised by him only in the manner prescribed by the Constitution.
In the context, it would be clear that this latter observation is not intended to lay down that a law cannot be made under article 309 or a Rule cannot be framed under the proviso to the said Article prescribing the procedure by which, and the authority by whom, the said pleasure can be exercised.
This observation which is mentioned as proposition number (2) must be read along with the subsequent propositions specified as (3), (4), (5) & (6).
The only point made is that whatever is done under article 309 must be subject to the pleasure prescribed by article 310.
Naidu J. was, therefore, in error in holding that the majority decision of this Court in the case of Babu Ram Upadhya(1) supported his broad and unqualified conclusion that R. 149(3) was invalid for the sole reason that the power to terminate the services had been delegated to the Railway Administration.
In the result, the four appeals in the first group succeed and are allowed.
The writ petitions filed by the four appellants in the three High Courts are granted and orders directed to be issued in terms of the prayers made by them.
The appellants would be entitled to their costs from the respondents.
The three appeals in the second group fail and are dismissed with costs.
One set of hearing fees in each group.
SUBBA RAO J I agree that the impugned rules infringe both article 14 and article 311(2) of the Constitution and are, therefore, void.
On 1 article 14, 1 have nothing more to say.
But on the impact of the said rules on article 311 of the Constitution, I would prefer to give my own reasons.
The short but difficult question is whether 148 of the Indian Railway Establishment Code, (1) ; 733 Vol. 1 (1951) and r. 149 of the revised edition of the said Code of the year 1959 replacing r. 148 of the Code of 1951 edition impinge upon the constitutional safeguard given to a person holding a civil post under the Union Government under article 311(2) of the Constitution.
While article 311(2) of the Constitution prohibits the State from dismissing or removing or reducing in rank a civil servant until he has been given a reasonable opportunity of showing cause against the action proposed to be taken in regard to him, rr. 148 and 149 of the said Code in effect enable the Government to terminate his services after issuing the prescribed notice thereunder ' Prima facie the said rules are in conflict with article 311(2) of the Constitution.
Broadly stated, the contention of the State is that a Union civil servant holds his office during the pleasure, of the President, that article 311 is not really a limitation on the exercise,of that pleasure, that it only prescribes safeguards against the imposition on him of three unmerited specified penalties, viz., dismissal, removal and reduction in rank, and that the termination of his services for a reason other than misconduct personal to the civil servant is not comprehended by any of the said penalties.
The further argument is that the "doctrine of pleasure" implies that a civil servant has no right to an office even in a case where he has a substantive lien on a post and that in any event he has none when there is a specific rule that his services can be terminated after the prescribed notice.
This Bench of seven Judges has been constituted to steer clear of conflicting observations, if any, found in the judgments of this Court and to arrive at a conclusion of its own unhampered by such observations.
I would, therefore, proceed to consider the relevant provisions in accordance with the natural tenor of the expressions used therein and then to scrutinize whether any of my conclusions would be in conflict with any of the decisions of this Court.
At the outset I must make it clear that I propose to confine my discussion only to the question of termi 734 nation of services of a permanent civil servant.
None of the observations I may make is intended to have any bearing on the question of termination of the services of other categories of servants.
As the argument of the learned Additional Soli citor General is based upon the doctrine of pleasure, it would be convenient at the outset to ascertain the precise scope of the doctrine in the context of the Indian Constitution.
Article 309 is subject to the provisions of the Constitution and, therefore, is subject to article 310 thereof Article 311 imposes two limitations on the doctrine of pleasure declared in article 310.
The gist of the said provisions is this: Under article 309 of the Constitution the appropriate Legislature may regulate the recruitment and conditions of service of persons appointed to public services and posts in connection with the affairs of the Union or any State; and until provision in that behalf is made, the President or such person as he may direct may make rules regulating the recruitment and conditions of service of persons appointed to the said services and posts in connection with the affairs of the Union.
In its ordinary meaning the expression "conditions of service" takes in also the tenure of a civil servant.
Under article 310, such a civil servant holds office during the pleasure of the President; but article 311 imposes two conditions to be satisfied before a civil servant can be dismissed, or removed or reduced in rank, namely, (i) he shall not be dismissed, removed or reduced in rank by an authority subordinate to that by which he was appointed, and (ii) he shall be given a reasonable opportunity of showing cause against the action proposed to be taken in regard to him.
A combined reading of these provisions indicates that the rules made under article 309 are subject to the doctrine of pleasure; and that the doctrine of pleasure is itself subject to two limitations imposed thereon under article 31 1.
This tenure at pleasure is a concept borrowed from English law, though it has been modified to suit the Indian conditions.
735 The English law on the doctrine of tenure at pleasure has now become fairly crystallized.
Under the English law, all servants of the Crown.
hold office during the pleasure of the Crown.
The right to dismiss at pleasure is an implied term in every contract of employment under the Crown.
This doctrine is not based upon any prerogative of the Crown but on public policy.
If the terms of appointment definitely prescribe a tenure for good behavior or expressly provide for a power to determine for a cause, such an implication of a power to dismiss at pleasure is excluded, and an Act of Parliament can abrogate or amend the said doctrine of public policy in the same way as it can do in respect of any other part of common law.
(see The State of U.P. vs Babu Ram Upadhya (1).
Section 96 B of the Government of India Act, 1915, for the first time in 1919, by an amendment, statutorily recognized this doctrine, but it was made subject to a condition that no person in the service might be dismissed by an authority subordinate to that by which he was appointed.
Section 240 of the Government of India Act, 1935, imposed another limitation, namely, that a reasonable opportunity of showing cause against the action proposed to be taken in regard to a person must be given to him.
But neither of the two Acts empowered the appropriate Legislature to make a law abolishing or amending the said doctrine.
The Constitution of India practically incorporated the provisions of section 240 and section 241 of the Government of India Act, 1935, in articles 309 and 310.
The English doctrine has been enlarged in one direction and restricted in another: while Parliament has no power to deprive the President of his pleasure, the said pleasure is made subject to two limitations embodied in article 311.
The English concept is considerably modified to suit the conditions of our country.
It is, therefore, not correct to say that article 311 is not a limitation on the power of the President to terminate the services of a Union civil servant at his pleasure.
To accept the argument that the (1) ; , 696. 736 relevant expression in article 311 shall be so construed as to give full sway to the doctrine is to ignore the limitations on that doctrine.
Both article 310 and article 311 shall be read together and, if so read, it is manifest that the said doctrine is subject to the said two conditions.
What is the scope of the relevant words, "dismissed" and "removed ' in article 311 of the Constitution? The general rule of interpretation which is common to statutory provisions as well as to constitutional provisions is to find out the expressed intention of the makers of the said provisions from the words of the provisions themselves.
It is also equally well settled that, without doing violence to the language used, a constitutional provision shall receive a fair, liberal and progressive construction, so that its true objects might be promoted.
Article 311 uses two well known expressions, "dismissed" and "removed".
The Article does not, expressly or by necessary implication, indicate that the dismissal or removal of a Government servant must be of a particular category.
As the said Article gives protection and safeguard to a Government servant who will otherwise be at the mercy of the Government, the said words shall ordi narily be given a liberal or at any rate their natural meaning, unless the said Article or other Articles of the Constitution, expressly or by necessary implication, restrict their meaning.
I do not see any indication anywhere in the Constitution which compels the Court to reduce the scope of the protection.
The dictionary meaning, of the word "dismiss" is "to let go; to relieve from duty".
The word " remove ' " means "to discharge, to get rid off, to dismiss".
In their ordinary parlance, therefore, the said words mean nothing more or less than the termination of a person 's office.
The effect of dismissal or removal of one from his office is to discharge him from that office.
In that sense, the said words comprehend every termination of the services of a Government servant.
Article 311(2) in effect lays down that before the services of a Government servant are so terminated, 737 he must be given a reasonable opportunity of showing cause against such a termination.
There is no justification for placing any limitation on the said expressions, such as that the dismissal or removal should have been the result of an enquiry in regard to the Government servant 's misconduct.
The attempt to imply the said limitation is neither warranted by the expressions used in the Article or by the reason given, namely, that otherwise there would be no point in giving him an opportunity to defend himself If this argument the correct, it would lead to an extraordinary result, namely, that a Government servant who has been guilty of misconduct would be entitled to a "reasonable opportunity" whereas an honest Government servant could be dismissed without any such protection.
In one sense the conduct of a party may be relevant to punishment; ordinarily punishment is meted out for misconduct, and if there is no misconduct there could not be punishment.
Punishment is, therefore, correlated to misconduct, both in its positive and negative aspects.
That is to say punishment could be sustained if there was misconduct and could not be meted out if there was no misconduct.
Reasonable opportunity given to a Government servant enables him to establish that he does not deserve the punishment, because he has not been guilty of misconduct.
That apart, a Government servant may be removed or dismissed for many other reasons, such as retrenchment, abolition of post, compulsory retirement and others.
If an opportunity is given to a Government servant to show cause against the proposed action, he may plead and establish that either there was no genuine retrenchment or abolition of posts or that others should go before him.
Now let me see whether the history of this constitutional provision countenances any such limitation on the meaning of the said expressions.
As we have already noticed, the concept of tenure at pleasure was first introduced in the Government of India Act, 1919.
Under section 96 B of that Act, 1/SCI/64 47 738 "(1) Subject to the provisions of this Act and of rules made thereunder, every person in the civil service of the Crown in Ind ia holds office during His Majesty 's pleasure, and may be employed in any manner required by a proper authority within the scope of his duty, but no person in that service may be dismissed by any authority subordinate to that by which he was appointed. " It will be seen that under this section the said concept was introduced subject to a condition; it may also be noticed that the section used only one word "dismissed".
In England, under that doctrine, services of a Government servant, whether he is a permanent or a temporary servant, can be terminated without any cause whether he is guilty of misconduct or not.
Therefore, when the word "dismissed" is used in section 96 B of the Act in the context of the exercise of His Majesty 's pleasure, that word must have been used in the natural meaning it bears, i.e. terminated.
But that section was subject to the provisions of the rules 'made under that Act.
In exercise of the power conferred under the Act on the Secretary of State for India in Council, he framed certain rules in December 1920 and with subsequent modifications they were published on May 27, 1930.
The said rules were designated as the Civil Services (Classification, Control and Appeal) Rules.
Rule 49 of those Rules provided for certain penalties and cl.
(6) thereof dealt with "Removal from the civil service of the Crown, which does not disqualify from future employment", and cl.
(7) provided for dismissal from the civil service of the Crown, "which ordinarily disqualified from future employment".
The explanation to that rule read thus: The termination of employment: (a) of a person appointed on probation during or at the end of the period of probation, in accordance with the terms of the appointment and the rules governing the probationary service; or 739 (b) of a temporary Government servant appointed otherwise than under contract, in accordance with rule 5 of the Central Civil Services (Temporary Service) Rules, 1949; or (c) of a person engaged under a contract, in accordance with the terms of his contract does not amount to removal or dismissal within the meaning of this rule or of rule 55.
" The explanation makes it clear that the three specified categories of termination covered by the explanation would amount to dismissal or removal but for the explanation.
That is to say, the expression "termination" is synonymous with the term "dismissal" or "removal".
Rule 55 of the Rules provided a machinery for dismissing or removing or reducing in rank a Government servant; he should be given thereunder an adequate opportunity to defend himself.
Then came the Government of India Act, 1935.
In section 240 thereof, the expression used was "dismissed" and that term, in the context of the exercise of His Majesty 's pleasure, could have meant only "termination" of services, though in view of the explanation to r. 49 of the Rules quoted above, the three specified categories of termination mentioned in the explanation might, by construction, be excluded from the natural meaning of the word "dismissal".
Then we come to article 311 of the Constitution, which with certain modifications incorporated the provisions of section 240 of the Government of India Act, 1935.
It introduced the expression "removed" in addition to the word "dismissed" presumably inspired by rr. 49 and 55 of the Rules.
The natural meaning of the said terms takes in every act of termination of service; but, if construed with the help of r. 49 of the Rules, their meaning may be cut down by excluding the three categories of termination covered by the explanation in the manner prescribed therein.
If the termination was otherwise than that prescribed therein, it would still be dismissal or removal.
If so, the history of the constitutional provisions may 740 lead to the conclusion that though the words "dismissed" and "removed" are words of widest connotation, namely "termination" of service of any category held under the Union, they were used in the limited sense they bear in r. 49 of the Rules, that is to say termination of employment excluding the three categories mentioned in the explanation.
So far the words "removed" and "dismissed" are concerned, r. 49 shows that there is no appreciable difference between the two except in the matter of future employment; and article 31 1, presumably, copied the two words from r. 49.
Therefore, whether the natural and dictionary meanings of the words "dismissal" and "removal" were adopted or the limited meanings given to those words by r. 49 were accepted, the result, so far as a permanent employee was concerned, would be the same, namely that in the case of termination of services of a Government servant outside the three categories mentioned in the explanation, it would be dismissal or removal within the meaning of article 311 of the Constitution with the difference that in the former the dismissed servant would not be disqualified from future employment and in the latter ordinarily he would be disqualified from such employment.
If so, it follows that if the services of a permanent Government servant, which fall outside the three categories mentioned in the explanation, were terminated, he would be entitled to protection under article 311(2) of the Constitution.
With this background let me now scrutinise the leading judgment of this Court on the subject, namely, Parshotam Lai Dhingra vs Union of India (1).
That was a case of reversion of a Government servant who was officiating in Class 11 Service as Assistant Superintendent, Railway Telegraphs, to his substantive post in Class III Service.
This Court, speaking through Das C.J., gave an exhaustive treatment to the scope of article 311(2) of the Constitution, parti (1)[1958] S.C.R. 828.
741 cularly with reference to the meaning of the expressions "dismissed", "removed" or "reduced in rank" found therein.
A careful reading of the judgment shows that this Court has heavily relied upon r. 49 of the Civil Services (Classification, Control and Appeal) Rules, and its explanation, and attempted to give a legal basis for the said provisions.
On that basis, having considered the different aspects of the problem, the Court has laid down the following two tests at p. 863, to ascertain whether a person is dismissed or removed within the meaning of article 311 of the Constitution; (1) Whether the servant had a right to the post or the rank or (2) whether he has been visited with evil consequences of the kind hereinbefore reference to i.e., loss of pay and allowances, loss of his seniority in his substantive rank or the stoppage or postponement of his future chances of promotion If an officer had a right to a post or rank and if the termination of his services deprived him of that right the said termination would be dismissal or removal as punishment.
So too, if the termination had the effect of the officer being visited with evil consequences then whatever may be the phraseology used for putting an end to his services, it would be dismissal as punishment.
The motive operating on the mind of the authority concerned or the machinery evolved or the method adopted to put an end to his services are not relevant in considering the question whether he was dismissed, if he had a right to the office or if he had been visted with evil consequences, though the said circumstances may have some relevance as other decisions of this Court disclose, in ascertaining whether he was discharged with a stigma attached to him.
While conceding that this decision does not in terms specifically lay down that even in the case of a person holding a permanent post, if there was an appropriate term in the conditions of service that his services could be terminated by notice, article 311 of the Constitution would not be attracted, it is contended that raison d 'etre of the decision and some passages therein lead to that conclusion.
Some of the passages relied upon may be extracted: 742 At pp.
857 858: "It has already been said that where a 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 o r is com pulsorily retired and in the absence of a contract express or implied, or a service rule he cannot be turned out of his post 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).
" At p. 862: "As already stated if the servant has got a right to continue in the post, then, unless the contract of employment or the rules provide to the contrary, his services cannot be terminated otherwise than for misconduct, negligence, inefficiency or other good and sufficient cause.
" These passages certainly lend support to the argument of the learned counsel, but the qualifying clauses on which reliance is placed are only incidental observations.
The main principles relevant to the present enquiry were laid down by the Court clearly and precisely at p. 860, thus: "Shortly put, the principle is that when a servant has right to a post or to a rank either under the terms of the contract of employment; express or implied, or under the rules governing the conditions of his service, the termination of the service of such a servant or his reduction to a lower post is by itself and prima facie a punishment, for it operates as a forfeiture of his right to hold that post or that rank and to get the emoluments and other benefits attached thereto." The following observation further pinpoints the principle; "One test for determining whether the termi nation of the service of a government servant 743 is by way of punishment is to ascertain whether the servant, but for such termination, had the right to hold the post." This decision, therefore, clearly lays down, without any ambiguity, that if a person has a right to hold office under the service rules or under a contract the termination of his services would attract Art 311 of the Constitution.
It also lays down that a person holding a substantive lien on a permanent post has a right to such office.
It does not say, expressly or by necessary implication, that even if a person is deprived of such a right, it will not be punishment unless it is inflicted for misconduct in the manner prescribed by the service rules.
Learned Additional Solicitor General further relied upon the decisions of this Court holding that a rule empowering the Government to compulsorily retire a permanent Government servant before that age of superannuation did not violate article 311 of the Constitution and contended that, on parity of reasoning, the impugned rules should likewise be valid.
It was asked, with considerable force, what relevant distinction there could be between the said two categories of rules in the context of the question whether the termination of services was dismissal or not within the meaning of article 311 of the Constitution? In the case of a Government servant, the argument proceeded, in either case he was deprived of his title to office and, therefore, both cases were equally covered by the principle laid down in Dhingra 's case(1).
This argument certainly deserves serious consideration.
The relevant rules pertaining to compulsory retirement of a permanent Government servant considered by this Court in the various decisions relied upon by learned counsel may now be noticed.
In Shyam Lal 's case (2) which is the sheet anchor of the appellants ' argument, the rule under consideration was Note 1 to article 465 A of the Civil Services Regulations.
The said Note read: (1) ; (2) ; 744 "Government retains an absolute right to retire any officer after he has completed twenty five years qualifying service without giving any reasons, and no claim to special compensation on this account will be ' entertained.
This right will not be exercised except when it is in the public interest to dispense with the further services of an officer.
" The rule considered in The State of Bombay vs Saubhagchand M. Doshi (1) was r. 165 A of the Bombay Civil Services Rules, applicable to the State of Saurashtra, and it read: "Government retains an absolute right to re tire any Government servant after he has com pleted 25 years qualifying service or 50 years of age, whatever the service, without giving any reason, and no claim to special compensation on this account will be entertained.
This right will not be exercised except when it is in the public interest to dispense with the further services of a Government servant such as on account of inefficiency or dishonesty.
" Rule 3 of the Railway Services (Safeguarding of National Security) Rules, 1949, was under consideration in Balakotaiah vs The Union of India(2) and it read: "A member of the Railway Service who, in the opinion of the competent authority is engaged in or is reasonably suspected to be engaged in subversive activities, or is associated with others in subversive activities in such manner as to raise doubts about his reliability, may be compulsorily retired from service, or have his service terminated by the competent authority after he has been given due notice or pay in lieu of such notice in accordance with the terms of his service agreement: Provided that a member of the Railway Service shall not be retired or have his service so terminated unless the competent authority is satisfied that his retention in public service is prejudicial to national security, and unless, (1) ; (2) ; 745 where the competent authority is the Head of a Department, the prior approval of the Governor General has been obtained." In Union of India vs Jeewan Ram(1) this Court had to consider sub rr.
(3) and (4) of r. 148 of the Indian Railway Establishment Code, Vol. 1.
The rule which was under scrutiny in Dalip Singh vs The State Punjab(2) was r. 278 of the Patiala State Regulations, which read: "For all classes of pensions the person who desires to obtain the pension is required to submit his application before any pension is granted to him.
The State reserves to itself the right to retire any of its employees on pension on political or on other reasons.
" The cases of Shyam Lal and Doshi were decided before Dhingra 's case and the cases of Dalip Singh and Balakotaiah, after Dhingra 'section In all the cases, under the relevant rules the age of superannuation was fixed but the order of compulsory retirement was made before the Government servant reached the age of superannuation.
The rule in Shyam Lal 's case ex facie declares that the right will not be exercised except when it is in the public interest to dispensed with the further services of an officer indicating thereby that the compulsory retirement is imposed as punishment for some sort of dereliction of duty on his part and, therefore, the termination of service under that rule necessarily carries a stigma with it.
The rule in Doshi 's case(3) iS more emphatic than that in Shyam Lal 's case: the rule in Doshi 's case elaborate what is implicit in the rule considered in Shyam Lal 's case and declares that the right there under shall be exercised by the Government only in the case of inefficiency or dishonesty of the Government servant Rule 3 of the Railway Services (Safeguarding of National Security) Rules considered in Balakotaiah case (4) expressly says that the order of compulsory retirement will be made for misconduct defined therein.
(1) A.I.R. 1958 section C. 905.
(2) (3) ; (4) 746 The rule in Dalip Singh 's case(1) gives a very wide power to the State to retire any of its employees on pension on political or other reasons before the age of superannuation.
In short the rules dealt with in the first three decisions expressly conferred an absolute power on the appropriate authority to terminate the services of a Government servant for misconduct, and the rule in the fourth decision went further and enabled the appropriate authority to dismiss the servant for any reason.
It may also be noticed that in Doshi 's cases(2) this Court expressed the view that "when there is no rule fixing the age of compulsory retirement or if there is one and the servant is retired before the age prescribed therein, then that can be regarded only as dismissal or removal within article 311(2) of the Constitution".
The emphasis appears to be more on the existence of a rule of compulsory retirement than on the character of the termination itself.
But this reservation was not accepted by the Court in Dalip Singh 's case(1), that is to say, the emphasis is shifted to the existence of a rule of termination detracting from the permanency of the post.
Pausing here a moment, I ask myself the question whether these decisions can be reconciled with the aforesaid principles laid down in Dhingra 's case(3).
In Dhingra 's case this Court held that a termination of the services of a Government servant, who has substantive lien on a permanent post, that is to say a title to his office, is dismissal or removal within the meaning of article 311(2) of the Constitution.
In the aforesaid three decisions the Government servant concerned had substantive lien on a permanent post, but he was compulsorily retired before the age of superannuation depriving him of his title to the post.
it is neither the phraseology used in respect of nor the nomenclature given to the act of termination of service that is material but the legal effect of the action taken that is decisive in considering the question whether a Government servant is dismissed or not.
Whether the services of a permanent Government servant are (1) (3) ; (2) ; 747 terminated by giving him 15 days ' notice or whether his services are dispensed with before the age of superannuation by way of compulsory retirement under or outside a rule of compulsory retirement, the termination deprives him of his title to the permanent post.
If in the former case it amounts to dismissal, in the latter case it must be equally so.
I would, prefer the principle laid down in Dhingra 's case (1) in the matter of termination of the services of a permanent Government servant to that laid down in the said other decisions.
Rule 148 of the Railway Establishment Code, Vol. 1, was considered both in Balakotaiah 's case (2) and in Jeewan Ram 's case(3): in the former, though there were some observations in support of the appellants ' contention, the question of construction of the rule was expressly left open, and in the latter though the Government servant concerned was discharged under that rule, the decision proceeded on the basis that he was expressly removed for misconduct.
A number of decisions of the High Courts are cited.
I have gone through them carefully.
I am not referring to them in detail, as, though some of the judgments contain instructive discussion on though subject, they practically extended the principle of Shyam Lal 's case(4) and held that the termination of service, such as under r. 148(3), was not dismissal within the meaning of article 311 of the constitution As, in my view, Shyam Lal 's case must yield to Dhingra 's case, a further discussion of the said decisions is not called for.
The effect of the two rules is the same; the difference is only superficial, which lies more in clever drafting than in their content.
Take for instance the following two rules: (i) the Government may terminate the services of a permanent Government servant at any time, or after a specified period but before the normal superannuation age, by way of compulsory retirement; and (ii) the Government may terminate (1) ; (3) A. 1.
R. (2) ; (4) ; 748 the services of a permanent civil servant by giving him 15 days ' notice.
Arbitrariness is writ large on both the rules: both the rules enable the Government to deprive a permanent civil servant of his office without enquiry.
Both violate article 311(2) of the Constitution.
Both must be bad or none at all.
The following principles emerge from the aforesaid discussion.
A title to an office must be distinguished from the mode of its termination.
It a person has title to an office, 'he will continue to have it till he is dismissed or removed therefrom.
Terms of statutory rules may provide for conferment of a title to an office and also for the mode of terminating it.
If under such rules a person acquires title to an office, whatever mode of termination is prescribed, whatever phraseology is used to describe it, the termination is neither more nor less than a dismissal or removal from service; and that situation inevitably attracts the provisions of article 311 of the Constitution.
The argument that the mode of termination prescribed derogates from the title that otherwise would have been conferred on the employee mixes up two clear concepts of conferment of title and the mode of its deprivation.
Article 311 is a constitu tional protection given to Government servants, who have title to office, against arbitrary and summary dismissal.
It follows that Government cannot by rule evade the provisions of the said Article.
The parties cannot also contract themselves out of the constitutional provision.
Once that principle is accepted the cases dealing with compulsory retirement before the age of superannuation cannot also fall outside the scope of article 311 of the Constitution.
Age of superannuation is common to all permanent civil servants: it depends upon an event that inevitably happens by passage of time, unless the employee dies earlier or resigns from the post.
It does not depend on the discretion of the employer or the employee; it is for the benefit of the employee who earns a well earned rest with or without pensionary benefits for the rest of his life; it has, by custom and by convention, become 749 an inextricable incident of Government service; and it is an incident of a permanent post.
Notwithstanding the rule fixing an age of superannuation, a person appointed to such a post acquires title to it.
The same cannot be said of a compulsory retirement before the age of superannuation.
It is not an incident of the tenure; it does not work automatically it is not conceived in the interest of the employee it is a mode of terminating his employment at the discretion of the appointing authority.
In effect whatever may be the phraseology used in terminating the services of a Government employee, it is punishment imposed on him, for it not only destroys his title but also inevitably carries with it a stigma such a. termination is only dismissal or removal within the meaning of article 311 of the Constitution.
I would, therefore, with greatest respect, follow the principle laid down in Dhingra 's case(1) in respect of permanent servants in preference to that accepted by Shyam Lal 's case(2) and the subsequent decisions following it.
Now let me turn to the relevant rules of the Indian Railway Establishment Code, hereinafter called that Code.
The Code is in two volumes.
The first volume embodies all rules governing the service conditions of railway servants with the exception of those rules which correspond to the Fundamental Rules, Supplementary Rules, Pension Rules and the Civil Service Regulations applicable generally to all civil servants under the Government of India.
The excepted rules are included in Vol.
11 of the Code.
Fundamental Rules embodied in Vol.
11 of the Code describe, inter alia the cadre strength, the different posts in the cadre and the nature of the appointments made in respect of such posts.
Broadly the posts are divided as permanent, officiating, temporary and for definite periods.
Rule 2003 (14) defines lien to mean th title of a railway servant to hold substantively either immediately or on the termination of a period or periods of absence, a permanent post, including a tenure post, to which he has been appointed substan (1) ; (2) 750 tively.
Under r. 2006, "Unless in any case it be otherwise provided in these Rules, a railway servant.
on substantive appointment to any permanent post acquires a lien on that post and ceases to hold any lien previously acquired on any other post".
Under r. 2009, "A railway servant 's lien on a post may, in no circumstances, be terminated, even with his consent, if the result will be to leave him without a lien or a suspended lien upon a permanent post.
" Rule 2042 provides that the pay and allowances of a railway servant who is removed or dismissed from service ceases from the date of the order of removal or dismissal.
Rule 2046, under the heading "Compulsory Retirement", fixes the age of superannuation for different categories of service.
These rules clearly lay down that a. railway servant on a substantive appointment to a permanent post acquires a lien on that post and he does not lose it till he attains the age of superannuation or is dismissed or removed in the manner prescribed; that is, he acquires a title to hold substantively a permanent post.
It is not of much relevance to give any particular nomenclature to that post.
It may not be a life tenure.
It may not also be a permanent post in the literal sense of the term, but it confers a title to that post with all the advantages appertaining to that post and ordinarily it comes to an end only on the incumbent attaining the age of superannuation, with or without pensionary benefits.
Briefly stated, the aforesaid Fundamental Rules embodied in Vol.
11 of the Code create offices of stability and security which for all practical purposes are permanent posts.
If so, the termination of services of such a servant can only be dismissal or removal, for he will be deprived of his title to the said office.
If that was the legal position, for the reasons already given, the said r. 148(3) And r. 149, conferring a power on the appointing authority to remove such a permanent servant on notice would infringe the constitutional protection given to a Government servant under article 311 of the Constitution.
A permanent post and such rules cannot stand together: the latter must inevitably yield to the former.
751 I therefore, hold that r. 148(3) and r. 149 of the Railway Establishment Code, being violative of the provisions of articles 14 and 311 of the Constitution are void and unenforceable.
In the result, I agree that Civil Appeals Nos 711 to 713 of 1962 and Civil Appeal No. 714 of 196 should be allowed with costs and that Civil Appeal Nos. 837 to 839 of 1963 should be dismissed wit costs.
DAS GUPTA J.
The principal question raised in the four appeals which have been numbered 711 to 714 of 1962 is as regards the validity of Rule 148 (3) of the Indian Railway Establishment Code in respect of certain non pensionable railway servants that their services shall be liable to termination on notice for the period as prescribed therein.
The appellants all railway employees whose services had been terminated on notice in accordance with the above provision and who have failed to obtain relief against the orders of termination challenge the validity of this provision on two grounds.
Their first contention is that this Rule in providing for termination of service on mere notice contravenes the provisions of Art 311(2) of the Constitution; secondly, it is contended that the Rule violates article 14 of the Constitution It will be necessary to examine these two grounds separately.
Is the termination as provided for in the above provision, in Rule 148 (3) 'removal ' or 'dismissal within the meaning of article 311(2) of the Constitution? That is the question that falls to be answered for deciding the first grounds.
To answer this against we have to determine first the connotation of the two words 'removal ' and 'dismissal ' as used in article 311(2).
In my opinion, this matter is completely covered by numerous decisions of this Court.
Before turning to the decisions however it will be convenient to examine the matter in the context in which article 311 (2) appears in the Constitution and also the historical background of the protection afforded thereby.
For this purpose it is necessary first to consider the three Articles of the Constitu 752 tion, viz., articles 309, 310 and 311.
They are in these words: "309.
Subject to the provisions of this Con stitution, Acts of the appropriate Legislature may regulate the recruitment, and conditions of service of persons appointed, to public services and posts in connection with the affairs of the Union or of any State : Provided that it shall be a competent for the President or such persons as he may direct in the case of services and posts in connection with the affairs of the Union and for the Governor or Rajpramukh of a State or such person as he may direct in the case of services and posts in connection with the affairs of the State, to make rules regulating the recruitment and the conditions of service of persons appointed to such services and posts until provisions in that behalf is made by or under an Act of the appropriate Legislature under this Article, and any rules so made shall have effect, subject to the provisions of any such Act.
(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 and 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 service of a State or holds any civil post under a State holds office during the pleasure of the Governor or, as the case may be, the Raj pramukh 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 or Rajpramukh 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 civil service of, the 753 Union or a State, is appointed under this Constitution to hold such a post may, if the President or the Governor or the Rajpramukh as the case may be, deems it necessary in order to secure the services of a perso n 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.
(1) 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 Union or a State shall be dismissed or removed by an authority subordinate to that by which he was appointed.
(2) No such person as aforesaid shall be dismissed or removed or reduced in rank until he has been given a reasonable opportunity of showing cause against the action proposed to be taken in regard to him.
Provided that this clause shall not apply (a) where a person is dismissed or removed or reduced in rank on the ground of conduct which has led to his conviction on a criminal charge; (b) where an authority empowered to dismiss or remove a person or to reduce him in rank is satisfied that for some reason, to be recorded by that authority in writing it is not reasonably practicable to give to that person an opportunity of showing cause; or (c) where the President or Governor or Rajpramukh, as the case may be, is satisfied that in the interest of the security of the State it is not expedient to give to that person such an opportunity.
(3) If any question arises whether it is reasonably practicable to give to any person an opportunity of showing cause under clause (2), the decision thereon of the authority empowered 1/SCI/64 49 754 to dismiss or remove such person or to reduce him in rank, as the case may be, shall be final.
" It has to be noticed that both Articles 309 and 310 are subject to article 31 1.
In other words, if any rule is made under article 309 as regards the conditions of service of a government servant in the matter of his dismissal or removal or reduction in rank it has to comply with the requirements of article 31 1.
Again, before any order dismissing or removing or reducing a government servant in rank is made by the President or the Governor in exercise of his pleasure, the President or the Governor has to comply with the require ments of article 311(2) of the Constitution.
Under article 310 all servants of the State hold office at pleasure of the President or the Governor as the case may be.
That by itself means that the officer has no right to be heard before his services are terminated.
To this article 311 provides an exception in the case of removal or dismissal.
It is easy to see that if every termination of service amounted to dismissal or removal the resultant position will be that every officer would have the right to be heard before any action could be taken under article 310.
That would leave no field in which article 310 could operate.
This by itself is sufficient to show that not all kinds of termination of service were intended to come within article 311.
Reading Articles 310 and 311 together it will be reasonable to understand them to say that the officer will have the right to be heard before his services were terminated by dismissal or removal but in all other cases of termination of his service he will not have any such right.
I have therefore no hesitation in rejecting the extreme proposition urged on behalf of the appellants that the words dismissal or removal in article 311 include every kind of termination of service.
This brings us to the question : what kinds of termination of service come within the words dismissal or removal and what kinds are not.
Taking the second Dart of the question first, it is not difficult to mention at least two kinds of termination which 755 cannot reasonably be included within the words dismissal or removal.
Take for instance the case where a government servant resigns his post but the resignation is not under the rules effective before it has been accepted by his superiors.
Here termination results only when the superior officer accepts the resignation.
It may be correct to say that thereby he terminates the service.
But it could not reasonably be said that the superior officer has removed the servant from service or dismissed him from service.
Such removal or dismissal was not necessary at all because of the resignation.
Take again the case of a servant who has been appointed to an office for a period of three years.
When the three year period ends he is asked to go.
There is termination of service.
But nobody would said that the superior officer by asking him to go at the end of the period had dismissed him or removed him from service.
The real question however is not so much as what in common parlance would be understood to be the dismissal or removal but what the Constitution intended by these words.
In this connection it will be helpful to examine the use of the words dismissal and removal in the earlier Constitution Acts.
The Charter Act of 1793 mentions in section 36 that nothing in this Act contained shall extend, or be construed to extend to preclude or take away the power of the Court of Directors of the said Company from removing or recalling any of the officers or servants of the said Company, but that the said Court shall and may at all times have full liberty , to remove, recall, or dismiss any of such officers or servants, at their will and pleasure in the like manner as if this Act had not been passed Section 35 made it lawful to and for the King 's Majesty his heirs and successors, by any writing or instrument under him or their sign manual, countersigned by the President of the Board of Commissioners for the affairs of India, to remove or recall any person or person holding any office, employment, or commission, civil or military, under the said United Company 756 in India for the time being.
In the Charter Act of 1833, similar provisions were enacted in sections 74 and 75.
Section 74 make it lawful "for His Majesty by any Writing under His Sign Manual,countersigned by the President of the said Board of Commissioners, to remove or dismiss any person holding any office, employment or commission, civil or military, under the said Company in India, and to vacate any Appointment or Commission of any person to any such office or employment.
" Section 75 ran thus: "Provided always, and be it enacted, that nothing in this Act contained shall take away the Power of the said Court of Directors to remove or dismiss any of the officers or servants of the said Company but that the said Court shall and may at all Times have full Liberty to remove or dismiss any of such officers or servants at their will and pleasure. .
When the Act of 1,858 transferred the government of India to Her Majesty the Queen of England section 38 of the Act provided that. "Any writing under the Royal Sign Manual removing or dismissing any person holding any office employment or commission, civil or military in India, of which, if this Act had not been passed, a copy would have been required to be transmitted or delivered within eight days after being signed by Her Majesty to the Chairman or Deputy Chairman of the Court of Directors, shall, in lieu thereof, be communicated within the time aforesaid to the Secretary of State in Council.
" It seems to me that in making these statutory provisions as regards dismissal or removal of public servants the British Parliament had in mind those servants only who had acquired such a right to the post under their conditions of service that but for such statutory provisions their dismissal or removal would have been unlawful.
If their service was terminable by the ordinary law of the land there 757 would have been no need in section 36 of the 1793 Act or section 75 of the 1833 Act to speak of the right of the Court of Directors of the Company to remove or dismiss the Company 's officers or servants at their will and pleasure.
It is clear that by these provisions the British Parliament was emphasizing the right of the Court of Directors of the Company to remove, or dismiss such servants whose services would not have been terminable under the ordinary law of master and servant.
It is also legitimate to read the provisions making it lawful for the King of England to remove or dismiss the Company 's servants (s).
35 in the Charter Act of 1793 and section 75 of the Charter Act of 1833) as intended to terminate the service of the same class of servants, viz., those whose services were not terminable under the ordinary law of the land.
In the light of this legislative history, the words removal and dismissal in section 38 :of the Act of 1858 and thereafter in the Government of India Act, 1915 (Section 95 and section 96B ) cannot but be read also to mean termination of service of such servants only who would not have been liable to termination under the ordinary law of master and servant.
In other words, only those servants who by their terms and conditions of their appointment to the service bad acquired a right to continue for a particular period which could not under the ordinary law be put an end to were intended to get the benefit of these provisions as regards dismissal or removal.
By the time the Government of India Act.
, 1935, came to be enacted by Parliament rules had been framed by the Secretary of State in Council under section 96B of the Government of India Act, in which these words, removal and dismissal, were used.
Among the rules framed under this section in 1924 was Rule XIII, which was in these words: "Without prejudice to the provisions of any law for the time being in force, the Local Government may for good and sufficient reasons: (1) Censure (2) Withhold promotion from 758 (3) Reduce to a lower post (4) Suspend (5) Remove, or (6) Dismiss any officer holding a post in a provincial or subordinate service or a special appointment.
" In the fresh set of rules framed in 1930 Rule 49 took the place of Rule XIII of the earlier Rules and was in these words: "R. 49.
The following penalties may, for good and sufficient reason and as hereinafter provided, be imposed upon members of the services comprised in any of the classes (1) to (5) specified in Rule XIV namely: (i) Censure, (ii) withholding of increments or promotion (iii) reduction to a lower post or time scale, or to a lower stage in a time scale, (iv) recovery from pay of the whole or part of any pecuniary loss caused to Government by negligence or breach of orders (v) suspension, (vi) removal from the civil service of the crown, which does not disqualify from future employment, (vii) dismissal from the civil service of the crown, which ordinarily disqualifies from future employment.
Explanation The discharge (a) of a person appointed on probation, during the period of probation, (b) of a person appointed otherwise than under contract to hold a temporary appointment, on the expiration of the period of the appointment, 759 (c) of a person engaged under contract, in accordance with the terms of his contract, does not amount to removal or dismissal within the meaning of this Rule.
" These Rules show that the Secretary of State in Council considered removal and dismissal from the service of the Crown only as penalties.
Explanation to Rule 49 of the 1930 Rules also shows that discharge from service of a person who had not acquired a right to the post was not considered to be removal or dismissal.
When the British Parliament made special provision in the Government of India Act, 1935 as regards removal or dismissal of persons in the civil service of the Crown it had before it not only the history of these words removal and dismissal in the Charter Act 1793, Charter Act of 1833, Government of India Act, 1858, the Government of India Act, 1915 but also these Rules framed by the Secretary of State in Council.
It is reasonable to think therefore that in making these special provisions in the 1935 Act the British Parliament proceeded on the basis that only terminations of service by way of punishment which could not have been inflicted under the ordinary law of master and servant would come within these words removal and dismissal.
Primarily such terminations by way of punishment could be made only in respect of those servants who had not acquired a right to continue in service.
It might however be said that even where there was no such right and termination could have been effected therefore under the ordinary law of contract between master and servant any termination which carried with it loss of benefits already acquired, say, forfeiture of pension or of provident fund was also contemplated to come within these words.
Termination in no other case could be said to be by way of punishment and in the light of the previous history of the use of the words removal and dismissal in connection with the civil servants of the crown it appears to be abundantly clear that 760 in the Government of India Act, 1935 the words removal and dismissal were not intended to include such other terminations.
When the Constitution was framed the provisions as regards removal and dismissal as contained in section 240 of the Government of India Act were embodied 'in articles 310 and 311 with practically little change.
Nothing has been shown to us to indicate that the Constitution makers could have meant by these words removal and dismissal in article 31 1, anything different from what the British Parliament had intended to include under those words in the Government of India Act, 1935.
The above consideration of the context an previous legislative history leads to the conclusion that the words 'removal ' or 'dismissal ' in article 311 meant only such terminations of service where the servant had acquired a right to continue in the post which right was cut short by the termination and such other terminations even where there was no such right, as resulted in loss of acquired benefits.
Turning now to the decided cases we find that the question now under consideration was fully discussed in this Court 's decision in Parshotam Lal Dhingra vs Union of India(1).
After an exhaustive discussion of appointments of Government servants to a permanent or temporary post, substantively or on probation or on an officiating basis, and numerous rules of service in connection with such appointments, Das C.J. speaking for the majority of the Court recorded the conclusion thus: "It follows therefore that if the termination of service is sought to be brought about otherwise than by way of punishment, then the government servant whose service is so terminated cannot claim the protection of article 311(2).
" The learned Chief Justice went on to say: "The foregoing conclusion however does not solve the entire problem, for it has yet to (1) 761 be ascertained as to when an order for the termination of service is inflicted as and by way of punishment and when it is not.
It has already been said that where a 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).
Termination of service of such a servant so appointed must per se be a punishment, for it operates as a forfeiture of the servant 's rights and brings abo ut a pre mature end of his employment.
Again, where a person is appointed to a temporary post for a fixed term of say five years his service can not, in the absence of a contract or a service rule permitting its premature termination be terminated before the expiry of that period unless he has been guilty of some misconduct, negligence inefficiency or other disqualifications and appropriate proceedings are taken under the rules read with article 311(2).
The premature termination of the service of a servant so appointed will prima facie be a dismissal or removal from service by way of punishment and so within the purview of article 311(2).
At page 862, the learned Chief Justice again observed: In short, if the termination of service is founded on the right flowing from contract or the service rules then, prima facie, the termination is not a punishment and carries with it no evil consequences and so article 311 is not attracted But even if the Government has, by contract or under the rules, the right to terminate the 762 employment without going through the procedure prescribed for inflicting the punishment of dismissal, or removal or reducing in rank, the Government may nevertheless, choose to punish the servant and if the termination of service is sought to be founded on misconduct, negligence, inefficiency or other disqualification, then it is a punishment and the requirements of article 311 must be complied with.
" At page 863, the learned Chief Justice observed thus: "Thus if the order entails or provides for the forfeiture of his pay or allowances or the loss of his seniority in his substantive rank or the stoppage or postponement of his future chances of Promotion, then that circumstance may indicate that although in form the government had purported to exercise its right to terminate the employment or to reduce the servant to a lower rank under the terms of the contract of employment or under the rules, in truth and, reality the Government has terminated the employment as and by way of penalty.
" Several years before this the question : what is meant by the words 'removal ' or 'dismissal. ' had been considered by this Court in Shyam Lal vs The State of Uttar Pradesh(1).
Shyam Lai, the appellant, had been ordered to retire compulsorily under the provisions of article 465A of the Civil Service Regulations.
On behalf of the appellant it was urged inter alia that this order was invalid as the provisions of article 311(2) of the Constitution had not been complied with.
In deciding that the compulsory retirement did not amount to dismissal or removal within the meaning of article 311(2) of the Constitution the Court laid down that (1) every termination of service does not amount to removal or dismissal and (2) that dismissal or removal is a punishment imposed on an officer as a penalty which involves loss of benefit already earned (1) ; It was pointed out that on compulsory retirement an officer would not suffer any diminution of the accrued benefit and though in a wide sense the officer might consider himself punished by the deprivation of the chance of serving and getting his pay till he attains the age of superannuation and thereafter to get an enhanced pension, there is clearly a distinction between the loss of benefit already earned and the loss of prospect of earning something more; where the officer did not lose the benefit already earned the same was not dismissal or removal.
At page 42 of the Report the Court said: "Finally, Rule 49 of the Civil Service (Classification, Control and Appeal) Rules clearly indicates that dismissal or removal is a punishment.
This is imposed on an officer as a penalty It involves loss of benefit already earned.
" In Doshi 's Case( ) the Court had to consider an order of compulsory retirement made under Ruled 165A of the Bombay Civil Service Rules as amended by the Saurashtra Government which gave the Government an absolute right to retire any government servant after he had completed 25 years of qualifying service or 50 years of age whatever his service without giving any reason.
It was held that such an order was not 'removal ' or 'dismissal ' under article 311 of the Constitution.
Speaking for the Court Venkatarama Aiyar J. said: "Now the policy underlying article 311(2) is that when it is proposed to take action against a servant by way of punishment and that will entail forfeiture of benefits already earned by him, he should be heard and given an opportunity to show cause against the order.
But that consideration can have no application where the order is not one of punishment and results in no loss of benefits already accrued, and in such a case there is no reason why the terms of employment and the rules of service should not (1) ; 764 be given effect to.
Thus, the real criterion for deciding whether an order terminating the services of a servant is one of dismissal or removal is to ascertain whether it involves any loss or benefits previously earned.
Applying this test, an order under R. 165A cannot be held to be one of dismissal or removal, as it does not entail forfeiture of the proportionate pension due for past services.
" Hartwell 's Case I was one of termination of a temporary servant under the U.P. Subordinate Agricultural Service, who for some time served in a temporary capacity in the U.P. Agricultural Service.
He was first reverted to his original appointment in the Subordinate Agricultural Service by an order dated May 3, 1954 and later a notice dated September 13, 1954 was served on him terminating his services in the Subordinate Agricultural Service.
The notice purported to be under Rule 25 Cl. 4 of the Subordinate Agricultural Service Rules.
The Court held that the termination of the appellant 's services under this rule did not amount to dismissal or removal within the meaning.
of article 311 as it was in accordance with the terms of the conditions of service applicable to the appellant.
Imam J. speaking for the Court observed: "In principle, we cannot see any clear distinction between the termination of the services of a person under the terms of a contract governing him and the termination of his services in accordance with the terms of his conditions of service.
The order complained against did not contravene the provisions of article 311 and was therefore a valid order." The proposition that it is not every termination of service of an employee that falls within the operation of article 31 1 and that it is only when the order is by way of punishment that it is one of dismissal or removal was reaffirmed by this Court in Balakotich vs The Union of India (3 ).
Reaffirming also the criteria indicated in Dhingar 's Case(3) as to what amounted (1) ; (2) ; (3) 765 to punishment for the purpose of article 311, Venkatarama Aiyar J. speaking for the Court observed: "The question as to what would amount to punishment for the purposes of article 311 was also fully considered in Parshotam Lal Dhingra 'section Case(1) It was therein held that if a person had a right to continue in office either under the service rules or under a special agreement, a premature termination of his service would result in loss of benefits already earned and accrued, that would also be punishment.
" Proceeding to apply this proposition to the facts of the case before it the Court said: "In the present case, the terms of employment provide for the services being terminated on a proper notice, and so, no question of pre mature termination arises.
Rule 7 of the Security Rules preserves the rights of the employee to all the benefits of pension, gratuities and the like, to which they would be entitled under the rules.
Thus, there is no forfeiture of benefits already acquired.
It was stated for the appellants that a person who was discharged under the rules was not eligible for reemployment, and that was punishment.
But the appellants are unable to point to any rule imposing that disability.
The order terminating services under R. 3 of the Security Rules stands on the same footing as an order of discharge under R. 148, and it is neither one of dismissal nor of removal within the meaning of article 311.
" The law as thus settled by this Court was again applied in Dalip Singh vs State of Punjab.
(2) Dalip Singh who had been Inspector General of Police, PEPSU, was compulsorily retired from service by the Rajpramukh by an order dated August 18, 1950 which ran as follows "His Highness the Rajpramukh is pleased to retire from service Sardar Dalip Singh, Inspector (1) (2) 766 General of Police, PEPSU, (on leave) for ad ministrative reasons with effect from the 18th August, 1950.
" The appellant brought his suit asking for a declaration that the order by which he was removed from the post of Inspector General of Police was unconstitutional, illegal, void, ultra vires and inoperative.
Among the grounds on which this declaration was sought was that the compulsory retirement of the appellant which had been made under Regulation 278 of the Patiala State Regulations, was removal from service within the meaning of article 31 1 of the Constitution.
Admittedly the requirements of article 311(2) had not been complied with in this case and so the question had to be decided whether such a retirement was removal or dismissal within the meaning of article 31 1.
The question was answered by this Court in the negative for the reasons that the order did not amount to punishment because though an enquiry had been held against him the charges or imputations against him had not been made the condition of the exercise of the power of retirement and further because the officer was not losing the benefits he had already earned, as full pension was ordered to be paid.
To emphasis the point that where compulsory retirement was in accordance with the rules of service it could not ordinarily be said to be by way of punishment, the Court pointed out that where a rule of service provided for compulsory retirement at any age whatsoever irrespective of the length of service put in, a retirement understand a rule would not be regarded as dismissal or removal.
An observation in Doshi 's Case(1) which might appear to indicate otherwise was not followed it being pointed out that in Doshi 's Case this matter did not fall to be considered.
Under Rule 278 he State reserved to itself the right to retire any of its employees on pension on political or on other reasons.
It did not mention any particular age for retirement under this Rule.
Care was taken in this case to mention that if the rule would result in loss (1) ; 767 of pension already earned, the termination would amount to removal or dismissal.
It is thus clear both on principle and on authority that the words removal and dismissal in article 311 of the Constitution mean and include only those terminations of service, where a servant had acquired a right to continue in the post on the basis of terms and conditions of service, and such other terminations, where though there were no such right, the order has resulted in loss of accrued benefits; and that terminations of service which did not satisfy either of these two tests do not come within any of these words.
Applying these tests to the termination of service under the provision of Rule 148 (3) of the Railway Code that "the service of other (non pensionable) railway servants shall be liable to termination on notice on either side.
" I am of opinion that neither of these is satisfied.
There is no doubt that this Rule applies not only to temporary railway servants but also to those railway servants who have been substantively appointed to permanent posts in the railways.
A "permanent post", under the Fundamental Rules applicable to the railways means a post carrying a definite rate of pay sanctioned without limit of time.
On substantive appointment the government servant has a lien on such post, i.e., the right to hold it substantively The right however is limited by all the terms and conditions of service.
One of such conditions is in the provision in the Rule for compulsory retirement Rule 2046 of the Railway Code which corresponds to Fundamental Rule 56 provides that generally the date of compulsory retirement of a railway servant, other than a ministerial servant, is the date on which he attains the age of 55 years.
He may be retained in service after the date of compulsory retirement with the sanction of the competent authority on public grounds, which must be recorded in writing, but he must not be retained after the age of 60 years except in very special circumstances.
Clause 2 of Rule 2046 provides the rule of compulsory retirement for ministerial servants.
Those government servants 768 who have entered government service on or after the 1st April, 1938, and those 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, but if he continues to be efficient, should ordinarily be retained in service upto the age of 60 years but that 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.
These rules have been modified from time to time but generally speaking a rule has always existed fixing the age beyond which a railway servant will not be allowed to be retained in service.
If such a rule of compulsory retirement had not existed, the servant would have had the right to continue in the service till his death.
The rule however limits that right, by providing in effect that the service would be terminated at a certain age.
Rule 148(3) is just another rule, limiting the servant 's right to continue in ' service.
It is as much a condition of service as Rule 2046 and in deciding the nature and extent of the right of a railway servant to whom Rule 148(3) applies to continue in service, Rule 148(3) is of as much importance as Rule 2046.
A railway servant to whom Rule 148(3) applies has two limitations put on his right to continue (1) termination on attaining a certain age and (2) termination on service of a notice under Rule 148(3).
Where the service is terminated by the order of retirement under Rule 2046, the termination is of a service where the servant has not the right to continue.
So, it is not 'removal ' or 'dismissal '.
Equally clearly and for the same reason, when the service is terminated by notice under Rule 148(3), the termination is not &removal ' or 'dismissal '.
It has not been suggested that the second test of loss of accrued benefits is satisfied in terminations under Rule 148(3).
If in any particular instance the order of termination entails loss of accrued benefits that will happen not because of anything in R. 148(3) 169 but for some extraneous action.
Where that happens it will be right to consider such terminations as removal or dismissal.
But that consideration is foreign to the provisions of Rule 148(3).
1 have therefore come to the conclusion that the first ground raised by the appellants in challenging the validity of Rule 148(3).
, viz., that it contravenes the provisions of article 311 of the Constitution must be rejected.
It is necessary now to consider the second ground urged by the appellants, viz., that Rule 148(3) contravenes article 14 of the Constitution.
Two contentions are urged in support of this ground.
First, it is urged that the Rule gives no guidance to the authority who would take action on it as regards the principle to be followed in exercising the power.
Secondly, it is urged that the Rule discriminates between railway servants and other public servants.
In my opinion, there is considerable force in the first contention.
Classifying the statutes which may come up for consideration on a question of its validity under article 14 of the Constitution in Ram Krishna Dalmia vs Justice S.R. Tendolkar & Ors.
"I this Court observed under the third class of such statutes thus: "A statute may not make any classification of the persons or things for the purpose of applying its provisions but may leave it to the discretion of the Government to select and classify persons or things to whom its provisions are to apply.
In determining the question of the validity or otherwise of such a statute the Court will not strike down the law out of hand only because no classification appears on its face or because a discretion is given to the Government to make the selection or classification but will go on to examine and ascertain if the statute has laid down any principle or policy for the guidance of the exercise of discretion by the government in the matter of the selection or classification." (1) ; 1/SCI/64 49 770 Applying the principle laid down in the above case to the present rule 1 find on scrutiny of the Rule that it does not lay down any principle or policy for guiding the exercise of discretion by the authority who will terminate the service in the matter of selection or classification.
Arbitrary and uncontrolled power is left in the authority to select at its will any person against whom action will be taken.
The Rule thus enables the authority concerned to discriminate between two railway servants to both of whom Rule 148(3) equally applied by taking action in one case and not taking it in the other.
In the absence of any guiding principle in the exercise of the discretion by the authority the Rule has therefore to be struck down as contravening the requirements of article 14 of the Constitution.
It is unnecessary for me to consider the other contention as mentioned above, which has been urged in support of this ground.
My conclusion therefore is that though the provisions of Rule 148(3) in respect of certain non pensionable railway servants that their services shall be liable to termination on notice for the period prescribed therein does not contravene article 311(2) of the Constitution, it contravenes article 14 of the Constitution and consequently is void.
I would accordingly allow with costs the four appeals (C.A. Nos.
711 713/62 and C.A. No. 714/62) set aside the order of the High Court and order that appropriate writs be issued in favour of the appellant as prayed for.
The other three appeals (C.A. Nos.
837 839 of 1963) challenge the decision of the Assam High Court in favour of three railway servants whose services had been terminated under Rule 149 of the Railway Code, that these terminations were invalid.
Rule 149(3) is in practically the same terms as Rule 148(3) and provides for the termination of certain railway servants on notice on either side for the period prescribed.
As, however, before November 1957 non 771 pensionable service had been brought to an end, and option was given to non pensionable servants either to opt for pensionable service or to continue under their previous terms and conditions of service, Rule 149(3) mentions permanent railway servants generally without any reference to their being nonpensionable.
The validity of his Rule was attacked on behalf of railway servants on the same ground as have been considered with regard to Rule 148(3).
For the reasons already given when discussing Rule 148(3) I am of opinion that Rule 149(3) does not contravene article 311(2) of the Constitution but contravenes article 14 of the Constitution.
The terminations of service under Rule 149(3) of the Railway Code were therefore rightly held by the High Court to be invalid.
I would accordingly dismiss these appeals with costs.
SHAH J.
Except as expressly provided by the Constitution, every member of the defence services or of a civil service of the Union or an all India service holds office during the pleasure of the President and every member of a civil service of a State holds office during the pleasure of the Governor of the State: article 310(1).
This is the normal tenure of office of persons serving the Union or the State.
The doctrine of holding office at pleasure applies even to a person with special qualifications employed under a contract, with the reservation that compensation may be paid to such person if before the expiry of the agreed period the office is abolished, or for reasons not connected with misconduct on his part, he is required to vacate that post: article 310(2).
The power to terminate at pleasure vested by the Constitution in the President or the Governor, as the case may be, is not liable to be restricted by any enactment of the Parliament or the State Legislature: it may be exercised only in the manner prescribed by the Constitution and being outside the scope of articles 53 and 154 of the Constitution cannot be delegated : State of Uttar Pradesh vs Babu Ram Upadhya(1) It is open to the (1) ; 772 Parliament and the State Legislatures to enact Acts subject to the provisions of the Constitution to regulate recruitment and conditions of services and posts in connection with the affairs of the Union or a State (article 309), and until such legislation is enacted, it may be observed that the Union Parliament has not enacted any general legislation governing public servants employed by the Union the President or the Governor or such person as may be directed in that behalf may make rules regulating the recruitment and conditions of service of persons appointed to such services and posts, and the rules so made by the President or the Governor shall have effect, subject to the provisions of any such Acts.
The power of the President or the Governor under article 310 (which is wholly independent of the power conferred by the rules or legislation under article 309), and the power conferred by legislation enacted or rules made or continued by virtue of article 309 are subject to certain restrictions contained in articles 311 & 314.
Article 314 grants certain special protections to members appointed by the Secretary of State or the Secretary of State in Council to a civil service of the Crown in India and who continue on and after the commencement of the Constitution to serve under the Government of India or a State.
Article 311 provides, subject to the proviso to cl.
(2), two safeguards to all public servants who are members of the civil service of the Union or an all India service or a civil service of a State who hold civil posts under the Union or the States.
These safeguards are "(1) that such members of the service shall not be dismissed or removed by an authority subordinate to that by which he was appointed; and (2) that he shall not be dismissed or removed or reduced in rank until he has been given a reasonable opportunity of showing cause against the action proposed to be taken in regard to him." 773 The proviso to cl.
(2) of article 311 excludes three specific classes of cases from the protection of the second guarantee.
Guarantees under article 311 are, except to the extent specifically provided, absolute and are not subject to the exercise of power, legislative or executive.
Accordingly the pleasure of the President or of the Governor cannot be exercised in a manner inconsistent with cl.
(2) of article 311.
Article 310 must therefore be read subject to article 311(2), and the rules made or legislation enacted under article 309 must also be read subject to article 31 1.
It must be emphasized that the guarantees protect all servants, whether appointed to substantive posts, or employed temporarily or on probation, or for limited duration under contracts, but they do not encompass all penalties or terminations of employment.
The guarantee under cl.
(1) is against dismissal or removal by an authority subordinate to that by which the public servant was appointed, and under cl.
(2) against dismissal, removal or reduction in rank without being afforded a reasonable opportunity of showing cause against the action proposed to be taken in regard to him.
The guarantee under cl.
(2) does not affect the investment of power to dismiss, remove or reduce in rank a member of the civil service; it merely places restrictions upon the exercise of the power.
Temporary servants on probation, officiating servants and even those holding posts under contracts all have the protection of article 31 1.
But the consequences of mere determination of employment in the very nature of things must vary according to the conditions or terms of employment.
Mere determination of employment of temporary servants, or probationers, and of servants whose tenure is governed by contracts, will not ordinarily amount to dismissal or removal, for, dismissal or removal according to the rules implies determination as a disciplinary measure.
The appellants in appeals Nos. 711 to 714 of 1962 are public servants employed in the Railways under the management of the Government of India 774 and were governed by the rules made under article 309, and their services were terminated in purported exercise of powers under Rule 148(3).
Rule 148, the validity of which is challenged by the appellants in these appeals, was originally framed in 1951 in exercise of the authority conferred by article 309, and was later modified so as.
to exclude from its operation determination of employment operating as dismissal or removal as a disciplinary measure.
The first clause deals with a temporary railway servant who holds no lien on a permanent post under the Union.
Such a person need be given no notice of termination of employment, if the termination is due to the expiry of sanction to the post, or of the officiating vacancy or is due to mental or physical incapacity, or where it amounts to removal or dismissal as a disciplinary measure.
Clause (2) deals with apprentices.
Clause (3) deals with (non pensionable) railway servants, who are substantively appointed to permanent posts.
Clauses (3) & (4) provide: "(3) Other (non pensionable) railway servants 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: (a) Probationary officers and officers on probation other than those in the Medical Department 3 months ' notice (b) Officers on probation in the Medical Department `month 's notice (c) Permanent Gazetted Officers 6 months ' notice (d) Permanent Non gazetted employees `month 's notice.
775 "(4) In lieu ' of the notice prescribed in this rule, it shall be permissible on the part of the Railway Administration to terminate the service of a railway servant by paying him the pay for the period of notice.
" In this group of appeals (Nos. 711 714 of 1962) the principal question raised by the appellants is that the third clause of Rule 148 is invalid.
The clause declares that the service of any railway servant who holds non pensionable employment is liable to be terminated on notice on either side of the periods set out in the Rule, but notice terminating employment by the Railway Administration is not a condition of dismissal or removal or of retirement on attaining the age of superannuation and of termination of service due to mental or physical incapacity.
The clause prescribes the mode of determination of employment of non pensionable railway servants by notice and proceeds to state that in the specified cases no notice for termination of employment by the Railway Administration shall be necessary.
It, ' however, does not follow that in the excepted classes of cases of the right of the Railway Administration to terminate employment is absolute or unrestricted: it is merely intended to be enacted by cl.
(3) that notice will be necessary where on compliance with other appropriate conditions, there is retirement on attaining the age of superannuation, or determination of employment in compliance with the provisions of the Constitution, or for mental or physical incapacity.
Clause (3) of Rule 148 is impugned by the appellants on two principal grounds: (1) that it is inconsistent with the protection which is guaranteed to all public servants by article 311(2); and (2) that it contravenes the fundamental freedom under article 14 of the Constitution in that certain classes of railway servants are selected for special prejudicial treatment when no such conditions of service are applicable in any other public employment and that in 776 any event an arbitrary power is conferred upon the authority competent in that behalf under the rules to terminate employment without any principle to guide him.
Under the first head it is urged that termination by ,.notice of employment of non pensionable servants under Rule 148(3) being removal from service, in the absence of rules prescribing machinery for affording a reasonable opportunity of showing cause against the action proposed to be taken in regard to such employees, the Rule infringes the constitutional guarantee under article 311 and is void.
This plea assumes that every termination of employment by notice under Rule 148(3) amounts to removal.
But on the plain text of cl.
(3) it is evident that the right to determine employ ment by notice cannot be exercised in the excepted cases and since dismissal or removal as a disciplinary measure falls within those excepted cases, the President has, by framing cl.
(3) of Rule 148, clearly 1 expressed the intention that determination of employment which amounts to dismissal or removal cannot be effected by notice.
In terms the clause makes a distinction between determination of employment by notice and determination of employment as a disciplinary measure, retirement on superannuation, and termination for reasons of physical or mental incapacity: it does not confer authority upon the Railway Administration to terminate employment of a public servant holding a substantive post, as a disciplinary measure.
The Rule is framed under article 309, and undoubtedly makes the tenure of a public servant appointed even substantively to hold a permanent post precarious.
Ordinarily a railway servant appointed substantively to a permanent post would, under the rules governing employment, continue in service till he attains the age of superannuation but that tenure is made subject to compulsory retirement after he attains the prescribed age if the railway servant belongs to certain specified classes: vide Rule 2046(2) & (3) of the Railway Code, 1958, and to discharge from employment under Rule 148(3) if his service is non pensionable.
Inci 777 dents relating to termination of employment on superannuation, on orders of compulsory retirement and on discharge from service under Rule 148(3) are parts.
of an organic scheme of rules governing the tenure of office of railway servants which also includes provisions relating to dismissal, removal or reduction in rank as a disciplinary measure.
By being appointed to a post a railway servant becomes entitled to the pay and allowances, increments subject to efficiencybar, leave, gratuity, pension etc.
These are also incidents of employment of the same character as the incident of determination of employment by compulsory retirement, discharge by notice and dismissal or removal.
In considering what the expression "dismissed or removed" used in article 311 means, a brief review of the relevant legislative history dealing with the tenure of office of civil servants in the employment of the Government of India may be useful.
It is sufficient to note that since the earliest time all persons holding office civil or military under the East India Company were liable to be removed at the pleasure of the King of England: see section 35 Charter Act 1793 (33 Geo.
III Ch. 2): and 74 Charter Act 1833 (3 & 4 will IV Ch. 85).
These provisions however did not take away the power of the Court of Directors to remove or dismiss any of its officers or servants not appointed by the Crown in England.
The same tenure of service prevailed after the British Crown took over the governance of India, the power to make regulations in relation to appointments and admission to services and matters connected therewith being vested in the Secretary of State in Council: section 37 Govern ment of India Act 1858 (21 & 22 Vict.
Ch. 106).
For the first time under the Government of India Act, 1919 (9 & 10 Geo.
V. Ch.
101) some protection was conferred upon the civil servants.
By the first clause of section 96 B the tenure of office of every employee under the civil service of the Crown was during pleasure of His Majesty, but dismissal from service by an authority subordinate to that by which the officer 678 was appointed was prohibited.
The power of the Secretary of State for India in Council to make rules regulating classification of civil services, method of recruitment, conditions of service, pay, allowances, discipline and conduct was reaffirmed.
This was followed by sections 240 to 243 of the Government of India Act, 1935 (26 Geo.
V. & 1 Ed. 8 Ch. 2) which made detailed provisions relating to the tenure of office of persons employed in civil capacities, recruitment and conditions of service and rules to be made in that behalf including rules applicable to railway, custom, postal and telegraph services, and special provisions relating to the police.
By section 240, a guarantee against dismissal without being afforded an opportunity of showing cause to persons employed in civil capacities was provided.
By cl.
(1) except as provided by the Act, every member of a civil service held office during His Majesty 's pleasure: by cl.
(2) it was enacted that "no such person shall be dismissed from service, by any authority subordinate to that by which he was appointed" and by cl.
(3) it was enacted that "No such person as aforesaid shall be dismissed or reduced in rank until he has been given a reasonable opportunity of showing cause against the action proposed to be taken in regard to him".
This was the guarantee of protection conferred by the Government of India Act 1935 upon members of the civil services and has since been affirmed by the Constitution in article 311 in almost the same terms the slight verbal alteration substituting "dismissed or removed" for "dismissed" having made no variation in the content of the guarantee.
In 1930 Rules were promulgated by the Secretary of State for India in Council under.
96 B(2) of the Government of India Act, 1919,called the Classification, Control and Appeal Rules.
These Rules did not in terms apply to railway servants, who were governed by a set of rules published as the Railway Establishment Code, but these were for all practical purposes in terms similar to the Civil Services (Classification, Control and Appeal) Rules, which may be called 'the General Rules '.
Under cl. 49 of the General Rules penalties which could be imposed 679 upon civil servants were enumerated and cl.
55 provided that no order of dismissal, removal or reduction shall be passed upon a civil servant unless he has been informed in writing of the grounds on which it is proposed to take action and he has been afforded adequate opportunity of showing cause against the action proposed to be taken.
These Rules remained in force after the Government of India Act, 1935, was brought into operation.
Even after the Constitution was brought into force, the rules continued to remain in operation till 1955, when a new set of rules were promulgated, but thereby in Rules 49 & 55 no substantial variation was made It is clear that, under the scheme of rules governing the employment of civil servants which obtained prior to the Constitution dismissal.
or removal had acquired a definite connotation, and when the Constitution makers adopted the scheme of protection of public servants in the same form in which it prevailed earlier, an intention to attribute to the expression "dismissed and removed" the same content may be assumed in the absence of any expressed intention to the contrary.
Since the constitutional guarantee of protection to public servants is couched in the same terms, the expression "removal" in the Service Rules having the same meaning as "dismissal" i.e., determination of employment as a disciplinary measure for misconduct, subject to the slight variation that an employee removed from service is not disqualified from future employment in public service, whereas a dismissed employee is so disqualified, it may reasonably be held that in the context of this development under the Constitution the expression "dismissed or removed" has not acquired a wider signification to include all terminations of public employment, whatever be the cause.
Apart from the historical evolution of the guarantee, there is inherent indication in the constitutional provisions that it was not the intention of the Constitution makers to include in the expression "dismissed or removed" all terminations of employ 780 ment.
Guarantee of reasonable opportunity of showing cause against the action proposed to be taken in regard to a public servant, would, be wholly inappropriate in cases of superannuation, expiry of the contractual priod of employment, expiry of the priod of probation or temporary employment, and resignations.
It would be futile in such cases to provide for "showing cause".
The use of the expression "action proposed to be taken in regard to him" also suggests that termination of employment is of the nature of penal action.
There is yet another ground which must be taken into account.
For nearly two centuries prior to the Constitution tenure of public servants has been expressly declared to be during the pleasure of the British Crown and that tenure has been repeated in the Constitution in article 310(1) with appropriate variations entrusting the power to the President or the Governor, as the case may be.
Vitality of this declaration is emphasized in cl.
(2) of article 310 so as to enable the President or the Governor to terminate even contractual employments at their respective pleasure.
If the Constitution makers intended that every termination of employment amounted to dismissal or removal within article 311, the provision of article 310, solemnly declaring that members of the services civil and defence hold office during the pleasure of the President is reduced to a meaningless formula having no practical content.
The argument that it continues to apply to probationers and temporary employees ignores the plain words of the Constitution, beside unduly minimising the content of the guarantee in article 311 which protects all public servants temporary, probationers, contractual as well as those holding substantive posts.
There is also a consistent body of authority which has taken the view that the expression "dismissed or removed" within the meaning of article 311 of the Constitution involves determination of employment as a disciplinary measure that is termination of employment on some ground personal to the officer concerned, such as incapacity or imputation 781 of charge against him which renders it inexpedient undesirable that he should continue in public employment: Satish Chandra Anand vs Union of India(1) Shyam Lal vs State of Uttar Pradesh & The Union of India(2); and Parshotam Lal Dhingra vs Union of India (3).
In considering whether termination of employment of a. public servant amounts to dismissal or removal, the primary test settled by a uniform course of authority is: does the termination amount to punishment of the public servant, i.e., has it the effect of depriving the public servant concerned of the right which he has already acquired as a public servant, or does it involve evil consequences such as forfeiture of pay or allowances or other benefits which by the rules governing the tenure he has earned, or impute a stigma? A public servant appointed substantively to a post normally acquires a right to hold the post until he attains the age of superannuation, and in the absence of a contract or service rules governing the tenure, discharge from service would deprive him of the right he has to the post.
Such deprivation of rights already accrued, or involving evil consequences, must in all cases amount to dismissal or removal, for, it amounts to imposing.
punishment.
But mere termination of the right to hold a post not as a discip linary measure, but according to the contract or rules governing his appointment and tenure, cannot be so regarded, because the rules which govern his right to the post make determination in the manner provided inherent in the right.
By appointment to an office a public servant does not acquire a right to hold it for his natural life time or even during good behaviour His right to hold it is during the pleasure of the President or the Governor, according as his employment is under the Union or the State: the right is also subject to the contract or rules governing the employ ment.
Rules framed under article 309 relating to super annuation, to compulsory retirement on attaining (1) ; (2) (1955] 1 S.C.R. (3) ; 782 a certain age, or completing a specified period of service, or to determination of employment of temporary or quasi permanent servants, or those on probation, form conditions of service, and govern the tenure, and it is difficult to perceive any distinction between those conditions of service, and the condition which expressly provides for determination of employment otherwise than as a matter of disciplinary measure.
The title of a railway servant holding a non pensionable office is subject to the condition of determination by notice under Rule 148(3) which as the clause expressly provides is not according to its terms exercisable as a disciplinary measure.
It cannot be assumed that on acquisition of the office, a railway servant becomes entitled to a right to the post free from the conditions attaching thereto by the rules governing his employment.
He is liable to ' vacate the office on superannuation, on compulsory retirement, on notice of determination, and on dismissal or removal alike, i.e., on the supervention of the prescribed conditions determination of employment of the prescribed class results, and not otherwise.
Terminations resulting from causes other than dismissal or removal are solely governed by the rules, but in the matter of dismissal or removal, beside the conditions prescribed by the appropriate rules, the overriding provisions of the Constitution must be complied with.
Under the Indian Railway Establishment Code, Vol. 11, "lien" is defined in Rule 2003(14) as meaning the title of a railway servant to hold substantively, either immediately or on the termination of a priod or periods of absence, a permanent post, including a tenure post to which he has been appointed substantively.
Evidently lien is the title which the railway servant has to a post, and a public servant appointed substantively must always till he is superannuated have lien on a specific post.
On substantive promotion his lien would attach to another post, his earlier lien being superseded.
While a railway servant appoin 783 ted to another post substantively must have a lien to that post, it cannot be assumed that his lien continues to attach to any particular post.
The lien is however subject to the rules: it does not in any manner confer a right to hold a post indefinitely.
Counsel for the appellants contended that all the appellants in this group of appeals were permanent employees, and even superannuation did not put an end to employment, since under the rules the superannuated employees had a right to pension.
it is impossible to hold that a superannuated employee continues to remain employed.
His employment is at an end: he is under no obligation to serve and earns no remuneration.
The pension is but a payment made by the State for services already rendered and not in lieu of services being rendered, or which the public servant may be called upon to render There can therefore be no distinction in principle between termination of employment of the employee attaining the prescribed age of superannuation, and termination of services in the manner prescribed by the rules, by notice, or by an order of compulsory retirement.
In all cases employment comes to an end Though the causes which result in termination are different, the effect is the same, viz., the public servant ceases to be employed.
The argument that on being appointed to a public service, the employee acquires right to continue in employment, proceeds upon a misconception of the nature of appointment to a public post.
Appointment to a public post is always subject to the pleasure of the President, the exercise of such pleasure being restricted in the manner provided by the Constitution A person appointed substantively to a post does not acquire a right to hold the post till he dies, he acquires thereby merely a right to hold the post subject to the rules i.e., so long as under the rules the employment is not terminated.
If the employment is validly terminated, the right to hold the post is determined even apart from the exercise of the pleasure of the President or the Governor.
There is in truth no permanent 784 appointment of a public servant under the Union or the State.
Nor is the appointment to a public post during good behaviour, i.e., a public servant cannot claim to continue in office so long as he is of a good behaviour.
Such a concept of the tenure of a public servant 's office is inconsistent with articles 309 and 310 of the Constitution.
It may be recalled that the guarantee under article 311 protects a public servant against dismissal or removal or reduction in rank as a disciplinary measure.
But if the determination of service does not amount to dismissal or removal as a disciplinary measure, there is nothing in the Constitution which prohibits such determination provided it is consistent with article 309 of the Constitution.
The tenure of office is subject to article 310, prescribed by article 309 that is the governing code.
The rules cannot undoubtedly provide for dismissal or removal otherwise than in a manner consistent with article 311.
Nor can an authority acting under the rules validly terminate an appointment to a post in a manner contrary to the Constitution or the rules.
Article 311 however covers only a part of the field governing the tenure of employment and in substance provides for a procedure for exercising the right to determine employment in certain specified classes of cases.
To hold that this determination of employment must in all cases, whatever may be the source or the power in the exercise of which it is determined, is to attribute to it a more exalted effect than is warranted by the scheme of the Constitution disclosed by articles 309 and 310.
The view which I have expressed is consistent with an overwhelming body of uniform authority dealing with different classes of cases in this Court, and we are asked to ignore the principle derived from that body of authority not on the ground of any demonstrable error but on the sole ground of a possible misuse of the powers entrusted to the Railway Administration and that was, as I understood, practically the only argument advanced at the Bar to justify a 785 departure from the settled course of authority.
But in considering whether cl.
(3) of Rule 148 infringes, the constitutional guarantee under article 311(2), the Court will not assume that in exercising the power to determine employment the authority competent in that.
behalf may not act honestly.
The presumption always is that the high officials in whom the power is vested Will perform the duties of their office honestly.
A mere possibility that the power may in some cases be misused or abused, will not per se induce the Court to deny validity to the entrustment of the power.
The impact of article 311 upon Rule 148(3), must be adjudged in the light of action which may be taken bona fide under the Rule.
If in a given case the order is not bona fide, and is intended to camouflage an order of removal from service as a disciplinary measure, the protection of article 311(2) would undoubtedly be attracted, for such an order cannot be regarded as made in exercise of authority conferred by Rule 148(3).
But the Court will not adjudge the rule invalid on the assumption that the rule may possibly be abused and may be made a cloak for imposing a punishment on a public servant or that the provision might be utilised for a collateral purpose.
I will briefly refer to some of the illustrative decisions of this Court.
In Satish Chandra Anand 's case(1) discharge from service by notice of a public servant employed under a contract for the duration of the Resettlement and Employment Organisation of the Union was held not to attract the protection of article 311 of the Constitution.
The public servant in Satish Chandra Anand 's case(1) was continued in service after expiry of the period of his original employment, under a contract for the duration of the Organisation on condition that he was to be governed by the Central Civil Services (Temporary Service) Rules, 1949, which provided, inter alia, for termination of the contract by a month 's notice on either side.
This Court held that to termination of his service (1) ; 1/SCI/64 50 786 by notice according to the 'rules governing his employment, article 311 had no application.
In the view of the court the case was not of dismissal or removal from service, because the State has power to enter into contracts of temporary employment and impose special terms not inconsistent with the Constitution, and those who chose to accept the terms and entered into the contract were bound by them, even as the State was bound.
This was a case of a premature termination of a contractual employment in exercise of a power reserved by Rules.
The view expressed in Satish Chandra Anand 's case(1) was approved in Parshotam Lal Dhingra 's case(2) .
Several cases dealing with termination of employment of temporary employees or employees on probation have since arisen, and it has consistently been held that mere termination of employment of these employees not on the ground of any misconduct did not amount to dismissal or removal within the meaning of article 311.
In Hartwell Prescott Singh vs The Uttar Pradesh Government and others(3) an order discharging a temporary employee from service by giving him a month 's notice as prescribed by Rule 25(4) of the U.P. Subordinate Agriculture Service Rules, by which he was governed, was held not to amount to dismissal or removal within the meaning of article 31 1.
It was observed in that case that in principle there was no distinction between the termination of service under the "terms of a contract" and that in accordance with the "terms of conditions of service".
In Parshotam Lal Dhingra 's case (2), Das, C.J., who entered upon an exhaustive review of the Rules governing service conditions of public servants of different classes (and with him all other members of the Bench except Bose J., agreed) observed at p. 842: ".
in the case of an appointment to permanent post in a Government service on (1) [19531 S.C.R. 6 5.
(2) ; (3) [19581 section C. R. 509.
787 probation or on an officiating basis, the servant so appointed does not acquire any substantive right to the post and consequently cannot complain, any more than a private servant employed on probation or on an officiating basis can do, if his service is terminated at any time.
Likewise an appointment to a temporary post in a Govern ment service may be substantive or on probation or on an officiating basis.
Here also, in the absence of any special stipulation or any specific service rule, the servant so appointed acquires no right to the post and his service can be terminate d at any time except in one case, namely when the appointment to a temporary post is for a definite period.
" In The State of Bihar vs Gopi Kishore Prasad(1) Sinha C.J., speaking for the Court summarised certain propositions governing the tenure of temporary public servants of which the following two are material: "(1) Appointment to a post on probation gives to the person so appointed no right to the post and his service may be terminated, without any taking recourse to the proceedings laid down in the relevant rules for dismissing a public servant or removing him from service.
(2) The termination of employment of a person holding a post on probation without any enquiry whatsoever cannot be said to deprive him of any right to a post and is, therefore, no punishment. " In The State of Orissa and another vs Ram Narayan das (2) this Court held that a probationer may be discharged in the manner provided by Rule 55 B of the Civil Services (Classification, Control and Appeal) Rules, and to such discharge from service article 311(2) did not apply, for mere termination of employment does not carry with it any evil consequences and an order discharging a public servant, even if he is a (1) ; (2) ; 788 probationer, on the result of an enquiry on charges of misconduct, negligence, inefficiency or other dis qualification, may appropriately be regarded as one by way of punishment, but an order discharging a probationer after an enquiry to ascertain whether he was fit to be confirmed, is not of that nature.
In section Sukhbans Singh vs The State of Punjab(1) it was held that the protection of article 311 is available only where dismissal, removal or reduction in rank is sought to be inflicted by way of punishment, and one of the tests for ascertaining whether the termination of service was by way of punishment is whether under the Service Rules, but for such termination, the servant has the right to hold the post.
The same view.
was expressed in Union Territory, Tripura vs Gopal Chandra Datta(2) and in Ranendra Chandra Bannerjee vs The Union of India(3).
Two cases on the other side of the line, which emphasize the distinction between a mere order of discharge of a temporary servant, and an order dismissing a public servant as a disciplinary measure may be noticed.
In Madan Gopal vs The State of Punjab and others(4), this Court pointed out that where the employment of a temporary government servant, even though liable to be terminated by notice of one month without assigning any reason, is not so terminated, and the appointing authority holds an enquiry into his alleged misconduct, the termination of service is by way of punishment, because it casts a stigma on his competence and thus affects his career.
In such a case the public servant is entitled to the protection of article 311(2) of the Con stitution.
In Jagdish Mitter vs The Union of India (5) it was held that an order discharging a temporary servant from employment b notice after recording that he was "found undesirable to be retained in Government service" was one casting a stigma, and (1) ; (2) [1963] Supp. 1 S.C.R. 266.
(3) ; (4) [1963] 3 S.C.R. 716.
(5) A. I. R. 789 was therefore an order of dismissal attracting the application of article 311 (2) of the Constitution.
There is still another class of cases which illustrate the rule that termination of employment otherwise as a disciplinary measure does not amount to dismissal or removal.
This Court has held that rules providing for compulsorily retiring public servants holding posts substantively are valid, and that termination of employment consequent upon such compulsory retirement does not amount to dismissal or removal from service so as to attract the protection of article 311(2).
In Shyam Lal 's case(1) challenge to the validity of termination of employment of a member of the Indian Service of Engineers compulsorily retired after be completed service for 25 years was discountenanced by this Court on the ground that compulsory retirement under the Civil Services (Classification, Control and Appeal) Rules, after a public servant had served for 25 years, did not amount to dismissal or removal within the meaning of article 311 of the Constitution.
It was observed that the word "removal" used synonymously with the term "dismissal" generally implied that the officer was regarded as in some manner blameworthy or deficient, the action of removal being founded on some ground personal to the officer involving leveling of some imputation or charge against him.
But there was no such element of charge or imputation in the case of compulsory retirement which did not involve any stigma or implication of misbehavior or incapacity, for, by the compulsory retirement the person concerned did not lose any benefit he had earned and loss of future prospects of earning could not be taken into account in considering whether the order of compulsory retirement amounted to imposing punishment.
In The State of Bombay vs Subhagchand M. Doshi(2) it was held that Rule 165 A of the Bombay Civil Services (Conduct, Discipline and Appeal) Rules adopted by the State of Saurashtra, subject to amendment, authorising the State Government to compulsorily (1) ; (2) ; 790 retire any public servant who had completed 25 years of qualifying service or had attained the age of 50 'years, without giving any reason was not violative of article 311(2) of the Constitution, as the order made under Rule 165 A was not one of dismissal or removal.
Venkatarama Aiyar, J., observed at p. 579 (obiter as was pointed out in a later case): "It should be added that questions of the above character could arise only when the rules fix both an age of superannuation and an age for compulsory retirement and the services of a civil servant are terminated between these two points of time.
But where there is no rule fixing the age of compulsory retirement, or if there is one and the servant is retired before the age prescribed therein, then that can be reregistration only as dismissal or removal within article 311(2)." In P. Balakottaiah vs The Union of India and others(1) an order for compulsory retirement under Rule 3 of the Railway Services (Safeguarding of National Security) Rules, 1949, was challenged as contravening article 311(2).
The public servants concerned in those appeals were railway servants and their services were terminated on the ground that the General Manager of the Railways had reason to believe that they were guilty of "subversive activities".
Notices were issued to them under section 3 of the Rules to show cause against certain charges.
The Committee of Advisers enquired into the charges and the explanations furnished by the public servants found the charges true.
The General Manager acting on the report of the Committee terminated the services of the railway servants concerned giving them a month 's salary in lieu of notice.
It was held by this Court that it is not every termination of the services of an employee that falls within the operation of article 311, and that it is only when the order is by way of punishment that it is one of dismissal or removal under that Article.
It was further observed at p. 1065: (1) ; 791 "In the present case, the terms of employment provide for the services being terminated on a proper notice, and so, no question of prema ture termination arises.
Rule 7 of the Security Rules preserves the rights of the employees to all the benefits of ' pension, gratuities and the like, to which they would be entitled under the rules.
Thus, there is no forfeiture of benefits already acquired.
The order terminating the services under R. 3 of the Security Rules stands on the same footing as an order of discharge under R. 148, and it is neither one of dismissal nor of removal within the meaning of article 311.
" The Court in that case appeared to express the opinion, though it was not necessary for deciding the case, that an order of discharge under Rule 148(3) was neither one of dismissal nor removal within the meaning of article 311(2).
In Parshotam Lal Dhingra 's case (1) the Court also considered the question whether an order of compulsory retirement of a public servant under the appropriate rules governing him amounts to dismissal or removal from service.
At p. 861, Das C.J., speaking for the majority of the Court observed: " .
every termination of service is not dismissal, removal or reduction in rank.
A termination of service brought about by the exercise of a contractual right is not per se dismissal or removal, Likewise the termination of service by compul sory retirement in terms of a specific rule regulating the conditions of service is not tantamount to the infliction of a punishment and does not attract article 311(2), as has also been held by this Court in Shyam Lal vs The State of Uttar Pradesh.
In either of the two above mentioned cases the termination of the service did not carry with it the penal consequences of loss of pay, or allowances under r. 52 of the Fundamental Rules." (1) ; 792 .lm0
In a still more recent case Dalip Singh vs State of Punjab(1) it was held by this Court that an order of compulsory retirement of a public servant for administrative reasons under R. 278 of the Patiala State Regulations which Regulations did not fix the minimum age or length of service after which an order of compulsory retirement could be made,was not one of dismissal or removal from service within the meaning of article 311(2) of the Constitution, because retirement under a Service Rule which provided for compulsory retirement at any age irrespective of the length of service put in, cannot necessarily be regarded as dismissal or removal within the meaning of article 311, and the observations (hereinbefore quoted) made by Venkatarama Aiyar, J., in Saubhagchand Doshi 's case(2) were for the purposes of deciding that case obiter, and that it was not a general rule that an order of compulsory retirement not amounting to dismissal or removal can take place only under a rule fixing the age of compulsory retirement.
These decisions which examine diverse facets of the tenure of employment of public servants, establish beyond doubt that mere determination of employment of a public servant whether he be a temporary employee, a probationer, a contractual appointee or sub stantively holding a permanent post will not attract the provisions of article 311 (2) of the Constitution, unless the determination is imposed as a matter of punishment.
All these decisions weave a clear pattern of employment of public servants who are governed by Rules providing for premature determination of employment.
Such determination of service, founded on a right flowing from contract or the service rules, is not punishment and carries with it no evil consequences.
It does not deprive the public servant of his right to the post, it does not forfeit benefits already acquired., and casts no stigma upon him.
A railway employee who has accepted employment on the conditions contained in the rules cannot after having obtained employment, claim that the (1) ; 88 (4) ; (2) [1958] S.C.R. 1052.
793 conditions which were offered to him and which he accepted, are not binding upon him.
The sole exception to that rule is in cases where the condition prescribed by contract or statutory regulations is void as inconsistent with the constitutional safeguard, the exception being founded not on any right in the public servant to elect, but on the invalidity of the covenant or regulation.
If the principle of the binding nature of the rules as condition of employment is valid, I am unable to see any distinction between cases of termination of employment resulting from attaining the age of superannuation or from orders of compulsory retirement, terminating contracts, terminating temporary employment, or employments on probation, and orders terminating employment after notice under Rule 148(3).
If Rule 165 A of the Bombay Civil Services (Classification, Control and Appeal) Rules, as amended, which fell to be considered in Saubh Chand Doshi 's case (1) was not invalid, if Rule of the Railway Services (Safeguarding of National Security) Rules, 1949, which fell to be considered in P. Balakottaiah 's case(2) was not invalid, if Rule 278 of the Patiala State Regulations which fell to be considered in Dalip Singli 's case (3) was not invalid, if Rule 5(a) of the Central Government Services (Temporary Service) Rules, 1949, which fell to be considered in Satish Chandra Anand 's case (4) was also not invalid, it is difficult to appreciate any ground either of logic or of law on which the vice of invalidity as infringing article 311(2) may be attributed to Rule 148(3).
The termination of employment under Rule 148(3) does not involve the public servant concerned in loss of any right which he has already acquired, it does not amount to loss of a post to which he is entitled under the terms of his employment, because the right to the post is necessarily circumscribed by the conditions of employment which include Rule 148(3) and does not cast any stigma upon him.
In the result I am unable to agree that (1) ; (2) ; (3) (4) (1953] S.C.R. 655.
794 Rule 148(3) was invalid as infringing the guarantee of constitutional protection under article 311(2).
In appeals Nos. 837 839 of 1963 the question as to the validity of the Rule 149(3) falls to be determined.
That Rule was substituted for the original Rule 148(3) some time in year 1959.
Rule 149 deals, by its first clause, with temporary railway servants and cl.
(2) deals with apprentices.
We are not concerned in these appeals either with temporary railway servants or with apprentices.
In this Rule cl.
(3) deals with the other railway servants.
It provides: "The service 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 phvsical incapacity.
The Rule then proceeds to set out the different periods for which notice may be given terminating employment.
Clause (4) of the Rule provides for payment in lieu of notice.
Rule 149(3) makes a departure from Rule 148(3).
The latter Rule applied only to members of the non pensionable service, whereas Rule 149(3) applies to all members of the railway service holding substantive appointments, and brings within its fold all employees even those who have entered employ ment before the date on which the Rule was framed.
But if by the terms of his appointment a railway servant who was not governed by Rule 148(3) is brought within Rule 149(3) so as to make his employment precarious by exposing him to liability to termination of employment, different considerations may apply.
For reasons which I have already set out the conditions of service validly made under article 309 of the Constitution and in existence on the date when a public servant enters service would be binding upon him.
There is nothing in Rule 149(3) which renders determination of employment in the 795 manner provided therein per se inconsistent with article 311.
But exercise of the power by the Railway Administration to determine employment of persons who were otherwise not subject to the new condition of service would, in my judgment, amount to imposing a penalty of dismissal or removal.
Therefore termination of services of a person who held appointment to a substantive post and was entitled under the previous rules to continue until he attained the age of superannuation, or till compulsory retirement, Rule 149(3) made applicable to him after he entered service would per se amount to dismissal or removal and it would be inconsistent with article 311.
This is not because the Rule is invalid, but because it would expose the public servant concerned to forfeiture, by amendment of the rules which were in existence at the time when he entered service, o rights which he had already acquired.
The alternative ground of invalidity that the rule infringes the fundamental right of equal protection of the laws under article 14 of the Constitution may now be considered.
This ground was set up under two broad heads.
(1) There is no other public employment under the Government of India in which conditions similar to these contained in Rule 148(3) or Rule 149(3) exist, and therefore discrimination between public servants employed in Railways and public servants employed in other branches of public undertakings or Administrative Services without any rational basis to support it, infringing the equal protection of laws guaranteed by article 14 of the Constitution, results.
The argument posed in this form does not appear to have been raised before the High Court and no investigation has been made whether similar conditions of service do or do not exist in other public employments.
In any event, employment in the Railways is in a vitally important establishment of the Union in which the employees are entrusted with 796 valuable equipment and a large measure of confidence has to be reposed in them and on the due discharge of the duties the safety of the public and the efficient functioning of the governmental duties depend.
Not only the travelling public, but the Union and the States have in a considerable measure to depend upon rail transport for the functioning of the governmental machinery and its welfare activities.
It would be possible even for one or a few employees of the Railway to paralyse communications and movement of essential supplies leading to disorder and confusion.
The Railway service has therefore a special responsibility in the smooth functioning of our body politic and a doctrinaire approach to equality of conditions of service in different branches of public employment, irrespective of the nature of the duties performed, irrespective of the possibility of harm to the community which misguided members or units may be capable of doing, and irrespective of the necessity to entrust special powers to terminate employment in deserving cases may not be permitted.
If for the purpose of ensuring the interests and safety of the public and the State, the President has reserved to the Railway Administration power to terminate employment under the Railways, it cannot be assumed that such vesting of authority singles out the railway servants for a special or discriminatory treatment so as to expose the Rule which authorises termination of employment to the liability to be struck off as infringing article 14.
Article 14 undeniably forbids class legislation, but it does not forbid reasonable classification for the purpose of legislation.
Legislation satisfying the test of classification founded on an intelligible differential distinguishing persons, objects or things grouped together from others left out of the. group, such differentia having a rational relation to the object sought to be achieved by the statute, has consistently been regarded as not open to challenge on the ground of infringing the equality clause of the constitution.
The special conditions in which the Railways have to operate and the interests 797 of the nation which they serve justify the classification, assuming the argument of classification to be factually correct.
It need hardly be pointed out that the basis of classification need not be expressly mentioned by the impugned statute: it may be gathered from the surrounding circumstances known to or brought to the notice of the Court.
(2) Rules 148(3) and Rule 149(3) are so framed as to lead to discriminatory treatment of Railway servants, because by the exercise of the arbitrary and uncontrolled power thereby conferred, exercise of which is not to be tested by any objective standard, service of any public servant falling within the classes to which they apply may be terminated Conferment of such a power leads to denial of the equal protection of the laws.
Rule 148(3 ) as it stood applied only to non pensionable services and not to pensionable services, and Rule 149(3) applies to all railway servants holding posts pensionable and non pensionable.
In dealing with a similar argument in Satish Chandra Anand 's case(1) in the context of termination of employment of a servant employed on a contract for the duration of an Organisation but whose tenure was governed by the Central Civil Services (Temporary Service) Rules, 1949, Bose, J., observed at p. 659: "There was no compulsion on the petitioner to enter into the contract he did.
He was as free under the law as any other p erson to accept or to reject the offer which was made to him.
Having accepted, he still has open to him all the right and remedies available to other persons similarly situated to enforce any rights under his contract which have been denied to him, assuming there are any, and to pursue in the ordinary courts of the land such remedies for a breach as are open to him to exactly the same extent as other persons similarly situated.
He has not been discriminated against and he has not been denied the protection (1) ; 798 of any laws which others similarly situated could claim.
" These observations in my judgment would, with appropriate variations, be applicable in considering the validity of Rules 148(3) & 149(3).
In adjudging 'whether there is by the impugned rules a denial of the equal protection of the laws, no rational ground of distinction can be found between an employee who is but for the rule for termination of em ployment by notice, by the contract entitled to continue in employment for a specified duration, and one who is appointed to a substantive post till superannuation.
In one case the employment is.
for a period defined or definable, in the other there is employment till superannuation, and in both cases liable to be terminated by notice.
If with his eyes open, a candidate for employment accepts a post permanent or temporary, tenure of which is governed by Rules, he cannot after accepting the post seek to avoid the onerous terms of employment.
This is not to say that acceptance of covenants or rules which are inconsistent with the Constitution is binding upon the public servant by virtue of his employment.
Such covenants or rules which in law be regarded as void, would not affect the tenure of his office.
The law which applies to railway servants falling within the class to which Rules 148(3) and 149(3) apply is the same.
There are no different laws applicable to members of the same class.
The applicability of the law is also not governed by different considerations.
It is open to the appointing authority to terminate appointment of any person who falls within the class.
There is therefore neither denial of equality before the law, nor denial of equal protection of the laws.
All persons in non pensionable services were subject to Rule 148(3).
There was no discrimination between them: the same law which protected other servants in the same group non pensionable servants protected the appellants in appeals Nos.
711 714 of 1962, and also provided for determination of their employment.
799 The Rule, it is true, does not expressly provide for guidance to the authority exercising the power conferred by Rule 148, but on that account the Rule, cannot be said to confer an arbitrary power and be unreasonable, or be in its operation unequal.
The power is exercisable by the appointing authority who normally is, if not the General Manager, a senior officer of the Railways.
In considering the validity of an order of determination of employment under Rule 148, an assumption that the power may be exer cised mala fide and on that ground discrimination may be practised is wholly out of place.
Because of the absence of specific directions in Rule 148 governing the exercise of authority conferred thereby, the power to terminate employment cannot be regarded as an arbitrary power exercisable at the sweet will of the authority, when having regard to the nature of the employment and the service to be rendered, the importance of the efficient functioning of the rail transport in the scheme of our public economy, and the status of the authority invested with the exercise of the power, it may reasonably be assumed that the exercise of the power would appropriately be exercised for the protection of public interest on grounds of administrative convenience.
Power to exercise discretion is not necessarily to be assumed to be a power to discriminate unlawfully, and possibility of abuse of power will not invalidate the conferment of power.
Conferment of power has necessarily to be coupled with the duty to exercise it bona fide and for effectuating the purpose and policy underlying the rules which provide for the exercise of the power.
If in the scheme of the rules, a clear policy relating to the circumstances in which the power is to be exercised is discernible, the conferment of power must be regarded as made in furtherance of the scheme, and is not open to attack as infringing the equality clause.
It may be remembered that the rules relating to termination of employment of temporary servants and those on probation, and even those relating to compulsory retirement generally do not lay down any specific directions governing the exercise of the powers 800 conferred thereby.
The reason is obvious: the appointing authority must in all these cases be left with discretion to determine employment having regard to the exigencies of the service, suitability of the employee for absorption or continuance in the cadre, and the larger interests of the public being served by retaining the public servant concerned in service.
In my view Rule 148(3) cannot, therefore, be regarded as invalid either as infringing article 311(2) of the Constitution or as infringing article 14 of the Constitution.
For the same reasons Rule 149(3) cannot also be regarded as invalid.
But the orders imposing upon the public servants determination of employment in exercise of the powers under Rule 149(3) made applicable to them when prior to the date on which the Rule was framed they were not applicable to them would be void as infringing article 311(2) of the constitution As, however, on this part of the case there has been no investigation by the High Court, I would remand appeals Nos. 837 839 of 1963 to the High Court and dismiss appeals Nos.
711 714 of 1962.
ORDER BY COURT In accordance with the opinion of the majority Civil Appeals Nos.
711 713 of 1962 and Civil Appeal No. 714 of 1962 are allowed with costs.
The writ petitions filed by the four appellants in the three High Courts are granted and Orders directed to be issued in terms of the prayers made by them.
Civil Appeals Nos.
837 839 of 1963 are dismissed with costs.
One set of hearing fees in each group.
[/INST]Moti Ram Deka was a peon employed by the North East Frontier Railway and Sudhir Kumar Das was a confirmed clerk.
General Manager, North East Frontier Railway, terminated th services under R. 148(3) of Indian Railway Establishment Co Vol.
They challenged the termination of their services but th writ petitions were rejected by the Assam High Court and t came to this court by special leave.
Priya Gupta was an Assistant Electrical Foreman in North Eastern Railway.
His services were terminated under R. 148.
His writ petition and Letters Patent Appeal challenging termination of his services having been rejected by Allahabad High Court, he came to this Court by special leave.
Tirath Ram Lakhanpal was a Guard employed by the Northen Railway.
His services were terminated under R. 148.
His writ petition and Letters Patent Appeal were dismissed by Punjab High Court and he came to this court by special leave.
S.B. Tewari, Parimal Gupta and Prem Chand Thakur employed in the.
North Eastern Frontier Railway.
Their service were terminated under R. 149.
Their writ petitions challenging termination of their services were accepted by the Assam High Court and Union of India came to this Court after getting a certificate of fitness from the Assam High Court.
The only question involved was the constitutional validity or otherwise of Rules 148(3) and 149(3) of the Indian Railway Establishment Code on the ground that they violated articles 14 and 311(2) of Constitution of India.
Held: By majority by Gajendragadkar, Wanchoo, Hidaya tullah, Ayyangar, Subba Rao and Das Gupta JJ.(Shah J. dissenting) 684 that Rules 148(3) and 149(3) of Indian Railway Establishment Code were invalid.
Per Gajendragadkar, Wanchoo, Hidayatullah and Ayyangar, jj.
Rules 148(3) and 149(3) are invalid inasmuch as they are inconsistent with the provisions of articles 311(2).
The termination of the services of a permanent servant which is authorised by those rules, is no more and no less than his removal from service and hence article 311(2) must come into play in respect of such cases.
The rule which does not require compliance with the procedure prescribed under article 311(2) must be struck down as invalid.
A person who substantively holds a permanent post has a right to continue in service, subject to the rules of superannuation and compulsory retirement.
If for any other reason that right is invaded and he is asked to leave his service, the termination of his service must inevitably mean the defeat of his right to continue in service and as such it is in the nature of a penalty and amounts to removal.
In other words, termination of the services of a permanent servant otherwise than on ground of superannuation or compulsory retirement, must per se amount to his removal and if by R. 148(3) or R. 149(3), such a termination is brought about, the rule clearly contravenes article 311(2) and must be held to be invalid.
Rules 148(3) and 149(3) contravene article 14 of the Constitu tion.
It is difficult to understand on what ground employment by the Railways alone can be said to constitute a class by itself for the purposes of framing the impugned rules.
If considerations of administrative efficiency or exigencies of service justify the making of such a rule, such rules should have been framed in other departments also.
The pleasure of the President has lost some of its majesty and power as it is controlled by the provisions of article 311.
Rules of superannuation are based on considerations of life expectation, mental capacity of civil servants having regard to climatic conditions under which they work and the nature of the work they do.
They are not fixed on any ad hoc basis and do not involve the exercise of any discretion.
They apply uniformly to all public servants falling under the category in respect of which they are framed.
There can be no analogy between the rule of superannuation and rules 148(3) and 149(3) of the Code.
If any rule permits the appropriate authority to retire compulsorily a civil servant without imposing a limitation in that behalf that such civil servant should have put in a minimum period of service, that rule would be invalid and the so called retirement ordered under the said rule would amount to removal of the civil servant within the meaning of article 311(2).
685 Where a rule is alleged to violate the constitutional guarantee afforded by article 311(2), the argument of contract between the parties and its binding character is wholly inappropriate.
Per Subba Rao, J. Rules 148(3) and 149(3) which confer a power on the appointing authority to remove a permanent servant on notice, infringe the constitutional protection guaranteed a Government servant under articles 14 and 311 of the Constitution A permanent post and rules such as 148(3) and 149(3) cannot stand together and the latter must inevitably yield to the former.
It is neither the phraseology nor the nomenclature given to the act of termination of service that is material but the legal effect of the action taken that is decisive in considering the question whether a Government servant is dismissed or not.
Whether the services of a permanent Government servant are terminated by giving him 15 day 's notice or whether his services are dispensed with before the age of superannuation by way of compulsory retirement under or outside a rule of compulsory retirement, the termination deprives him of his title to the permanent post.
If in the former case it amounts to dismissal,in the latter case,it must be equally so.
In both cases, article 311(2) is attracted.
Compulsory retirement before age of superannuation is not an incident of tenure.
It does not work automatically.
It is not conceived in the interest of the employee.
It is a mode of terminating his employment at the discretion of the appointing authority.
As a matter of fact, whatever the language used in that connection, it is a punishment imposed on him.
It not only destroys his title but also inevitably carries with it a stigma and hence such a termination is dismissal or removal within the meaning of article 311.
A title to an office must be distinguished from the mode of its termination.
If a person has title to an office, he will continued to have it till he is dismissed or removed from there.
Terms of statutory rules may provide for conferment of a title to an office and also for the mode of protecting it.
If under such rules, a person acquires title to an office, whatever mode of termination is prescribed and whatever phraseology is used to describe it, the termination is neither more nor less than a dismissal or removal from service and that inevitably attracts the provisions of article 311 of the Constitution.
The argument that the mode of termination prescribed derogates from the title that otherwise would have been conferred on the employee mixes up two clear concepts of conferment of title and the mode of its deprivation.
Article 311 is a constitutional protection given to Government servants, who have title to office against their arbitrary and summary dismissal.
Government cannot by rule evade the provisions of article 311.
Parties also cannot contract themselves out of the constitutional provision Per Das Gupta, J. Rule 148(3) does not contravene Art 311(2).
A railway servant to whom R. 148(3) applied has two 686 limitations put on his right to continue in service, viz., termination on attaining a certain age and termination of service on a notice under R. 148(3).
Where service is terminated by order of retirement under R. 2046, the termination is of a service where the servant has no right to continue and it is not removal or dismissal.
Likewise when service is terminated by notice under R. 148(3) that termination is not removal or dismissal.
The words 'removal ' and 'dismissal ' in article 311 mean and include only those terminations of service where a servant has acquired a right to continue in the post on the basis of terms and conditions of service and such other terminations where though there is no such right, the order has resulted in loss of accrued benefits.
Terminations of service which do not satisfy either of these two tests do not come within any of these words.
Both articles 309 and 310 are subject to article 311.
If any rule is made under article 309 as regards conditions of service of a Government servant in the matter of his dismissal or removal or reduction in rank, it has to comply with the requirements of article 31 1.
Before an order dismissing or removing or reducing a Government servant in rank is made by President or Governor in exercise of his pleasure, President or Governor has to comply with the requirements of 311(2).
Under Art 310, all servants of the State hold office during the pleasure of the President or Governor as the case may be.
That means that the officer has no right to be heard before his services are terminated.
Article 311 provides an exception in the case of removal or dismissal.
However, R. 148(3) contravenes article 14 as it does not give any guidance for exercise of discretion by the authority concerned and hence is invalid.
Per Shah, J.Rules 148(3) and 149(3) do not infringe Art.311(2) or article 14of the Constitution.
There is neither logic nor law in support of the contention that r. 148(3) contravenes article 311(2).
The termination of employment under r. 148(3)does not involve the public servant concerned in loss of any right which he has already acquired.
It does not amount to loss of a post to which he is entitled under the terms of his employment because the right to a post is necessarily circumscribed by the conditions of employment which include r. 148(3).
It also does not cast any stigma upon him.
Mere determination of employment, of a public servant, whether he is a temporary employee, a probationer, a contractual appointee or appointed substantively to hold a permanent post, will not attract the provisions of article 311(2) unless the determination is imposed as a matter of punishment.
A railway servant who has accepted employment on the conditions contained in the rules, cannot after having obtained employment, claim that the conditions which were offered to him and which he accepted, are not binding upon him.
The sole exception to that rule is in cases where the 687 condition prescribed by contract or statutory regulations is void as inconsistent with the constitutional safeguard.
This exception is founded not on any right in the public servant to elect, but on t invalidity of the covenant or regulation.
There is no distinction between cases of termination of employment resulting from attaining the age of superannuation or from orders of compulsory retirement terminating temporary employment or employment on probation and orders terminating employment after notice under R. 148(3) An appointment to a public post is always subject to th pleasure of the President, the exercise of such pleasure being restricted in the manner provided by the Constitution.
A person appointed substantively to a post does not acquire a right t hold the post till he dies.
He acquires merely a right t hold the post subject to the rules.
If employment is validly terminated, the right to hold the post is determined even apart from th exercise of the pleasure of the President or the Governor.
public servant cannot claim to remain in office so long as he is of good behavior.
Such a concept of the tenure of a public servant 's post is inconsistent with articles 309 and 310 of the Constitution.
Rules 148(3) and 149(3) do not infringe article 14 of the Constitution.
article 14 forbids class legislation but it does not forbid reasonable classification for the purpose of legislation.
special conditions in which the railways have to operate and t interests of the nation which they serve, justify the classification If for the purpose of ensuring the interests and safety of the public and the State, the President has reserved to the Railway Administration power to terminate employment under the Railways, it cannot be assumed that such vesting of authority singles out the railway servants for a special or discriminatory treatment so as to expose the rule which authorises termination of employment to the liability to be struck off as infringing article 14.
It is true that R. 148(3) does not expressly provide for guidance to the authority exercising the power conferred by it, but on that account, the rule cannot be said to confer an arbitrary power and be unreasonable or be in its operation unequal.
The power exercisable by the appointing authority who normally is if not the General Manager, a Senior Officer of the Railways.
In considering the validity of an order of determination of employment under r. 148, an assumption that the power may be exercised mala fide and on that ground discrimination may be practiced, is wholly out of place.
Because of the absence of specific directions in R. 148, governing the exercise of authority conferred the by the power to terminate employment cannot be regarded as an arbitrary power exercisable at the sweet will of the authority when having regard to the nature of the employment and the service to be rendered, importance of the efficient functioning of the rail transport in the interest of national economy and the 688 status of the authority invested with the exercise of power, it may reasonably be assumed that the exercise of the power would appropriately be exercised for the protection of public interest or on grounds of administrative convenience.
Power to exercise discretion is not necessarily to be assumed to be a power to discriminate unlawfully and possibility of abuse of power will not invalidate the conferment of power.
Case law referred to.
</s>
|
<s>[INST] Summarize the judgementAppeal Nos.
474 477 966.
Appeals by special leave from the judgment and order dated September 5, 1963 of the Gujarat High Court in Income tax Reference No. 19 of 1962.
S.T. Desai, A. N. Kirpal, R.N. Sachthey and S.P. Nayyar for the appellant (in all the appeals).
R.J. Kolah, M.L. Bhakta and O.C. Mathur, for the respondents (in all the appeals).
The Judgment of the Court was delivered by Sikri, J.
These four appeals by special leave are ' directed against the judgment of the Gujarat High Court in Income Tax Reference No. 19 of 1962, whereby the High Court answered the questions referred to it by the Income tax Appellate Tribunal against the Commissioner of Income tax, who is the appellant before us.
The reference was in respect of assessment years 1955 56 and 1956 57 in the case of Shri Jayantilal Amratlai (Individual) and in respect of assessments years 1958 59 and 1959 60 in the case of Jayantilal Amratlal Charitable Trust Ahamedabad.
The questions referred are: (1 ) Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that the income of Jayantilal Amratlal Charitable Trust was not assessable in the hands of the settlor Jayantilal Amratlal under the first proviso to Sec.
16(1)(c) of the Income tax Act for the assessment years 1955 56 and 1956 57 ? (2) Whether on 1he facts and in the circumstances of the case, the Tribunal was right in holding that the income of the Trust should be considered in the assessment of the trustees and that they were entitled to the benefits of the refunds attached to the dividends from the Trust properties for 'the assessment years 1958 59 and 1959 60 ? The answer to these quest.ions depends on the true interpretation of section 16(1)(c) of the Indian Income tax Act, 1922, and the interpretation of the Trust Deed dated June 19, 1947, and 948 to appreciate the points fully it is necessary to give a few facts which are stated in the statement of the case.
Jayantilal Amratlal, individual, hereinafter referred to as the settlor, executed a trust deed whereby he settled 80 ordinary shares of M/s Jayantilal Amratlal Ltd., on trust and created a trust known as "Jayantilal Amratlal Charitable Trust" to carry out the following various objects set out in the Trust Deed : "For the relief of poor, for education, for medical relief, for advancement of religion, knowledge, commerce, health, safety or any other objects beneficial to mankind." This Trust Deed was registered with the Charity Commissioner under the Bombay Public Trust Act, 1950.
The Department accepted this trust as a valid charitable trust and gave the necessary relief to the trustees in respect of the income of the Trust.
till the assessment year 1957 58.
The Income tax Officer, while dealing with the assessment of Jayantilal Amratlal Charitable Trust for the year 1958 59, wrote A letter to the Trust to show cause why the income of the Trust should not be included in that of the settlor and why the case of the Trust should not be decided accordingly.
The Managing Trustee submitted his reply.
The Income tax Officer wrote lengthy order holding that on the facts the case was covered by the first proviso to section 16 ( 1 ) (c).
He was impressed both by the wide powers given to the settlor and the way in which the settlor had been utilising his powers under the various clauses of the Trust Deed.
He held : "It is not necessary that there should be diversion of income or assets from char table purposes to noncharitable purposes to constitute "retransfer of assets to or re assumption of power over" the income or assets of the settlor.
It is not even necessary for the purpose of 1st proviso to section 16(1)(c), especially its later part i.e. "give the settlor a right to reassume power directly or indirectly over the income or assets" that income or assets should be used for personal ends.
For diversion of such assets or income from one charitable purpose to another in accordance with the wishes of the settlor and the utilisation of income and investment of income or assets not in full conformity with the desires of the trustees would be enough to drag the Trust property in the ambit of section 16 (I) (c).
In the instant case, the settlor is all in all, he is the managing trustee and in the event of a conflict of opinion amongst the trustees the settlor would exercise predominating 949 influence both as managing trustee as also in his capacity of an arbitrator and his decision would be binding on all.
The most important point which needs consideration is that all the inherent powers and discretion for the income and corpus of the Trust property remain with The settlor, in his capacity as settlor and not by way of his capacity of a trustee.
" The Income tax Officer accordingly held that the income of the Trust would not be computed in the hands of the trustees but would be computed in the hands of the settlor under section 16(1) (c).
For the assessment year 1959 60 he passed a similar order on the same date.
On the same day he also dealt with the assessments of Jayantilal Amratlal, individual, for the years 1955 56 and 1956 57.
Following his reasoning he included the relevant income of the Trust in the hands of Jayantilal Amratlal.
Four appeals were taken to the Appellate Assistant Commis sioner who, by his two orders dated November 8, 1960, dismissed the appeals.
Before him the settlor relied on section 35 of the Bombay Public Trust Act, 1950, but the Appellate Assistant Commissioner held that this did not assist the settlor because the Income tax law did take into consideration income derived directly or indirectly by illegal means.
He felt that the settlor "could not be precluded from utilising funds of the trust directly or indirectly to his benefit since he had a right under the settlement to do so and the Bombay Public Trust Act did not hold any fear for him as the penalties leviable were not of a deterrent nature, compared to the advantages that he could gain directly or indirectly by re assuming control over the investments or its income".
On appeal, Income tax Appellate Tribunal, however, reversed these orders and held that the income from the Trust was not hit by the first proviso to section 16(1)(c).
The Tribunal ignored the factual position relied on by the Income tax Officer and the Appellate Assistant Commissioner and confined itself only to the Trust Deed.
Regarding the offending clauses 4, 10 and 21 of the Trust Deed, which we will presently refer to, the Appellate Tribunal held: "We see nothing in these clauses which confer on the assessee the right to retransfer to the assessee directly or indirectly the income or the assets or to reassume power over them.
He has always to exercise these powers within the framework of the Trust.
There is no doubt power in clause (10) to invest in any manner and thereby in the assessee 's own companies, but this is overridden by clause 35 of the Bombay Trust 9 5 0 Act under which it is registered.
If the Charity Commissioner has chosen not to take action, it may also be that he has considered the matter and approved the action.
It is purely his responsibility.
The. fact that the investment itself has not been made illegal under the Trust Act and that the assessee can offend the provisions with impunity as the penalty is light are all matters extraneous to this consideration which has to be confined only to the provisions in the deed.
" At the instance of the Commissioner of Income tax the Appellate Tribunal stated the case and referred the questions which we have already reproduced above.
The High Court held : "When a statute talks about a right to reassume, it must mean a lawful right which can be lawfully exercised.
a right to reassume must be given to the settlor independently of any third party and dependent upon his own volition.
It is true that the Charity Commissioner may grant leave to the settlor, but he may or may not grant it.
A right to reassume cannot rest dependent upon whether the Charity Commissioner may or may not grant sanction.
" Shelat, C.J., observed "Surely, it must be presumed that the Charity Commissioner would not grant his sanction to an investment which is bound to result in a conflict of duty and interest on the part of the settlor who is also a trustee.
Therefore, such a right, if it can be called a right, is not one of any substance and cannot, therefore, be construed as a right to reassume power over the trust assets or the income thereof, as contemplated by proviso I to section 16(1)(c)." "A loan, by the very nature of it, cannot be said to amount to an exercise of dominion or control over its subject matter.
It is repayable and is given on conditions as to the time of repayment and interest, if any.
By taking a loan a settlor does not exercise over its subject matter power.or dominion which, but for the trust or the settlement, he would have been able to exercise." Section 16(1) (c) reads as follows "16.
Exemptions and exclusions in determining the total income. .
(1) In Computing the total income of an assessee.
(a) . 951 (b). (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 (VII 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 that for the purposes of this clause a settlement, disposition or transfer shall be deemed to be revocable if it contains any provision for the retransfer directly or indirectly of the income or assets to the settlor, disponer or transferor, or in any way gives the settlor, disponer or transferor a right to reassume power directly or indirectly over the income or assets; Provided further that the expression "settlement or disposition" shall for the purposes of this clause include any disposition, trust, covenant, agreement, or arrangement, and the expression "settlor or dispone r" in relation to a settlement or disposition shall include any person by whom the settlement or disposition was made : 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 life time 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." The learned counsel for the appellant, Mr. section T. Desai, has submitted three propositions before us (1) The operation of the first proviso to section 16(1) (c) depends only on the settlement and its terms and not on any provision of the Bombay Public Trusts Act, which may or may not be observed; (2) The absolute powers reserved over the income and corpus of the trust property remain vested in the settlor in his capacity as the settlor and not as trustee, and further they fall within the purview of the first pro.
viso to section 16(l.) (c); and (3) It is a relevant consideration that, as found by the authorities, the settlor has been deriving direct and indirect benefits from the trust properties.
He relies on clauses 4, 6, 8, 10, 11 and 21 of the Trust Deed to show that the Trust Deed gives the settlor right to re assume power directly 9 Sup.
CI/67 17 952 or indirectly over the income or assets of the Trust within the first proviso to section 16(1)(c).
Let us now examine the Trust Deed.
This indenture was made between Jayantilal Amratlal, hereinafter called the settlor, and Jayantilal Amratlal, Padmavati wife of the said Jayantilal Amratlal, Ramanlal Amratlal, Hariprasad Amratlal, Kasturlal Chandulal Parikh and Bhagubhai Chandulal, hereinafter called the Trustees.
Clause, 1 vests the shares and the other trust properties and income in the trustees.
Clause 2 gives the name of the trust Clause 3 obliges the trustees to get and collect income ,of the trust properties and pay expenses, etc.
Clause 4 creates the trust for the relief of poor, and for education, medical relief, etc.
It further provides : "The Trustees shall at the direction of the Settlor during, his lifetime and after his death at their discretion set aside any portion of the income of the Trust Premises to provide cash, food and clothes for any temple or temples of the Pushti Marg Sampradaya.
In applying.
the income of the Trust Premises for all or any of the objects hereinbefore specified the Trustees may consider the claims of any needy or poor person belonging to the Visa Porwad Community.
" Clause 5 enables the settlor to give direction to the trustees to accept contributions ,or donations to the Trust from other persons.
Clause 6 provides as follows : "The Setflor may at any time or times by writing direct that any specific funds or investments or property forming part of the Trust Premises and/or the income thereof shall be utilised and applied exclusively for any one more of the aforesaid ,charitable objects and the Settlor may by writing at any time or times vary or revoke any such directions previously given by him and Trustees shall be bound to carry into effect all such directions given by the Settlor.
" Clause 7 enables the Trustees to utilise the whole or any portion of the Trust Premises for all or any of the charitable object ,,, if the Settlor so directs.
Clause 8 may be set out in full : "8.
The Trustees shall from time to time at the direction of the settlor during his life time and after his death may at any time at their discretion deliver or hand over the income of the Trust Premises or any part of such income to any institution, association or society to be applied for all or any of the purposes of these presents without being bound to see to the application thereof or being liable for the loss or misapplication thereof.
" Clause 9 enables the Trustees to invest the residue, etc., and to accumulate the same and apply towards the objects of the Trust.
Clause 10 inter alia empowers the Settlor to give directions regardin the investment of moneys "as are authorised by law for invest 953 ment of trust premises or in ordinary or preference shares of joint stock companies, whether partly or fully paid, or in debentures or in giving loans to any public company or firm of good standing and reputation or in the purchase or mortgage of any movable or immovable property with power to the Trustees with the like direction to vary or transpose the said investments into or for others of the same or of a like nature.
" Clause II inter alia enables the Settlor to direct the Trustees to vary the investments.
Out of the other clauses we need only mention clause 21 which reads as follows : "All questions arising in the management and administration of the trusts or powers hereof and all differences of opinion amongst the Trustees shall be disposed of in accordance with the opinion of the Settlor during his lifetime and on and after the death of the settlor in accordance with the opinion of the majority of the Trustees in the case of their being equally divided the trustee senior most in age shall have a casting vote.
" The learned counsel for the appellant says that these clauses read fairly would enable the Settlor to direct the Trustees to give a loan to him and he could give directions to the Trustees in 'such a way as to re assume control over the assets.
He says that as a matter of fact the Income tax Officer did find that the Settlor has been utilising these powers for his own benefit.
There is no doubt that under the Trust Deed the Settlor has very wide powers and the Settlor could direct the Trustees to grant loan to him.
The Trustees could even grant loan to a firm in which be was interested.
But this would be contrary to the provisions of the Bombay Public Trust Act.
Section 35 (I) of the Bombay Public Trust Act provides : "35(1) : Investment of Public Trust Money Where the trust property consists of money and cannot be applied immediately or at an early date for the purposes of the public trusts the trustee shall be bound (notwithstanding any direction contained in the Instrument of the Trust) to deposit the money in any scheduled bank as defined in the , in the Postal Savings Bank or in a Cooperative Bank approved by the State Government for the purpose or to invest it in Public security; Provided.
Provided further that the Charity Commissioner may by general or special order permit the Trustee of any public trust or classes of such trusts to invest the money in any other manner.
" 9 54 Mr. section T. Desai submits that we cannot take into consideration the provisions of the Bombay Public Trust Act.
We are unable to accept this submission.
The Bombay Public Trust Act must, to the extent it operates, override any provisions in the Trust Deed.
As Shelat, J., observed, "when proviso 1 talks about a right to reassume power, prima facie, that must mean that there, is such power lawfully given under the deed of trust.
" It seems to us that the Legislature, in proviso I to section 16(1)(c) is thinking of powers lawfully given and powers lawfully exercised.
Any person can commit breach of trust and assume power over the income or assets but for that reason the income of the trust cannot be treated as the Income of the settlor under the proviso.
The Calcutta High Court in Commissioner of Income tax, West Bengal vs Sir section M. Bose(1) observed "The first proviso to Section 16(1)(c) only contemplates cases where the settlor can lawfully reassume power over the income or the assets.
Unless that was so, the proviso would cover every trust where a settlor has made himself trustee because a trustee acting dis honestly could always assume control over the income.
" We agree with these observations.
Similarly, in an unreported judgment (Commissioner of Income tax, Bombay North vs Mathuradas Mangaldas Parekh ( 2 ) the Bombay High Court repelled a similar argument by observing : "The first answer to this contention is that them trustees would be committing a breach of the law if they were to advance moneys to themselves.
There is a clear prohibition under Section 54 of the Trusts Act.
" If we do not ignore the provisions of the Bombay Public Trust Act and the general principles applicable to public trusts, the question arises whether on a true interpretation of the first proviso to section 16 ( 1 ) (c) the powers reserved to the settlor under the Trust Deed come within its mischief.
The learned counsel says that the words of the proviso are very wide.
I He points out the reasons why Parliament has inserted this proviso.
He draws our atten tion to the following observations of Lord Macmillan in Chamberlain vs Inland Revenue Commissioners(1), quoted in.
Tulsidas Kilachand vs Commissioner of Income tax(1) (1) at p. 141.
(2) I.T. Ref.
No. 4 of 1954, judgment dated August 26, 1954, reported in "unreported Income tax Judgmenis of the Bombay High Court, Book One, Published by Western India Regional Council of the Institute of Chartered Accountants of India, Bombay" p. 314 at p. 316.
(3) 329.
(4) , 4. 955 .lm15 "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.
" This Court held in that case, that these observations applied also to the section under consideration, and the Indian provision is enacted with the, same intent and for the same purpose.
But even so, Lord Simonds observed while construing a similar provision in Wolfson vs Commissioners of Inland Revenue(1) : "It was urged that the construction that I favour leaves an easy loophole through which the evasive taxpayer may find escape.
That may be so; but I will repeat what has been said before.
It is not the function of a court of law to give to words a strained and unnatural meaning because only thus will a taxing section apply to a transaction which, had the Legislature thought, of it, would have been covered by appropriate words." Viscount Simonds observed again in Saunders vs Commissioners of Inland Revenue(1) in construing a similar provision occurring in the English Act : "I am assuredly not going to depart from the fair meaning of words in a taxing Section in order that tax may be exacted.
" What then is the fair meaning of section 16(1)(c) proviso.1 ? It seems to us that the words "reassume power ' give indication to the correct meaning of the proviso.
The latter part of the proviso contemplated that the settlor should be able by virtue of something contained in the Trust Deed, to take back the power he had over the assets or income previous to the execution of the Trust Deed.
A provision enabling the settlor to give directions to trustees to employ the assets or funds of the trust in a particular manner or for a particular charitable object contemplated by the trust cannot be said to confer a right to reassume power within the first proviso.
Otherwise a settlor could never name himself a sole trustee.
It seems to us that the latter part of the proviso contemplates a provision which would enable the settlor (1) , 169.
(2) ,431, 956 to take the income or assets outside the provisions of the Trust Deed.
Mr. Desai says that if a settlor can derive some direct or indirect benefit under a trust deed the trust would fall within first proviso.
But the first proviso does not use these words.
The words "direct or indirect benefit" occur only in the third proviso.
This Court held in Commissioner of Income tax, Punjab vs section Raghbir Singh(1) that although the settlor in that case obtained a benefit from the trust payment of his debts the first proviso was not attracted.
Coming to the various clauses of the Trust Deed there is no doubt that the settlor has retained power to see that his wishes are carried out while he is alive.
But he can only direct the carrying out of his wishes within the terms of the Trust Deed.
What he can direct under clause 4 is the application of income to a particular charitable purpose.
Similarly under clause 6 he can nominate the charitable object and the fund or investment which should be utilised for that object.
This is in no sense a power to reassume control.
Clause 8 enables the settlor to delegate the carrying out of a particular charitable object.
For instance, he could direct some contributions to be made to a hospital or a school without obliging the trustees to see that the hospital or the school does not misapply the funds.
Clauses 10 and It which enable the settlor to give directions regarding the investment must be read subject to the provisions of the Bombay Public Trust Act and the general principles of law relating to trusts.
We have already said that he could not legally direct a loan to be made to himself.
Further it is difficult to subscribe to the,, proposition that a loan to a company in which the settlor is interested would give power to the settlor over the assets within the meaning of the first proviso.
Clause 21 only shows the wide powers which the settlor has reserved to himself.
None of these clauses comes within the purview of Proviso 1.
In the result we agree with the conclusions of the High Court.
The appeals accordingly fail and are dismissed with costs.
One hearing fee.
G.C. Appleas dismissed.
[/INST]The petitioners were owners of certain land in Greater Bom bay in respect of which a declaration of intention under s.4(1) of the Bombay Town Planning Act, 1954, to prepare a development plan, had been made by the respondent Bombay Municipal Corporation.
They applied to the Municipal Commissioner, in January 1962, for permission to change the existing user of their land and for a commencement certificate under section 12 to construct factory sheds on a part of the land, but their application was rejected by the Executive Engineer, Development Plan.
A tentative develop ment plan for the area which included the petitioner 's land was published on January 9, 1964, in which their land was shown as partly reserved for public roads, partly for industrial purposes and the rest was marked green.
After a large number of objections and suggestions on the tentative plan had been received and considered in accordance with the provisions of section 9 of the Act, the Municipal Corporation finally approved the plan on July 2, 1964 and forwarded it to the State Government for its sanction under section 10.
The State Government sanctioned the final development plan for the ward in which the petitioners ' lands were located on September 14, 1966 after consulting its special Consulting Surveyor, who scrutinised all the objections received by the Municipal Corporation and heard the objectors.
The final plan showed that a major portion of the petitioner 's land was earmarked for a recreation centre.
Although a writ petition filed by the petitioners before the publication of the tentative development plan against the rejection of their application for a commencement certificate was allowed by the High Court on the ground that powers of the Municipal Corporation under section 12 had not been exercised by an officer prescribed under section 86, two subsequent petitions filed by them after the approval of the final plan by the Municipal Corporation to obtain redesi gnation of their land were dismissed.
In the present petition under article 32 of the Constitution, the petitioners claimed that after the reservation of their land as shown in the tentative plan published on January 9, 1964, its redesignation in the final plan for a recreation centre was without authority of law and violative of their rights under articles 14 and 19.
It was contended, inter alia, (i) that sections 9 and 10 of the Act were invalid and unconstitutional in that they empowered the local authority and the State Government to modify, as a result of objections received from other persons, a development plan, against which a particular person may not have objected, without giving an opportunity to that person to represent against a subsequent modification by which his interest may be adversely affected; (ii) that under section 12 the final 275 and only authority who had the power to grant or withhold permission to carry on any development work after a declaration of intention under section 4(1) was the Municipal Commissioner; he could, under section 13, grant or refuse a commencement certificate at will, there being nothing to guide him in such a matter before the preparation of a development plan; even after the preparation of such a plan, a commencement certificate could be refused arbitrarily and there was no provision for any appeal from or revision of the order containing the refusal; and (iii) that by the combined operation of sections 4 and 11 (3), the local authority could easily delay the acquisition of any land designated for a public purpose under section 7 of the Act for 14 years and this constituted an unreasonable restriction on the right to hold property.
Held: The objections raised as to the invalidity of sections 9, 10, 11, 12 and 13 could not be upheld.
(i) The contention that a person was given no opportunity of meeting the objections raised by others with regard to the development plan has no force in the light of the facts disclosed as to the enormity of the task of finalising the development plan.
If the authorities were to hear all the parties with regard to all the suggestions made, give them separate and independent hearings, no development plan could ever be prepared.
The authority was not concerned with considering the advantages or disadvantages which might accrue to a particular person or a group of persons owning lands in different parts of the area concerned, but it had to go by the larger interest of the population at large and the generations to come.
The affidavits show that nothing was done haphazardly.
Suggestions and objections at all stages were carefully considered, the assistance of committees of experts was taken and the plan emerged only after an immense amount of labour had been bestowed in its preparation.
[297B D] (ii) There was enough guidance in the Town Planning Act to enable the Municipal Commissioner to come to a conclusion as to whether a particular commencement certificate should be granted or not and the power exercisable under sections 12 and 13 was neither uncanalised nor arbitrary.
section 13 prescribes that the local authority should make an inquiry before granting or refusing a commencement certificate.
The Authority must therefore look into all material available to it including the tentative plans and the final development plan and then make up its mind as to whether a commencement certificate should be granted or not.
If the provisions of the Act are borne in mind and the rules framed thereunder complied with, there was little or no scope for the local authority acting arbitrarily under section 13 of the Act.
[298A C] The fact that no appeal from the decision under section 13 was provided for is a matter of no moment for the authority under section 13 is no less than the Municipal Commissioner himself or the Chief Officer of the Municipal Borough or a person exercising the power of an Executive Officer of any local authority.
when the ' power had to be exercised by one of the highest officers of the local authority intimately connected with the preparation of the development plan in all its stages, it is difficult to envisage what other authority could be entrusted with the work of appeal or revision.
[297F H] (iii) In view of the immensity of the task of the local authorities to find funds for the acquisition of lands for public purposes, a period ' of ten years fixed by section 11 (3) was not too long.
In the present case the authority had to deal with an area measuring about 169 sq.
miles which was larger than most of the big cities in India.
276 The preparation of a development plan for such an area must take a considerable period of time.
Furthermore, it is not beyond the range of possibility that the final development plan may require modifications.
It could not therefore be held that the limit of time fixed under section 14 read with section 11(3) formed an unreasonable restriction on the right to hold property.
[298G 229A] Joyti Pershad vs Administration for The Union Territory of Delhi, ; Manecklal Chhotalal & Ors.
vs M. G. Makwana and Ors; W.P. 64/1966, cases, relied upon.
</s>
|
<s>[INST] Summarize the judgementAppeal No. 1825 of 1967.
Appeal by special leave from the judgment and order dated the 18th May, 1967 of the Punjab and Haryana High Court in L.P.A. No. 158 of 1967.
Naunit Lal and Lalit Kohli, for the appellant O.P. Verma, for the respondent The Judgment of the Court was delivered by ALAGIRISWAMI, J.
The property in dispute in this appeal belonged to Wadhawa Singh, the father of the respondent.
After his death in the year 1933 his widow, who succeeded to the estate, made a gift of the property in favour of her daughter, the respondent, in.
April, 1933.
The appellants filed a suit as reversioners to the estate of Wadhawa Singh questioning the gift.
The suit was decreed and the decree was confirmed on appeal.
After coming into force of the on 17 6 1956 the widow again made a gift of the same lands to the respondent.
She died in 1963.
The appellants then filed the suit, out of which this appeal arises, for possession of the lands alleging that the second gift was void.
The Trial Court decreed their suit but on appeal the respondent succeeded in the first Appellate Court as well as the High Court on second appeal.
There is no doubt that Wadhawa Singh 's widow had no right to male a gift of the property which she inherited from her husband in 1933 and the decree obtained by the appellants, who were reversioners to her husband 's estate would bind the respondent who was also a party, to that suit.
The question then is whether the coming into force, of the Hindu succession Act and the subsequent gift made by the widow in favour of the respondent make any difference.
Had not the widow made the gift to the respondent in 1933, she would have become an absolute owner of the property as a result of section 14 of the and the gift made by her subsequently in favour of the respondent could not have been questioned.
But having made the gift in 1933 she was not in possession of the property inherited by her from her husband and, therefore, did not become a full owner, with the result that the subsequent gift made by her in favour of the respondent was of no effect.
This point that unless the limited owner is in possession of the property section 14 does not apply has now been settled by decisions of this Court beyond dispute.
What then is the effect of the provision of section 8 of the in the circumstances of this case. 'The Punjab High Court in its decisions in Banso vs Charan Singh (AIR 1961 Punjab 45), and Kuldip Singh vs Karnail Singh (AIR 1961 Punjab 573), where the facts 530 were similar to the present case, has taken the view that when a widow dies after the coming into force of the the next heir to her husband is to be determined in accordance with the law prevailing on the date of the death of the widow and not in accordance with the law prevailing at the time of the death of her husband and held that the daughter succeeded in preference to the reversioners.
The Mysore High Court on the other hand in Kempiah vs Girigamma (AIR has held that on the death of the widow succession would be governed by the Hindu Law which was in force when the last mate holder actually died.
The Patna High Court in Renuka Bala vs Aswini Kumar (AIR 1961 Patna 498) was disposed to take a similar view though the case before it was concerned with succession to the property of a female under s.15.
The Madras High Court in Sampathkumari vs Lakshmi Ammal (AIR 1963 Madras 50) also took the view that in such circumstances section 8 of the would not apply.
But the case before that Court was one where two widows who had succeeded to the estate of their husband were in possession, and therefore, section 14 was applicable.
Lastly, we have the decision of this Court in Eramma vs Verrupanna In that case this Court after setting out the provisions of section 6 of the observed: "It is clear from the express language of the section that it applies only to coparcenary property of the mate, Hindu holder who dies after the commencement of the Act.
It is manifest that the language of section 8 must be construed in the context of section 6 of the Act.
We accordingly hold that the provisions of section 8 of the are not retrospective in operation and where a male Hindu died before the Act came into force i.e., where succession opened before the Act section 8 of the Act will have no application.
" Interpreted literally this dicision would seem to accord with the decisions of all the other High Courts except the Punjab High Court.
But it should be noticed that the problem that we are faced within the present appeal and in the cases before the Punjab and Mysore High Courts did not arise before this Court on the earlier occasion.
The decisions of the Madras High Court and the Patna High Court are not directly in point.
In the case before this Court the two women were in possession of property whose last male holder, who had died before coming into force of the , was their step son.
They were not, therefore in legal possession of the properties of the last male holder.
The question that had to be decided was whether because of the coming into force of the they were entitled to succeed under section 8, and the further question whether section 14 would be attracted as they were actually in possession.
It was held that as they were not legally in possession s, 14 would not apply, It was in that context that it was said that where a male Hindu died before the; Act came into force i.e., where succession opened before the section 8 of the Act will have no application, The point that succession 531 might open not only when the male Hindu died but also subsequently again when a limited owner who succeeds him dies was not taken into account.
There was no need and no occasion to consider such a contingency in that case.
There was the further fact that the last male holder was succeeded on his death by persons who were then.
his nearest heirs and the property vested in them could not be divested by the coming into force subsequently thought this fact was not adverted to in the judgment.
This Court had, therefore.
also no occasion to consider the effect of the earlier decisions on the question as to what happens when a female limited owner, whether she is a widow, mother or daughter who succeeds the last male bolder, dies.
That position may now be considered.
It was authoritatively laid down by the Privy Council in its decision in Moniram Kolita vs Keri Kaliteni (ILR 5 Calcutta 776 at 789) that : "According to the Hindu Law, a widow who succeeds to the estate of her husband in default of male, issue, whether she succeeds by inheritance or survivorship as to which see the S hivagunga case (1) does not take a mere life estate in the property.
The whole estate is for the time vested in her absolutely for some purposes, though in some respects for only a qualified interest.
Her estate is an anomalous one, and has been compared to that of a tenant in tail.
It would perhaps, be more correct to say that she holds an estate of inheritance to herself and the heirs of her husband.
But whatever her estate is, it is clear that, until the termination of it, it is impossible to say who are the persons who will be entitled to succeed as heirs of the husband (2).
The succession does not open to the heirs of the husband until the termination of the widow 's estate.
Upon the termination of that estate the property descends to those who would have been the heirs at the husband if he had lived up 'to and died at the moment of her death (3).
" In the subsequent decision in Duni.
Chand vs Anar Kali (AIR the Privy Council observed: ". during the lifetime of the widow, the reversioners in Hindu Law have no vested interest in the estate but have a mere spes succession is or chance of succession, which is a purely contingent right which may or may not accrue,that the succession would not open out until the widow died, and that the person who would be the next reversioner at that time would succeed to the estate and the alteration in the rule of the Hindu Law brought about by the Act would then be in full force.
(1) 9 Moore 's I.A., 604.
(2) Id., 532 In the argument before their Lordships, reliance was placed upon the words "dying intestate" in the Act as connoting the future tense, but their Lordships agree with the 'view of the Lahore High Court in at p. 367, that the words are a description of the status of the deceased and have no reference and are not intended to have any reference to the time of the death of a Hindu male.
The expression merely m eans "in the case of intestacy of a Hindu male".
To place this interpretation on the Act is not to give a retrospective effect to its provisions, the materials point of time being the date when the ,.succession opens, namely, the death of the widow.
On the position of reversioners in Hindu Law, opinions have been expressed by this Board from time to time with which the views of the learned Chief Justice in 58 All.
1041(2) mentioned above, are in agreement.
It was said, for instance, that until the termination of the widow 's estate, it is impossible to say who are the persons who will be entitled to succeed as heirs to her husband; (3) at p. 604.
The succession does not open to the heirs of the husband until the termination of the widow 's estate.
Upon its termination, the property descends to those who would have been the heirs of the husband If he had lived uP to and died at the moment of her death 7 I. A. 115 (4) at 154.
" It would be noticed that the Privy Council interpreted the words "dying intestate" as merely meaning "in the case of intestacy of a Hindu male" and said that to place this interpretation on the Act is not to give retrospective effect to its provisions.
Those are the very words found in section 8.
These may be contrasted with the words of section 6 "where a male Hindu dies after the commencement of this Act.
" Here the reference is clearly to the time of the death.
In section 8 it is only to the fact of intestacy.
The material point of time, as pointed out by the Privy Council, is the date when the succession opens, namely, the death of the widow.
It is interesting to note that the Privy Council was interpreting the provisions of the Hindu Law of Inheritance (Amendment) Act, 1929 where the two contrasting expressions found in the are not found. ' The case for the interpretation of the words "dying intestate" under the is stronger.
The words "where a male Hindu dies after the commencement of this Act" in section 6 and their absence in section 8, are extremely significant.
Thus two propositions follow: (1) Succession opens on the death of the limited owner.
and (2) the law then in force would govern the succession.
Now if this proposition is correct, as we hold it is, that where a female heir succeeds to an estate, the person 'entitled to succeed on the basis as if the last male holder had lived up to and died at the (1) Mt. Rajpali Kunwer vs Surju Rai (58 All. 1041).
(2) Shakuntala Devi vs Kambsalya Devi (3) Katam Natchiar vs Rajah of Shiva Gunga , (4) Monirain Kolita vs Kerry Kolitang (7 IA 115: 533 death of the limited owner, succession to Wadhawa Singh 's estate in the present case opened when his widow died and it would have to, be decided on the basis that Wadhawa Singh had died in 1963 when his widow died.
In that case the succession to his estate would have to, be decided on the basis of s.8 of the .
The various High Courts which have held otherwise seem to have been oppre ssed by the feeling that this amounted to giving retrospective effect to section 8 of the whereas it is only prospective.
As the Privy Council pointed out it means no such thing.
The accepted position under the Hindu Law is that where a limited owner succeeds to an estate the succession to the estate on her death will have to be decided on the basis that the last full owner died on that day.
It would be unreasonable to hold that in such a circumstance the law as it existed at the time when the last male holder actually died should be given effect to.
If the person who is likely to succeed at the time of the limited owner 's death is not, as happens very often, likely to be the person who would have succeeded if the limited owner had not intervened, there is nothing unreasonable in holding that the law as to the person who is entitled to succeed on the limited owner 's death should be the law then in force and not the law in force at the time of the last full owner 's death.
The Madras High Court thought that the decision of the Privy Council in Duni Chand vs Anar Kali (supra) was based upon a legal fiction and that fiction cannot be given effect to except for a limited purpose.
The Mysore High Court also thought that the death referred to in section is actual death and not fictional death.
In East end Dwellings Co., Ltd. vs Finsbury Borough Council 132) lord Asquith of Bishopstone observed :.
"If you are bidden to treat an imaginary state of affairs as real, you must surely, unless prohibited from doing so,. also imagine as real the consequences and incidents which, if the putative state of affairs had in fact existed, must inevitably have flowed from or accompanied it.
One of those in this case is emancipation from the 1939 level of rents.
The statute says that you must imagine a certain state of affairs; it does not say that having done so, you must cause or permit your imagination to boggle when it comes to the inevitable corollaries of that state of affairs".
This observation was cited with approval by this Court in Venkatachalam vs Bombay Dyeing & Mfg. Co., Ltd (1959 S.C.R. 703) If, therefore, succession opens and is to be decided on the basis of the last full owner dying on the date of death of the limited owner the inevitable corollary is that it is only the law in force at the time of the death of the limited owner that should govern the case.
To hold that the old Hindu Law applies to such a case is to allow your imagination to boggle.
In the case decided by the Privy Council in Duni Chand vs Anar Kali (supra) if this principle had been applied the new heirs 534 introduced by the Hindu Law of inheritance (Amendment) Act, 1929 could not have then come in.
We are not impressed with the reasoning of the Patna High Court that because the change brought about by that Act is different from the change brought about by the a different conclusion follows.
We should consider that if even the limited change in the area of succession effected by the Hindu Law of Inheritance (Amendment) Act, 1929 is to be given effect to as the law applicable on the date of the death of the limited owner, it is all the more reason why the which makes a much more radical change in the Hindu Law should have similar application.
The Mysore High Court thought that the not being a mere declaratory Act, retrospective effect should not be given to it so as to impair existing rights and obligations.
But the reversioners ' right being a mere spes succession is there is no question of impairing existing rights by adopting the interpretation we place on section 8 apart from the fact that, as earlier pointed out, the interpretation does not amount to giving retrospective effect to section 8.
of course, if the property had already vested in a person under the ,old Hindu Law it cannot be divested.
We must also point out that the classes of cases where such a question is likely to arise is very limited.
Where a widow, mother or daughter was in possession of the estate on the coming into force of the she would become full owner under the provisions of the section 14 of the Act.
Even if a widow was in possession of the share belonging to her in the joint family estate tinder the pro visions of the Hindu Women 's Right to property Act, 1937, she would become a full owner under section 14.
In both those cases section 8 would have no operation.
It is only in rare cases, like the present, that the question is likely to arise at all and we can see no reason either in principle or on authority why the principle consistently followed under the earlier Hindu Law that on the death of the limited owner succession opens and would be decided on the basis that the last male owner died on that day, should not apply even after coming into force of the Hindu ,Succession Act, Mr. Naunit Lal appearing for the appellant argued that the result ,of the decision of this Court in Eramma vs Verrupanna (supra) is that on the death of Wadhawa Singh 's widow it is the old Hindu Law that applied and therefore under the custom in force in Punjab under which a daughter was not entitled to succeed to the ancestral property of the father in preference to the reversioners should apply and the appellants are entitled to succeed.
There is no doubt about the position under the Customary Law of Punjab before coming into force of the .
In Rattigan 's Digest of the Customary Law ' published by the University Book Agency (14th Ed.), paragraph 23 at age 132 it is stated: " 23.(1) A daughter only succeeds to the ancestral landed property of her father, if an agriculturist, in default : (1) Of the heirs mentioned in the preceding paragraph and 535 (2) Of near male collaterals of her father, provided that a married daughter sometimes excludes near male collaterals, especially amongst Muhammadan tribes : (a) where she has married a near collateral descendant from the same common ancestor as her father; or (b) where she has, with her husband continuously lived with her father since her marriage; looking after his domestic wants, and assisting him in the management of his estate; or (c) where being married to a collateral of the father 's family, she has been appointed by her father as his heir.
(2) But in regard to the acquired property of her father,the daughter is preferred to collaterals.
" It is on the basis of this Customary Law that the reversioners succeeded in the suit filed by them questioning the gift made by the respondent 's mother to her.
There is no doubt that Rattigan 's work is an authoritative one on the subject of Customary Law in Punjab, This Court in Mahant Salig Ram vs Musammat Maya Devi at 1196) said : "Customary rights of succession of daughters as against the collaterals of the father with reference to ancestral and non ancestral lands are stated in paragraph 23 (if Rattigan 's Digest of Customary Law.
it is categorically stated in sub paragraph (2) of that paragraph that the daughter succeeds to the self acquired property of the father in preference to the collaterals even though they are within the fourth degree.
Rattigan 's work has been accepted by the Privy Council as "a book of unquestioned authority in the Punjab".
Indeed the correctness of this paragraph was not disputed before this Court in Gopal Singh vs Ujagar Singhi (1).
It is not now open to the respondent to show whether any of the circumstances mentioned in sub paragraph (2) of paragraph 23 of Rattigan 's Digest of Customary Law is present here as the previous decision is resjudicata between the parties and in any case it has not been attempted to be shown in this case.
But in the view we have taken that it is section 8 of the that applies and not the Customary Law the appellants cannot succeed in this appeal.
In the result the appeal is dismissed.
The appellants will pay the respondent 's costs.
section B. W. Appeal dismissed.
[/INST]The trial court had convicted the respondents u/S. 302/34 I.P.C. and section 307/34 I.P.c.
for the death of two persons G&Z.
The occurrence took place during the night between 18th & 19th June, 1969.
The victims used to cultivate jointly with others.
The respondents and the two acquitted accused persons were brothers who lived in the same village.
It is said that there was enmity between the deceased persons and the respondents.
The prosecution case was that on the of 18th June 1969, the respondents with two others attacked G&Z and as result G died but Z survived.
The trial court had convicted the respondents but the High Court acquitted them.
I On appeal by the State, the main question was whether the three alleged eye witnesses, P.W.3, P.W.4 & P.W.5 who were related to each other and the victims could be relied upon, when corroborated by other facts and circumstances.
Allowing the appeal, HELD : (1) It is a principle, common to all criminal appeals by special leave that this Court will refrain from substituting its own views about the appreciation of evidence if the judgment of the High Court is based on one of two alternative views each of which was reasonably open to the High Court to accept.
If however, the High Courts approach is vitiated by some basically erroneous assumptions, or it adopts reasoning which, on the face of it is unsound, it may become the duty of this Court, to prevent a miscarriage of justice and to interfere with an order whether it be of conviction or of acquittal.[729F] (2) In the present case, the trial court had accepted the testimony of 3 eye witnesses, despite the fact that they are relations of the victims.
It has been repeatedly held by this Court that the mere fact that witness is related to the victim could not be a good enough ground for rejecting his testimony although it may be a ground for scrutinizing his evidence more critically and carefully where facts and circumstances disclose that only relations have been produced and others, presumably independent witness", who were available, were not produced.
[729 H] The ordinary presumption is that a witness speaking under an oath Is truthful unless and until he is shown to be unreliable or untruthful.
In any particular respect, witnesses solemnly deposing on oath in the witness box during a trial upon a grave charge of murder, must be presumed to act with a full sense of responsibility of the consequences of what they state.
it may be that what they say is so ' very unlikely or unreasonable that it is safer not to act upon it or even to disbelieve them.
[730 F] In the present case, the evidence of Z who became unconscious due to fatal blows by the assailants can be accepted when his evidence is strongly corroborated by medical and other evidence. 'Therefore, the present case is a fit case where this court will interefere.
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<s>[INST] Summarize the judgementCivil Appeal No. 63 of 1971.
Appeal by Special Leave from the Judgment and order dated the 19th February 1970 of the Andhra Pradesh High Court in R.C. No. 50 of 1966.
section T. Desai and K. Rajendre Choudhary, for the Appellant G. C. Sharma and section P. Nayar, for the Respondent.
The Judgment of the Court was delivered by GUPTA, J.
This appeal by special leave is directed against an order of the High Court of Andhra Pradesh at Hyderabad answering in the negative and in favour of the revenue the following question referred to it under sec.
66(1) of the Indian Income Tax Act, 192 (hereinafter referred to as the Act).
"Whether the Assessee is entitled to registration under Section 26A of the Income Tax Act, 1922 for the assessment year 1961 62.
" The assessee is a firm.
The instrument of partnership was executed on January S, 1959 but the application for registration under sec.
26A remained undisposed of until the assessment for the year 1961 62 was taken up.
The instrument shows that three persons, Mandyala Narayana, Mandyala Venkatramaiah, Mandyala Srinivasulu and a minor, Mandyala Jaganmohan who was admitted to the benefits of the partnership, held the following shares: Narayana 31 per cent, Venkatramaiah 23 per cent, Srinivasulu 23 per cent, and minor Jaganmohan 23 per cent: Clause 2 of the instrument which sets out the 133 shares of the partners add that the profits of the above partnership A business shall be divided and enjoyed according to the shares specified above.
" There is no clause in the instrument specifying the proportion in which the three adult partners were to share the losses, if any.
Having set out all the terms of agreement, the instrument closes with clause 9 which states: "We (the partners) are bound to act according to the above mentioned stipulations and also according to the provisions of the Indian Partnership Act. " The High Court was of the view that unless the instrument of partnership specified the shares of the partners not only in the profits hut also in the losses, the firm would not be entitled to registration under sec.
26A, and negatived the contention raised on behalf of the assessee that clause 9 of the instrument indicated how losses were to be apportioned between the partners.
The correctness of this decision is challenged by the appellant firm.
It is not that a firm to be able to trade must be registered under sec.
26A. A firm, registered or unregistered, is an assessee under the Act and can do business as such.
However, registration under sec.
26A "confers on the partners a benefit", as would appear from the provisions of sec.
23 (5) of the Act, "to which they would not have been entitled but for section 26A, and such a right being a creature of the statute, can be claimed only in accordance with the statute which confers it, and a person who seeks relief under section 26A must bring himself strictly within its terms before he can claim the benefit of it": Rao Bahadur Ravulu Subba Rao and others vs Commissioner of Income tax, Madras.(1) The question in this case is whether in the absence of a specific statement in the instrument as to the proportion in which the partners were to share the losses, the requirement of sec.
26A can be said to have been satisfied.
Sec 26A reads: "26A. (1) Application may be made to the Income tax officer on behalf of any firm, constituted under an instrument of partnership specifying the individual shares of the partners for registration for the purposes of this Act and of any other enactment for the time being in force relating to income tax or super tax.
(2) The application shall be made by such person or persons, and at such times and shall contain such particulars shall be in such form, and be verified in such manner, as may be prescribed; and it shall be dealt with by the Income tax officer in such manner as may be prescribed.
" The required particulars are specified in rules 2 and 3 of the Rules framed under the Act and the form of application including the Schedule annexed to rule 3.
Paragraph 3 of the Form requires the partners to ` 'certify that the profits (or loss if any) " of the relevant period were or will (1) 134 be, as the case is, '`divided or credited, as shown in Section 8 of the Schedule".
In Section 8 of the Schedule are to be recorded the "particulars of the apportionment of the income, profits or gains (or loss) of the business, profession or vocation in the previous year between the partners who in that previous year were entitled to share in such income, profits or gains (or loss)".
Note (2) appended to this Schedule states that if any partner is entitled to share in profits but is not liable to bear a similar proportion of any losses, this fact should be indicated.
It is clear therefore that the application for registration which has to be made in the prescribed form must include particulars of the apportionment of the loss, if any.
It does not appear to have been considered in this case whether the application for registration made by the firm conforms to the prescribed rules; the dispute is confined to the question whether sec.
26A requires the instrument of partnership to specify the individual shares of the partners in the profits as well as the losses of the business.
Section 23(5) of the Act provides different procedures in the assessment of a registered firm and a firm that is unregistered.
Without going into details, in the case of a registered firm the share of each partner in the firm 's profits is added to his other income and he is assessed on his total income which includes his share of the profits and the tax payable by him is determined accordingly.
There is a proviso which lays down that "if such share of any partner is a loss it shall be set off against his other income or carried forward and set off in accordance with the provisions of section 24".
Thus, the loss, if any, affects the assessment proceeding and therefore the Income tax officer has to know what are the respective shares of the partners in the losses before allowing the firm to be registered.
It is not disputed that the Income tax officer must be in a position to ascertain how losses are to be apportioned; the question is whether it is a condition for registration under sec.
26A that the instrument of partnership must specify the respective shares of the partners in the losses.
According to the appellant sec.
26A has no such requirement.
The appellant contends that sec.
26A does not require specification of the shares in losses in the instrument of partnership and it is sufficient if the proportion in which the losses are to be shared is otherwise ascertainable, and that, assuming the section did so require, clause 9 of the instrument satisfies that requirement.
The contention that clause 9 specifies the respective shares of the partners in the losses is obviously untenable.
This clause says that the partners are "bound to act according to the provisions of the Indian Partnership Act"; that they are in any case, and it is not clear which provision of the Partnership Act indicated the proportion in which the partners were to bear the losses in this case.
Counsel for the appellant refers to sec.
13(b) of the Partnership Act in this connection.
12(b) reads: "Subject to contract between the partners (a) x x x x (b) the partners are entitled to share equally in the profits earned, and shall contribute equally to the losses sustained by the firm :" 135 We shall refer to sec.
13(b) in more detail when we consider the other contention of the appellant, but assuming that this provision has any relevance to the facts of this case, which it has not, bringing in by implication sec.
13(b) from a general statement that the partners are to act in accordance with the Partnership Act does not amount to specification of the partners ' shares in the losses, and the instrument of partnership, it must therefore be held, fails to comply with sec.
26A of the Act, were this a requirement of that section.
The other contention of the appellant is that it is not essential for registration under sec.
26A of the Act that the shares of the partners in the losses must be specified in the partnership deed.
In support of this contention reliance is placed mainly on two decisions, one of the Mysore High Court: R. Sannappa and Sons vs Commissioner of Income tax, Mysore (1) and the other of the Allahabad High Court: Hiralal Jagannath Prasad vs Commissioner of Income tax, U.P. (2) on behalf of the revenue it is claimed on the authority of a decision of the Gujarat High Court, Thacker & Co. vs Commissioner of Income tax, Gujarat (3), that the shares in the profits and losses have both to be specifically stated in the instrument of.
partnership in order to comply with the conditions laid down in sec.
26A to obtain registration.
The view taken by the Gujarat High Court appears to have been followed by the Kerala High Court in the following cases among others: C. T. Palu & Sons vs Commissioner of Income tax, Kerala (4) and Commissioner of Income tax, Kerala vs Ithappiri & George (5), There is thus a conflict of opinion in the High Courts on the point.
It will not be necessary, however, for the purpose of this appeal to consider at any length the conflicting views of the different High Courts and decide which view is correct according to us because on the facts of the case the appeal is bound to fail on any view.
It is not, and it cannot be, disputed that the Income tax officer before allowing the application for registration must be in a position to ascertain the shares of the partners in the losses even if sec.
26A did not require the shares in the losses to be specified in the instrument of partnership.
Counsel for the appellant argues that clause 9 of the instrument refers to sec.
13(b) of the Partnership Act by implication and, accordingly, in the absence of any contrary indication, it must be held that the partners are liable to share the losses equally.
The argument is not based on a correct appreciation of the scope of sec.
13(b) and the facts of the case.
13(b), it seems plain to us, makes the partners liable to contribute equally to the losses only when they are entitled to share equally in the profits.
In this case the shares of the partners are not equal.
In the absence of any indication to the contrary, where the partners have agreed to share the profits in certain proportions, the presumption is that the losses are also to be shared in like proportions.
Jessel M. R. states the principle in In re Albion Life Assurance Society (G) as follows: (1) (2) (3)[1966] (4) (5) (6) 16 Ch.
83 (87).
10 L1276SCI/75 136 "It is said, as a general proposition of law, that in ordinary mercantile partnerships where there is a community of profits in a definite proportion, the fair inference is that losses are to be shared in the same proportion.
" In the case before us the partners having unequal shares in the profits, there can be no presumption that the losses are to be equally shared between them Sec.
13(b) of the reproduces the provisions of the repealed sec.
253(2) of the .
In K. Pitchiah Chettiar vs G.Subramaniam Chettiar(1), Ramesam J. explained the scope of sec.
253 (2) of the : "Section 253(2) of the lays down that all partners are entitled to share equally in the profits of the partnership business, and must contribute equally towards the losses sustained by the partnership.
As I read the section, it lays down two presumptions with which the Court should start.
The two presumption are clubbed in one sub section.
The first is, if no specific contract is proved, the shares of the partners must be presumed to be equal.
In the present case the plaintiff alleged unequal shares which were not denied by the defendants.
So the parties being agreed on their pleadings as to the shares possessed by them in the profits, there is no scope for the application of this first presumption.
The second presumption is that where the partners are to participate in the profits in certain shares they should also participate in the losses in similar shares.
Now the section says that both should be in equal shares but implies that if unequal shares are admitted by the partners as to profits that applies equally to losses.
In the absence of a special agreement, that this should be the presumption with which one should start is merely a matter of common sense and in India one has only to rely on section 114 of the Evidence Act for such a principle.
" The law stated here in the context of sec.
253(2) of the Contract Act, 1872 applies equally to sec.
13(b) of the Partnership Act, 1932: the two provisions are in identical terms.
On the facts of the present case, and having regard to the scope of sec.
13(b), the section has plainly no application.
(1) I. L. R. (28).
137 The other rule that where the shares in the profits are unequal, the A losses must be shared in the same proportions as the profits if there is no agreement as to how the losses are to be apportioned, does not also apply to this case.
In this case even if the adult partners bear the losses in proportion to their respective shares in the profits, the amount of loss in the minor 's share would still remain undistributed.
Will the partners between them bear this loss equally, or to the extent of their own individual shares ? To this the instrument of partnership does not even suggest an answer.
There is therefore no means of ascertaining in this case how the losses are to be apportioned.
For the reasons stated above, the appeal fails and is dismissed with costs.
P.H.P.Appeal dismissed.
[/INST]The respondent landlord filed a suit for eviction against the appellant tenant on the ground of bona fide personal requirement and that he has no other resonably suitable accommodation of his own which is one of the grounds of eviction under the Madhya Pradesh Accommodation Control Act.
The appellant filed a Written Statement denying the claim of the respondent.
After some evidence was recorded the parties entered into a compromise and filed it in the Court.
The compromise deed mentioned that "due to the necessity of the plaintiffs for their own business opening grocery shop, the decree for ejectment may be granted to them against the defendant".
The Trial Court passed a decree in terms of the compromise after coming to the conclusion that the compromise was legal.
the appellant was given 3 years ' time to vacate the premises under the compromise.
On the appellant 's failure to vacate after the expiry of three years, the respondent filed Execution Application.
The appellant objected to the execution on the ground that the compromise decree was void and inexecutable as being against the provisions of the Act.
The Execution Court accepted the appellant 's objection and dismissed the Execution Case.
The District Judge dismissed the appeal filed by the respondent.
The High Court allowing the Second Miscellaneous Appeal came to the conclusion that the decree was not a nullity and that it was executable.
In an appeal by Special Leave the Appellant contended that the decree was nullity since the Court was not satisfied that the eviction was in accordance with the provisions of the Act.
The counsel further contended that even if what is stated in the compromise deed might be accepted as admission, the admission is only about the bona fide requirement and that there is no admission about the landlord not having any other suitable accommodation. ^ HELD: dismissing the appeal: 1.
In order to get a decree or order for eviction against a tenant whose tenancy is governed by any Rent Restriction or Eviction Control Act the Suitor must make out a case for eviction in accordance with the provisions of the Act.
When the suit is contested the issue goes to trial.
The Court passes a decree for eviction only if it is satisfied on evidence that a ground for passing such a decree in accordance with the requirement of the Statute has been established.
Even when the trial proceeds ex parte, this is so.
If, however, parties choose to enter into a compromise due to any reason such as to avoid the risk of protracted litigation, expenses it is open to them to do so.
The Court can pass a decree on the basis of the compromise.
In such a situation the only thing to be seen is whether the compromise is in violation of the requirement of the law.
In other words, parties cannot be permitted to have a tenant 's eviction merely by agreement without anything more.
The compromise must indicate either on its face or in the background of other materials in the case that the tenant expressly or impliedly is agreeing to suffer a decree for eviction because the landlord, in the circumstances, is entitled to have such a decree under the law.
The case of K. K. Chari vs P. M. Seshadri, followed [882 A D] 2.
It is too late in the day to contend that the provisions of order 23 rule 3 of the Code of Civil Procedure cannot apply to eviction suits governed by the special statutes.
A compromise of suit is permissible under the said provisions of law.
[882 E F] 879 3.
If the compromise for the eviction of the tenant is found on the facts of a particular case to be in violation of a Rent Control Act, the Court would refuse to record the compromise as it would not be a lawful agreement.
If the Court is satisfied on consideration of the terms of the compromise and if necessary by considering them in the context of the pleadings and other materials in the case that the agreement is lawful as in any other suit in an eviction suit the court is bound to record the compromise and pass a decree in accordance therewith.
[882 F G] 4.
The meaning of the term the bona fide requirement in the compromise deed is clear and definite specially in the background of the pleadings of the parties and it makes out a case of eviction within the meaning of the Act.
[883 C]
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<s>[INST] Summarize the judgementition (Criminal) No. 735 of 1987.
(Under Article 32 of the Constitution of India).
U.R. Lalit, P. Lal and Mrs. Rani Chhabra for the Petitioner.
Yogeshwar Prasad and Dalveer Bhandari for the Respondent.
The following order of the Court was delivered JAGANNATHA SHETTY, J.
The arguments of this case conc luded at the close of the court hours on December 18, 1987.
We then nlade the following order: "We will give the reasons later.
But we make the operative order here and now.
595 The detention order is quashed.
The detenu will be set at liberty forthwith.
" Here are the reasons: In this writ petition, the validity of the detention of Arun Aggarwal has been challenged.
He has been detained by the District Magistrate, Meerut by an order dated August 3, 1987 made under sec.
3(2) of the .
The Government, after the receipt of opinion of the Advisory Board, has approved the detention as required under sec.
12(1) of that Act.
The impugned order reads as under: "office of the District Magistrate, Meerut ORDER As I am satisfied as District Magistrate, Meerut that issue of order to prevent Shri Arun Aggarwal, son of Shri Rattan Singh, resident of 234, 'L ' Block, Shastri Nagar, Police Station Medical, Meerut from doing act against the maintenance of public order is necessary.
Therefore, in exercise of power given in sub section 3 of sec.
3 of (Act No. 65/ 1980), I hereby give order that the above said Shri Arun Aggarwal, son of Shri Rattan Singh, resident of 234, 'L ' Block, Shastri Nagar Police Station Medical, Meerut be detained in general category in District Meerut Jail in the custody of the Supdt.
Of the said jail under sub section 2 of Sec.
3 of the above said Act.
Passed today dated 3.8.1987 under my signature and seal " There are as many as five grounds of detention set out in the order.
All relate to the offence said to have been committed by Arun Aggarwal on May 19, 1987.
Two of the offences are said to have been committed at 9.OO A.M.
On that day, the other two offences at 9.30 A.M. and the fifth one was alleged to have been committed between 9.30 A.M. to 1.00 P.M.
On the same day.
In each of the grounds there is a mention to the following effect: 596 "Due to your above ill acts there broke out com munal riots causing heavy loss to properties and lives of the people and your this ill act has spread fear and terror in the general public of Meerut City.
In this manner, you have corrlmitted such an act which is against public law and order.
" All the cases referred to in the grounds are non bailable offences.
In relation of those offences, Arun Aggarwal was arrested as an accused on August 2, 1987.
The detention order was passed and served on August 3, 1987.
The order particularly stated: "At present you are detained in District Jail, Meerut and you are trying to come out on bail and there is enough possibility of your being bailed out." Before we consider the main ground raised in the petition, we may make one point clear.
The order of detention repeatedly states that the detenu committing the alleged five offences set out in the detention order was the cause for breaking out communal riot in Meerut City.
But in the counter affidavit filed on behalf of the respondents, it has been stated "that the communal riots broke out in Meerut on April 14, 1987 on the occasion of Shab e Earat.
That was controlled by the Administration.
However, in the night intervening between 13/19 May, 1987, again a communal riot broke out.
" But all the offences said to have been committed by the detenu were after 9.00 A.M. on May 19, 1987.
It was not in the intervening night between May 18/19.
It was, therefore, inaccurate to state that the communal riot broke out due to the incidents attributed to the detenu on May 19, 1987.
The primary question however, is whether the detention of Arun Aggarwal could be justified solely on the ground that he was trying to come out on bail and there was enough possibility of his being bailed out and he would then act prejudicially to the interest of the public order.
Mr. Yogeshwar Prasad, learned counsel for the State, sought to justify the detention order relying upon the decision of this Court in Alijan Mian and another vs District Magistrate, Dhanbad, [ The counsel also said that the subsequent two decisions of this court to which we will make reference later, are not in tune with the ratio of the decision in Alijan Mian 's case.
We will first consider what the case about in Alijan Mian case.
The detention order considered in that case contained statement that the District Magistrate was satisfied that the detenu was likely to be 597 released on bail and if he was allowed to remain at large, he would be indulging in activities prejudicial to the maintenance of public order.
This court refused to interfere with that detention order on the ground that the detaining authority was justified in forming that opinion.
The conclusion of this Court was evidently on the basis of material placed before the detaining authority in that case.
The principles applicable in these types of preventive detention cases have been explained in several decisions of this Court.
All those cases have been considered in a recent decision in Poonam Lata vs M. L. Wadhawan, ; The principles may be summarised as follows.
Section 3 of the does not preclude the authority from making an order of detention against a person while he is in custody or in jail, but the relevant facts in connection with the making of the order would make all the difference in every case.
The validity of the order of detention has to be judged in every individual case on its own facts.
There must be material apparently disclosed to the detaining authority in each case that the person against whom an order of preventive detention is being made is already under custody and yet for compelling reasons, his preventive detention is necessary.
We will now refer to the two decisions which according to Mr. Yogeshwar Prasad are not in tune with the ratio of the decision in Alijan Milan 's case (supra).
In Ramesh Yadav vs District Magistrate Etah and Ors., [1985]4 SCC 232 at p. 234, this Court observed: "On a reading of the grounds, particularly the paragraph which we have extracted above, it is clear that the order of detention was passed as the detaining authority was apprehensive that in case the detenu was released on bail he would again carry on his criminal activities in the area.
If the apprehension of the detaining authority was true, the bail application had to be opposed and in case bail was granted, challenge against that order in the higher forum had to be raisec;.
Merely on the ground that an accused in detention as an under trial prisoner was likely to get bail an order of detention under the should not ordinarily be passed.
" What was stressed in the above case is that an apprehension of the detaining authority that the accused if enlarged on bail would again 598 carry on his criminal activities is by itself not sufficient to detain a person under the .
Every citizen in this country has the right to have recourse to law.
He has the right to move the court for bail when he is arrested under the ordinary law of the land.
If the State thinks that he does not deserve bail the State could oppose the grant of bail.
He cannot, however, be interdicted from moving the court for bail by clamping an order of detention.
The possibility of the Court granting bail may not be sufficient.
Nor a bald statement that the person would repeat his criminal activities would be enough.
There must also be credible information or cogent reasons apparent on the record that the detenu, if enlarged on bail, would act prejudicially to the interest of public order.
That has been made clear in Binod Singh vs District Magistrate Dhanbad, ; at 421, where it was observed: "A bald statement is merely an ipse dixit of the officer.
If there were cogent materials for thinking that the detenu might be released then these should have been made apparent.
Etemal vigilance on the part of the authority charged with both law and order and public order is the price which the democracy in this country extracts from the public officials in order to protect the fundamental freedoms of our citizens.
" There is, to our mind, nothing in these two decisions which runs counter to the decision in Alijan Mian 's case (supra).
In the instant case, there was no material made apparent on record that the detenu, if released on bail, is likely to commit activities prejudicial to the maintenance of public order.
The detention order appears to have been made merely on the ground that the detenu is trying to come but on bail and there is enough possibility of his being bailed out.
We do not think that the order of detention could be justified only on that basis.
These were the reasons upon which we quashed the order of detention.
[/INST]% The appellants in C.A. Nos. 59 and 60 of 1982, who were appointed as Civil Judges on temporary and officiating basis on probation, were not confirmed after the expiry of the period of probation or the extended period of probation, and their services were terminated by the State Government under Rule 12 of the Madhya Pradesh Government Services (Temporary and Quasi Permanent Service) Rules, 1960.
They filed writ petitions before the High Court, challenging the orders of termination of service as illegal and invalid, contending that in view of Rule 3 A, providing that a Government servant in respect of whom a declaration under cl.
(ii) of Rule 3 had not been issued, but had been in temporary service continuously for five years in a service or post in respect of which such declaration could be made, shall be deemed to be in quasi permanent service unless for reasons to be recorded in writing they should be deemed to be in Quasi Permanent Service, since no declaration under cl.
(ii) of Rule 3 had been issued and they had been in service continuously for five years.
On behalf of the respondents it was contended that the question of confirmation came within the purview of Article 235 of the Constitution vesting in the High Court control over subordinate courts and, consequently, the provision of Rule 3 A had no application to the members of the Subordinate Judicial Service.
Division Bench of the High Court took the view that if in Rule 3 A in place of the words "appointing authority" the words "competent authority" be read it would be consistent with Article 235 of the 493 Constitution, and dismissed the writ petitions holding that the resolution passed in the Court meeting, adjudicating the appellants unfit for confirmation, satisfied the requirement of Rule 3 A as continuance in Quasi Permanent capacity was included within the ambit of confirmation.
The services of the respondent in .A.
No. 2860 of 1985 were also terminated under Rule 12 of the Rules.
In the writ petition filed by him, the Full Bench of the High Court, while approving the aforesaid view expressed by the Division Bench, held that the findings of the High Court in its resolution, considering the respondent unfit for confirmation, could not be regarded as reasons within the meaning of Rule 3 A, and quashed the impugned termination order.
Disposing of the appeals, ^ HELD: Whether a member of Subordinate Judicial Service should be confirmed or not is absolutely the concern of the High Court.
The question of confirmation falls squarely within Article 235 of the Constitution and no rule framed by the State Government can interfere with the control vested in the High Court under Rule 235.
[498A B ] B.S. Yadav vs State of Haryana, ; and High Court of Punjab & Haryana vs State of Haryana, ; relied on.
Both the Full Bench and the Division Bench were wrong in placing reliance upon Rule 3 A of the M.P. Government Service (Temporary and Quasi Permanent) Rules, 1960.
As the High Court did not confirm the omcials, the question of their being deemed to be in Quasi Permanent Service does not arise.
Further, as the question of confirmation was completely within the domain of the control of the High Court under Article 235 of the Constitution, there is no necessity to read the words "competent authority" in place of "appointing authority", for Rule 3 A was inapplicable to the members of the Subordinate Judicial Service.
Moreover, there is a specific provision in the termination of service of a Judicial officer who is found by the High Court to be unfit for confirmation as provided in Rule 16(5) of the Madhya Pradesh Judicial Service (Classification, Requirement
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<s>[INST] Summarize the judgementbeen clearly mentioned that they shall be deemed to have been made ap plicable from 1st April, 1974.
The Board had set up 280 their case in the reply to the writ petition on the basis of these Regulations and it was the duty of the Division Bench of the High Court to have looked into the reply filed by the Board and to decide the effect of such statutory regulations in the present case.
[291D E] (5) The High Court committed a serious error in ignoring clause IX of the First Settlement dated 22.2.1972 as well as the Regulations made by the Board in 1978.
[291H] & CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2917 of 1985.
WITH Civil Appeal Nos.
2900 2901, 2903 2916 of 1985 and 2918 21 of 1985.
From the Judgment and Order dated 21.5.1984 (Judgment pronounced on 2.7. 1984) of the Rajasthan High Court in D.B. Civil Special Appeal No. 172 of 1984.
Dr. L.M. Singhvi, Sushil Kumar Jain, Shahid Rizvi, Dr. D.K. Singh, Pradeep Agarwal, Pratibha Jain and Sudhanshu Atreya for the Appellants.
Rajinder Singhvi, M.R. Singhvi and Surya Kant for the Respondents.
The Judgment of the Court was delivered by KASLIWAL, J.
All these civil appeals by special leave are directed against the Judgments of the Rajasthan High Court dated May 11, 1984, May 21, 1984 and the reasons whereof pronounced on 2.7.
Controversy raised in all these cases is whether the respondents are entitled to pay scale No. 2 or pay scale No. 3.
The Government of India vide its Resolution dated 20th May, 1966 constituted a General Wage Board for electricity undertakings for evolving wage structure, specialisation of nomenclature and job description.
The recommendations of the said Wage Board were accepted by the Government of India in July, 1970.
The Prantiya Vidyut Mandal Mazdoor Federation (in short the Federation) recognised trade union of the employees of the Rajasthan State Electricity Board presented their demands before the Labour Department of the 281 Government of Rajasthan for implementation of the recommen dations of the Wage Board.
While the said industrial dispute between the management of the Board and its employees was pending before the Conciliation Officer, a settlement was arrived at on February 22.
By this agreement the parties agreed that the existing scale of pay of various categories of posts would be revised w.e.f.
1st April, 1969.
The schedule of the said agreement set out various catego ries of posts under different pay scales.
At St. No. 21 Meter Reader/Meter Checker was mentioned under scale No. 3 i.e. Rs. 126 8 150 10 250.
In pursuance to the above settle ment the Board issued a notification dated 22nd March, 1972 revising the pay scales of its employees w.e.f. 1st April, 1969.
Subsequent to this agreement the Board entered into another agreement with the Federation on December 2, 1972 (hereinafter referred to as the Second Settlement).
In the second settlement.
it was mentioned that this was done in view of some anomalies and difficulties which had cropped up in the course of implementation of previous agreements dated January 26, 1970; April 27, 1971; and July 28, 1972.
It was also mentioned in the said settlement that it was considered desirable to remove the anomalies and clarify certain points by mutual negotiations.
The settlement was made effective w.e.f.
1st April, 1968.
In the second settlement it was agreed to have two categories for Meter Readers i.e. Meter Reader I/Meter Checker I and Meter Reader II/Meter Checker II.
The relevant Clause in this regard reads as under: "II.
Under pay scale No. 3 technical read 21" Meter Reader I/Meter Checker I and under pay scale No. 2 technical, insert "7 Meter Reader /I/Meter Checker II" and insert the following Note below pay scale No. 2: "Meter Reader II/Meter Checker II appointed/fixed, pro moted/adjusted on or before 31.3.
1968 will be fixed in pay scale No. 3 instead of pay scale No.2.
The Board in accordance with the second settlement issued another Notification dated 6.12.
1972 whereby the previous Notification dated March 22, 1972 was amended.
Some of the employees, namely, Jagdish Prasad, Brij Mohan, Madho Singh, Prakash Chander, section Samuel, Brij Lal and Chander Bhan filed writ petitions in the High Court of Judicature for Rajasthan at Jodhpur and challenged the Notification dated 6th December, 1972.
It may be noted that all these employees were appointees before 6.12.
Learned Single Judge of the High Court by Judgment dated 21st March, 1979 allowed the write 282 petitions and quashed the Notification dated 6th December, 1972 mainly on the ground that the second settlement could not have been made as no conciliation proceedings were pending before such settlement and that the date 1.4.1968 mentioned in the notification for making the settlement effective was arbitrary and without basis.
The Board filed on appeal before the Division Bench which by their judgment dated 19th December, 1979 dismissed the same and upheld the judgment of the Learned Single Judge.
The Board implemented the judgment of the High Court in respect of Jagdish Prasad & Ors.
and issued orders to provide scale No. 3 to all Meter Readers appointed upto 6.12.
After 6th December, 1972 some more persons were appoint ed on the post of Meter Reader/Meter Checker Grade II i.e. in the pay scale of Rs.80 5 110 6 152 7 194 between the period 1972 1979.
Some of the employees again filed writ petitions in the High Court.
The High Court vide its judg ment dated 29th March, 1982 allowed the writ petitions on the ground that the second settlement had already been quashed by the earlier judgment given in Brij Lal vs Rajas than State Electricity Board, [1979] WEN UC 221.
The High Court inter alia held and observed as under: "Once the second settlement dated December 6, 1972, no longer exists in view of non compliance with Section 19(2) of the aforesaid Act and in view of the decision of this Court in Brijlal 's case (supra), the only settlement which can be said to be in existence is the first settlement dated February 22, 1972.
The aforesaid settlement only provides one grade (scale No. 3 item No. 21) for Meter Reader/ Check er, and, therefore, the petitioner is entitled to be fixed in that grade.
Merely because the post of Meter Reader II/Checker II was advertised with pay scale No. 2 and the petitioner applied and was selected, it cannot be said that the petitioner is estopped now from challenging his fixation in the aforesaid pay scale.
There can be no estoppel against statute.
The petitioner was not knowing and could not know that it is the first settlement dated February 22, 1972 which was in force and the settlement dated December 6, 1972 was invalid, and, therefore, no case of estoppel is made out against the petitioner.
Once this Court had quashed the second settlement dated December 6, 1972 and held that the first settlement 283 dated 22,2, 1972 Was in force, it Was necessary for the Board to have fixed the Meter Reader/Meter Checker in scale No. 3 item No. 21 of Schedule 'A ' to the first settlement.
The Board in spite of demand made to it by the petitioner in this behalf refused to do it".
A bunch of 35 identical writ petitions directing the Board to fix the petitioners in the pay scale No. 3 (Rs. 126 250) as revised from time to time were allowed by learned Single Judge of the High Court by a common order dated November 15, 1983.
The Board filed special appeals before the Division Bench.
The Division Bench dismissed the special appeals by orders dated 11.5.1984, 21.5.1984 and observed that the reasons will be recorded later on.
The Division Bench thereafter pronounced the reasons by order dated 2.7.
The Board has now filed these appeals restricted to such employees who were appointed as Meter Readers/Checkers grade II after 1.4.1974.
It may also be mentioned at this stage that under Clause IX of the first settlement dated 22nd February, 1972 it was mentioned as under: "(IX) This agreement shall remain in force upto 31st March, 1974 and the Federation agrees not to raise any demand in respect of any of the matters covered by this agreement during the period of the operation of the agreement".
It may also be mentioned that in exercise of the powers conferred by Section 79, sub sec.
(c) and (k) of the Elec tricity (Supply) Act, 1948, the Board after obtaining con currence of the Government of Rajasthan and directives issued under Sec.
70(A) of the said Act and taking into consideration the suggestions made by the representatives of the employees, made regulations which are called Rajasthan State Electricity Board Employees (emoluments) Regulations, 1978.
These regulations were made applicable retrospectively from 1st April, 1974.
Under these regulations post of Meter Reader II/Meter Checker I1 was mentioned in scale No. 2 as revised in the pay sclae of Rs.260 8 324 10 464.
Dr. L.M. Singhvi, St. Advocate appearing on behalf of the Board contended that irrespective of the earlier judg ment given by the High Court in Brij Lal vs R.S.E.B. (supra) quashing the second notification dated 6.12.1972 the present appeals having been filed against the Meter Readers appoint ed on or after 1.4.1974, they are not entitled to scale 284 No. 3 as the first settlement dated 22.2.
1972 was to remain in force upto 31st March, 1974.
It was also argued that in the appointment orders of the respondent employees appointed after 1.4.1974, it was clearly mentioned that they were appointed as Meter Reader/Meter Checker II in pay scale No. 2 i.e. Rs.80 194.
Dr. Singhvi further argued that the Board had also made regulations which had statutory force and were made applica ble retrospectively from 1st April, 1974.
Under these regu lations also the post of Meter Reader II/Meter Checker II was mentioned in Scale No. 2.
It was thus contended that considering the matter from any angle, the respondents were not entitled to scale No. 3 but were only entitled to scale No. 2 as revised from time to time.
It was also pointed out by Dr. Singhvi that without prejudice to the above submis sions so far as respondents Laxman Lal, Sita Ram and Madhay Lal are concerned, they were otherwise also not entitled to get any relief in as much as they were appointed Meter Readers II after the notification of the Regulations of 1978.
The Regulations were notified vide notification No. RSEB.
F. RRBS/D.41 dated 4th May, 1978 whereas Laxman Lal, Sita Ram and Madhay Lal were appointed respectively on 19th August, 1978.8th October, 1979 and 9th April, 1979.
Learned counsel for the respondent employees on the other hand submitted that in the settlement dated February 22, 1972 no distinction was made of Meter Reader Gr.
I or II and the post of Meter Reader/ Meter Checker was placed in pay scale No. 3.
It was submitted that validity of second settlement and the notification dated December, 6, 1972 was challenged in Brij Lal 's case and a Division Bench of the High Court had quashed the aforesaid settlement and the said judgment was not challenged by the Board before this Hon 'ble Court and the same had become final.
Thereafter an arbitra tion award was given in 1979 between the Board and the Federation under which two categories of Meter Readers/Meter Checkers were again made.
According to this award Meter Reader/Meter Checker II was placed in the pay scale No. 2 of Rs.80 194 and Meter Reader/Meter Checker I was placed in the pay scale of No. 3 of Rs. 126 250.
It was thus submitted that all the Meter Readers appointed upto 1979 were entitled to scale No. 3.
It was further submitted that the first settlement dated February 22, 1972 and the notification issued thereafter on March 22, 1972 continued to operate and there was only one pay scale of Rs. 126 250 for all Meter Readers and there being no classification of Gr.
I or II, the pay scale of Rs. 126 250 remained in force, till the arbitration award was given on June 15, 1979.
It was submit ted that all the respondents having been 285 appointed prior to June 15, 1979, they were entitled to pay scale No. 3.
As regards the stand taken by the Board that it had framed Regulations regarding the fixation of pay scales it was contended that no such plea was taken in reply to the writ petitions filed by the employees.
It was pointed out that the contention with regard to the first settlement having come to an end on March 31, 1974 as well as the contention raised on the basis of regulations was rightly negatived by the Division Bench of the High Court in the following manner: "It was contended by the learned counsel for the appellants that the learned Single Judge did not take into considera tion the fact that first settlement came to an end on March 31, 1974 and was not in force after that date.
He submitted that the Board had powers under Sec.
79(c) and (k) of the to frame Regulations regard ing the fixation of pay scales.
Learned counsel for the appellants was asked to show from the writ petitions whether this point was taken in the writ petitions or not.
Learned counsel for the appellants candidly admitted that it was not raised in the writ petitions filed by the petitioners.
It was, then.
put to the learned counsel whether this point was argued before the learned Single Judge.
Mr. S.N. Deedwania submitted that in the absence of the affidavit of the coun sel who argued on behalf of the appellants before the learned Single Judge positive assertion to that effect cannot be made.
In the memo of appeal this ground, of course, has been taken but not in the manner in which it has been stated hereinabove.
As this point was not taken in the writ peti tions and it was not argued before the learned Single Judge, we do not consider it necessary to examine it.
We shall examine the validity of the order under appeal on the basis of the grounds that were argued on behalf of the petitioners before the learned Single Judge".
It was further contended that during the pendency of these appeals additional affidavit was filed on behalf of Laxman Lal respondent.
It was pointed out in the additional affidavit that Sh.
Udai Lal and Sh.
Shyam Lal were appointed as Meter Readers vide order dated 6.9.1974.
These persons filed writ petitions Nos.
1191/81 and 1181/81 respectively.
The aforesaid writ petitions were allowed by the High Court vide judgment dated 28.3.1982.
One Sh.
Prem Shankar who was appointed as Meter Reader vide order dated 16.5.
1974 also filed a writ petition 286 No. 120/81 in the High Court and it was also allowed by order dated 28th March, 1982.
The Board did not challenge the aforesaid orders and issued order on 23.8.1982 imple menting the judgment of the High Court.
The above examples were given in order to show that these persons were also appointed after 1.4.1974 and in their cases also relief was granted by the High Court and the Board never challenged the aforesaid judgments given in favour of Udai Lal, Shyam Lal and Prem Shankar.
It has also been submitted that the Board has also published a revised revenue manual on 1.9. 1986 in which vide para 124 duties of Meter Readers have been laid down.
It is contended that in the manual no dif ferent duties have been prescribed for Meter Reader II and Meter Reader I and thus in the discharge of duties there is no difference.
A supplementary affidavit has been filed by Shri R.C. Harit, Deputy Director, Rajasthan State Electricity Board.
It has been submitted in the supplementary affidavit as under: "That is so happened that after the aforesaid judgment dated 19th December, 1979 in the matter of R.S.E.B. vs Jagdish Prasad Brij Lal D.B. Appeal No. 179 of 1979 some other Meter Readers on the basis of this judgment filed various other writ petitions.
In these writ petitions the question above the applicability of Regulations or the question as to whether the Respondent can challenge his own appointment by which they were appointed to Meter Reader II post were not at all raised or decided by the High Court.
The High Court decided the said writ petitions only on the basis of the earlier judgment in the matter of R.S.E.B. vs Jagdish Prasad (Brij Lal).
The Appellant Board implemented the said order.
The respondent is trying to raise the said question which was neither been decided by the High Court and has been raised for the first time in this supplementary affidavit.
On account of lapse of time, the appellant is finding it difficult to give reply.
The Deponent has tried his best to locate the records but in such a short period he could not get the file of the case which was decided about eight years back as it appears to have been mixed up in the old record.
That the order passed in the matter of Shanti Lal was a Judgment inter parties and, therefore, simply because the Board did not challenge the said order, it does not mean that the respondent can also take advantage of the same and can raise the question of equal pay for equal work.
In this the 287 Appellants further state that all the persons except re spondent Shri Lehar Singh and Gharsi Lal (Geharial) in civil appeal in the present case were appointed after 7th Septem ber, 1974 and 16th May,1974 i.e. the date on which three persons whose matters were decided alongwith Shanti Lal 's case were appointed" We have thoroughly examined the record and have consid ered the arguments advanced b.y Learned counsel for the parties.
It may be noted that all the above appeals are in respect of such employees who were appointed after 1.4.1974.
In the appointment orders of all the respondents it was specifically mentioned that they were appointed as Meter Reader Gr.
II in the pay scale of Rs. 80 194 (subsequently revised to Rs. 260 464).
In Clause (ix) of the First Settle ment dated 22nd February, 1972 it was clearly mentioned that this agreement shall remain in force upto 31st March, 1974.
The stand taken by the Board all along was that this settle ment was subsequently amended by another agreement (Second Settlement) on December 2, 1972.
In this second Settlement certain anomalies and difficulties had cropped up in the course of implementation of earlier settlements and hence some clarifications were made by mutual negotiations.
The clarifications relevant for our purpose were that the First Settlement was made effective w.e.f.
1st April, 1968 instead of 1st April, 1969 and two categories were fixed for Meter Readers i.e. Meter Reader I/Meter Checker I and Meter Read er II/Meter Checker II.
Necessary amendments were made in the Schedules annexed to the Settlement according to which under pay scale No. 3 at Item No. 21 Meter Reader I/ Meter Checker I and under pay scale No. 2 at Item No. 7 Meter Reader II/Meter Checker II were inserted.
This Second Set tlement was subsequently notified by a Notification dated 6.12.
According to the Board this Second Settlement was merely a clarification settlement and not a new settle ment in as much as it sought to make clear the ambiguity which had cropped up in the First Settlement in the matter of fixing the grades and pay scales of the Meter Readers/Meter Checkers.
The Notification dated 6.12.1972 which related to the Second Settlement dated 2.12.1972 was challenged by some of the employees by filing writ petitions in the High Court and Learned Single Judge by Judgment dated 21st March, 1979 allowed the writ petitions and quashed the notification dated 6th December, 1972.
It may be noted that the Second Settlement was quashed on the ground that the Second Settlement could not have been made as no concilia tion proceedings were pending before such settlement and the date 1.4.1968 mentioned in the Notification was arbitrary and without any 288 basis.
An appeal filed by the Board against the aforesaid decision was dismissed by the Division Bench of the High Court on 19th December, 1979.
This litigation was commenced by such employees who were appointed prior to 6.12.1972.
Subsequently employees appointed between the period 1972 1979 filed writ petitions in the High Court.
The stand taken by these employees was that the Notification dated 6.12.
1972 had already been quashed by the High Court and as such they were to be governed by the First Settlement dated February 22, 1972 in which there was only one category Of Meter Reader/Meter Checker to whom pay scale No. 3 had been given and as such they were also entitled to pay scale No. 3.
The High Court allowed the writ petitions and granted pay scale No. 3 to all the 35 petitioners.
the Board has now come before this Court against such employees who were appointed after 1.4.1974.
The contention of the Board is that even if for arguments ' sake the earlier decision given by the High Court may be considered as final, that was in respect of employees who were appointed before 6th December, 1972.
As regards the present employees it has been submitted that no benefit can be granted in their case as the First Settlement itself was to remain in force upto 31st March, 1974 and in any case in the appointment orders of the re spondents it was clearly mentioned that they were appointed as Meter Reader/Meter Checker Gr.
II in the pay scale No. 2.
It has also been urged before us that the Board had made Rajasthan State Electricity Employees (emoluments) Regula tions 1978 published on 4.5.
1978 but the same were deemed to have been made applicable from 1st April, 1974.
Under these regulations post of Meter Reader II/Meter Checker II in pay scale No. 2 and Meter Reader I/Meter Checker I have been placed in pay scale No. 3.
Learned counsel for the employees respondents contended that though according to Clause IX of the First Settlement dated 22.2.
1972, it was mentioned that the same will remain in force till 31st March, 1974 yet the same would remain in operation until the expiry of two months from the date on which a notice in writing of an intention to terminate the settlement is given by one of the parties to the other party or parties to the settlement as provided under Sub section
(2) of Section 19 of the (hereinafter referred to as the Act).
It has been submitted that no such notice was given by the Board and the Second Settlement dated 2.12.
1972 and Notification dated 6.12.
1972 had already been quashed by the High Court in Brij Lal 's case (supra) and the same having become final, the first settle ment Would govern the parties.
Reliance in support of the above contention is placed on The Life Insurance Corporation of India vs D.J. 289 Bahadur and Ors., [1980] Lab.
I.C. Vol.
2 1218.
Our attention was drawn to para 33 of the above case which reads as under: "The core question that first fails for consideration is as to whether the settlements of 1974 are still in force.
There are three stages or phases with different legal effects in the life of an award or settlement.
There is a specific period contractually or statutorily fixed as the period of operation.
Thereafter, the award or settlement does not become honest but continues to be binding.
This is the second chapter of legal efficacy but qualitatively different as we will presently show.
Then comes the last phase.
If notice of intention to terminate is given under Section 19(2) or 19(6) then the third stage opens where the award or the settlement does survive and is in force between the parties as a contract which has superseded the earlier contract and subsists until a new award or negotiated set tlement takes its place.
Like Nature, Law abhors a vacuum and even on the notice of termination under Sections 19(2) or (6) the sequence and consequence cannot be just void but a continuance of the earlier terms, but with liberty to both sides to raise disputes, negotiates settlements or seek a reference and award.
Until such a new contract or award replaces the previous one, the former settlement or award will regulate the relations between the parties.
Such is the understanding of industrial law at least for 30 years as precedents of the High Courts and of this court bear testi mony.
To hold to the contrary is to invite industrial chaos by an interpretation of the ID Act whose primary purpose is to obviate such a situation and to provide for industrial peace.
To distil from the provisions of Sec. 19 a conclusion diametrically opposite of the objective, intendment and effect of the Section is an interpretative, stultification of the statutory ethos and purpose.
Industrial law frowns upon a lawless void and under general law the contract of service created by an award or settlement lives so long as a new lawful contract is brought into being.
To argue other wise i, to frustrate the rule of law.
If law is a means to an end order is society can it commit functional harakiri by leaving a conflict situation to lawless void"? In our view the above Sections 19(2) and 19(6) of the Act cannot give any benefit to the respondents in the fact of the present case.
It is not 290 in dispute that the period of the First Settlement was agreed upto 31st March, 1974.
The question which calls for our consideration is not the applicability of the First Settlement, but the real question to be considered is wheth er the Board could have appointed or not the respondents on the post of Meter Reader/Meter Checker Gr.
II in pay scale No. 2 after 1.4.
The respondents/employees in the present case want to take advantage of the First Settlement simply on the ground that it did not make any mention of Meter Reader/Meter Checker Gr.
I or II and it simply made mention of Meter Reader/Meter Checker to whom pay scale No. 3 was given.
The above ambiguity was clarified by an agree ment between the Board and the Union representing the em ployees as early as on 2.12.
1972 itself to the effect that Meter Reader/Meter Checker can be placed in two different grades.
After this there was no restriction on the Board to make appointment of the Meter Reader/Meter Checker in Grade II after 1.4.
That apart there was clear mention in the appointment orders of the respondents that they were appointed as Meter Reader/Meter Checker Gr.
II in pay scale No. 2.
Learned counsel for the respondents/employees were unable to place any law, Rule or Regulation of the Board to show that the Board had no power to make such appointments of the Meter Reader/Meter Checker in Gr.
The Board had already taken the stand the first settlement was clarified by the second settlement and as such even if the High Court had quashed the second settlement, it was at least a suffi cient notice within the meaning of Section 19(2) of the Act that the Board had terminated the first settlement after 31.3.
The Regulations deemed to have come into force from 1.4.1974 also clearly provided for pay scale No. 2 for Meter Reader/Meter Checker Gr.
The Division Bench of the High Court refused to consider the above argument placed on behalf of the Board on the ground that learned counsel for the appellants was asked to show from the writ petitions whether this point was taken in the writ petitions or not and the learned counsel candidly admitted that it was not raised in the writ petitions filed by the petitioners.
The High Court further observed in this regard that as this point was not taken in the writ peti tions and it was not argued before the Learned Single Judge, they did not consider it necessary to examine it.
We have already extracted in extenso the observations of the High Court in this regard in the earlier part of the Judgment.
There is a complete fallacy, in the above order in as much as the Board was not the petitioner before the High Court and there was no question of taking any such ground in the writ petitions.
In one of the above appeals No. 2901 of 1985 Rajasthan State Electricity 291 Board & Ors.
vs Sharad Chander Nagar reply to the writ petition filed by the Board has been placed on record as Annexure 'C '.
In the said reply in Para (8) it has been stated as under: "That the contents of Para No. 8 of the writ petition are wrong and denied.
The petitioner was not appointed at the time of settlement date 22.2.1972.
The Wage Board set tlement dated 22.2.1972, which was in force upto 31.3.
1974, and thereafter the Rajasthan State Electricity Board Employ ees (Emoluments) Regulation 1978 was (sic) come into force with effect from 1.4.1974 and wages of all the employees were revised in pursuance of the Rajasthan State Electricity Board (Emoluments) Regulation 1978.
The copy of the Board (Emoluments) Regulation 1978 is submitted herewith as Annex ure "B".
Apart from the above circumstances of the case the Board in its reply to the writ petition also took the stand that the post of the Meter Reader Gr.
I is a promotion post while the post of Meter Reader Gr.
II is filled by direct recruit ment.
The Rajasthan State Electricity Board (Emoluments) Regulation 1978 made in exercise of the powers conferred by Sec.
79 Sub sections (c) & (k) of the have Statutory force and it has been clearly mentioned that they 'shall be deemed to have been made applicable from 1st April, 1974.
The Board had set up their case in the reply to the writ petition on the basis of these Regulations and it was the duty of the Division Bench of the High Court to have looked into the reply filed by the Board and to decide the effect of such statutory regulations in the present case.
The Board under Clause (C) of Regulation 79 was fully empowered to provide for the duties of officers and other employees of the Board, and their salaries, allowances and other conditions of service or under the residuary clause (k) for any other matter arising out of the Board 's function under this Act for which it is necessary or expedient to make regulations.
We have gone through the regulations which have been brought into force from 1st April, 1974 and in Schedule II group 'B ' at Item No. 7 Meter Reader II/Meter Checker II has been fixed in the revised pay scale of Rs.260 464 (original scale Rs.80 194) and in group 'C ' at Item No. 21 Meter Reader I/Meter Checker I in scale No. 3 revised pay scale Rs.370 570 (original scale Rs. 126 250).
The High Court committed a serious error in ignoring Clause IX of the First Settlement dated 22.2.1972 as well as the Regulations made by the Board in 1978.
292 So far as the cases of Udai Lal, Shyam Lal and Prem Shankar are concerned even if the Board did not challenge the order of the High Court dated 28.3.1982 in their cases, it cannot act as res judicata or as estoppel against the Board in challenging the present order of the High Court before this Court.
There is no question of applying the principle of equal pay for equal work in the facts and circumstances of this case and to allow Meter Readers II/Meter Checker Gr.
II, the pay scale of Meter Reader/Meter Checker Gr.
I. Apart from that, these controversies have been raised by the respondents for the first time by filing affidavits before this Court at the fag end of arguments, and these questions being mixed questions of fact and law, cannot be permitted to be raised now.
In the result, we allow all these appeals, set aside the Judgment of the High Court, and dismiss all the writ peti tions.
In the facts and circumstances of the case we direct the parties to bear their own costs.
R.S.S. Appeals al lowed.
[/INST]The appellant, a company resident in British India, had a cotton mill.
The cloth manufactured in the mill was sold in British India as well as native States.
For the assess ment years 194546, 194647 and 1947 48, the company was assessed under Section 14(2)(c) of the Income Tax Act, 1922, in respect of certain sums remitted to British India from native States, in addition to the assessment under Section 42(3), deeming 1/3rd of the profit from the sales effected in native States, as having accrued from the manufacturing part of business in British India.
The assessee 's contention that 1/3rd of income having been assessed under Section 42(3), as income deemed to have accrued in British India, no further assessment should be made under Section 14(2)(c) was rejected by the Income Tax Officer, the Appellate Assistant Commissioner and the Income Tax Appellate Tribunal.
The Tribunal also rejected the assessee 's additional contention that if the remittances made to British India in any year exceeded the amount taxed under Section 42(3), then it was only so much of the excess which could be taxed under Section 14(2)(c).
However, it reduced the additions made by the Income Tax Officer and affirmed by the appellate authority, by 1/3rd of such remit tances.
On a reference made under Section 66(1), the High Court confirmed the Tribunal 's decision.
In the appeal before this Court, on behalf of the appel lantassessee R was contended that where there was a mixed fund, as in the instant case, consisting partly of taxed and partly of untaxed monies, any remittance made should he deemed to have been paid out of that 294 part of the money which had suffered tax and that it was the right of the tax payer to attribute the payment to the taxed money so as to obtain the benefit allowed by the law.
Dismissing the appeals, this Court, HELD: 1.1 If there were two funds at the disposal of the assessee one upon which tax had been already levied and another which was liable to be brought to tax a presump tion, in the absence of evidence to the contrary might arise that the remittance made by the assessee in the course of its business was made out of the fund that was already taxed and not out of the fund that remained to be taxed.
[297F] Meyyappa Chettiar vs The Commissioner of Income Tax, , 45, referred to. 1.2 The tax payer is given the right of attribution in the way most favourable to himself.
In the absence of evi dence to the contrary, it is presumed that payments are made out of income.
This abstract principle of attribution is applicable in certain circumstances.
Whether it is applica ble in a particular case depends upon the facts of that case and the provisions of the statute.
It can be adopted only to the extent that it is consistent with the law and facts.
[298E F] Paton (As Penton 's Trustee) vs Commissioners of Inland Revenue, 21 Tax Cases 626 and The Cape Brandy Syndicate vs The Commissioners of Inland Revenue, 12 Tax Cases 359, 366, referred to.
In the instant case, on the facts found the assessee did not have two funds, but only one fund composed of taxed and non taxed amounts.
As one third of this amount had already been taxed under section 42(3) of the Act, 1/3rd of the remittances to British India in a particular year was held to be exempted from levy.
The Tribunal having excluded 1/3rd of the remittances to British India from taxation during a particular year, the High Court was justified in refusing to grant any further relief to the assessee.
[297G; 299B]
</s>
|
<s>[INST] Summarize the judgementminal Appeal No. 135 of 1956.
188 Appeal by special leave from the judgment and order dated November 25, 1955, of the Allahabad High Court, in Criminal Appeal No. 702 of 1955 and Referred No. 77 of 1955 arising out of the judgment and order dated May 17, 1955, of the Court of Sessions Judge, at Moradavad in Sessions Trial No. 29 of 1955.
P. section Safeer, for the appellant.
G. C. Mathur and C. P. Lal, for the respondent.
November 21.
The Judgment of the Court was delivered by IMAM J.
The appellant was sentenced to death for the marder of Daya Ram by shooting him with a country made pistol.
He was also convicted for being in possession of an unlicensed firearm under the Arms Act for which offence he was sentenced to two years rigorous imprisonment.
He appealed to the High Court of Allahabad, but his appeal was dismissed and the conviction and sentence was affirmed.
Against the decision of the Allahabad High Court the appellant obtained special leave to appeal to this Court.
According to the prosecution, the occurrence took place at about midnight of July 4, 1954, when Daya Ram was sleeping on a cot on a platform.
Near him were sleeping Gokul, Doongar and Jai Singh, while two women Ratto and Bhuri slept in a room to the north of the platform and adjoining it.
The report of the shot fired woke up these people.
According to them, they saw the appellant running towards the east.
He was accompanied by three others who were armed with lathis.
Daya Ram died almost instantaneously as the result of the injuries on his chest and stomach from where pellets were recovered at the time of the post mortem examination.
Daya Ram had been shot from a close distance because the skin was charred over the entire area of the wound.
Near the cot, on which he slept, a cartridge exhibit I. was found which was handed over to the Police Officer when he arrived for investigation.
A first information report was lodged at the police station five miles away at 8 10 a. m. on July 5, 1954.
189 The motive for the murder, as alleged by the prosecution, was that on the death of one Bhai Singh the appellant hoped to become guardian of Ratto 's property, who, however, appointed Daya Ram to take charge of it.
The appellant resented this very much.
Three days before the murder of Daya Ram there had been a quarrel between the appellant and his wife on the one side and Ratto and Bhuri on the other.
The quarrel arose over an attempt by the appellant to construct a wall over Ratto 's land. ' The appellant uttered a threat that he would soon settle with the person on whom Ratto was depending, that is to say, the deceased Daya Ram.
According to the High Court, the defence did not seriously challenge these allegations and the appellant himself admitted that Ratto wanted him to be turned out of his house.
The appellant was arrested on the night between July 5 and July 6, 1954, at a village fourteen miles away from the village of "occurrence Dhakeri.
On July 7, he informed the Sub Inspector that he was prepared to produce the pistol exhibit III.
The SubInspector and the appellant went to village Dhakeri and Kartar Singh, Mahtab Singh and Khamani were invited to witness the events that might follow.
On reaching the appellant 's house, which adjoins the resid ential house of Ratto, the appellant stated that the pistol exhibit III had been concealed by him in a corn bin.
From a secret place he took out a key and opened the lock of his house with it.
He then took the SubInspector and the witnesses to a mud corn bin inside his house, which appeared to be freshly plastered at one place.
The appellant removed the plaster at this place and from inside took out the country made 12bore pistol exhibit III, and three live 12 bore cartridges.
The cartridge exhibit I, which was found near the cot of Daya Ram, and the pistol exhibit III were sent to Shyam Narain, a Deputy Superintendent of Police, who is ,a fire arms expert of the C. I. D. of Uttar Pradesh Government.
He made scientific tests.
He came to the conclusion as the result of the various tests made by him that the cartridge Ex, I was fired from the pistol exhibit III and no other fire arm.
190 While the Sessions Judge believed the testimony of the eye witnesses, the learned Judges of the.
High Court were of the opinion that they were unable to accept the assertion of the eye witnesses that they actually saw the appellant with a pistol by the bedside of the deceased.
The High Court, however, relied upon the circumstantial evidence in the case in upholding the conviction of the appellant.
There was motive for the crime and a few days before the killing of.
Daya Ram the appellant had held out a threat against him.
The appellant was arrested fourteen miles away from his village which is the place of occurrence.
He produced a pistol exhibit
III from his house in circumstances which clearly showed that he only could have known of its existence there.
The opinion of the fire arms expert clearly established that the cartridge exhibit 1, found near the cot of Daya Ram, was fired with the pistol exhibit III produced by the appellant.
All these circumstances, in the opinion of the High Court, left no doubt in the minds of the learned Judges of that Court that the appellant murdered Daya Ram by shooting him with his pistol.
The learned Advocate for the appellant urged that the appellant could not have placed the pistol in his house and it must have been planted there by someone because none of the witnesses stated that they had seen him going to his house after the murder and the appellant was certainly not found in his house in the morning.
According to the situation of the house of the appellant and where the witnesses were immediately after the occurrence, it was impossible for the appellant to have entered his house without being seen.
It was further unlikely that after having committed the murder, the appellant, after having run away, would return to his house.
Both the Courts below, however, found no reason to disbelieve the Sub Inspector and the witnesses that the appellant had produced the pistol exhibit III from the corn bin inside his house.
The appellant had the key of the house which was hidden in a secret place and the com bin was itself freshly plastered at one place.
These circumstances clearly showed that no one but the appellant could have 191 known of the existence of the pistol in the corn bin in his house.
As to whether the appellant could or.could not have gone to his house after the occurrence that is a matter of pure speculation.
It does not appear that any witness was asked anything about it.
The High Court found that the witnesses might have caught a glimpse of the people who were fast disappearing from the scene but who had no reasonable opportunity of marking their features.
In the confusion of the occurrence the witnesses may not have observed where the culprits had disa speared except that they were seen running towards the east.
On the record, there is nothing to show that to enter the appellant 's house, after the occurrence, the appellant had necessarily to go into his house within the view of the witnesses.
It is quite unnecessary to examine this matter any further because the evidence concerning the production of the pistol exhibit III by the appellant from his house is ' clear and reliable and, therefore, it is certain that the appellant did enter his house after the occurrence without being seen by anyone.
It was next urged on behalf of the appellant, that,it was impossible for a cartridge to have been near the cot of Daya Ram, because after the shot had been fired the cartridge would still remain in the barrel of the firearm.
This again is pure speculation.
That the cartridge was ejected from the fire arm is certain.
Why it was ejected none can say.
It may be that the miscreant reloaded his weapon to meet any emergency.
The evidence of the Sub Inspector is clear that on his arrival at the place of occurrence the cartridge exhibit I was handed over to him by the witness Khamani who cannot be said to be unfavorable to the appellant.
The Courts below had no reason to disbelieve the evidence in the case that the cartridge exhibit I was found near the cot of Daya Ram and we can find no extraordinary circumstance to justify us saying that the Courts below took an erroneous view of the evidence.
On the facts found there was a motive for the murder.
Apparently, for no good reason the appellant was not found at his house on the morning of July 5, but was 192 in a village fourteen miles away at the time of his arrest.
The appellant produced the pistol exhibit III in circumstances clearly showing that he had deliberately kept it concealed.
We have no reason to doubt the evidence in this respect.
The real question is, whether it is safe to act upon the opinion of the fire arms expert that the cartridge exhibit I was fired from the pistol exhibit III produced by the appellant and none other, because without that evidence the circumstantial evidence in the case would be insufficient to convict the appellant of the crime of murder.
The opinion of 'the fire arms expert, based on the result of his tests, does not seem to have been challenged in cross examination or before the High Court.
If there is no reason to think that there is any room for error in matters of this kind and it is safe to accept the opinion of the expert, then clearly it is established that the cartridge exhibit I, found near the cot of Daya Ram, was fired from the pistol exhibit III produced by the appellant.
To satisfy ourselves we have looked into the works of some authors dealing with the marks left on cartridges and shell cases by fire arms in order to ascertain that there is no error in the opinion of the fire arms expert in the present case.
Kirk in his book "Crime Investigation" at page 346 states: "Fired cases are less often encountered in criminal investigation than are bullets, but when found they are usually of greater significance because they receive at least as clear markings as do bullets, have a greater variety of such markings, and are not ordinarily damaged in firing. . . . . . . . .
The questions which may be asked as a result of finding such materials are similar to those that require answers when only bullets are located.
In the ordinary case, quite definite answers can be given.
This is true both of shotgun shells and of cartridge cases from pistols, revolvers, and rifles. . . . . .
In general, it is possible to identify a certain firearm as having fired a particular shell or cartridge.
It is often possible to identify the type or make of gun ' which fired it, though in many instances this must be tentative or probable identification only." ` 193 After :dealing with the marks left by breech block, firing pin impressions, marks from extractors and ejectors, marks due to expansion, magazine marks and loading mechanism marks,he states, "Summarizing, the cartridge or shell case us.
ally carries markings which are quite distinctive of the gun in which the charge is fired, and can be used for positive identification of the latter.
Those marks arise from a variety of contacts with various parts of the gun, an analysis of which is useful in, determining the type of weapon in case no suspected gun is available . . . .
Thus, the recovered shell or cartridge case is one of the most useful types of physical evidence which can be found in shooting cases.
" Soderman and O 'Connel in their book "Modern Criminal Investigation" also deal with the subject and they refer to the marks from the fire pin, the extractor, the. ejector and the breech block.
After referring to comparison being made of the cartridge or shell fired from a fire arm for the purpose of test, they state at page 200, If they are in the same position in relation to one another and their general appearance is the same, one may conclude that they have been fired from a pistol of the same make.
An absolute conclusion about the origin of the shells, however, can be reached only after a photomicrographic examination of the markings from the breech block on the rear of the shell. . . . . .
Identification, with the aid of the enlargement, should not prove difficult.
The characteristic scratches can be easily seen.
A photograph of the incriminating shell and one of a comparison shell should be pasted side by side on cardboard, and the characteristic marks should be recorded with lines and ciphers, following the same method as that used in the ' identification of fingerprints.
" In Taylor 's book on Medical Jurisprudence, Tenth Edition, Vol. 1, at page 459, it is stated, " It is never safe to say that a cartridge case was not fired from a given pistol unless the marks are quite 25 194 different, and a case which bears no marks at all may quite well have been fired from the same pistol as one which leaves well defined marks.
In general, however, though it is unlikely that all marks will be equally good, it is usually possible to obtain definite information from the marks of the firing pin, extractor, ejector, or breech block.
on the base or rim, or from grooves or scratches on the surface.
In weapons of the same manufacture, the marks are of the same general nature, but in each weapon there are individual differences which usually enable it to be definitely identified.
" The expert 's evidence in this case shows that he had fired four test cartridges from the pistol exhibit III He found the individual characteristics of the chamber to have been impressed upon the test cartridges Exs. 9 and 10 and that exactly identical markings were present on the paper tube of the cartridge exhibit 1.
He made microphotographs of some of these individual marks on Exs. 1 and 10.
In giving his reasons for his opinion, the fire arms expert stated that every fire arm has individual characteristics on its breach face striking pin and chamber.
When a cartridge is fired gases.
are generated by the combustion of the powder, creating a pressure of 2 to 20 tons per square inch.
Under the effect of this pressure the cap and the paper tube of the cartridge cling firmly with the breach face striking pin and chamber and being of a softer matter the individualities of these parts are impressed upon them.
By firing a number of test cartridges from a given fire arm and comparing them under a microscope with the evidence cartridge, it can definitely be stated, if the marks are clear, whether the evidence cartridges had been fired or not from that fire arm.
It seems to us that the fire arms expert made the necessary tests and was careful in what he did.
There is no good reason for distrusting his opinion.
The learned Judges of the High Court examined the micro photographs in question and were satisfied that there was no ground for distrusting the evidence of the expert.
They were accordingly justified in coming to the conclusion that the cartridge exhibit 1, found nor the cot of Dava Ram, 195 was fired from the pistol exhibit III produced by the appellant from his house.
There can, therefore, be no room for thinking, in the circumstances established in this case, that any one else other than the appellant might have shot Daya Ram.
He was, therefore, rightly convicted for the offence of murder.
The appeal is accordingly dismissed.
[/INST]The petitioner (wife) filed a suit (O.P. 72/79) in forma pauperis seeking maintenance from the respondent (husband) in the court of subordinate Judge, Eluru (Andhra Pradesh).
On the receipt of the notice of the suit, the respondent filed a divorce suit (Petition Case No. 28/1980) against the wife under section 13 of the in the court of the District Judge, Udaipur (Rajasthan).
By the instant transfer petition filed under section , the wife sought to get the suit at Udaipur transferred to Eluru.
A preliminary objection was raised to the effect that section 25 of the Civil Procedure Code, which gets excluded by reason of the provisions of sections 20 and 21 of the , is not applicable to proceedings under the said Act and as such the Supreme Court has no power to transfer the husband 's suit from Udaipur District Court, Udaipur (Rajasthan) to Eluru District Court, Eluru (A.P.).
Rejecting the preliminary objection, the Court ^ HELD: Per curiam On merits, it is expedient for the ends of justice to transfer the husband 's suit pending in the District Court Udaipur (Rajasthan) to the District Court at Eluru (Andhra Pradesh), where both the proceedings could be tried together and for that purpose, the wife is agreeable to have her maintenance suit transferred to the District Court at Eluru (A.P.).
[226 A B] Per Tulzapurkar J. 1.
It will invariably be expedient to have a joint or consolidated hearing or trial by one and the same Court of a husband 's petition for restitution of conjugal rights on the ground that the wife has withdrawn from his society without reasonable excuse under section 9 of the and the wife 's petition for judicial separation against her husband on ground of cruelty under section 10 of the said Act in order to avoid conflicting decisions being rendered by two different Courts.
In such a situation resort will have to be had to the 224 powers under sections 23 to 25 of the Civil Procedure Code for directing transfer of the petitions for a consolidated hearing.
[228 G H, 227A] 2:1.
On a proper construction of the relevant provisions, it cannot be said that the substantive provision contained in section 25 Civil Procedure Code is excluded by reason of section 21 of the .
In terms, section 21 C.P.C. does not make any distinction between procedural and substantive provisions of C.P.C. and all that it provides is that the Code, as far as may be, shall apply to all proceedings under the Act and the phrase "as far as may be" means and is intended to exclude only such provisions of the Code as are or may be inconsistent with any of the provisions of the Code.
It is impossible to say that such provisions of the Code as partake of the character of substantive law are excluded by implication as no such implication can be read into section 21 of the Act and a particular provision of the Code irrespective of whether it is procedural or substantive will not apply only if it is inconsistent with any provisions of the Act.
[226 G H, 227 A B] 3.
Section 21A of the does not exclude the power of transfer conferred upon the Supreme Court by the present section 25 C.P.C., in relation to proceedings under that Act.
The marginal note of section 21A itself makes it clear that it deals with power to transfer petitions and direct their joint or consolidated "trial in certain cases" and is not exhaustive.
Section 21A does not deal with the present section 25 C.P.C. which has been substituted by an amendment which has come into force with effect from February 1, 1977 (section 11 of the Amending Act 104, 1976).
By the amendment very wide and plenary power has been conferred on the Supreme Court for the first time to transfer any suit, appeal or other proceedings from one High Court to another High Court or from one Civil Court in one State to another Civil Court in any other State throughout the country.
Conferral of such wide and plenary power on the Supreme Court could not have been in contemplation of Parliament at the time of enactment of section 21A of the .
[227 C D, F H, 228 A B] Smt.
Rama Kanta vs Ashok Kumar, AIR 1977 Punjab & Haryana 373 and Priyavari Mehta vs Priyanath Mehta, AIR 1980 Bombay 337, overruled.
Per Amrendra Nath Sen, J. 1.
A plain reading of section 25 C.P.C. clearly indicates that very wide jurisdiction and powers have been conferred on the Supreme Court to transfer any suit, appeal or any other proceedings from a High Court or other Civil Court in any State to a High Court or other Civil Court in any other State for the ends of justice.
Supreme Court enjoys the power and jurisdiction to entertain the transfer application under section 25 of the Code of Civil Procedure.
D] 2 : 1.
Sections 21 and 21A of the do not in any way, exclude, effect or curtail the power conferred on the Supreme Court under section 25 of the Code of Civil Procedure.
If the jurisdiction clearly conferred 225 on any court has to be ousted, the exclusion of such jurisdiction must be made in clear and unequivocal terms.
[232E, 233D] 2 : 2.
Section 21 of the only provides that "all proceedings under the shall be regulated as far as may be by the Code of Civil Procedure, 1908".
Section 21 of the does not deal with the question of jurisdiction of any court and it cannot be construed to exclude the jurisdiction conferred on the Supreme Court under section 25 C.P.C. [232 E G] 2 : 3.
Section 21A of the has, indeed, no bearing on the question of jurisdiction conferred on the Supreme Court under section 25 C.P.C. Section 21A has no application to the case of transfer of any suit or proceeding from one State to another.
[233 B C] 2 : 4.
The Supreme Court must necessarily enjoy the power and jurisdiction under the provisions of section 25 C.P.C. of transferring such a suit or proceeding for the ends of justice unless the power and jurisdiction of the Supreme Court are specifically taken away by any statute.
[232D E] 3.
Section 25 of the Code of Civil Procedure came into force after section 21 and 21A of the have been incorporated in the and as such section 25 of the Code overrides sections 21 and 21A of the .
[233 A E]
</s>
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<s>[INST] Summarize the judgementN: Criminal Appeal No. 158 of 1972.
Appeal by special leave from the Judgment and order dated the 12th November, 1971 of the Gujarat High Court at Ahmedabad in Criminal Appeal No. 219 of 1970.
H.S. Patel, S.S. Khanduja and Lalita Kohli, for the appellant.
section K. Zauri, Amaresh Kumar and M. V. Goswami, for the respondents 1 2.
H. R. Khanna and M. N. Shroff, for respondent No. 3.
The Judgment of the Court was delivered by CHANDRACHUD, J.
This is an appeal by special leave from the judgment of the Gujarat High Court convicting the appellant under section 36 read with section 8 of the Gujarat Agricultural Produce Markets Act, 20 of 1964 (referred to herein as "the Act"), and sentencing him to pay a fine of Rs. 10/ .
The judgment of conviction was recorded by the High Court in an appeal from an order of acquittal passed by the learned Judicial Magistrate, First Class, Godhra.
An Inspector of Godhra Agricultural Produce Market Committee filed a complaint against the appellant charging him with having purchased a certain quantity of ginger in January and February, 1969 without obtaining a licence as required by the Act.
The learned Magistrate accepted the factum of purchase but he acquitted the appellant on the ground that the relevant notification in regard to the inclusion of ginger was not shown to have been promulgated and published as required by the Act.
The case was tried by the learned Magistrate by the application of procedure appointed for summary trials.
That circumstance together with the token sentence of fine imposed by the High Court gives to the case a petty appearance.
But occasionally, matters apparently petty seem on closer thought to contain points of importance though, regretfully, such importance comes to be realized by stages as the matter travels slowly from one court to another.
As before the Magistrate so in the High Court, the matter failed to receive due attention: a fundamental premise on which the judgment of the High Court is based contains an assumption contrary to the record.
Evidently, the attention of the High Court was not drawn either to the error of that assumption or to some of the more important aspects of the case which the parties have now perceived.
It is necessary, in order to understand the controversy, to notice some of the relevant statutory provisions.
In the erstwhile composite State of Bombay there was in operation an Act called the Bombay Agricultural Produce Markets Act, 22 of 1939.
On the bifurcation of that State on May 1, 1960 the new State of Gujarat was formed.
The Bombay Act of 1939 was extended by 454 an appropriate order to the State of Gujarat by the Government of that State.
That Act remained in operation in Gujarat till September 1, 1964 on which date the Gujarat Agricultural Produce Markets Act, 20 of 1964, came into force.
The Act was passed "to consolidate and amend the law relating to the regulation of buying and selling of agricultural produce and the establishment of markets for agricultural produce in the State of Gujarat".
Section 4 of the Act empowers the State Government to appoint an officer to be the Director of Agricultural Marketing and Rural Finance.
Sections 5, 6(1) and 6(5) of the Act read thus: "5.
Declaration of intention of regulating purchase and sale of agricultural produce in specified area. (1) The Director may, by notification in the Official Gazette, declare his intention of regulating the purchase and sale of such agricultural produce and in such area, as may be specified therein.
Such notification shall also be published in Gujarati in a newspaper having circulation in the area and in such other manner as may be prescribed.
(2) Such notification shall state that any objection or suggestion received by the Director within the period specified in the notification which shall not be less than one month from the date of the publication of the notification, shall be considered by the Director.
(3) The Director shall also send a copy of the notification to each of the local authorities functioning in the area specified in the notification with a request to submit its objections and suggestions if any, in writing to the Director within the period specified in the notification.
Declaration of market areas. (1) After the expiry of the period specified in the notification issued under section 5 (hereinafter referred to in this section as 'the said notification '), and after considering the objections and suggestions received before its expiry and holding such inquiry as may be necessary, the Director may, by notification in the Official Gazette, declare the area specified in the said notification or any portion thereof to be a market area for the purposes of this Act in respect of all or any of the kinds of agricultural produce specified in the said notification.
A notification under this section shall also be published in Gujarati in a newspaper having circulation in the said area and in such other manner, as may be prescribed.
(5) After declaring in the manner specified in section 5 his intention of so doing, and following the procedure there in, the Director may, at any time by notification in the Official Gazette.
exclude any area from a market area specified in a notification issued under sub section (1), or include any area therein and exclude from or add to the kinds of agricultural produce so specified any kind of agricultural produce.
" 455 By section 8, no person can operate in the market area or any part thereof except under and in accordance with the conditions of a licence granted under the Act.
Section 36 of the Act provides, to the extent material, that whoever without holding a licence uses any place in a market area for the purchase or sale of any agricultural produce and thereby contravenes section 8 shall on conviction be punished with the sentence mentioned therein.
Rule 3 of the Gujarat Agricultural Produce Markets Rules, 1965 provides that a notification under section 5 (1) or section 6(1) shall also be published by affixing a copy thereof at some conspicuous place in the office of each of the local authorities functioning in the area specified in the notification.
The simple question, though important, is whether the notification issued under section 6(5) of the Act, covering additional varieties of agricultural produce like ginger and onion, must not only be published in the official gazette but must also be published in Gujarati in a newspaper.
The concluding sentence of section 6(1) says that a notification under "this section" "shall also be published in Gujarati in a newspaper" having circulation in the particular area.
The argument of the appellant is twofold: Firstly, that "this section" means this subsection so that the procedure in regard to publication which is laid down in subsection (1) of section 6 must be restricted to notifications issued under that subsection and cannot be extended to those issued under subsection (5) of section 6; and secondly, assuming that the words "this section" are wide enough to cover every sub section of section 6 the word "shall" ought to be read as "may".
First, as to the meaning of the provision contained in section 6 (1) of the Act.
It means what it says.
That is the normal rule of construction of statutes, a rule not certainly absolute and unqualified, but the conditions which bring into play the exceptions to that rule do not exist here.
Far from it; because, the scheme of the Act and the purpose of the particular provision in section 6(1) underline the need to give to the provision its plain, natural meaning.
It is not reasonable to assume in the legislature an ignorance of the distinction between a "section" of the statute and the "subsections" of that section.
Therefore, the requirement laid down by section 6(1) that a notification under "this section" shall also be published in Gujarati in a newspaper would govern any and every notification issued under any part of section 6, that is to say, under any of the sub sections of section 6.
If this requirement was to govern notifications issued under sub section (1) of section 6 only.
the legislature would have said so.
But the little complexity that there is in this matter arises out of a known phenomenon, judicially noticed but otherwise disputed, that sometimes the legislature does not say what it means.
That has given rise to a series of technical rules of interpretation devised or designed to unravel the mind of the law makers.
If the words used in a statute are ambiguous, it is said, consider the object of the statute, have regard to the purpose for which the particular provision is put on the statute book 456 and then decide what interpretation best carries out that object and purpose.
The words of the concluding portion of section 6(1) are plain and unambiguous rendering superfluous the aid of artificial guide lines to interpretation.
But the matter does not rest there.
The appellant has made an alternative argument that the requirement regarding the publication in Gujarati in a newspaper is directory and not mandatory, despite the use of the word "shall".
That word, according to the appellant, really means "may".
Maxwell, Crawford and Craies abound in illustrations where the words "shall" and "may" are treated as interchangeable, "Shall be liable to pay interest" does not mean "must be made liable to pay interest", and "may not drive on the wrong side of the road" must mean "shall not drive on the wrong side of the road".
But the problem which the use of the language of command poses is: Does the legislature intend that its command shall at all events be performed ? Or is it enough to comply with the command in substance ? In other words, the question is : is the provision mandatory or directory ? Plainly, "shall" must normally be construed to mean "shall" and not "may", for the distinction between the two is fundamental.
Granting the application of mind, there is little or no chance that one who intends to leave a lee way will use the language of command in the performance of an act.
But since, even lesser directions are occasionally clothed in words of authority, it becomes necessary to delve deeper and ascertain the true meaning lying behind mere words.
Crawford on 'Statutory Construction ' (Ed. 1940, article 261, p. 516) sets out the following passage from an American case approvingly: "The question as to whether a statute is mandatory or directory depends upon the intent of the legislature and not upon the language in which the intent is clothed.
The meaning and intention of the legislature must govern, and these are to be ascertained, not only from the phraseology of the provision, but also by considering its nature, its design, and the consequences which would follow from construing it the one way or the other.
" Thus, the governing factor is the meaning and intent of the legislature, which should be gathered not merely from the words used by the legislature but from a variety of other circumstances and considerations.
In other words, the use of the word 'shall ' or 'may ' is not conclusive on the question whether the particular requirement of law is mandatory or directory.
But the circumstance that the legislature has used a language of compulsive force is always of great relevance and in the absence of anything contrary in the context indicating that a permissive interpretation is permissible, the statute ought to be construed as pre emptory.
One of the fundamental rules of interpretation is that if the words of a statute are themselves precise and unambiguous, no more is necessary than to expound those words in their natural and ordinary sense, the words themselves in such case best declaring the intention of the legislature(1).
Section 6(1) of the Act provides in terms, plain and precise that a notification issued under the section "shall also" be published in Gujarati in a newspaper.
The word 'also ' provides an 457 important clue to the intention of the legislature because having provided that the notification shall be published in the Official Gazette, section 6(1) goes on to say that the notification shall also be published in Gujarati in a newspaper.
The additional mode of publication prescribed by law must, in the absence of anything to the contrary appearing from the context of the provision or its object, be assumed to have a meaning and a purpose.
In Khub Chand vs State of Rajasthan, it was observed that "the term 'shall ' in its ordinary significance is mandatory and the court shall ordinarily give that interpretation to that term unless such an interpretation leads to some absurd or inconvenient consequence or be at variance with the intent of the Legislature, to be collected from other parts of the Act.
The construction of the said expression depends on the provisions of a particular Act, the setting in which the expression appears, the object for which the direction is given, the consequences that would flow from the infringement of the direction and such other considerations".
The same principle was expressed thus in Haridwar Singh vs Begum Sumbrui.
"Several tests have been propounded in decided cases for determining the question whether a provision in a statute, or a rule is mandatory or directory.
No universal rule can be laid down on this matter.
In each case one must look to the subject matter and consider the importance of the provision disregarded and the relation of that provision to the general object intended to be secured.
" Recently in the Presidential Election Case(3), the learned Chief Justice speaking on behalf of a seven Judge Bench observed: "In determining the question whether a provision is mandatory or directory, the subject matter, the importance of the provision, the relation of that provision to the general object intended to be secured by the Act will decide whether the provision is directory or mandatory.
It is the duty of the courts to get at the real intention of the legislature by carefully attending to the whole scope of the provision to be construed. 'The Key to the opening of every law is the reason and spirit of the law, it is the animus imponentis, the intention of the law maker expressed in the law itself, taken as a whole '.
" The scheme of the Act is like this: Under section 5(1) the Director of Marketing and Rural Finance may by a notification in the Official Gazette declare his intention of regulating purchase and sale of agricultural produce in the specified area.
Such notification is also required to be published in Gujarati in a newspaper having circulation in the particular area.
By the notification, the Director under section 5(2) has to invite objections and suggestions and the notification has to be stated that any such objections or suggestions received by the Director within the specified period, which shall not be less than one month from the date of the publication of the notification, shall be considered by the Director.
After the expiry of the aforesaid period the Director, under section 6(1), has the power to declare an area as the market area in respect of the particular kinds of agricultural produce.
This power is not absolute because by the terms of section 6(1) it can only be exercised after considering the objections and suggestions received by the Director within the stipulated period.
The notification under section 6(1) is also required to be published in Gujarati in a newspaper.
The 458 power conferred by section 5(1) or 6(1) is not exhausted by the issuance of the initial notification covering a particular area or relating to a particular agricultural produce.
An area initially included in the market area may later be excluded, a new area may be added and likewise an agricultural produce included in the notification may be excluded or a new variety of agricultural produce may be added.
This is a salutary power because experience gained by working the Act may show the necessity for amending the notification issued under section 6(1).
This power is conferred by section 6(5).
By section 6(5), if the Director intends to add or exclude an area or an agricultural produce, he is to declare his intention of doing so in the manner specified in section 5 and after following the procedure prescribed therein.
Thus, an amendment to the section 6(1) notification in regard to matters described therein is equated with a fresh declaration of intention in regard to those matters, rendering it obligatory to follow afresh the whole of the procedure prescribed by section 5.
That is to say, if the Director intends to add or exclude an area or an agricultural produce, he must declare his intention by notification in the Official Gazette and such notification must also be published in Gujarati in a newspaper.
Secondly, the Director must invite objections or suggestions by such notification and the notification must state that any objections or suggestions received within the stipulated time shall be considered by him.
The Director must also comply with the requirement of sub section (5) of section 3 by sending a copy of the notification to each of the local authorities functioning in the particular area with a request that they may submit their objections and suggestions within the specified period.
After the expiry of the period aforesaid and after considering the objections or suggestions received within that period, the Director may declare that the particular area or agricultural produce be added or excluded to or from the previous notification.
This declaration has to be by a notification in the Official Gazette and the notification has to be published in Gujarati in a newspaper having circulation in the particular area.
The last of these obligations arises out of the mandate contained in the concluding sentence of section 6(1).
The object of these requirements is quite clear.
The fresh notification can be issued only after considering the objections and suggestions which the Director receives within the specified time.
In fact, the initial notification has to state expressly that the Director shall consider the objections and suggestions received by him within the stated period.
Publication of the notification in the Official Gazette was evidently thought by the legislature not an adequate means of communicating the Director 's intention to those who would be vitally affected by the proposed declaration and who would therefore be interested in offering their objections and suggestions.
It is a matter of common knowledge that publication in a newspaper attracts greater public attention than publication in the Official Gazette.
That is why the legislature has taken care to direct that the notification shall also be published in Gujarati in a newspaper.
A violation of this requirement is likely to affect valuable rights of traders and agriculturists because in the absence of proper and adequate publicity, their right of trade and business shall have been hampered without affording to them an opportunity to offer objections and suggestions, an opportunity which the statute clearly deems so 459 desirable.
By section 6(2), once an area is declared to be a market area, no place in the said area can be used for the purchase or sale of any agricultural produce specified in the notification except in accordance with the provisions of the Act.
By section 8 no person can operate in the market area or any part thereof except under and in accordance with the conditions of a licence granted under the Act.
A violation of these provisions attracts penal consequences under section 36 of the Act.
It is therefore vital from the point of view of the citizens ' right to carry on trade or business, no less than for the consideration that violation of the Act leads to penal consequences, that the notification must receive due publicity.
As the statute itself has devised an adequate means of such publicity, there is no reason to permit a departure from that mode.
There is something in the very nature of the duty imposed by sections 5 and 6, something in the very object for which that duty is cast, that the duty must be performed.
"Some Rules", as said in Thakur Pratap Singh vs Sri Krishna, "are vital and go to the root of the matter: they cannot be broken".
The words of the statute here must therefore be followed punctiliously.
The legislative history of the Act reinforces this conclusion.
As stated before, the Bombay Agricultural Produce Markets Act, 1939 was in force in Gujarat till September 1, 1964 on which date the present Act replaced it.
Section 3(1) of the Bombay Act corresponding to section 5(1) of the Act provided that the notification `may ' also be published in the regional languages of the area.
Section 4(1) of the Bombay Act which corresponds to section 6(1) of the Act provided that "A notification under this section may also be published in the regional languages of the area in a newspaper circulated in the said area".
Section 4(4) of the Bombay Act corresponding to section 6(5) of the Act provided that exclusion or inclusion of an area of an agricultural produce may be made by the Commissioner by notification in the Official Gazette, "subject to the provisions of section 3".
Section 4(4) did not provide in terms as section 6(5) does, that the procedure prescribed in regard to the original notification shall be followed if an area or an agricultural produce is to be excluded or included.
The Gujarat legislature, having before it the model of the Bombay Act, made a conscious departure from it by providing for the publication of the notification in a newspaper and by substituting the word `shall ' for the word `may '.
These are significant modifications in the statute which was in force in Gujarat for over 4 years from the date of reorganisation till September 1, 1964.
These modifications bespeak the mind of the legislature that what was optional must be made obligatory.
We are therefore of the opinion that the notification issued under section 6(5) of the Act, like that under section 6(1), must also be published in Gujarati in a newspaper having circulation in the particular area.
This requirement is mandatory and must be fulfilled.
Admittedly the notification (exhibit 10) issued under section 6(5) on February 16, 1968 was not published in a newspaper at all, much less in Gujarati, Accordingly, the inclusion of new varieties of agricultural produce in that notification lacks legal validity and no prosecution can be founded upon its breach.
460 Rule 3 of the Gujarat Agricultural Produce Markets Rules, 1965 relates specifically and exclusively to notifications "issued under subsection (1) of section 5 or under sub section (1) of section 6.
" As we are concerned with a notification issued under sub section (5) of section 6, we need not go into the question whether Rule 3 is complied with.
We may however indicate that the authorities concerned must comply with Rule 3 also in regard to notifications issued under sections 5(1) and 6(1) of the Act.
After all, the rule is calculated to cause no inconvenience to the authorities charged with the duty of administering the Act.
It only requires publication by affixing a copy of the notification at some conspicuous place in the office of each of the local authorities functioning in the area specified in the notification.
The prosecution was conducted before the learned Magistrate in an indifferent manner.
That is not surprising because the beneficent purpose of summary trials is almost always defeated by a summary approach.
Bhailalbhai Chaturbhai Patel, an Inspector in the Godhra Agricultural Produce Market Committee, who was a material witness for proving the offence, said in his evidence that he did not know whether or not the notifications were published in any newspaper or on the notice board of the Godhra Municipality.
The learned Magistrate acquitted the appellant holding that the prosecution had failed to prove beyond a reasonable doubt that the notifications were published and promulgated as required by law.
In appeal, the High Court of Gujarat began the operative part of its judgment with a wrong assumption that exhibit 9 dated April 19, 1962 was a "notification constituting the Godhra Market area." In fact exhibit 9 was issued under section 4 A(3) of the Bombay Act as amended by Gujarat Act XXXI of 1961 declaring certain areas as "market proper" within the Godhra Market area.
The High Court was really concerned with the notification, exhibit 10, dated February 16, 1968 which was issued under section 6(5) of the Act and by which new varieties of agricultural produce like onion, ginger, sunhemp and jowar were added to the old list.
The High Court set aside the acquittal by following the judgment dated February 12, 1971 rendered by A. D. Desai, J. in Cr.
Appeal 695 of 1969.
That judgment has no application because it arose out of the Bombay Act and the question before Desai, J. was whether section 4(1) of the Bombay Act was mandatory or directory.
That section, as noticed earlier, provided that the notification "may" also be published in the regional language of the area in a newspaper circulated in that area.
The High Court, in the instant case, was concerned with section 6(5) of the Act which has made a conscious departure from the Bombay Act in important respect.
The High Court did not even refer to the provisions of the Act and it is doubtful whether those provisions were at all brought to its notice.
Everyone concerned assumed that the matter was concluded by the earlier judgment of Desai, J.
For these reasons we set aside the judgment of the High Court and restore that of the learned Judicial Magistrate, First Class, Godhra.
Fine, if paid, shall be refunded to the appellant.
P.H.P. Appeal allowed.
[/INST]Section 2(15) of the Income tax Act provides that 'charitable purpose ' includes relief of the poor, education medical relief.
and the advancement of any other object of general public utility.
The appellant is a sole trustee of the "Loka Shikshana Trust", holding properties mentioned in a schedule attached to a deed of trust executed on 19 2 1962 by himself purporting to re declare a trust of 15 7 1935.
The total assets of the earlier trust of 1935 consisted of a sum of Rs. 4308.109 only.
Under the provisions the earlier trust of the trustee had carried on a lucrative business of printing at Belgaum, and, thereafter, he started publishing a daily newspaper.
The value of the redeclared trust of 1962 stood at Rs. 2,97,658/ .
Clause 2 of the trust deed provided that the object of the Trust shall be to educate the people of India in general and of Karnatak in particular by (a) establishing conducting and helping directly or indirectly institutions calculated to educate the people by spread of knowledge on all matters of general interest and welfare; (b) founding and running reading rooms and libraries and keeping and conducting printing houses and publishing or aiding the publication of books, booklets, leaflets, pamphlets, magazines etc,, in Kannada and other languages, all these activities being started, conducted and carried on with the object of educating the people; (c) supplying the Kannada speaking people with an organ or organs of educated public opinion and conducting journals in Kannada and other language for the dissemination of useful news and information and for the ventilation of public opinion on matters of general public utility; and (d) helping directly or indirectly societies and institutions which have all or any of the aforesaid objects in view.
The Income tax officer sent a communication to the trust on April 27, 1963 to the effect that, since the only activity of the trust was printing, publication, and sale of newspaper.
weekly and monthly journal, the trust carried on an activity for profit.
The claim of the sole trustee was rejected, and, having been unsuccessful through out the appellant has preferred this appeal after certification of the case under section 261 of the Income tax Act, 1961.
Dismissing the appeal, ^ HELD: (Per H. R. Khanna and A. C. Gupta, JJ.) (1) It is not correct to say that the word "profit" in section 2(15) of the Act means private profit.
The word used in the definition provision is profit and not private profit and it would not be permissible to read in the definition the word 462 "private" as qualifying profit even though such word is not there.
There is also no apparent justification or cogent reason for placing much a construction on the word "profit".
[472B] The words "general public utility" contained in the definition of charitable purpose are very wide.
These words exclude objects of private gain [472C] All India Spinners ' Association vs Commissioner of Income tax, , relied on.
It is also not correct to say that the newly added words "not involving the carrying on of any activity for profit" merely qualify and affirm what was the position as it obtained under the definition in the Act of 1922.
If the legislature intended that the concept of charitable purpose should be the same under the Act of 1961 as it was in the Act of 1922, there was no necessity for it to add the new words in the definition.
The earlier definition did not involve any ambiguity.
and the position in law was clear and admitted of no doubt after the pronoumcement of the Judicial Committee in the Tribune case and in the case of All India Spinners ' Association.
If despite that fact, the legislature added new words in the definition of charitable purpose, it would be contrary to all rules of construction to ignore the impact or the newly added words and to so construe the definition as it the newly added words were either not there or were intended to be otiose and redundant.
[47CC E] (ii) The sense in which the word "education" has been used in section 2(15) is the systematic instruction, schooling, or training given to the young in preparation for the work of life.
It also connotes the whole course of scholastic instruction which a person has received.
The word "education" has, not been used in that wide and extended sense according to which every acquisition of further knowledge constitutes education.
According to this wide and extended sense, travelling is education, because as a result of travelling you acquire fresh knowledge.
Likewise, if you read newspapers and magazines, see pictures, visit art galleries, museums and zoos, you thereby add to your knowledge.
Again, when your grow up and have dealings with other people, some of whom are not straight, you learn by experience and thus add to your knowledge of the ways of the world.
If you are not careful, your wallet is liable to be stolen or you are liable to be cheated by some unscrupulous is liable to be stolen or you are liable to be cheated by some unscrupulous person.
The thief who removes your wallet and the swindler who cheats you teach you a lesson and in the process make you wiser though poorer.
If you visit a night club, you get acquainted wit and add to your knowledge about some to the not much revealed realities and mysteries of life.
All this in a way is education in the great school of life.
But, that is not the sense in which the word "education" is used in clause (15) of section 2.
What education connotes in that clause is the process of training and developing the knowledge, skill mind, and character of students by formal schooling.
[469C F] (iii) The fact that the appellant trust is engaged in the business of printing and publication of newspaper and journals and the further fact that the afore said activity vields or is one likely to yield profit and there are no restrictions on the appellant trust earning profits in the course of its business would go to show that the purpose of the appellant trust does not satisfy the requirement that it should be one "not involving the carrying on of any activity for profit." [471C D] In re The Trustees of the 'Tribune , State of Gujarat vs M/s Raipur Mfg. Co., [1967] 1 S.C.R. 618, and Commissioner of Income tax vs Lahore Electric Supply Co. Ltd., , referred to.
(i) It has been declared repeatedly by the Courts, even before the addition of the words "not involving the carrying on of any activity for profit" to the definition of "charitab1e purpose".
that activities motivated by private profit making fell outside the concept of charity altogether.
It is more reasonable to infer that the words used clearly imposed a new qualification on public utilities entitled to exemption.
It was obvious that, unless such a limitation was introduced, the fourth and last category would become too wide to prevent 463 its abuse.
Wide words so used could have been limited in Scope by judicial interpretations ejusdem generis so as to confine the last category to objects similar to those in the previous categories and also subject to a dominant concept of charity which must govern all the four categories.
But, the declaration of law by the Privy Council, in the Tribune case had barred this method of limiting an obviously wide category of profitable activities of general public utility found entitled to exemption.
Hence, the only other way of cutting down the wide sweep of objects of "general public utility" entitled to exemption was by legislation.
This, therefore, was the method Parliament adopted as is clear from the speech of the Finance Minister who introduced the amendment in Parliament.
[482F H] Income Tax Commissioners vs Pemsel, ; , 583; Morice vs Bishop of Durham, ; All India Spinners ' Association vs Commissioner of Income Tax, Bombay, 1944(12) ITR 482, 486; commissioner of Income Tax, Madras vs Andhra Chamber of Commerce, 1965(55) I.T.R. 722, 732; In re Grove Gredy , 582; Cape Brandy Syndicate vs I.R.C. , 71; Rt.
Hon 'ble Jerald Lord Strickland vs Carmelo Mifud Bonnici, A.I.R. 1935 P.C. 34; The Englishman Ltd. vs Engineering Mazdoor Sang & Anr., A.I.R. 1975 S.C. p. 946 @ 949; Commissioner of Income tax Gujarat vs Vadilal Lallubhai, 1972 (86) I.T.R. p. 2; Commissioner of Income tax vs Sadora Devi, 1957 (32) I.T.R. 615 @ 627 [1958] 1 I.S.C. 1 and In re the Tribune, , referred to.
(ii) If the profits must necessarily feed a charitable purpose, under the terms of the trust, the mere fact that the activities of the trust yield profit will not alter the charitable character of the trust.
The test is the genuineness of the purpose tested by the obligation created to spend the money exclusively or essentially on "charity".
If that obligation is there, the income becomes entitled to exemption.
That is the most reliable test.
The governing idea of charity must qualify purpose of every category enumerated in section 2(15) of the Act of 1961.
[483 C D] (iii) Although the term 'education ', as used in section 2(15) of the Act, seems wider and more comprehensive than education through educational institutions, such as Universities, whose income is given an exemption from income tax separately under section 10(22) of the Act, provided the educational institution concerned does not exist "for purposes of profit", yet the educational effects of a newspaper or publishing business are only indirect, problematical and quite incidental so that, without imposing any condition or qualification upon the nature of information to be disseminated or material to be published, the mere publication of news or views cannot be said to serve a purely or even predeminantly educational purpose in its ordinary and usual sense.
Judging from the facts set out in the trust deed itself, the sole trustee had managed to make the satisfaction of the needs mentioned in clause 2(c) a highly profitable business.
The deed puts no condition upon the conduct of the newspaper and publishing business from which one could infer that is was to be on "no profit and no loss" basis.
The High Court was right in coming to the conclusion that the appellant is not entitled to claim exemption from income tax.
[485 E G, 486 D] East India Industries (Madras) Pvt. Ltd. vs Commissioner of Income tax Madras, ; Commissioner of Income tax, Madras vs Andhra Chamber of Commerce, ; Md. Ibrahim Riza vs Commissioner of Income tax, Nagpur, (1930) L.R. I.A. 260 and Commissioner of Income tax, West Bengla II vs Indian Chamber of Commerce, ARGUMENTS For the appellant (1) The objects clause of the Trust is so worded as to make it clear that the whole and sole object of the Trust is education of the people of India 464 in general and of Karnatak in particular by the four means or modes set out h in that clause.
Those four means or modes are not separate objects of the Trust but are merely the instrumentalities prescribed by the Settlor for achieving the specified object of education.
Even assuming for the purpose of argument that sub clauses (a) to (d) of clause 4 of the Trust Deed are separate and distinct objects of the Trust, clause (c) which covers a newspaper or a journal is itself an object falling within the category of "education".
(2) The words added in the 1961 Act "not involving the carrying on of any activity for profit" go only with the last head viz "any other object of general public utility" and not with the first three heads.
This is put beyond doubt by the comma which appears after each of the first three heads, there being no comma after the fourth head.
(3) The present case falls within the second head of "charitable purpose", viz. education.
The ruling of the Privy Council in the Tribune case does not apply to the facts of the present case.
(4) Assuming that the case does not fall within the category of "education" it falls within the last head "any other object of general public utility, and the qualifying words "not involving the carrying on of any activity for profit" are satisfied.
First the word "profit" means private gain, and the qualifying words merely say expressly what was implicit in the 1922 Act at 423, and at 488).
Even assuming the word "profit" covers profit for the Trust, involving no private gain, the qualifying words are still satisfied.
They require that the object of the Trust should not involve, i.e. entail that the trustees should carry on the activity for profit.
No such condition about making profit is imposed by the trust deed.
That profit may result from the activities of the Trust in a particular year is wholly irrelevant.
Profit making is not the motive of the Trust.
(5) Provisions of section ll of the Act clearly reveal that it is implicit in the very scheme of the Act that a business undertaking can be held in trust for an object of general public utility.
For the respondent (i) The decision of the Privy Council in the Tribune case squarely applies to the facts of the present case; (ii) For ascertaining that true meaning of the expression "not involving the carrying on of an activity for profit" it was not only permissible but only proper for the Courts to refer to parliamentary debates and other proceedings of the legislature.
(iii) Where a business undertaking is held as property of the Trust and income resulting therefrom is wholly applied for charitable purposes such as education, medical relief of the poor, or for any other object of general public utility but with which object the production or income is not linked it would be still exempt.
But if that income is utilised only for the purposes of advancing the very object from the advancement of which it is derived it would cease to be exempt.
The means and processes adopted by the Trustee for the advancement of the object were such as rendered the object itself as non charitable.
(iv) The expression "activity for profit" was much wider in cope than merely a business activity.
The legislature had intentionally used the expression "activity" instead of business because in some cases the income produced from the activity may not be legally assessable under the provisions of the Income tax Act, 1961 under the head "Income, profits and gains of business" (Section 28).
The expression 'activity for profit" in the context meant activity for profit making; (v) Since the advancement of education was being achieved by means involving the carrying on of an activity for profit, the Trust would still be denied exemption.
In other words, the qualifying words added to the definition at the end did not govern merely the last category of charity i.e. the object of general public utility but equally governed the earlier three well known categories namely medical relief, relief of the poor, and education.
The effect of the qualifying words "not involving the carrying on an activity for profit" was to deny exemption to trusts which carried on a profit making activity for advancing the object of general public utility.
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<s>[INST] Summarize the judgementTION: Criminal Appeal No. 74 of 1976.
Appeal by Special Leave from the Judgment and 'Order dated 28 7 75 of the Patna High Court in Criminal Revi sion No. 1046 of 1972.
A.K. Sen and A.K. Nag for the Appellant.
D. Gobrudhan, for the respondent.
The Judgment of the Court was delivered by FAZAL ALI, J.
This appeal by special leave exhibits the careless and cavalior manner in which the Sub Divisional Magistrate appears to have dealt with the complaint filed before him as far back as 21st February, 1966.
The com plaint itself contains allegations of a very petty nature, of which hardly any cognizance could have been taken and which would be a trivial act under Sec.
95 of Indian Penal Code for which no criminal proceedings could be taken.
There were proceedings under Section 107 between the parties and both 126 parties applied for copies of .these proceedings on the 20th December, 1965.
It is alleged in the complaint that the appellant got the copy which was meant for the complainant, by signing his name.
The complainant also got his copy a few days after eventually.
Such a small matter could have been resolved by the Magistrate himself if he had persued the complaint carefully and was certainly not a , matter for which a detailed inquiry under section 202, Code of Criminal Procedure, 1908 was called for.
It appears, howev er, that the Magistrate tossed the complaint from one Magis trate to another for inquiry and report, without conclusive results, starting from 21st February 1966 to 23rd November 1968, that is, for a period of more than two years.
Ulti mately, on the 23rd November, 1968 the complaint was dis missed under section 203 of the Criminal Procedure Code on the ground that the complainant was absent and did not show any interest in the inquiry ordered by the Court.
On the 7th of December, 1968 the respondent appeared before the Magistrate and filed an application for recalling his order.
The Magistrate passed no orders on this applica tion but he sent the case ' for inquiry to Mr. K.P. Sinha, another Magistrate.
Thereafter, the matter was sent to Mr. S.N. Dube on 30th of October, 1969.
Mr, Dube reported that the inquiry had been completed and hence he returned the papers.
of inquiry to the Magistrate.
On 9th of Decem ber, 1970, the Magistrate recalled the inquiry from Mr. K.P. Sinha and transferred to Mr. A.R. Ansari and on the basis of his report, the learned Magistrate passed the order taking cognizance of the case and summoned the accused by his order dated 3 5 1972, and issued processes against the appellants.
It would thus appear that a very petty matter was allowed to have a long and chequered career because the Magistrate refused to apply his mind either to the ' allegations made in the complaint or to control the proceedings before him.
In support of the appeal Mr, Nag has submitted a short point.
He has contended that the Magistrate had no jurisdic tion to recall the order dated 23 11 1968, by which he had dismissed the complaint under Section 203 of the Code of Criminal Procedure.
In fact, there was no express order recalling the order dismissing the complaint, but by a process of deeming fiction the Magistrate thought that the order dismissing the complaint stood recalled.
We might mention that the order dated 23rd November, 1968 was a judicial order by which the Magistrate had given full reasons for dismissing the complaint.
Even if the Magistrate had any jurisdiction to recall this order, it could have been done by another judicial order after giving reasons that he was satisfied that a case was made out for recalling the order.
We, however, need not dilate on this point because there is absolutely no provision in the Code of Criminal Procedure of 1908 (which applies to this case) empowering a Magistrate to.
review or recall an order passed by him.
Code of Criminal Procedure does contain a provision for inherent powers, namely, Section 561 A which, however, confers these powers on the High Court and the High Court alone.
Unlike Section 151 127 of Civil Procedure Code, the subordinate criminal courts have no inherent powers.
In these circumstances, there fore, the learned Magistrate had absolutely no jurisdic tion to recall the order dismissing the complaint.
The remedy of the respondent was to move the Sessions Judge or the High Court in revision.
In fact after having passed the order dated 23 11 1968, the Sub Divisional Magistrate became functus officio and had no power to review or recall that order on any ground whatsoever.
In these circumstances, therefore, the order even if there be one, recalling order dismissing the complaint, was entirely without jurisdiction.
This being the position, all subsequent proceedings follow ing upon recalling the said order,would fall to the ground including order dated 3 5 1972 summoning the accused which must also be treated to be a nullity and destitute of any legal effect.
The High Court has not at all considered this important aspect of the matter which alone was sufficient to put an end to these proceedings.
It was suggested by Mr. D. Goburdhan that the application given by him for recalling the order of dismissal of the complaint would amount to a fresh complaint.
We are, however, unable to agree with this contention because there was no fresh complaint and it is now well settled that a second complaint can lie only on fresh facts or even on the previous facts only if a special case is made out.
This has been held by this Court in Pramatha Nath Taluqdar vs Saroj Ranjan Sarkar(1).
For these reasons therefore, the appeal is allowed.
The Order of the High Court maintaining the order of the Magistrate dated 3 5 1972 is set aside and the order of the Magistrate dated 3 5 1972 summoning the appellant is hereby quashed.
M.R. Appeal allowed.
(1) [1962] 2 Supp.
S.C.R. 297.
[/INST]The assessee was the owner of more than 100 acres of land within municipal limits and enclosed by a compound wall.
The land was adjacent to a tank, had two wells in it, was capable of being used for agriculture, was assessed to land revenue as agricultural land, but had not been actually put to any non agricultural use.
The High COurt held that the land was 'agricultural land ' under section 2(e)(i) of the Wealth Tax Act, 1957 and exempt from wealth tax on the basis that, (1 ) the expres sion 'agricultural land ', not having been defined in the Act, must be given the widest possible meaning; (2) so interpreted, all land which is capable of being utilised for agricultural purposes would be 'agricultural land unless it is actually put to some non agricultural use like construc tion of buildings etc; and (3) the land has been assessed to land revenue as agricultural land under the State Revenue Law.
Allowing the appeal, HELD: It is only land, which either is being actually used or ordinarily used, or has been set apart or prepared for use for agricultural purposes so as to indicate the intention of the owner or occupier of the land to put it to agricultural use, that would be 'agricultural land '.
[156 A] (1 ) It is not correct to give.
the expression a wide meaning merely because the statute does not define it.
The correct rule is for the Court to endeavour to find out logically the exact sense in which the words have been used in a particular context, reading the statute as a whole, giving an interpretation in consonance with the purposes of the statute, and avoiding absurd results.
[153 A B] (2) The object of the Wealth Tax Act is to tax surplus ' wealth.
It is not all land but only 'agricultural land ' that is excluded from the definition of assets.
Therefore, it is imperative to give reasonable limits to the scope of the expression 'agricultural land '.
[153 C] (3) The determination of the, character of land, accord ing to the purpose for which it is meant or set apart and can be used, is a matter which ought to be determined on the facts of each particular case.
What is really required to be shown is the connection with an agricultural purpose and user, and not the mere possibility of user by some possible future.
owner or possessor.
for an agricultural purpose.
It is not the potentiality, but its actual condition and in tended user which has to be seen for purposes of exemption from wealth tax.
The correct test to apply would be to.
find out whether human labour had been applied to the land it self, in order to extract from its natural powers, added to or aided by other natural or artificial sources of strength, a product which can yield income.
If there is nothing in its condition, or in the evidence to indicate the intention of its owner or possessor, so.
as to connect it with an agricultural purpose, the land could not be agricultural land.
The person claiming that any property is exempt must satisfy the conditions of the exemption.
[155 G H] The extent of the land, its situation, that it was capable of being used for agricultural purposes and has not been actually put to any use which would make it unfit for immediate cultivation, .are, therefore, inconclusive being based on absence of user for non agricultural purpose.
Entries in revenue records are.
however, good prima facie evidence since they are based on some quasi judicial enquiry but they raise only a rebuttable presumption.
If such 147 pritma facie evidence was enough for the assessee to dis charge his burden to establish an exemption, evidence to rebut it should have been led on behalf of the Department.
In the present case, however, the High Court relied not only on the entries, but also on the inconclusive circumstances based on potentialities.
While doing so, the High Court did not hold that categorical finding of the taxing authorities and Tribunal that the land was never used, nor was intended to be used for an agricultural purpose did not rest on any evidence at all; nor did it give any reasons for rejecting the finding.
it is therefore a fit case for being remanded to the Tribunal for deciding the question of fact, after giving opportunity to both sides to adduce evidence.
[155 B E] C.I.T.W.
Bengal vs Raja Benoy Kumar (1957) I.T.R. 466, followed.
Sarojini Devi vs Raja Sri Krishno A.I.R. 1944 Mad. 401, overruled.
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<s>[INST] Summarize the judgementthe applicability is underfined but the statute is clearly enforceable as long as it is in the statute book side by side with the normal excise duties.
The clear intention is that the same provisions shall govern both the levies except that the duty under the later Act is confined to certain goods only und its distributability among the States may perhaps follow a different pattern from the principal duty.
[825B C] 3(v) The Finance Acts which levied special or regular or additional excise duties contained in themselves all the elements of charge or duty.
T he goods were mentioned and the duty has to be levied either at a percentage of the normal excise duty payable under the 1944 Act or at a percentage of the value of the assessable goods as determined under the 1944 Act.
All that was further needed was the applicability of the procedural provisions of the 1944 Act.
However, the 1957 Act is incomplete as to the basis of the charge and its provisions would become totally unworkable unless the concepts of 'manufacture ' and 'assessable value ' as determined under the 1944 Act are carried into it.
[825D F] & ORIGINAL JURISDICTION: Writ Petition No. 12183 of 1985 etc.
etc (Under Article 32 of the Constitution of India) K. Parasaran.
Attorney General, Soli i Sorabjee A.J. Rana A.K Sen, S.K. Dholakia, Hari Swarup V.C.Mahajan, A. K. Ganguli, Mrs. Shashi Rana, Mrs. J Wad, Ms. Aruna Mathur, Subhash Parekh, Dushyant Dave, P.H Parekh E. K. Jose Ms. Rashmi Chandrachud, Sanjay Bharthri, Sarve Mitter, C.L. Beri, S.K. Beri R.C. Bhatia.
Ravi P. Wadhwani.
P C Kapur Sukumaran, D.N. Mishra, B.V. Desai, M.B Lal.
Mukul Mudgal, B Kanta Rao, Mrs. H Wahi, Mrs. V D Khanna, Aruneshwar Gupta, Mrs. Anil Katiyar R.K.Kapur, B.R. Kapur.
Anis Ahmed Khan.
Ms. Abha Jain, R. Karanjawala, Mrs. Karanjawala, Ms. Meenakshi.
Vishnu Mathur, Kailash Vasudev P.D.Shah, Shri Narain, Sandeep Narain, M.N. Shroff.
Mrs P section Shroff, R. Sasprahbu, S.A.Shroff, S.S Shroff, Praveen Kumar, M.N Chowdhary M.D. Chowdhary, N. Das Gupta, Rajesh Chibber, K.K Bhaduri, Rajiv Dutta.
E.C. Agarwala, Harjinder Singh, R.K. Nambiar P Paremeswaran, Ms. Bina Gupta, K.Swami and V.N. Ganpule for the appearing parties.
The following Judgments of the Court were delivered PG NO.
783 VENKATACHALIAH J.
These appeals, by Special Leave, preferred against the Judgments of the High Court of Gujarat and the High Court of Bombay and the batch of writ petitions under Article 32 of the Constitution of India are heard together and disposed of by this common judgment as they all involve questions common to them concerning the validity of the levy of duties of excise under tariff items 19 and 22 of the Schedule to the ("Central Excise Act") as amended by the Central Excise and Salt Additional Duties Excise (Amendment) 1980 Act ( '"Amending Act") treating as "Manufacture" the process of Bleaching.
Dyeing, Printing, Sizing, Mercerising, water proofing, rubberising, Shrink Proofing Organdie, Processing, etc done by the processor who carry out these operations in their factories on Job work basis in respect of Cotton fabric ' and 'Man made fabric belonging to their customers The Amending Act which became effective from 24.12.1979 sought to render the processes of Bleaching, Dyeing, Printing Sizing, Mercerising etc "Manufacture within the meaning of the Section 2(f) of the Central Excise Act The amendment was necessitated by the Judgment of the High Court of Gujarat which has declared the levy on such 'processing as illegal as, according to the High Court the processing did not bring into being a new and commercially different article with a distinctive character and use and did not therefore constitute 'manufacture ' for purposes, and within the meaning, of the charging section.
The processors who carry out these operations on cotton fabrics or "man made fabrics which are popularly go by the name 'Grey fabric in the particular trade also challenged the levy of the additional duties of excise under the provisions of the additional Duties of Excise goods (of special importance) Act 1957 (Additional Duties Act) on the ground, first.
that if the processes carried on by them do not amount to "manufacture" under Section 2(f) as it originally stood, then, consistent with the impermissibility of main impost.
the levy of additional duties also fails and, that at all cvents, even after the amendment the concept of manufacture under the said Additionl Duties Act had not been correspondingly widened by an appropriate amendment.
The present hatch of appeals and writ petitions comprise of a large number of cases It is not, having regard to the questions requiring to be decided in these matters, necessary to go into, in any particular detail, the fact situation of each individual case.
The processors in these PG NO 784 cases, who may conveniently be referred to as the processors" or "jobbers ', mainly carry out these operations of Bleaching, Dyeing, Printing, Sizing, Finishing etc.
of 'Grey fabric ' on 'job work ' against payment of processing charges to them by the customers who are the owners of the Grey fabric.
The ownership of the cloth rests with the customers who get these processes done to their specifications from these processing houses on payment of processing charges.
The Grey fabric, after processing, is returned by the processing house to the customers.
The facts of W P. No. 12 183 of 1985 'M/s. Ujagar Prints vs Union of India and Ors.), in which the petitioner has challenged the levy by a petition under Article 32 of the Constitution are typical and representative of all other similar cases The petitioner is a firm of partners with its Head Office at 51, Sheikh Memon Street, Bombay.
It has a factory at Sunder Baug, Deonar, Bombay, which is equipped with machinery and plants for processing of man made grey fabric The machinery and equipment installed in the petitioners factory? it is averred and that is not disputed either are suited for and appropriate to the processing of Grey fabric and are not capable of manufacturing Grey fabric The man made grey fabric such as Art Silk Grey fabric, it is stated, is manufactured in mills and on power looms and that letter is exempt from excise duty on its manufacture Petitioners further over that the Art Silk (Grey fabrics which are processed in the petitioner ' factory are those manufactured on power looms and not by the mills and that the Art Silk (Grey fabric received do not come from the manufacturers of the grey fabric through the manufacturing stream but from the various traders through the sales stream.
The point that the petitioners seek to made is that the processing of the grey fabric is not a part, a continuation, of the process of manufacture in the manufacturing stream, but is an independent and distinct operation carried out in respect of the Grey fabric, after it has left manufacturing stage and has become part of the common stock of goods in the market.
It is also averred that the firm M/s. Ujagar Prints does not purchase the Grey fabric but is only engaged in processing it for charges and that in many cases the Grey fabric would have passed on from trader to trader with the attendant increase in the prices with each successive change of hands and is entrusted to the petitioner by the last purchaser for processing against stipulated processing charges on job work basis.
It is contended that these job work processing operations do not amount to "manufacture" as the petitioners do not carry out any spinning or weaving operations; that what they receive from their customers for processing is PG NO 785 therwise fully manufactured man made fabric and that what is returned to the customers after processing continues to remain man made fabric.
The imposition of excise duty on the processor on the basis of the full value of the processed material, which reflects the value of grey fabrics, the processing charges, as well as the selling profits of the customers is, at once unfair and anamolous, for, in conceivable cases the duty itself might far exceed the processing charges that the processors stipulate and get.
The batch of cases also includes cases where the grey fabric is also purchased by these processing houses and are sold by them, after processing In some cases the manufacturers of the grey fabric subject it to captive consumption and process them in their own compositeestablishments .
The essential question is whether these situational differences have a bearing on the principles of determination of the assessable value of processed grey fabric and whether the assessable value could be different in the different fact situations which would be the logical corollary if the contention of the processing houses which do not processing work for charges on the goods not their own, is accepted and the assessable value determined on the basis of mere processing charges.
But the main questions that arise are whether "processing" of the kind concerned in these cases amounts to manufacture", whether the provisions of section 2 of the Amending Act which impart an artificial dimension to the concept of "manufacture" is ultra vires Entry 84 List l; whether at all events, the imposition of a tax on such 1processing is referable to Entry 97 List l; and if the import on the processors is justified under tariff items 19 and 22, according as whether the Grey fabric is cotton or 'man made, what should be the assessable value for purposes of levy of duty so far as processors are concerned.
Prior to the Amending Act of 1980, the levy on the processors was challenged before the Gujarat High Court The Gujarat High Court by its judgment dated 24.1.1979 in the cases of Vijaya Textiles Mills vs Union of India and Real Honest Textiles vs Union of India held that the processes that the processing houses imparted to the Grey fabric did not amount to 'manufacture ' and did not attract ad valorem duty under tariff items 19 and 22, and that processors were liable to pay duty under tariff entry 68 only on the value added by the processing.
PG NO.
786 Following this judgment a large number of similar claims of processing houses were allowed by the High Court by its judgment dated 13.3.1979.
Civil Appeals 1685 to 1766 of 1979 are preferred by the Union of India challenging this view of the High Court.
The Bombay High Court on the contrary by its judgment,dated 16th June, 1983 in writ petition 1623 of 1979 New Shakti Dye Works Pvt. Ltd. vs Union of India and Anr.
took a view different from the one that commended itself to the Gujarat High Court.
Bombay High Court held that even under the concept of "manufacture ' envisaged in Section 2(f) even prior to its amendment, the operations carried on by the processors amounted to "manufacture" and that, at all events, the matter was placed beyond any controversy by the mending Act i.e. Act of 1980.
The aggrieved processors have come up in appeal by Special Leave in Civil Appeal No 6396 of 1983.
Some of the processors have, as stated earlier, filed writ petitions under Article 32 directly in this court challenging the impost on grounds that commended themselves for acceptance to the Gujarat High Court.
Before its amendment by the Amending Act Central Act VI of 1980) Section 2(f) of the Central Excise ACt, defined 'manufacture ' in its well accepted legal sense nomen juris and not with reference to an artificial and statutorily expanded import "2(f) 'manufacture ' includes any process, incidental or ancillary to the completion of a manufactured product; and (i) ] (ii) ] Omitted as unnecessary" The reasoning of the Gujarat High Court was on these lines "In the instant case, the excise duty claimed on the basis of the market value of the processed cotton fabrics or manmade fabrics cannot be levied because, assuming that process amounts to manufacture, all that they have done is to manufacture processed cloth, processed fabric, either cotton or man made and that not being a taxable event in the light of Section 3 read with section 2(d) of the Act and PG NO 787 Items 19 and 22 levy of excise duty on this basis was ultra vires and contrary to law . " This view, according to the Revenue, was incorrect and caused serious prejudice to the legitimate financial interests of the State.
Accordingly the President of India promulgated an Ordinance called the 'Central Excise and Salt and Additional Duties of Excise (Amendment) Ordinance ', 1979 (Central Ordinance No. 12 of 1979) sub sequently replaced by Central Act VI of 1980 of the same name with retrospective effect from 24.2.1979 amending Section 2(f) of the Central Excise Act and tariff items 19(1) and 22(1).
The relevant entries in the Schedule to the 'Additional Duties Act ' were also amended.
So far as amendment to Section 2(f) was concerned, Section of the Amending Act introduced three sub items in the definition of 'manufacture '.
Two of them are material for the present purpose: "(v) in relation to goods comprised in Item No. 19(1) of the First schedule, includes bleaching, mercerising, dyeing, printing, water proofing, rubberising.
shrink prcofing, organdie processing or any other process or any one or more of these processes. ' "(vii) in relation to goods comprised in Item No 22(1) of the First Schedule, includes bleaching.
dyeing, printing, shrink proofing, tentering, heat setting, crease resistant processing or any other process or any one or more of these processes.
" Similarly, amendments were affected by Section 3 of the Amendment Act which amended the original tariff items 19 and 22 by sub stituting the following provisions in their respective places: " 1 Cotton fabrics other than (i) embroidery in the piece.
strips or in motifs, and (ii) fabrics impregnated, coated or laminated with preparations of cellulose derivatives or of other artificial plastic materials (a) cotton fabrics.
not subjected to any process Twenty per cent ad valorem (b) cotton fabrics, subjected to the process of bleaching, mercerising, dyeing, printing, water proofing, rubberising, shrink proofing, organdie processing or any other process or any two or more of these processes.
Twenty per cent ad valorem PG NO 788 XXX XXX XXX" "22(1) Man made fabrics other than (i) embroidery in the piece, in strips or in motifs, (ii) fabrics impregnated, coated or laminated with preparations of cellulose derivatives or of other artificial plastic materials (a) man made fabrics, not subjected to any process: Twenty per cent ad valorem plus rupees five per square metre.
(b) man made fabrics, subjected to the process of bleaching, dyeing, printing, shrink proofing, tentering, heat setting, crease resistant processing or any other process or any two or more of these processes Twenty per cent ad valorem plus rupees five per square metre.
" Section 4 of the Amending Act amended the relevant entries in the Schedule to the Additional Duties Act.
Section 5(2) of the Amending Act provided: "5 Special provisions as to duties of excise on cotton fabrics, woollen fabrics, man made fabrics, etc during a certain past period and validation: (1). . . . (2) Any rule or notification or any action or thing made issued, taken or done or purporting to have been made.
issued, taken or done under a Central Act referred to in sub section (I) before the date of commencement of this Act, with respect to or in relation to the levy of duties of excise on (a) 'cloth", "cotton cloth" or, as the case may be.
cotton fabrics," (b) woollen fabrics", (c) "rayon or artificial silk fabrics" or, as the case may be, "man made fabrics", shall for all purposes be PG NO 789 deemed to be and to have always been, as validly and effectively made, issued taken or done as if the provisions of this section had been in force at all material times and, accordingly, notwithstanding any judgment, decree or order of any court, tribunal or other authority (a) all duties of excise levied, assessed or collected or purported to have been levied assessed or collected before the date of commencement of this Act, on (i) "cloth", "cotton cloth" and "cotton fabrics" subjected to any process, (ii) "woollen fabrics" subjected to any process, (iii) "rayon or artificial silk fabrics" and "man made fabrics" subjected to any process, under any such Central Act shall be deemed to be, and shall be deemed always to have been, as validly levied, assessed or collected as if the provisions of this section had been in force on and from the appointed day; (b) no suit or other proceeding shall be maintained or continued in any court for the refund of, and no enforcement shall be made by any court of any decree or order directing the refund of, any such duties of excise which have been collected and which would have been validly collected if the provisions of this section had been in force on and from the appointed day; (c) . . . . (d) . . . . " 8.
Indeed, the correctness of the judgment of the Gujarat High Court in the cases of Vijaya Textiles and Real Honest Textiles were considered by a Bench consisting of three judges of this court in Empire Industries vs Union of India, [1985]SUPP.
I SCR 292 by the judgment dated 6.5.1985, one of us (Sabyasachi Mukharji J ) speaking for the Court upheld the validity of the impost Vijaya Textiles Mills vs Union of India, (1979] 4 ELTJ 181, was held not to have been PG NO 790 decided correctly.
The view taken by the Bombay High Court in New Shakti Dye Works Pvt.
vs Union of India & Anr. was approved.
The pronouncement of this court in Empire Industries case otherwise covers, and is a full answer to, the contentions raised in this batch of cases.
However, the correctness of the view taken in the Empire Industries ' case on certain aspects was doubted by another Bench of this court and the matter was, accordingly, referred to a Bench of five judges.
It is, perhaps, necessary to refer to the order dated 9.12.1986 made by the Division Bench referring the cases to a larger bench.
What came before the Division Bench were WP 12183/1985 (M/s. Ujagar Prints vs Union of India & Ors.) and CA Nos.
1685 1766/1979 (Union of India & Ors.
vs Narendra Processing Industries & Ors.).
Two questions arose before and were examined by the Referring Bench.
The first was whether the processing of Grey fabric amounted to 'manufacture ' within the meaning of Section 2(f) as it stood prior to its amendment.
The second question was whether, even if such processing did amount to 'manufacture ' what should he the proper basis for determining the assessable value of the processed fabrics.
Both these questions had earlier been examined and answered in the Empire Industries case.
It is necessary to ascertain as to the precise points on which the Empire Industries ' decision was required to be reconsidered.
The Referring Bench did not disagree with the decision in Empire Industries ' case on the question whether processing ' did amount to 'manufacture '.
Indeed, the Referring Bench appears to have proceeded on the premise that the view taken in Empire Industries case on the point was the correct one.
Referring Bench said this on the point: ".
So far as the first question is concerned it was agitated before this Court in Empire Industries Ltd. v Union of India and this Court held that the processes of bleaching, mercerising, dyeing, printing.
water proofing.
carried out by the processors on job work basis amount to manufacture both under the Act as it stood prior to the amendment as also under the Act subsequent to the amendment and the processed fabrics are liable to be assessed to excise duty in the hands of what may be called jobbers '.
Since this was a decision given by a Bench of three Judges, the petitioners and appellants who are carrying on business of processing on job work basis could not contend that these PG NO 791 processes do not amount to manufacture and that the processed fabrics are not liable to be assessed to excise duty in the hands of the jobbers.
But, it was the second question which provoked serious controversy before us .
It is only on the second question touching valuation that it expressed some doubts.
Nevertheless, in par.
6 of the order, the Referring Bench made a further observation to this effect: ".
Of course, when.
,n se writ petitions and appeals are referred to the larger Bench it will be open to the larger Bench to consider not only the question of determination of the assessable value but also the other question, namely, whether processing of grey fabric by a processor on job work basis constitutes manufacture, because the judgment in Empire Industries case which has decided this question in favor of the revenue and against the processor is a judgment of a Bench of only three Judges and now the present writ petitions and appeals will be heard by a Bench of five Judges .
This is how the first question which is, otherwise concluded by the pronouncement in Empire Industries case is sought to be reagitated before us Out of deference to the learned counsel who vigorously argued this aspect at great length and we though we should examine the submission on this point also, though, the matter could by no means be considered to have been referred to a larger bench.
On the second question also the matter is within a short compass.
The Referring Bench clearly excluded any possibility of the assessable value being limited to the mere processing charges.
It contemplated the alternative possibilities of valuation thus: "It was common ground between the parties that the procedure followed by the Excise authorities was that the trader, who entrusted cotton or man made fabrics to the processor for processing on job work basis would give a declaration to the processor as to what would be the price at which he would be selling the processed goods in the market and that would be taken by the Excise authorities as the assessable value of the processed fabrics and excise duty would be charged to the processor on that basis.
This may be illustrated by giving the following example: PG NO 792 (i) Value of grey cloth in the hands of the processor: Rs. 20.00 (2) Value of job work done: Rs.5.00 Value of finished cloth returned to the trader ( 1+2): Rs.25.00 (3) Trader 's selling price inclusive of his selling profits, etc.: Rs.30.00 The assessable value in the case given in this example would be taken by the Excise authorities at Rs.30 which was the sale price of the trader . ' ' The view of the Referring Bench on the point was this: "We cannot accept the contention of the learned counsel on behalf of the petitioners and the appellants that the value of the grey cloth which is processed by the processor should not be included in the assessable value of the processed fabric since the grey cloth is one of the raw materials which goes into the manufacture of the processed fabric and the value of the processed fabric cannot be computed without including the value of the raw material That goes into its manufacture.
The assessable value of the processes fabric cannot therefore be limited merely to the value of the job work done but it must be determined by reference to the wholesale cash price of the processed fabric gate of the factory of the processor .
The Referring Bench was of the view that the correct assessable value should be: ". .
Thus in the example given above the assessable value of the processed fabric must be taken to be Rs. 20 + 5 that is Rs. 25 and the profit of Rs.5 which the trader may make by selling the processed fabric cannot be included in the assessable value.
The element of selling profit of the trader would be entirely an extraneous element and it cannot be taken into account for the purpose of determining the assessable value of the processee fabric which would comprise the value of the grey cloth and the PG NO 793 job work charges but exclude the profit at which the trader may sub sequently sell the processed fabric.
We have heard Sri A.K Sen, Sri Soli J. Sorabjee, Dr. Chitale and Sri Dholakia, learned Senior Advocates in the appeals and writ petitions preferred by the processors; and Sri K. Parasaran, learned Attorney General and Sri A.K. Ganguli, learned Senior Advocate for the Union of India and its authorities.
On the contentions urged, the points that fall for determination are: (a) (i) Whether the processes of Bleaching, Dyeing, Printing, Sizing, Shrink proofing etc.
carried on in respect of cotton or man made 'Grey fabric ' amount to 'manufacture ' for purposes, and within the meaning of Section 2(f) of the prior to the amendment of the said Section 2(f) by Section 2 of the Amending Act VI of 1980.
(a) (ii) Whether the decision in Empire Industries Limited & Ors.
vs Union of India, [1985] Suppl.
1 SCR 282 holding that these operations amount to a manufacture is wrongly decided and requires reconsideration.
(b) Whether the amendment brought about by the Amending Act of 1980 of Section 2(f) and to tariff items 19 and 22 of the Central Excise Act is ultra vires Entry 84 List I and, therefore, beyond the competence of the Union Parliament.
Whether, at all events, even if the expanded concept of manufacture introduced by the Amendment is beyond the scope of Entry 84 List l, whether the impost is, at all events, referable to and supportable by the residual Entry 97 of List I. (c) Whether, at all events, even if the amendments to Central Excise Act are valid, the levy under the Additional Duties Act is unsupportable and without the authority of law as there is no corresponding enlargement of the definition of 'manufacture ' under the Additional Duties Act.
(d) Whether the retrospective operation of the Amending Act is an unreasonable restriction on the fundamental right of the 'processors ' under Article 19(1)(g) of the Constitution.
PG NO 794 (e) Whether, even if the levy is justified, at all events, the computation of the assessable value of the processed Grey fabric on the basis of the whole sale cash selling price declared under classification list under Rule 173(b) is unjustified and illegal in respect of the assessable value of the processed Grey fabric done on job work basis.
Re: Contention (a) The essential condition to be satisfied to justify the levies, contend counsel, is that there should be 'manufacture ' of goods and in order that the concept of 'manufacture ' in Entry 84 List I is satisfied there should come into existence a new article with a distinctive character and use, as a result of the processing.
It is contended that nothing of the kind happens when 'Grey fabric ' is processed; it remains 'grey fabric '; no new article with any distinctive character emerges.
A number of authorities of this Court and of the High Courts were cited.
Particular reference was made to Union of India vs Delhi Cloth & General Mills, [1963] Supp.
( I) SCR 586 at 597; Tungabhadra Industries Ltd. vs Commercial Officer Kurnool, L 1961] ? SCR 14; Deputy Commissioner of Sales Tax vs Pio Food Packers, ; at 1275; Sterling Foods vs State of Karnataka, ; at 475 & 476; Kailash Nath vs State of U.P., 8 STC 358; Deputy Commissioner Sales Tax vs Sadasivan, 42 STC 201 (Kerala); Swastic Products Baroda vs Superintendent of Central Excise, Swan Bangle Stores v Assistant Sales Tax Officer, 25 STC 122 '(Allahabad); Stale of Andhra Pradesh vs Sri Durga Hardware Stores, 32 STC 322 (Andhra Pradesh) and Extrusion Process Pvt. Ltd. vs N.R. Jadhav, Superintendent of Central Excise, [19791 ELT 380 (Gujarat ). 13.
The following observations of this Court in Union of India vs Delhi Cloth and General Mills, AIR 1963 SC p. 791 at 794 were emphasised: "According to the learned counsel "manufacture is complete as soon as by the application of one or more processes.
the raw material undergoes some change.
To say this is to equate "processing to manufacture and for this we can find no warrant in law.
The word "manufacture" used as a verb is generally understood to mean as "bringing into existence a new substance ' and does not mean merely to produce some change in a substance.
however minor in consequence the change may be. ' PG NO 795 These observations in Health & Milligan Manufacturing Company, the Sherwin Williams Company, etc.
vs J.H. Worst, Director of the North Dakofa Government Agricultural Experiment Station which were referred to with approval by this Court in the case of Pio Food Packers ' supra, was relied upon: "At some point processing and manufacturing will merge.
But where the commodity retains a continuing substantial identity through the processing stage we cannot say that it has been "manufactured".
(Emphasis Supplied) The following observations of Bhagwati J. in Pio Food Packers case were cited: " . . manufacture is the end result of one or more processes through which the original commodity is made to pass .
Where there is no essential difference in identity between the original commodity and the processed article it is not possible to say that in one commodity has been consumed in the manufacture of another.
Although it has undergone a degree of processing, it MUSt be regarded as still retaining its original identity." (Emphasis Supplied) The observations of this ( 'court in Kailash Nath vs State of U. P., 3 STC 358 made while repelling the contention of the revenue urged in that case that when cloth is printed and coloured it gets transformed to sorne other material and that therefore when such printed and coloured cloth is exported what was exported was not the same cloth and that by such printing and dyeing the original cloth got transformed into different material were relied on: The cloth exported is the same as the cloth sold with this variation or difference that the colour has change by printing and processing.
In view which we take the cloth exported is the same as the cloth sold by the petitioners, there can be no question above the exemption clause not applying to it .
(Emphasis Supplied) The following passage in the permanent Edition of 'Words and Phrases ' referred to with approval in Delhi Cloth and General Mills ' AIR 1963 SCp.
791 at 795 case was referred to: PG NO 796 "Manufacture implies a change, but every change is not manufacture and yet every change of an article is the result of treatment, labour and manipulation.
But something more is necessary and there must be transformation; a new and different article must emerge having a distinctive name, character or use.
" Further, learned counsel placed reliance upon Tungabhadra Industries ' case where it was held that ground nut oil after the process of hydrogenation which improved its keeping qualities and shelf life yet remained basically ground nut oil and that the quality of the oil had been improved by the processes it was subjected to, did not detract from its continuing identity as ground nut oil.
The change brought about in the oil, it was observed by this Court, rendered it more acceptable to the customers by improving its quality, but did not render the oil a commodity other than ground oil which still continued to be "groundnut oil" notwithstanding the processing which was merely for the purpose of rendering the oil more stable thus improving its keeping qualities for those who desire to consume ground nut oil.
Likewise the processing such as bleaching, dyeing.
printing, finishing etc.
, it was urged, merely improved the quality of Grey fabric and rendered it more acceptable to the customers while not shedding its basic character as 'cotton fabric ' or 'man made fabric '.
It was also urged that the affidavits filed by person engaged in and familiar with the textile trade indicated that the finished fabric was not a commercially different commodity.
We have carefully considered these submissions.
In the Empire Industries case, this court considered similar submissions in an almost identical context and situation.
Learned judges referred to the observations of this Court in Commissioner of Sales Tax UP (Lucknow) vs Harbilas Rai, 21 STC 17 in which the view expressed by the Division Bench of the Madhya Pradesh High Court in Hiralal Jitmal vs Commissioner of Income tax, 8 STC 325 at 326 was held supportable on the reasoning that: " .
The decsion of the Madhya Pradesh High Court might perhaps be justified on the ground that a printed or dyed cloth is commercially different article from the cloth which is purchased and printed or dyed." PG NO 797 The Division Bench also referred to, with approval, the decision of the Bombay High Court in Kores (India) Limited vs Union of India and Ors., The Division Bench noticed the question arising for decision: "Fabric itself means woven materials.
It was contended that processing the manufactured fabric does not bring into existence any new woven material but the question is: does new and different goods emerge having distinctive name, use and character?" Answering, the Bench said: "It appears in the light of the several decisions and on the construction of the expression that the process of bleaching, dyeing and printing etymologically also means manufacturing processes . ' 15.
It is strenuously urged for the processors that the view taken by the Division Bench in the Empire Industries case suffers from fallacies both of reasoning and conclusion and requires to be reconsidered.
The prevalent and generally accepted test to ascertain that there is 'manufacture ' is whether the change or the series of changes brought about by the application of processes take the commodity to the point where, commercially, it can no longer be regarded as the original commodity but is, instead, recognised as a distinct and new article that has emerged as a result of the processes.
The principles are clear.
But difficulties arise in their application in individual cases.
There might be border line case where either conclusion with equal justification be reached.
Insistence on any sharp or intrinsic distinction between processing ' and 'manufacture, we are afraid, results in an over simplification of both and tends to blur their interdependence in cases such as the present one.
The correctness of the view in the Empire Industries case cannot be tested in the light of material in the form of affidavit expressing the opinion of persons said to be engaged in or connected with the textile trade as to the commercial identity of the commodities before and after the processing placed before the court in a sub sequent case.
These opinions are, of course, relevant and would be amongst the various factors to be taken into account in deciding the question.
PG NO.798 16.
On a consideration of the matter, we are persuaded to think that the view taken in the Empire Industries case that 'Grey fabric ' after they undergo the various processes of bleaching, dyeing, sizing printing, finishing etc.
emerges as a commercially different commodity with its own price structure, custom and other commercial incidents and that there was in that sense a 'manufacture ' within the meaning of Section 2(f), even as unamended, is an eminently plausible view and is not shown to suffer from any fallacy.
Indeed, on this point the Referring bench did not disagree or have any reservations either.
It is to be noticed that if the amending law is valid, this aspect becomes academic.
We think, we should reject Contention (a).
Re: Contention (b) The concept of manufacture ' embodied in Entry 84 of List I, it is urged, should be construed not in an artificial sense, but in its recognised legal sense and so construed artificial dimensions sought to be imparted to it by the amendment would be impermissible.
Learned counsel drew attention to the following observations of this Court in Diamond Sugar Mills vs State of UP, ; at 248. ". . we have, on the one hand, to bear in mind the salutary rule that words conferring the right of legislation should be interpreted liberally and the powers conferred should be given the widest amplitude; on the other hand we have to guard ourselves against extending the meaning of the words beyond their reasonable connotation, in an anxiety to preserve the power of the legislature.
(Emphasis supplied) Though entries in the legislative lists are to be construed liberally and the widest possible amplitude given to them, however, no artificial or arbitrary extensions of the meaning of the words in the entry.
it is urged, are permissible.
It is submitted the concept manufacture in Entry 84 List I has a well accepted legal connotation and in construing the entry the precise connotation which it possesses and conveys in law must be kept in mind.
There is in law no 'manufacture ' unless as a result of the process a new and commercially distinct product with distinct use emerges.
The idea of manufacture might imply change, but every change is not necessarily manufacture.
It is.
accordingly, contended that the amendment which seeks to equate "processing "with "manufacture" is beyond the scope of Entry 84 List I. PG NO.
799 18.
In the Empire Industries ' case a similar argument was urged but without success.
Learned Judges were persuaded to the view that such processes which were referred to by the amendment were not so alien or foreign to the concept of 'manufacture ' that they could not come within that concept.
Entries to the legislative lists, it must be recalled, are not sources of the legislative power but are merely topics or fields of legislation and must receive a liberal construction inspired by a broad and generous spirit and not in a narrow pedantic sense.
The expression "with respect to" in Article 246 brings in the doctrine of "Pith and Substance" in the understanding of the exertion of the legislative power and wherever the question of legislative competence is raised the test is whether the legislation, looked at as a whole, is substantially 'with respect to ' the particular topic of legislation.
If the legislation has a substantial and not merely a remote connection with the entry, the matter may well be taken to be legislation on the topic.
In Empire Industries case, it was held: "As has been noted processes of the type which have been incorporated by the impugned Act were not so alien or foreign to the concept of "manufacture ' that these could not come within that concept.
At all events, even il the impost on process is not one under Entry 84, list l, but is an impost on 'processing ' distinct from "manufacture" the levy could yet be supported by Entry '97.
List l, even without the aid of the wider principle recognised and adopted in Dhillon 's case AIR 1972 SC l061.
It was, however, contended that the levy of tax on an activity which cannot reasonably be regarded as an activity of 'manufacture ' cannot be described as a levy of duties of excise under Entry 84, List I.
If it is a non descript tax under Entry 97, the Parliament, it is urged, has not chosen1 to enact any such law in this case.
The charging section does not, it is urged.
bring such a taxable event to charge.
This argument was noticed in Empire Industries case thus: " .
It was then argued that if the legislation was sought to be defended on the ground that it is a tax on activity like processing and would be covered by the powers enumerated under Entry 97 of List I of the Seventh Schedule PG NO 800 then it was submitted that there was no charging section for such an activity and as such the charge must fail, and there cannot be any levy . " The contention was rejected holding: ".
This argument proceeds on an entire misconception.
The charging section is the charging section 3 of the .
It stipulates the levy and charge of duty of excise on all excisable goods produced or manufactured.
"Manufactured" under the Act after the amendment would be the 'manufacture ' as amended in section 2(f) and Tariff item 19 I and 22 and the charge would be on that basis.
Therefore it is difficult to appreciate the argument that the levy would fail as there will be no appropriate charging section or machinery for effectuating the levy on the activity like the method of processing even if such an activity can be justified under Entry 97 of List l of Seventh Schedule.
We are, therefore, of the opinion that there is no substance in this contention We respectfully agree.
If a legislation purporting to be under a particular legislative entry is assailed for lack of legislative competence, the State can seek to support it on the basis of any other entry within the legislative competence of the legislature.
It is not necessary for the State to show that the legislature, in enacting the law, consciously applied its mind to the source of its own competence.
Competence to legislate flows from Article 245, 246, and the other Articles following, in Part XI of the Constitution.
In defending the validity of a law questioned on ground of legislative incompetence, the State can always show that the law was supportable under any othe entry within the competence of the legislature.
Indeed in supporting a legislation sustenance could be drawn and had from a number of entries.
The legislation could be a composite legislation drawing upon several entries.
Such a "rag bag" legislation is particularly familiar in taxation.
Bennion in his "Statutory Interpretation" (at page 644) refers such a composite legislation, though the observations must be under stood in the context of the supremacy of the British Parliament and one of unlimited powers and which is, under no inhibitions unlike a federal polity, of PG NO 801 distribution of legislative powers.
Learned author refers to: " 'Ragbag ' Acts: Some Acts are 'rag bag ' Acts, covering many areas.
The annual Finance Act is an extreme example.
It is divided into Parts, dealing respectively with customs and excise duty, value added tax, income tax, capital gains tax, stamp duty, capital transfer tax and so on.
Even within a Part of a Finance Act the various provisions havnuite different aims. " In Hari Krishna Bhargav vs Union of India and Anr., ; , this Court said: ". .
There is no prohibition against the Parliament enacting in a single statute, matters which call for the exercise of power under two or more entries in List I of the Seventh Schedule.
Illustrations of such legislation are not wanting in our statute book, and the fact that one of such entries is the residuary entry does not also attract any disability . " 21.
So far as, the exclusive competence of the Union Parliament to legislate is concerned all that is necessary is to find out whether the particular topic of legislation is in List II or List III.
If it is not, it is not necessary to go any further or search for the field in List I. Union Parliament has exclusive power to legislate upon that topic or field.
Of course, it has concurrent power also in respect of the subjects in List III.
Contention (b) is, therefore, insubstantial.
Re: Contention (c) This pertains to the validity of levy of additional duties.
The contention proceeds on the pre supposition that processing does not amount to 'manufacture ' under Section 3(1) of the Additional Duties Act.
If it does, as has been held on point (a), this argument does not survive at all.
The point, however, sought to be put across is that, even if the concept of 'manufacture ' for purposes of levy of excise duty under the 'Central Excise Act ' is validly expanded or that a tax on processing is, otherwise, PG NO 802 supportable under Entry 97(1), the position under the 'Additional Duties Act ' ;s quite different.
The 'Additional Duties Act ' does not expressly invoke or attract the definition of 'Manufacture ' in Section 2(f) of the 'Central Excise Act '; nor does the 'Additional Duties Act ' itself contain a definition of 'manufacture ' in the broad terms in which Section 2(f), as amended, contains.
The result is, it is urged, that the ordinary legal connotation of 'manufacture ', contained in the charging Section 3(1) of the 'Additional Duties Act ' can alone support the levy.
It is not, it is urged, permissible to import the artificial and expanded definition of 'manufacture ' containing in Section 2(f), as amended, into Section 3(1) of the Additional Duties Act.
The following observations of this court in Pandit Ram Narain vs The State of Uttar Pradesh and Ors.
, l1956] SCR 664 at 673 are pressed into service: ". .It was rightly pointed out that it is no sound principle of construction to interpret expressions used in one Act with reference to their use in another Act . " Again, the observations in Macbeth & Co. vs Chisten, at 224 referred to with approval by this court in Commissioner of Sales Tax, Madhya Pradesh vs Jaswant Singh Charan Singh, ; at 725 26 were relied upon: ". .It would be a new terror in the construction Acts of Parliament if we were required to limit a word to an unnatural sense because in some Act which is not incorporated or referred to such an interpretation is given to it for the purposes of that Act alone '. ." It is further contended that a mere amendment of the schedules to the 'Additional Duties Act ' purported by Section 4 of the Amending Act VI of 1980 would be inadequate to serve the purpose of a valid levy on the activity of processing.
It was also urged that Section 3(3) of the 'Additional Duties Act ' which provides that the provisions of 'Central Excise Act ' and the rules made thereunder shall, so far as may be, apply in relation to the 'levy and collection" of the Additional Duties would not also enable the wider definition of 'manufacture ' in Section 2(f) to be imported into Section 3(1) of the Additional Duties Act to justify levy of Additional Duties on 'processing '.
The contention was neatly and attractively presented and appeared, at first blush, to merit a serious PG NO 803 consideration of the validity of the levy of additional duties.
But on a closer examination of the concept of, and the scheme for, levy and collection of the additional duties and the specific statutory provisions, the tensile strength of the argument breaks down.
There are at least two circumstances which render the definition of 'manufacture ' under Section 2(f) attracted to the additional levies.
Section 3(3) of the Additional Duties Act provides: ". .Ievy and collection of the additional duties as they apply in relation to the levy and collection of the duties of excise on the goods specified in sub section (l) .
" It is plain that the statute expressly makes the provision in the "Central Excise Act" apply in relation to 'levy and collection ' of the additional duties.
The question is whether this provision is sufficient to attract Section 2(f) of the main Act as amended.
This, in turn, depends upon what the expression "levy" connotes and carries with it.
The term 'levy ' it is held, is an expression of wide import.
It includes both imposition of a tax as well as its quantification and assessment.
In Assistant Collector of Central Excise, Calcutta Division vs National Tobacco Co. of India Ltd., [ 1973] I SCR 822 this Court held: "The term "levy" appears to us to be wider in its import than the term "assessment".
It may include both of a tax as well as assessment.
The term imposition" is generally used for the levy of a tax or duty by legislative provision indicating the subject matter of the tax and the rates at which it has to he taxed . . 24.
That apart, Section 4 of Amending Act VI of 1980 has amended the relevant items in the schedule to the Additional Duties Act.
The expressions 'produce ' or 'manufacture ' in Section 3(1) of the Additional Duties Act must be read along with the entries in the schedules.
In Att.
Gen vs Lamplough, , 229 it is observed: 'A schedule in an Act is a mere question of drafting, a mere question of words.
The schedule is as much a part of the statute, and is as much an enactment, as any other part.
804 Maxwell says (in Interpretation of Statutes 11th ed.
p. 156): " . if an enactment in a schedule contradicts an earlier clause it pevails against it.
" Bennion (in Bennion 's Statutory Interpretation, p. 568 569) referring to the place of schedules in statutes observes: "The Schedule is an extension of the section which induces it.
Material is put into a Schedule because it is too lengthy or detailed to be conveniently accommodation in a section, . ." "A Schedule must be attached to the body of the Act by words in one of the sections (known as inducing words].
It was formerly the practice for the inducing words to say that the Schedule was to be construed and have effect as part of the Act.
(See, e.g. Ballot Act 1872 section 28.) This is no longer done, being regarded as unnecessary.
If by mischance the inducing words were omitted, the Schedule would still form part of the Act if that was the apparent intention. " " .
The schedule is as much a part of the statute, and is as much an enactment, as any other par.
(See also.
to the like effect, Flower Freight C o. Ltd. vs Hammond [19633] 1 QB 275; R vs Legal Aid Committee No. I [London] Legal Aid Area.
ex p. Rondel, and metropolitan Police Commr.
vs Curran.
, What appears.
therefore, clear is that what applies to the main levy, applies to the additional duties as well, we find no substance in Contention [c] either.
Re: Contention [d] There is really no substance in the grievance that the retroactivity imparted to the amendments is violative of Article 19 [l] (g).
A Competent legislature can always validate a law which has been declared by courts to be invalid, provided the infirmities and vitiating infactors noticed in the declaratory judgment are removed or cured.
Such a validating law can also be made retrospective.
If in the light of such validating and curative exercise made by the Legislature granting legislative competence the earlier judgment becomes irrelevant and unenforceable, that cannot PG NO 805 be called an impermissible legislative overruling of the judicial decision.
All that the legislature does is to usher in a valid law with retrospective effect in the light of which earlier judgment becomes irrelevant.
(See Sri Prithvi Cotton Mills Ltd. & Anr.
vs Broach Borough Municipality & Ors., Such legislative expedience of validation of laws is of particular significance and utility and is quite often applied, in taxing statutes.
It is necessary that the legislature should be able to cure defects in statutes.
No individual can acquire a vested right from a defect in a statute and seek a windfall from the legislature 's mistakes.
Validity of legislations retroactively curing defects in taxing statutes is well recognised and courts, except under extraordinary circumstances, would be reluctant to override the legislative judgment as to the need for and wisdom of the retrospective legislation.
In Empire Industries Limited & Ors.
vs Union of India & Ors.
Etc., [ 19851 l Supp. 292 at 327 this court observed: ". . not only because of the paramount governmental interest in obtaining adequate revenues, but also because taxes are not in the nature of a penalty or a contractual obligation but rather a means of apportioning the costs of government amongst those who benefit from it".
In testing whether a retrospective imposition of a tax operates so harshly as to violate fundamental rights under Article l9(1)(g), the factors considered relevant include the context in which retroactivity was contemplated such as whether the law is one of validation of taxing statute struck down by courts for certain defects; the period of such retroactivity, and the degree and extent of any unforeseen or unforseable financial burden imposed for the past period etc.
Having regard to all the circumstances of the present case, this court in Empire Industries ' case held that the retroactivity of the Amending provisions was not such as to incur any infirmity under Article 19( l)(g).
We arc in respectful agreement with that view.
There is no merit in contention (d) either.
Re: Contention (e) This concerns the question of the correctness of the determination of the assessable value.
The processors say that they have filed classification lists under rule 173 B PG NO 806 of the Central Excises and Salt Rules 1944 as they had no other choice and that if the proper principles of determination of the assessable value do not legally justify the consequences flowing from the classification, it is open to them to contend against the validity of the determination and they are not estopped from doing so.
Duties of excise are imposed on the production or manufacture of goods and are levied upon the manufacturer or the producer in respect of the commodity taxed.
The question whether the producer or the manufacturer is or is not the owner of the goods is not determinative of the liability.
The essential and conceptual nature of the tax is to be kept clearly distinguished from both the extent of the power to impose and the stage at which the tax is imposed.
Though the levy is on the production or manufacture of the goods, the imposition of the duty could be at the stage which the law considers most covenient to impose as long as a rational relationship with the nature of the tax is maintained.
The processors contend that, the assessable value could only be the job work charges received by them for the processing of 'Grey fabric ' and cannot be the selling price at which the customer who entrusts the Grey fabric for processing ultimately sells it in the market.
Such a sale price, it is said, would, quite painly.
include the value of the Grey fabric, the processing charges and also the selling profit of the customer.
Even in regard to the price of the Grey fabric itself which comes to the processing houses in fully manufactured condition would again depend upon how many hands it has changed before reaching the particular customer who brings them for processing.
The determination of assessable value at the actual or hypothetical selling price of goods of like nature and quality in the wholesale market would include the post manufacturing profits of the trader which cannot legitimately be regarded as part of the assessable value.
This contention was considered in detail in Empire Industries case [ 1985] 1 Supp.
SCR 293 at 327 wherein it was held: "When the textile fabrics are subjected to the processes like bleaching, dyeing and printing etc.
by independent processes, whether on their own account or on job charges basis, the value of the purposes of assessment under section 4 of the Central Excise Act will not be the processing charges alone but the intrinsic value of the processed fabrics which is the price at which such fabrics are sold PG NO 807 for the first time in the wholesale market.
That is the effect of section 4 of the Act.
The value would naturally include the value of grey fabrics supplied to the independent processors for the processing.
However, excise duty, if any, paid on the grey fabrics will be given pro forma credit to the independent processors to be utilised for the payment on the processed fabrics in accordance with the Rules 56A or 96D of the Central Excise Rules, as the case may be." Even the Referring Bench did not doubt the correctness of the inclusion in the assessable value the cost of the Grey fabric and the processing charges.
The Referring Bench held: "We cannot accept the contention of the learned counsel on behalf of the petitioners and the appellants that the value of the grey cloth which is processed by the processor should not be included in the assessable value of the processed fabric . " 29.
In the argument, as presented, that the assessable value would include what is referred to as the "post manufacture profits", there is an obvious fallacy.
In Atic Industries Ltd. vs H.H. Dave, Asstt.
Collector of Central Excise and Ors., [ 1975] 3 SCR p. 563 Bhagwati J. speaking for the Court said: "The value of the goods for the purpose of excise must take into account only the manufacturing cost and the manufacturing profit and it must not be loaded with post manufacturing cost or profit arising from post manufacturing operation . . " " .
It may be noted that wholesale market in a particular type of goods may be in several tiers and the goods may reach the consumer after a series of wholesale transactions.
In fact the more common and less expensive the goods, there would be greater possibility of more than one tier of wholesale transactions. ." " .
If excise were levied on the basis of second or subsequent wholesale price, it would load the price with a post manufacturing element, namely, selling cost and selling profit of the wholesale dealer.
That would be plainly contrary to the true nature of excise as explained in the PG NO 808 Voltas ' case (supra).
Secondly, this would also violate the concept of the factory gate sale which is the basis of determination of value of the goods for the purpose of excise. " "There can, therefore, be no doubt that where a manufacturer sells the goods manufactured by him in wholesale to a wholesale dealer at arms length and in the usual course of business, the wholesale cash price charged by him to the wholesale dealer less trade discount would represent the value of the goods for the purpose of assessment of excise . " Explaining what really is the idea of "post manufacturing profit" referred to in Atic 's case this court in Union of India & Ors.
v Bombay Tyre International Ltd. etc.
, [ 1984] l SCR, p. 347 at 375 aid: ". .When it refers to post manufacturing expenses and post manufacturing profit arising from post manufacturing operations, it clearly intends to refer not to the expenses and profits pertaining to the sale transactions effected by the manufacturer but to those pertaining to the subsequent sale transactions effected by the wholesale buyers in favour of other dealers." (Emphasis Supplied) The principles for the determination of assessable value are laid down under section 4 of the Act.
Section 4 of the Central Excise Act ' envisages that the value of an article for the purposes of duty shall be deemed to be; (a) The wholesale cash price for which an article of the like kind and quality was sold or was capable of being sold at the time of removal of the article from the factory or premises of manufacture for delivery at the place of manufacture or; (b) Where such price was not ascertainable, the price at which an article of the like kind and quality was sold or capable of being sold at the time of removal of the article chargeable with duty.
The nature of the excise duty is not to he confused with, or tested with reference to, the measure by which the tax is assessed.
The standard adopted as the measure of assessment may throw light on the nature of the levy but is not determinative of it.
When a statutory measure for assessment of the tax is contemplated, it "need not contour PG NO 809 along the lines which spell out the levy itself.", and "a broader based standard of reference may be adopted for the purposes of determining the measure of the levy.
" Any statutory standard which maintains a nexus with the essential character of the levy can be regarded as a valid basis for assessing the measure of the tax.
In the case of processing houses, they become liable to pay excise duty not because they are the owners of the goods but because they cause the 'manufacture ' of the goods.
The dimensions of the Section 4(1)(a) and (b) are fully explored in number of decisions of this Court.
Reference may be made to the case of Bombay Tyres International.
Consistent with the provisions of Section 4 and the Central Excise (Valuation) Rules, 1975, framed under Section 37 of the Act it cannot be said that the assessable value of the processed fabric should comprise only of the processing charges.
This extreme contention if accepted, would lead to and create more problems than it is supposed to solve; and produce situations which could only be characterised as anomalous.
The incidence of the levy should be uniform, uninfluenced by fortuitous considerations.
The method of determination of the assessable value suggested by the processors would lead to the untenable position that while in one class of Grey fabric processed by the same processor on bailment, the assessable value would have to be determined differently dependent upon the consideration that the processing house had carried out the processing operations on job work basis, in the other class of cases, as it not unoften happens, the goods would have to be valued differently only for the reason the same processing house has itself purchased the Grey fabric and carried out the processing operations on its own.
It is to solve the problem arising out of the circumstances that goods owned by one person are "manufacture ' by another that at a certain stage under rule 174A, a notification was issued by the Central Government exempting from the operation of the rule 174A: ". every manufacturer who gets his goods manufactured on his account from any other person, subject to the conditions that the said manufacturer authorises the person, who actually manufactures or fabricates the said goods to comply with all procedural formalities under ( l of 1944) and the rules made thereunder, in respect of the goods manufactured on behalf PG NO 810 of the said manufacturer and, in order to enable the determination of value of the said goods under section 4 of the said Act, to furnish information relating to the price at which the said manufacturer is selling the said goods and the person so authorised agrees to discharge all liabilities under the said Act and the rules made thereunder.
On a consideration of the matter, the view taken in the matter in the Empire Industries case does not call for reconsideration.
Contention (e) is also held and answered against the petitioner.
In the result the appeals preferred by the Union of India are allowed and the Judgment of the Gujarat High Court under appeal is set aside.
The appeals preferred by the processors against the judgment of the Bombay High Court and the writ petitions filed by the processors directly in this court are dismissed.
There will, however, be no orders as to costs in the appeals and the writ petitions.
The Union of India and its authorities shall be entitled to recover the amounts due by way of arrears of excise duty and shall be entitled to take necessary steps to seek the enforcement of the bank guarantees, if any, for the recovery of the arrears.
SABYASACHI MUKHARJI, J.
I have had the advantage of reading in draft the judgment proposed to be delivered by my learned brother Venkatachaliah, J. I respectfully agree with him.
There is, however, one aspect of the matter in respect of which I would like to say a few words.
Contention (e) as noted by my learned brother in his judgment deals with the determination of the assessable value.
The processors in the cases before us say that they have filed classification lists under rule 173B of the Central Excises and Salt Rules, 1944 as they had no other choice and that if the proper principles of determination of the assessable value do not legally justify the consequences flowing from the classification it is open to them to contend against the validity of the determination and they are nOt estopped from doing so.
The processors are right in contending that the true principle should be followed in determining the assessable value.
Then what is the true principle? Section 4 of the Act deals with the valuation of excisable goods for purposes of charging of duty of excise.
Section 4 [l] (a) of the Act stipulates that the value should be subject to other provisions of the Section the normal price thereof, that is to say, the price at which such goods are ordinarily sold by the assessee to a buyer in the course of wholesale trade for delivery at the time and place of removal, where the buyer PG NO 811 is not a related person and the price is the sole consideration for the sale.
For the present purpose, we are not concerned with the provisos nor the situation where the normal price of goods is not ascertainable for any reason.
In Empire Industries Limited & Others etc.
vs Union of India and Others etc.
, L , it was held that where for the purpose of calculating assessable value, a notional sum is laid down by the legislature to be arrived at one a certain basis, it is not permissible for the courts to engraft into it any other deduction or allowance or addition or read it down on the score that unless the said deduction or allowance or addition is authorised elsewhere in the Act or in the Rules.
A statutory charge should be measured by the method of its own computation as laid down in the statute and not by any other method of computation.
The circumstances that thereby the benefit of any exemption granted by the legislation may be lost and that in some cases hardship might result are not matters which would influence courts on the construction of the statute.
A tax payer is entitled only to such benefit as is granted by the legislature.
It was emphasised that the taxation under the Act is the rule and the benefit and exemption, the exception.
And it was held that there was no hardship in these cases.
It was further reiterated that when the textile fabrics are subjected to the processes like bleaching, dyeing and printing etc.
by independent processes, whether on their own account or on job charges basis, the value for the purposes of assessment under section 4 of the Central Excise Act will not be the processing charge alone but the intrinsic value of the processed fabrics which is the price at which such fabrics are sold for the first time in the wholesale market.
That is the effect of section 4 of the Act.
The value would naturally include the value of grey fabrics supplied to the independent processors for the processing.
However excise duty, if any, paid on the grey fabrics will be given proforma credit to the independent processors to be utilised for the payment on the processed fabrics in accordance with the relevant rules.
In M/s. Ujagar Prints vs Union of India, [1986] Suppl.
S.C.C. 652 Bhagwati C.J. held that the processes of bleaching, dyeing, printing, mercerising etc.
carried on by a processor on job work basis in respect of grey cotton fabrics and manmade fabrics belonging to the customer and entrusted by him for processing amount to manufacture with the meaning of the Act prior to its amendment so as to attract levy of excise duty on the processed fabrics and in any event, after the Amendment Act, these processes amount to manufacture and excise duty is leviable on the processed fabrics.
The learned Chief Justice also dealt with the other PG NO 812 question, namely, what is the value of the processed fabrics liable to be assessed.
Referring to the aforesaid decision of the Empire Industries, (supra), he illustrated the problem by reference to the example set out in the judgment (Page 654 of the report at para 2).
In that example illustrated by him the value of the grey cloth in the hands of the processor was Rs.20.
The value of the job work was Rs.5.
B Trader 's selling price inclusive of his selling profits etc.
was put at Rs.30.
Bhagwati C.J. at page 655 of the report observed that the assessable value of the processed fabric must obviously be taken to he the wholesale cash price of the processed fabric at the factory gate that is when the processed fabric leaves the factory of the processor and it cannot possibly include the selling profit of the trader who subsequently sells the processed fabrics.
The learned Chief Justice reiterated that it is at the point when the processed fabric leaves the factory of the processor that its assessable value has to be determined and that assessable value cannot include the selling profit of the trader.
Empire Industries, (supra) did not say that the post manufacturing profits or post manufacturing costs could be included in the assessable value of the processed fabric.
If the trader who entrusted cotton or man made fabrics to the processor for processing on job work basis, would give a declaration to the processor as to what would be the price at which he would be selling the processed goods in the market that would be taken by the Excise authorities as the assessable value of the processed fabrics and excise duty would be charged to the processor on that basis.
Where a manufacturer sells the goods manufactured by him in wholesale to a wholesale dealer at the arms length and in the usual course of business, the wholesale cash price charged by him to the wholesale dealer less trade discount would represent the value of the goods for the purpose of assessment of excise But the price received by the wholesale dealer who purchases the goods from the manufacturer and in his turn sells the same in wholesale to other dealer, would be irrelevant for determination of the value of the goods and the goods would not be charged on that basis.
This has been explained in Atic Industries Ltd. vs H.H. Dave.
Asstt.
Collector of Central Excise and Ors., [ 1975] 3 S.C.R .
This has also been explained in Union of India & Ors.
vs Bombay Tyre International Ltd. etc.
[1984] l S.C.R. 347 at 375.
It has to he reiterated that the valuation must be on the basis of wholesale cash price at the time when the manufactured goods enter into the open market.
See in this connection the ratio of this Court in Union of India and Ors.
vs Cibatul Ltd., [ 1985] Suppl 3 SCR 95 and the Joint Secy.
to the Govt of India & Ors.
vs Food Specialities Ltd., 11985] Suppl 3 SCR 165.
It was emphasised in Union of India & Ors.
vs Cibatul, (supra) that the value of the trade marks was not be taken into account PG NO 813 in computing the assessable value as the affixation of the trade marks of a particular brand was extraneous to manufacture.
The values of such extraneous or additional factors do not enter into the computation of assessable value and as such the wholesale cash price at which the goods enter into the wholesale market would be independent of the value of the trade marks.
So that cannot be taken into the computation of the assessable value.
Similarly, in the case of Joint Secretary to the Govt.
of India and others vs Food Specialities Ltd., (supra), it was held that the value of Nestle 's trade marks could not be to the wholesale price charged by the dealer to Nestle 's for the purpose of computing the value of the goods manufactured.
The goods in both these cases were manufactured independently of the addition of the trade marks.
The price thereof at the factory gate was not after taking into account the value of the trade marks.
If that was the position the value of the trade marks cannot be added to the wholesale cash price charged by the dealer.
Affixation of trade marks for enhancement of the value thereof is extraneous to and independent of the process of manufacture.
The charges for the same are not part of the assessable value and cannot enter into computation of the whole sail cash price on the basis of which excise duties ale to be levied.
In the aforesaid view of the law and tor the reasons mentioned by my learned brother, l agree with his answer to this contention.
The assessable value would.
therefore.
include the value of the grey cloth in the hands of the processors plus the value of the job work done plus manufacturing expenses whatever would be included in the price at the factory gate.
The correct assessable value must be the value of the fabric at the factory gate, that is to say, the value at which manufactured goods leave the factory and enter the main stream.
One more aspect will have to be reiterated.
Computation of the assessable value is one question and as to who would be liable for the same is another.
Duties of excise are imposed on production or the manufacture of goods and are levied upon the manufacturer or the producer in accordance with the relevant rules.
This is quite independent of the ownership of goods.
It is, therefore.
necessary to reiterate that the value for the assessment under section of the Act will not be the processing charge alone but the intrinsic value of the processed fabrics which is the price at which the fabrics are sold for the first time in the wholesale market.
The rules are clear on the computation of that value.
If the valuation is made according to the rules as adumbrated in Empire Industries (supra) and as clarified by my learned brother in this judgment no difficulty should arise.
PG NO 814 RANGANATHAN, J. I agree but I should like to add a few words on two of the points argued before us.
First, I should like to clarify the nature of the decision in Hindustan Milkfood Manufacturers Ltd. vs Union, (the HMM case) (to which I was a party), since learned counsel for the petitioners sought to rely on my judgment in that case as supporting his contention that the Union cannot seek to uphold the amendment presently in question by reference to Entry 97 of List I in the Seventh Schedule to the Constitution.
In that case, the Delhi High Court was concerned with the interpretation of the amendment to section 4 of the by Act 22 of 1975.
The pre amendment section postulated the determination of excise duty on the basis of the wholesale cash price of the excisable goods at "the factory gate"; and, an explanation provided that, in determining this price, no abatement or deduction shall be allowed in respect of trade discount and the amount of duty payable at the time of the removal of the goods from the factory.
The post amendment section made certain changes in the concept of sale at the factory gate by excluding therefrom sales effected in favour of a category of persons defined as "related persons" with which we are not concerned here.
The amendment also defined the assessable "value" so as to include packing charges but to exclude the amount of excise duty, sales tax and other taxes as well as trade discount.
The question was whether this amendment precluded the deduction, from the wholesale factory gate price, of post manufacturing expenses and profits.
The question had been answered by several High Courts in the negative principally on the ground that the duty sought to be levied under the Act was an excise duty, the very nature of which required a proximate connection with production or manufacture and that what had passed beyond this region and entered the domain of sale could not pass as excise duty.
Counsel for the Union of lndia.
with a view to overcome these decisions, had contended that since Entry 97 of List I in the Seventh Schedule to the Constitution enabled Parliament to enact a legislation even beyond the purview of an excise duty covered by Entry 84 of that list, the Court should not read into the amended section the limitations that had been considered inherent in the section before its amendment.
It was in repelling this contention that certain observations were made by me in paras 30 to 32 of the judgment to which Sri Soli Sorabjee drew our attention.
It will, however, be clear from the discussion in the paragraphs referred to that the contention was repelled not on the ground that the legislature could not make a wider levy by reference to Entry 97 but only on the ground that the history, context and language of the amendment did not warrant the wider interpretation.
This will be clear from the following two sentences in para 31 where I said: PG NO 815 "Mr. Chandrasekharan 's contention . that the language of the new section should be given an enlarged scope and interpretation by relating it to Entry 97 of List I of Seventh Schedule cannot, in our opinion, be accepted.
We do not think, in considering this amendment, that it is necessary for us to discuss whether, if Parliament were to enact a law imposing on goods manufactured or produced a duty based not only on the manufacturing cost/profits, but also including in the dutiable value the whole or some part, post manufacturing cost/profits, such a law would be intra vires or not: because it appears to us that no such law has been enacted in this case.
We shall assume with Mr. Chandrasekharan, that in view of Entry 97 in the Union List under the Constitution, it is open to and competent for the legislature to expand or even modify the nature of the levy.
The question, however, will be whether it has done so.
" It was concluded, after referring to the previous position as well as the statement of objects and reasons for the amendment, that there was nothing to show that the legislature had intended to make ally change and that the rule against a presumption of implicit alteration of the law should be invoked in the context.
In other words, the HMM decision was based not on the scope of legislative Entry 97 in List 1 but on the language and scope of the amendment actually effected.
It was considered not necessary or possible to stretch the language of the definition in section 4 beyond the ambit of the provision as delineated in the earlier decisions.
The question decided was not that the legislature could not, but that it did not, make any radical change in the nature of the levy.
The position considered in the HMM case may be illustrated by an analogy.
Entry 82 in List I of the Seventh Schedule to the Constitution permits the enactment, by the Union Legislature, of a law relating to taxation of 'income.
The entry does not restrict such laws only to the income of a 'previous year ', though this was the pattern of the prevelent Income Tax Acts activated by annual Finance Acts.
Between 1948 and 1955, however, the Finance Acts purported to impost a tax on "excess dividends" which, in brief, was a tax on dividends declared out of profits of past years.
The effect of these enactments was considered by the Bombay High Court as well as this Court.
In C.I.T. vs Elphinstone Spinning & Weaving Mills Co. Ltd., , this Court held that the language of the relevant provision in the Finance Acts was so framed that it could not be read as an independent charging section.
It will be appreciated that the Finance Acts were also enactments of the Union Legislature and a taxation of profits, even of past years, by an independent and specific enactment could certainly have been brought within the scope of Entry 97, if not Entry 82 itself.
Nevertheless, the enactments were held ineffective not because they could not but because they did not contain the words necessary to effectuate the result.
The position in the HMM case was somewhat similar.
The legislature retained the levy on the basis of the wholesale cash price at the factory gate as before and only introduced a definition of the expression 'value ' in terms a little more elaborate but basically not very different from what had been contained in the earlier section.
The Court saw no reason to read into the language of the amended provision a meaning much wider that had been attributed to the provision before its amendment.
The amendment gave no indication that, contrary to what had been decided earlier, it was the intention of the legislature to bring into the assessable value even an element of post manufacturing cost/profit.
PG NO 816 But here the position is entirely different.
The amendment has specifically enlarged the meaning and concept of the word "manufacture".
If such extended concept is within the range of duties of excise as envisaged under Entry 84 and I agree that with my learned brothers that is , there is no difficulty.
But, if, as contended for by Sri Sri Soli Sorabjee, that legislative entry permits a duty levied with on the process of 'manufacture", stricto sensu, and the processing in this case cannot be brought within that definition then this expended definition cannot be fitted into that entry.
Nevertheless the specific statutory definition cannot be ignored and it it cannot be held valid by reference to Entry 84, its validity has to be considered with reference to the residuary Entry 97.
The definition of manufacture in a limited sense.
It explictly enlarges the scope of the levy of excise duty and, if it is not permissible to bring it within the scope of Entry 84, a resort to Entry 97 cannot be ruled out.
In my view, therefore, there is nothing in the decision in the HMM case that supports the contention of the petitioners have that the amendment of the definition of "manufacture" cannot be PG NO 817 sustained by reference to Entry 97 of List I in the Seventh Schedule to the Constitution of India, if it cannot be upheld as falling under the purview of Entry 84.
The second point, on which I feel inclined to add a few words is in regard to the contention on behalf of the petitioners that the definition of the term "manufacture" enacted in the Central Excises & Salt Act, 1944 as enlarged by Amendment Act 6/80, cannot be read into the provisions of the Additional Duties of Excise Act (No. 58), 1957.
The argument is in three phases and runs thus: (i) section 3 of the 1957 Act, which is the charging section, fastens the charge of duty at the state of 'manufacture out this e expression is deliberately left undefined, though the statute takes special care in section 2 to adopt, for its purposes, the definition of the specified goods as contained in the 1944 Act.
This excludes the definition of 'manufacture ' enacted in section 2(f) of the 1944 and enlarged from time to time .
(ii) section 3(3) cannot help the Revenue in this regard, as its only purpose and effect is to avoid a repetition.
in this Act of the procedural provisions of the 1944 Act.
The charge or imposition of the tax having been said under section 3 [1], the purpose of .S. 3(3) is only to say that this charge shall be qualified, demanded of the 1944 Act.
This sub section cannot be read as having the effect of incorporating the substantive definition of "manufacture" in the 1944 Act particularly when section 2 chose to incorporate only the definition of the specified goods as contained in the 1944 Act.
[iii] Even if the language of section 3( 3 ) is construed more liberaly, it will be effective with only to incorporate the definitions contained in the 1944 Act as on the date of commencement of the 1957 Act but not its subsequent legislative expansions.
In my opinion.
there is no warrant or justification for giving such a narrow interpretation to the wide language of section 3[3] of the 1957 Act.
Learned counsel for the petitioner, in advancing this argument, apparently has in mind the famous dictum of Lord Dunedin in Whitney vs Inland Revenue Commissioners, [1927] A.C. 7 echoed in several decisions of this Court and of the various High Courts in India: PG NO 818 "Now, 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 persons 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 particularizes 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 argument, founded on the above figurative analysis, seeks to equate the expressions "levy and collection" used in section 3(3) with the stages of assessment and collection concerned with the procedure for quantification and recovery of a duty that has already been imposed.
The first stage of "charge", according to counsel, has already been dealt with in the first sub section of section 3, which has fastened a charge on the production of manufacture of specified goods.
The third sub section, it is said, only relates to the quantification or recovery of the charge imposed under section 3(1) .
I do not see any force in this argument.
In the first place, even section 3(1) which, according to the counsel, is the charging section, uses the same words "levied and collected.
These are the same as the words used in Article 265 of the Constitution, which have been interpreted as comprehending the entire process of taxation commencing from the imposition of the tax by enacting a statute to the actual taking away of money from the pocket of a citizen.
They take in every stage in the entire process of taxation.
The words "levied" is a wide and generic expression.
One can say with as much appropriateness that the Income tax Act levies a tax on income as that the the Income Tax Officer levies the tax in accordance with the provisions of the Act.
It is an expression of wide import and takes in all the stages of charge, quantification and recovery of duty, though in certain contexts it may have a restricted meaning.
In the context of sub section (1) the word "levied" admittedly means "charged " as well as "assessed.
The words "levy and collection ' in sub section (3) cannot be construed differently from the words levied and collected used in sub section (1).
section 3(3), therefore, also covers the entire gomut of section 3 (1) and cannot be construed as becoming operative at a somewhat later stage.
Its operation cannot be excluded in determining the scope of the charge.
PG NO 819 In this context, reference has to be made to a decision of this Court which had to consider a provision, almost identical with section 3(3) of the 1957 Act, appearing in the Finance Act 1965, in a somewhat indirect manner, as the decision contains some observations, which, at first sight, appear to support the line of argument of the petitioner herein.
Such a provision has been annually repeated in all Finance Acts vide, the Finance Act from 1963 to 1983 and imposes what has been described as "special", "regular" or "auxiliary" duties of excise and customs.
The decision I am referring to is that of this Court in Associated Cement Co. Ltd. vs Director of Inspection, 19.
This decision was really concerned with section 280 ZD of the Income Tax Act, 1961, which in turn called for a reference to section 80 of the Finance Act, 1965 which is in the following terms: "(I) When goods of the description mentioned in this section chargeable with a duty of excise under the Central Excises Act . are assessed to duty, there shall be levied and collected (a) as respects (certain) goods . . , a special duty of excise equal to 10 per cent of the total amount so chargeable on such goods; (b) as respects (certain other) goods . . , a special duty of excise equal to 20 per cent .
: and (c) as respects (certain other) goods . . , a special duty of excise equal to 33 1/3 per cent .
(2) xxx xxx (3) The duties of excise referred to in sub section ( l) chargeable on such goods under the Central Excise Act or any other law for the time being in force . (4) The provisions of the Central Excises Act and the rules thereunder.
including those relating to refunds and exemptions from duty, shall.
so far as may be.
apply in relation to the levy and collection of the duty of excise leviable under this section in respect of any goods as they apply in relation to the levy and collection of the duties of excise on such goods under that Act or rules.
" PG NO 820 Section 280 ZD of the Income Tax Act, 1961 enabled an assessee, in certain circumstances, to obtain a "tax credit" certificate in respect of a percentage of the amount of "duty of excise payable by him." "Duty of excise" was defined by the section to mean "the duty of excise leviable under the Central Excises & Salt Act".
The question was whether the tax credit could also be given in respect of the amount of the special duty of excise levied and collected under the Finance Act.
This Court held that, obviously, the special duty levied under section 80 could not be regarded as having been levied under the Central Excise Act.
It said: "It is true that the expression 'leviable ' is an expression of wide import and includes stages of quantification and recovery of the duty but in the context in which that expression has been used in clause (b) of sub section (6) of section 280 ZD, it is clear that it has been used in the sense of chargeability to duty.
In other words, the duty of excise in respect whereof tax credit is available would be in respect of such duty of excise as is chargeable under the Excise Act and clearly the Special excise duty in respect whereof additional tax credit is sought by the appellant company is not chargeable under the Excise Act but chargeable under the Excise Act.
" Having said this, the Court added: " 'Sub clauses [3] and (4) of section 8() of the Finance Act on which reliance has been placed by counsel for the appellant company in terms refers to the procedural aspect such as the qualification and collection of the special duty and simply because the qualification and collection of the special duty under the Finance Act is to he done in accordance with the provisions of the Excise Act such duty does not become leviable that is to say chargeable, under the Excise Act.
" The above observations no doubt lend some support to the contention of the petitioner, as the wording of section 80(4) of the 1965 Finance Act is identical with that of section 3(3) and has been interpreted as attracting only the procedural aspect of the Central Excise Act.
But in my opinion, while that may have been true of section 80(4) of the Finance Act, 1965, it will not be correct to draw the same conclusion about the 1957 Act.
For, section 80(1) of the Finance Act, 1965 fully exhausted the aspect of charge of the special duty.
It PG NO 821 specified the goods to be taxed and also laid down that the special duty was to be a percentage of the normal excise duty chargeable on those goods.
Nothing else remained except the quantification and the collection.
But here the position is different.
There are three ingredients of the charging provision viz. section 3(1).
The additional duties are charged (a) on manufacture, storage of production (b) of certain named goods (c) at the rates specified in the first schedule.
Of these, only aspect (b) finds mention in the t957 Act but in relation to the definitions contained in the 1944 Act.
Aspect (c), clearly is not complete without a reference to the main Act.
For, turning to the First Schedule of the Act, originally it specified rates on the basis of length, weight or number on all items except "cigarettes" where the duty was to be ad valorem.
The Amendment Act, No. 6 of 1980, substituted the rate per metre specified under the original schedule in respect of the items with which we are concerned to ad valorem rates.
Now the assessable value is to be determined on the basis of which the special duty will have to be worked out cannot be found out from the 1957 Act which contains no definition or indication in this regard.
The statute cannot be worked atleast in respect of goods where an ad valorem rate is prescribed unless section 3(l) is read with section 3(3 ) and the definition of "assessable value" in section 14 of the 1944 Act is read with the Finance Act.
In like manner, I think.
the content of aspect (a) cannot be understood differently from, or independently of, the definition in the main enanctment.
Having regard to the nature and content of the levy indicated in s 3(1), it is obvious that section 3(3) has to have the effect of attracting not only the purely procedural and machinery provisions of the 1944 Act but also some of its charging provisions.
It is, therefore difficult to consider section 3(1) of the 1(1957 Act in contrast to the Finance Act of 1965 As covering the entire ambit of the charge imposed.
In short, the language of section (3) has to he given a wider meaning than under the Finance Act, 1985.
I have referred to the fact that a provision similar to that in section 80 of the Finance Act, 1965 is also found in other Finance Acts.
On perusal of these provisions, it will be found that a like position exists there also.
These provisions are all self contained and completely specify the scope of the charge either as a percentage of the excise duty normally chargeable under the Central Excises & Salt Act, 1944 or as a percentage of the 'assessable value determined under section 4 of the 1944 Act. ' This, in my view, is a very important reason why the observations in the Associated Cement Co. 's case (supra) cannot be of application in the context of the 1957 Act.
A question has been raised as to why, if it were the intention of the Legislature to take in all the provisions PG NO 822 including definitions from the 1944 Act, it was considered necessary to make a specific reference to the definitions of the various goods on which additional duty was being imposed as contained in the schedule to the 1944 Act.
Counsel says that this enactment of specific definitions drawn from the 1944 Act should lead to an inference that no other definitions from that Act were intended to be incorporated in the 1957 Act.
A careful examination will, however.
show that this is not the effect.
Actually, section 2 is not much of a 'definition ' section.
(a) is not strictly necessary and cl.
(b) is only intended to clarify that the proceeds of the duties are not be distributed to Union Territories.
So far as clause (c) is concerned, it is necessary to make a reference to section 7 of the Act, which reads thus: "7.
It is hereby declared that the following goods, namely, subject, tobacco, cotton fabrics, rayon or artificial fabrics and woolen fabrics, are of special importance in inter state trade of commerce and every sales tax law of a State shall, in so far as it imposes or authorises the imposition of a tax on the sale or purchase of the declared goods, he subject, as from the 1st day of April, 1958, to the restrictions and conditions specified in section 15 of the .
" The effect of this provision, as held in M/s Mahendra Pratap Rama Chandra vs Commercial Tax Officer & Others, is that "the contents of section 15 became a part of section 7 from the moment when section ', was enacted. ' ' section 15 of the Central Sales Act applies to "declared" goods as defined in section 2(c) and enumerated in section 14 of that Act as being of special importance in inter state trade and commerce.
section 14 of the .
enumerates various items of goods among which arc the six items specified in section 3(1) of the 1957 Act and this list further specifies that they shall have the same meaning as is attached to the respective items in the First Schedule to the Central Excises & Salt Act, 1944 vide items (ii a), (vii), (viii), (ix).
(x) and (xi).
Thus, it was always clear that the specified goods have to be understood in the way they were defined in the Central Excises & Salt Act, 1944.
The idea in 1956 was to restrict the powers of the States to levy sales tax in respect of such goods and other goods.
In 1958, the idea was conceived of the Centre levying an additional excise duty on these goods and distributing the same to the States subject to the condition specified in Schedule II that such States did not impose any sale or purchase tax on these commodities.
Subsequently, perhaps.
it was realised that section 7 served no specific purpose under the Act except that of the definitions which was an aspect PG NO 823 already covered by section 2(c).
In these circumstances, not much significance need be attached to section 2(c) much less can it be construed as negativing the import of other definitions from the 1944 Act.
The next question that arises for considerion is, whether, even assuming that the terms of section 3(3) are applicable, its terms are wide enough to take in not merely the provisions of the Central Excises and & Salt Act, 1944 and, in particular its definition clauses, as they stood in 1957 on the date when the 1957 Act came into force but also the amendments effected therein from time to time.
The answer to this question depends upon the general principles applicable to what is described as 'referential legislation ' of which this is an instance.
Legislatures sometimes take a short cut and try to reduce the length of statutes by omitting elaborate provisions where such provisions have already been enacted earlier and can be adopted for the purpose on hand.
While, on the one hand, the prolixity of modern statutes and the necessity to have more legislation then one on the same or allied topics render such a course useful and desirable, the attempt to legislate by reference is sometimes everdone and previty is achieved at the expense of lucidity.
However, this legislative device is quite well known and the principles applicable to it fairly well settled.
Referential legislation is of two types.
One is where an earlier Act or some of its provisions are incorporated by reference into a later Act.
In this event, the provisions of the earlier Act or those so incorporated, as they stand in the earlier Act at the time of incorporation, will be read into the later Act.
Subsequent changes in thc earlier Act or the incorporated provisions will have to be ignored because, for all practical purposes, the existing provisions of the earlier Act have been re enacted by such reference into the later one, rendering irrelevant what happens to the earlier statute thereafter.
Examples of this can be seen in Secretary of State vs Hindustan Cooperative Insurance Society, AIR 1931 P.C. 149; Solani Ores Ltd. vs State, ; and Mahindra and Mahindra Ltd. vs Union, AIR 1979 S.C.798.
On the other hand, the later statute may not incorporate the earlier provisions.
It may only make a reference of a broad nature as to thc law on a subject generally, as in Bhajiyu vs Gopikabai. ; ; or contain a general reference to the terms of an earlier statute which are to be made applicable.
In this case any modification, repeal or re enactment of the earlier statute will also be carried into in the later, for here, the idea is that certain provisions of an earlier statute which become applicable in certain circumstances are to be made use of for the purpose of the latter Act also.
Examples of PG NO 824 this type of legislation are to be seen in Collector of Customs vs Nathella Sampathu Chetty, ; ; New Central Jute Mills Co. Ltd. vs Assistant Collector, ; and Special Land Acquisition Officer vs City Improvement Trust, Whether a particular statute falls into the first or second category is always a question of construction.
In the present case, in my view, the legislation falls into the second category.
section 3(3) of the l957 Act does not incorporate into the 1957 Act any specific provisions of the 1944 Act.
It only declares generally that the provisions of the 1944 Act shall apply "so far as may be", that is, to the extent necessary and practical, for the purposes of the 1957 Act as well.
That apart, it has been held, even when a specific provision is incorporated and the case apparently falls in the first of the above categories, that the rule that repeals, modifications or amendments of the earlier Act will have to be ignored is not adhered to incertain situations.
These have been set out in State of Madhya Pradesh vs Narasimhan.
[ ; In that case.
the Supreme Court was considering the question whether the amendment of section 21 of the Penal Code by the Criminal Law Amendment Act.
195X, was also applicable for purposes of the Prevention of Corruption Act, 1947, which by section 2 incorporates, for the purposes of that Act, the definition of `public servant ' in s 2l of the Penal Code.
Answering thc (question in the affirmative, the Court outlined the following proposition: "Where a subsequent Act incorporates provisions of a previous Act.
then the borrowed provisions become an integral and independent part of the subsequent Act and are totally uneffected by any repeal or amendment in the previous Act This principle.
however will not apply in the following, cases: (a) where the subsequent Act and the previous Act are supplemental to each other; (b) where the two Acts are in pari materia: (c) where the amendment in the previous Act, if not imported into the subsequent Act also, would render the subsequent Act wholly unworkable and uneffectual; and (d) where the amendment of the previous Act, either PG NO 825 expressly or by necessary intendment, applies the said provisions to the subsequent Act.
" The present case falls within the scope of these exceptions, even if section 3(3) is construed as incorporating certain specific provisions of the 1944 into itself.
The legislation presently in question is clearly in pari materia with the 1944 Act.
It is also merely supplemental.
While the 1944 Act imposes a general levy of excise duty on all goods manufactured and produced, and aim of the present Act is to supplement the levy by an additional duty of the same nature on certain goods.
The duration of the applicability is undefined but the statute is clearly enforceable as long as it is in the statute book side by side with the normal excise duties.
The clear intention is that the same provisions shall govern both the levies except that the duty under the later Act is confined to certain goods only and its distributability among the States may perhaps follow a different pattern from the principal duty.
There is no reason or logic why all the incidents attaching under the earlier legislation, in so &r as they are not clearly inconsistent with the later one should not be extended to the later legislation as well.
As has been pointed out earlier, the Finance Acts which levied special or regular or additional excise duties contained in themselves all the elements of charge of duty.
The goods were mentioned and the duty as to be levied either at a percentage of the normal excise duty payable under the 1944 Act or at a percentage of the value of the assessable goods as determined under the 1944 Act.
All that was further needed was the applicability of the procedural provisions of the 1944 Act Here, however, the 1957 Act is incomplete as to the basis of the charge and its provisions would become totally unworkable unless the concepts of "manufacture" and "assessable value? ' as determined under the 1944 Act are carried into it.
In the circumstances, I agree that we should give full and literal effect to the language of section 3(3) and hold that it has the effect not only of attracting the procedural provisions of the 1944 Act but also all its other provisions, including those Containing the definition.
[/INST]Section 3(1) of the Andhra Pradesh Scheduled Areas Land Transfer Regulation 1959 (Regulation I of 1959) prohibited transfer of immovable properties situated in the scheduled areas from a member of scheduled tribe to non tribals without previous sanction of the State Government.
In order to facilitate effective enforcement of the said 1959 regulations, the Andhra Pradesh Scheduled Areas Land Transfer (Amendment) Regulation, 1970 was introduced.
Regulation 1970 inter alia brought the following changes namely (i) transfers of land in scheduled areas in favour of 'non tribals ' were wholly prohibited in future and (ii) non tribals holding lands in the scheduled areas were prohibited from transferring their lands in favour of persons other than tribals.
The appellants who owned lands in the scheduled areas having acquired them from tribals and 'non tribals ' were affected by this amending Regulation of 1970.
They filed writ petitions in the High Court challenging this regulation being unconstitutional.
The High Court dismissed the writ petitions.
Hence these appeals by Certificate under Article 133(1)(a) of the Constitution.
The main contention of the appellants was that the impugned provisions were unconstitutional as being violative of Article 19(1)(f) of the Constitution as it obtained at the 444 material time till it was repealed by the Constitution (Forty fourth) Amendment in 1979 because they imposed unreasonable restrictions on the non tribal holders of properties in the scheduled areas.
Dismissing the appeals and while tracing a short history of the legislation, this Court, ^ HELD: originally all the lands in these tracts were owned by the 'tribals '.
With the advent of the 'non tribals ' in the late 19th Century and early 20th Century, the lands changed hands from 'tribals ' to 'non tribals '.
This change of ownership was a result of exploitation raising: (1) In the context of money lending operations and (2) in the context of dubious and unconscionable dealings in the course of trade.
The 'non tribals ' had so often circumvented the legislation enacted in order to protect the 'tribals ' by recourse to benami transactions and by recourse to dubious devices.
The poor ignorant, illiterate, and unsophisticated tribals had succumbed to the wiles of the economically stronger and unscrupulous 'non tribals '.
A legislation which in essence and substance aims at restoration to the 'tribals ' of the lands which originally belonged to the 'tribals ' but which passed into the hands of 'non tribals ' in the aforesaid background certainly cannot be characterised as unreasonable.
[455G H; 456A C] No unreasonableness is involved in making the prohibition against transfer to 'non tribals ' applicable to both the 'tribal ' as also to the 'non tribal ' owner in the scheduled area.
As a matter of fact it would have been unreasonable to do otherwise.
In the absence of protection, the economically stronger 'non tribals ' would in course of time devour all the available Lands and wipe out the very identity of the tribals who cannot survive in the absence of the only source of livelihood they presently have.
[457C D] The submission that the prohibition against transferring the properties to 'non tribals ' being in absolute terms, a non tribal ' cannot even raise a loan on his properties even in the event of the 'non tribal ' being under economic compulsion to do so cannot be acceded to as it overlooks the amendment introduced by Sec.
3A(1) inserted by Regulation 1 of 1971.
[458A B] Tribes of India The Struggle for Survival (1982 83 edition) by Christoph von Furer Haimendorf; The Continent of Circe, [1965] by Nirad C. Chaudhari; Manchegowda and Ors.
vs State of Karnataka, [1984] 3 SCC p. 301 and Lingappa Rochanna Appelwar vs State of Maharashtra. , referred to.
445 The argument that the expression 'Iand ' has been used in its restricted sense in paragraph 5(2)(a) of Schedule V to the Constitution of India and therefore the impugned provisions prohibiting the transfer of lands along with structures thereon by employing the expression 'immovable property ' is not in accordance with law is devoid of merit for two reasons: firstly, there is no reason to believe that `land ' has not been employed in its legal sense.
The expression 'land ' in its legal sense is a comprehensive expression which is wide enough to include structures, if any, raised thereon and secondly to interpret the expression 'land ' in its narrow sense is to render the benevolent provisions impotent and ineffective.
In that event the prohibition can be easily circumvented by just raising a farm house or a structure on the land.
The impugned provisions were inserted by the Amending Regulation precisely to plug such loopholes and make the law really effective.
[.158C D; 459D E] The Dictionary of English Law, [19591 Edition Vol.
2 p. 1053 by Earl Jowitt; Words and Phrases Judicially Defined, By Roland Burrows Vol.
IlI 1944 Edition p. 206 and The Law Lexicon, By p. Ramanatha Aiyar Reprint Edition 1987 p. 700, referred to.
</s>
|
<s>[INST] Summarize the judgementCriminal Appeal No. 258 of 1981.
869 From the Judgment and Order dated 12th Feb. 1981 of the Madhya Pradesh High Court in Misc.
Criminal Case No. 617 of 1980.
Appellant in person.
Uma Nath Singh for the Respondent.
The Judgment of the Court was delivered by section RATNAVEL PANDIAN,J.
The appellant, Mr. Pritam Pal Dhingra is a practising Advocate in the High Court of Madhya Pradesh at Jabalpur, having joined the Bar on 4.2.1979.
Earlier to joining the Bar, he was serving in the Army and retired on 23.12.65.
Thereafter, he was re employed in the Defence Accounts Department on 7.2.1966 as U.D.C. (Auditor).
On 29.2.76, the appellant served three months ' notice of resignation upon the departmental authorities for the reasons mentioned in the said notice and also requested to pay him the contributory provident fund benefits for his 10 years service though the date of his superannuation in the said post was 30.9.1986.
The Department not only refused to accept his resignation but also did not relieve him even after the expiry of three months.
According to the appellant, there was neither any departmental enquiry pending nor contemplated against him during those three months i.e. between 29.2.76 and 31.5.76.
However, a charge sheet dated 21.12.76 for imposing a major penalty on a complaint by Jt.
C.D.A. Vehicle Factory was served on him to which he submitted his written statement.
Then he served a final quit notice w.e.f. 8.1.77.
Though on the basis of the show cause notice, an enquiry was started, nothing came out of it.
Therefore, the appellant moved the High Court of Madhya Pradesh at Jabalpur by filing Writ Petition M.P. No. 786 of 1978 under Article 226 of the Constitution of India sworn on 27.11.78 requesting several prayers inclusive of issuance of directions to the respondent therein (the departmental authorities) to accept his resignation so as to enable him to take any other profession of his liking and to declare the retention of his service against his will after 31.5.1976 as illegal and malafide and to re imburse pay and allowances for the period of his enforced absence after the expiry of three months notice period etc.
The High Court issued show cause notice to the respondents 1 to 3 in the Writ Petition.
The respondent No. 3 thereafter accepted the resignation dated 29.2.76 of the appellant w.e.f. 15.1.79 by 870 which time the appellant claims to have completed 31 years of combined military and civil service i.e. from 29.11.47 to 15.1.79.
Meanwhile, the departmental enquiry initiated against him was dropped.
Then the appellant submitted supplemental applications praying that his resignation should be converted into one of voluntary retirement and that his military services should be counted with civil service and that he should be given all service benefits like pension, gratuity etc.
as well as consequential benefits on account of the delay in acceptance of his resignation.
Two applications being I.A.No. 908/79 and I.A. No. 4246/78 were filed by the appellant, they being one for amendment of the petition and the other for taking some additional grounds.
Both applications were allowed by a Division Bench of the High Court comprising of Mr. Justice J.S. Verma (as he then was) and Mr. Justice U.N. Bachawat, as the counsel for the respondents had no objection and granted one week time for incorporating the amendments in the petition.
At the request of the counsel for the respondent, Shri R.P. Sinha, the Court granted two weeks time to file the additional return by order dated 16.3.79.
The case was listed for further hearing on 2.4.79 on which date the writ petition was dismissed.
The appellant then on 16.4.79 moved an application to review the order dated 2.4.79.
The application was registered as M.C.C. No. 209 of 1979.
This application was too dismissed on 23.4.79 with the following observation: "The grievance of the petitioner in this review petition is that the writ petition (M.P. No. 786/78) was dismissed in motion hearing without hearing the petitioner.
The substance of the order dismissing the Writ Petition in motion hearing as stated earlier indicates that this averment made by the petitioner is not correct.
We also distinctly recollect that the petitioner was heard fully on the question of admission and it was only thereafter that the petition was dismissed by dictating that order in the Court in the presence of the petitioner.
We would, therefore, reiterate that this grievance of the petitioner that he was not heard at the time of motion hearing is wholly incorrect.
The submissions made by the petitioner in support of this review application are (1) that there is error apparent on the face of the record because the writ petition was dismissed in motion hearing without hearing the petitioner; (2) that, sum 871 marily dismissal of the writ petition was arbitrary because after notice had been issued to the respondents 1 to 3 show cause why the petition be not admitted, it was incumbent on the Court to admit the writ petition and hear both sides at length before passing any order; and (3) that, on account of above position, the petitioner was not given a fair deal before dismissing the writ petition in motion hearing.
As earlier stated, the petitioner was heard fully at the end of motion hearing and so also the counsel for respondents Nos. 1 to 3, Shri R.P. Sinha.
The main averment on the basis of which all the aforesaid submissions are based, i.e. lack of full opportunity to the petitioner is, therefore, wholly non existent.
We are constrained to observe that in making these submissions, the petitioner who is now enrolled as an Advocate, has not been fair to the Court.
The petitioner who is now enrolled as a lawyer was expected to exhibit at least the minimum decorum and sense of responsibility which is expected from a members of this noble profession.
We are pained to observe that the petitioner took a very unreasonable attitude and exhibited a behaviour which could not be appreciated even by the member of the Bar who were present when this order was being dictated in the Court room after the hearing.
However, taking into account the fact that the petitioner is a new entrant in the Bar, we have chosen not to take serious notice of the conduct of the petitioner in the hope that the petitioner having now become a member of the Bar will try to follow the high traditions of the Bar which he has chosen to join.
There is no merit in this Review application.
It is summarily dismissed.
" On being aggrieved by the above order of dismissal dated 2.4.79, the appellant filed Special Leave Petition No. 570 of 1979 before this Court but was not successful as the SLP was dismissed on 25.7.79.
The appellant on being disturbed by the dismissal of his Writ Petition moved a Contempt Petition on 16.4.80 under Section 16 of the (hereinafter referred to as `the Act ') making some 872 serious allegations against the two Hon 'ble Judges of the High Court who dismissed his Writ Petition on 2.4.79 and thereafter the Review Petition on 23.4.79 and also impleaded Shri R.P. Sinha as the third respondent in that petition.
According to the appellant, the contempt petition was registered as M.C.C. No. 136 of 1980 and placed before a Division Bench on 29.4.1980 which after hearing the appellant summarily dismissed contempt petition.
While it was so, the Registry of the High Court examined the allegations made in the affidavit filed by the appellant in M.C.C. No. 136/80 under Rule 5 of Rules regarding contempts framed by the High Court (Notification No. 8958 Nagpur dated the 24th October, 1953) and placed the matter before the learned Chief Justice of the said High Court who on that motion/reference passed an order on 2.5.1980 to place the matter before a Division for further action.
The Division Bench before which the matter was placed took cognizance of criminal contempt and directed issue of notice on 13.5.80 to the appellant directing to show cause as to why he should not be punished for contempt of Court to which the appellant filed his reply raising certain preliminary objections stating that the notice was bad for the reasons, namely, (1) The Section of the Act under which cognizance had been taken was not specifically mentioned; (2) Though the offending portions are marked the notice does not show sufficient cause as to why the words and expressions used therein have been construed as contemptuous; (3) The procedure followed by the High Court was contrary to the rules framed by it; and (4) No consent of the Advocate General has been obtained.
The appellant, on the basis of the above objections prayed to discharge the rule of contempt.
On 11.7.80 when the case came up for hearing, the learned Advocate General filed his reply to the preliminary objection and served a copy of the same to the appellant.
On the same day, the High Court passed an order reading thus: ". .
The Government Advocate further gives notice to the respondent that the contempt proceedings are under article 215 of the Constitution.
Let the respondent take inspection of the original record in case he would like to know the offending portions marked both 873 underlined and side marked and let him file his reply on merits within 15 days.
" Admittedly, the appellant inspected the Court records relating to this matter.
Even thereafter when the appellant persistently requested as under what Section of the Act he has been charged, he was informed that the proceedings were under the provisions of Article 215 of the Constitution of India.
For the proper understanding of the issue in question, we feel that it would be necessary to reproduce the offending words and passages as appearing in the contempt petition.
They are as follows: "7.
That on 2.4.79, when the case came up for hearing, the judicial process required that it was the non applicant, Shri R.P.Sinha who should have been heard in the first instance and he should have been asked by the Court whether he has filed the addition return but on account of misfortune of the petitioner and misconduct of the Presiding Judge, Justice Shri J.S. Verma that he while coming out of the chamber and occupying the seat in the temple of justice called out the petitioner and told him that after the acceptance of the resignation, the petition had become infructuous as such he was dismissing it summarily.
The petitioner was shocked to witness the most illegal and unconstitutional legal process adopted by the Hon 'ble Judge. . . . . . . . .
When the petitioner started arguing his case that his Fundamental Rights were infringed, the Hon 'ble Presiding Judge not only stopped the petitioner from arguing his case but threatened him for dire consequences in case the petitioner argued any more.
This amounts to desacrilege the sanctity of his own Court by the Judges.
. . . . . 9.
The Review Petition was heard by the same Bench in utter disregard of judicial cannon since no person against whom serious allegations have been levelled (against) can be a Judge in his own case.
The Review Petition was also 874 rejected summarily repeating the false averments more in explicit terms that they heard the petitioner as well as the counsel for the respondents thus super imposing the seal of truth over the falsehood.
GROUNDS 1.
The petitioner charges the Hon 'ble Court especially Justice J.S. Verma for adopting a most illegal and unconstitutional judicial process in utter disregard of cannons and principles of adjudication, for showing rude behaviour towards the petitioner.
The amounts to desacrilege the sanctity of his Court.
That when the attention of Justice Verma was drawn on 2.4.79, that he was violating the legal process, he misbehaved with the petitioner without any valid reason which amounts to misconduct of the Judges.
That again on 23.4.1979 when the Review Petition was being argued, he threatened the applicant/petitioner for dire consequences for no valid reasons.
That the High Court is a Temple of Justice and the Judges who occupy the seat of justice are just like Dharamraj.
Dharamraj 's are not supposed to utter falsehood atleast while occupying this sacred seat of Justice.
The Hon 'ble Judges have not only uttered falsehood in their order dated 2.4.79 ( Annexure `B ') but super imposed their false averments in their order dated 23.4.79 in which they stated that they distinctly recollect that the petitioner as well as the counsel for the respondents were heard.
The petitioner 's charge that they do not remember as to what they heard. . . 5.
. . . . . . . . . 6.
The charge against Justice U.N. Bachawat (the associate Judge) is that he silently witnessed the proceedings throughout.
He never uttered a single word or intervened when his senior faltered out and succumbed to the false averments 875 of the Presiding Judge as if was not an independent Judge but serving faithfully and obediently to his master.
. . . . . . . . . 8.
That the petitioner avers that both the contemner Judges have acted and bad faith and have fouled the seat of justice by clear malafides act of theirs and as such no protection can be extended to them under cover a bonafide act done in good faith as Judges.
That both the Judges have violated the sanctity attached to the seat of Justice and have committed a Contempt of their own Court.
Both have acted malafidely in bad faith.
PRAYER It is, therefore, prayed that Contempt Proceedings under Section 16 of the Contempt of Court Act, 1971, may be initiated against Justice J.S. Verma and Justice U.N. Bachawat of the Madhya Pradesh High Court on the aforesaid grounds.
" The High Court after examining the above scandalising remarks made by the appellant in his contempt petition rejected the objections of the appellant/contemner holding that the cognizance of the criminal contempt was taken by it on suo moto, that the contemner was informed that the Court was invoking its jurisdiction under Article 215 of Constitution of India to punish him for contempt, that the does not confer any new jurisdiction by its authority, that in a suo moto action by the High Court, consent of the Advocate General was not necessary, that non quoting of the provisions Section in the notice is immaterial and that the contemner had full notice of the charge of contempt levelled against him and concluded, "We see no defect in the notice served upon the contemner, nor do we find defect in the procedure followed." Then after referring to certain decisions of this Court in Perspective Publications vs State of Maharashtra, ; ; C.K. Daphtary vs O.P. Gupta, ; and Baradakanta Mishra vs Registrar of 876 Orissa High Court; , , the High Court made the following observation with reference to the facts of the case: "16.
The offending portions in paras 7 and 9, and repeated in grounds 1,2,3 and 4,8 and 9 attribute to Mr. Justice J.S. Verma (a) improper motive, (b) unfairness and undue basis in dealing with the case, (c) being a Judge who administers justice in a cursory manner without giving thought to the points involved, (d) of being intemperate in language, impatient and unjust, (e) who would arise false proceedings and when falsity has been brought his notice, would have the audacity to stick to the falsehood.
If the words have this import, the inevitable effect is undermining the confidence of the public in the judiciary.
The person who has indulged in scurrilous abuse of the Judge, must suffer in punishment.
" On the basis of the above observations, the High Court recorded its finding thus: "20.
In our reading of the offending portions duly marked in paras 7,9 and grounds 1,2,3 and 4,8 and 9 of the application dated 16.4.1980 in the context in which they have been written, there are imputations of malafides, bias and prejudice against Mr. Justice J.S. Verma.
The contempt involved in these passages is grossly scandalous.
Coming to the allegations in Ground No. 6 relating to Mr. Justice Bachawat, it was said that "he silently witnessed the proceedings.
He never uttered a single word or intervened when his senior faltered and succumbed to false averments of the Presiding Judge as if he was not an independent Judge but serving faithfully and obediently his master." Finally, the High Court held that the contemner, Mr. Pritam Lal is guilty of criminal contempt of not only scandalising the Court and lowering its authority but also substantially interfering with the due course of justice.
Coming to the question of sentence, the High Court taking note of the defiant attitude of the contemner who even did not think it necessary to 877 apologise but tried to justify the aspersions, sentenced the contemner to suffer simple imprisonment for two months.
Hence the present appeal.
The Contemner, Mr. Pritam Lal appeared before us in person and advanced his arguments which are similar to the submissions made before the High Court, inter alia contending that the impugned order of the High Court should be set aside with costs and suitable compensation on the ground of procedural irregularities in that (1) that the offending remarks have not been communicated to him as per Rules 5 and 9 framed by the High Court; (2) that the cognizance of the criminal cotmpt has not been taken in conformity with Section 15 of the Act; (3) that the procedure after cognizance as prescribed under Section 17 of the Act has not been followed; and (4) that Article 215 of the Constitution of India does not prescribe any procedure to be followed.
According to him he has not been given a fair and full hearing but on the other hand, the learned Judges have browbeaten and unjustly convicted him ignoring the well settled principle that every person has got an inalienable right of making fair criticism.
He has further added that the impugned order was pre conceived and pre judged one.
In addition to the oral arguments, he has filed detailed written arguments, signed on 15.11.88 citing a number of decisions which in our view, do not have any relevance to the facts of the case.
In the written submissions also, he has again made certain outrageous and contemptuous remarks about the Judges of the High Court, in attempting to justify his action which has led to the initiation of the proceedings of contempt of Court before the High Court.
As rightly pointed out by the High Court, these contentions in our opinion do not merit any consideration since every High Court which is a Court of Record is vested with `all powers ' of such Court including the power to punish for contempt of itself and has inherent jurisdiction and inalienable right to uphold its dignity and authority.
Whilst Article 129 deals with the power of the Supreme Court as Court of Record, Article 215 which is analogous to Article 129 speaks of the power of the High Court in that respect.
Prior to the , it was held that the High Court has inherent power to deal with a contempt of itself summarily and 878 to adopt its own procedure, provided that it gives a fair and reasonable opportunity to the contemner to defend himself.
But the procedure has now been prescribed by Section 15 of the Act in exercise of the powers conferred by Entry 14, List III of the Seventh Schedule of the Constitution.
Though the contempt jurisdiction of the Supreme Court and the High Court can be regulated by legislation by appropriate Legislature under Entry 77 of List I and Entry 14 of List III in exercise of which the Parliament has enacted the Act 1971, the contempt jurisdiction of the Supreme Court and the High Court is given a constitutional foundation by declaring to be `Courts of Record ' under Articles 129 and 215 of the constitution and, therefore, the inherent power of the Supreme Court and the High Court cannot be taken away by any legislation short of constitutional amendment.
In fact, Section 22 of the Act lays down that the provisions of this Act shall be in addition to and not in derogation of the provisions of any other law relating to contempt of courts.
It necessarily follows that the constitutional jurisdiction of the Supreme Court and the High Court under Articles 129 and 215 cannot be curtailed by anything in the Act of 1971.
The above position of law has been well settled by this Court in Sukhdev Singh Sodhi vs The Chief Justice and Judges and Judges of the PEPSU High Court, ; holding thus: "In any case, so far as contempt of a High Court itself is concerned, as distinct from one of a subordinate Court, the Constitution vests these rights in every High Court, so no Act of a legislature could take away that jurisdiction and confer it afresh by virtue of its own authority.
" It has been further observed: "The High Court can deal with it summarily and adopt its own procedure.
All that is necessary is that the procedure is fair and that, the contemner is made aware of the charge against him and given a fair and reasonable opportunity to defend himself." In R.L. Kapur vs State of Madras, ; a question arose did the power of the High Court of Madras to punish contempt of itself arise under the so that under Section 25 of the , Sections 63 to 70 of the Penal Code and 879 the relevant provisions of the Code of Criminal Procedure would apply.
This question was answered by this Court in the following words: "The answer to such a question is furnished by Article 215 of the Constitution and the provisions of the themselves.
Article 215 declares that every High Court shall be a court of record and shall have all powers of such a court including the power to punish for contempt of itself.
Whether Article 215 declares the power of the High Court already existing in it by reason of its being a court of record, or whether the article confers the power as inherent in a court of record, the jurisdiction is a special one, not arising or derived from the , and therefore, not within the purview of either the Penal Code or the Code of Criminal Procedure.
" After giving the above answer to the query raised, this Court has reiterated the view held in the case of Sukhdev Singh Sodhi (referred supra).
The view expressed in Sukhdev Singh Sodhi and followed in R.L. Kapur been referred with approval in a recent decision in Delhi Judicial Service Association vs State of Gujarat, ; , holding that the view of this Court in Sukhdev Singh Sodhi is "that even after the codification of the law of contempt in India, the High Court 's jurisdiction as a Court of Record to initiate proceedings and take seisin of the matter remained unaffected by the contempts of Courts Act, 1926.
" Beg, C.J. in Re section Mulgaokar, ; has explained the special power of the Supreme Court under Article 129 stating. "This Court is armed, by Article 129 of the Constitution, with very wide and special powers, as a Court of Record, to punish its contempts.
" In Delhi Judicial Service Association case (supra), it has been pointed out as follows: "Article 129 provides that the Supreme Court shall be a court of record and shall have all the powers of such a court including the power to punish for contempt of itself.
Article 215 contains 880 similar provisions in respect of a High Court.
Both the Supreme Court as well as High Courts are courts of record having powers to punish for contempt including the power to punish for contempt of itself.
" Yet another question whether the provisions of the Code of Criminal Procedure are applicable to such Proceedings, has been negatively answered by this Court in Sukhdev Singh Sodhi case (supra) stating thus: "We hold therefore that the Code of Criminal Procedure does not apply in matters of contempt triable by the High Court.
The High Court can deal with it summarily and adopt its own procedure.
All that is necessary is that the procedure is fair and that the contemner is made aware of the charge against him and given a fair and reasonable opportunity to defend himself.
" See also Brahma Prakash Sharma and Others vs The State of Uttar Pradesh, From the above judicial pronouncements of this Court, it is manifestly clear that the power of the Supreme Court and the High Court being the Courts of Record as embodied under Articles 129 and 215 respectively cannot be restricted and trammelled by any ordinary legislation including the provisions of the and their inherent power is elastic, unfettered and not subjected to any limit.
It would be appropriate, in this connection, to refer certain English authorities dealing with the power of the superior Courts as Courts of Record.
The 1884 edition of Belchamber 's Practice of the Civil Court says at page 241 that "Every superior court of record, whether in the United Kingdom, or in the colonial possessions or dependencies of the Crown has inherent power to punish contempts, without its precincts, as well as in facie curiae. . ." In 9 Halsbury 's Law of England (4th Edition) by Lord Hailsham at page 3 under the caption "Criminal Contempt", the following passage is found: 881 "The superior courts have an inherent jurisdiction to punish criminal contempt. ." It is further stated at page 3 itself that the power to commit by summary process is arbitrary and unlimited, but that power should be exercised with the greatest caution.
In Re Clements and the Republic of Costa Rica vs Erlanger, at page 383, Lord Jessel, M.R. said: ". this jurisdiction of committing for contempt being practically arbitrary and unlimited should be most jealously and carefully watched, and exercised. ," Reference also may be bad to a decision of the Division Bench of the Bombay High Court in State of Bombay vs P., 1958 Bom.
Law Reporter, (60) Page 873 wherein it has been held that the jurisdiction which each Judge of the High Court possesses and uses as constituting a Court of Record is a jurisdiction which is inherent in the Court itself for punishment for contempt of Court, whether it is ex facie the Court or otherwise and that for the exercise of that jurisdiction it is not necessary to refer either to the Letters Patent or the Rules framed by the Court thereunder and that it is a jurisdiction which is being exercised in the same manner as was exercised in the Court of King 's Bench Division in England.
In special feature of the procedure to be followed in a contempt proceeding is the summary procedure which is recognised not only in India but also abroad.
It is an outstanding characteristic of the law of contempt both in England and Scotland that it makes use of a particular and summary procedure which is unknown to any other branch of those countries.
In England, this summary procedure began to be adopted by the common law Courts inspite of trial by jury and that the trial by jury for contempt has steadily declined and has now fallen entirely into disuse.
In other words, consequent upon the use of the summary procedure in England, a person alleged to be in contempt does not enjoy the benefit of some of the safeguards of the ordinary criminal law such as those provided by the Judges ' Rules in England and Wales and the right to trial by jury.
882 Rule 42 of the Federal Rules of Criminal Procedure of United States reads that ``A criminal contempt may be punished summarily if the Judge certifies that he saw or heard the conduct constituting the contempt and that it was committed in the actual presence of the Court." In Ex parte Terry, ; , 307; , , 80 (1888) and in Matsusow vs United States, ; , 339 (5th Cir.
1956), it has been ruled that "If the contempt be committed in the face of the court, the offender may be instantly apprehended and imprisoned at the discretion of the judges, without any further proof or examination.
" In the Contempt of Court by Oswald, the following passage relating to the summary power of punishment is found: "The summary power of punishment for contempt has been conferred on the courts to keep a blaze of glory around them, to deter people from attempting to render them contemptible in the eyes of the public.
These powers are necessary to keep the course of justice free, as it is of great importance to society.
" In the year 1899, Lord Moriss in delivering the judgment of the Judicial Committee in Mc Leod vs St. Aubin said: "The power summarily to commit for contempt is considered for the proper administration of justice." This has long been the practice in India also.
The power under Articles 129 and 215 is a summary power as held in the cases of Sukhdev Singh Sodhi, C.K. Daphtary (referred to above) and in Hira Lal Dixit vs State of U.P., ; Peacock, C.J.laid down the rule quite broadly in the following words in Re Abdool vs Mahtab, 1867 (8 WR) Cr. 32 at page 33: "there can be no doubt that every court of record has the power of summarily punishing for contempt.
" The above view is re stated in a number of decisions of this Court.
In the case of Sukhdev Singh Sodhi it has been observed: 883 ". .the power of a High Court to institute proceedings for contempt and punish where necessary is special jurisdiction which is inherent in all courts of record and section 1 (2) of the Code expressly excludes special jurisdiction from its scope.
" The position of law that emerges from the above decisions is that the power conferred upon the Supreme Court and the High Court, being Courts of Record under Articles 129 and 215 of the Constitution respectively is an inherent power and that the jurisdiction vested is a special one not derived from any other statute but derived only from Articles 129 and 215 of the Constitution of India (See D.N. Taneja vs Bhajan Lal, ; and therefore the constitutionally vested right cannot be either abridged by any legislation or abrogated or cut down.
Nor can they be controlled or limited by any statute or by any provision of the Code of Criminal Procedure or any Rules.
The caution that has to be observed in exercising this inherent power by summary procedure is that the power should be used sparingly, that the procedure to be followed should be fair and that the contemner should be made aware of the charge against him and given a reasonable opportunity to defend himself.
If we examine the facts of the present case in the backdrop of the proposition of law, the contentions raised by the appellant challenging the procedure followed by the High Court do not merit any consideration since the appellant has been served with a notice of contempt and thereafter permitted to go through the records and finally has been afforded a fair opportunity of putting forth his explanation for the charge levelled against him.
Incidently, we may say that the submission of the contemner that the impugned order is vitiated on the ground of procedural irregularities and that Article 215 of the Constitution of India is to be read in conjunction with the provisions of Sections 15 and 17 of the Act of 1971, cannot be countenanced and it has to be summarily rejected as being devoid of any merit.
The remaining important question for consideration are whether the statements which we have extracted in the preceding part of this judgment, made by the contemner amount to a scurrilous attack on the integrity, honesty and judicial impartiality of the learned Judges of the High Court and whether the contemner by his conduct as well as by making such 884 written scandalising statements and invective remarks have interfered and seriously disturbed the system of administration of justice by bringing it down to disrespect and disrepute.
There is an abundance of empirical decisions upon particular instances of conduct which has been held to constitute contempt of Court.
We shall now refer to a few.
Lord Russel of Killowen, L.C.J. has laid down the law of Contempt in at 40 as follows: "Any act done or writing published calculated to bring a Court or a Judge of the Court into contempt, or to lower his authority, is a Contempt of Court.
" The above proposition has been approved and followed by Lord Atkin in Andre Paul vs Attorney General, AIR 1936 PC 141.
Lord Justice Donovan in Attorney General vs Butterworth, , after making reference to Reg.
vs Odham 's Press Ltd., ex parte A.G. said, "Whether or not there was an intention to interfere with the administration of justice is relevant to penalty, not to guilt." This makes it clear that an intention to interfere with the proper administration of justice is an essential ingredient of the offence of contempt of court and it is enough if the action complained of is inherently likely so to interfere.
In Morris vs The Crown Office, at page 1081, Lord Denning M.R. said: "The course of justice must not be deflected or interfered with.
Those who strike at it strike at the very foundations of our society.
" In the same case, Lord Justice Salmon spoke: "The sole purpose of proceedings for contempt is to give our courts the power effectively to protect the rights of the public by ensuring that the administration of justice shall not be obstructed or prevented." 885 Frank Further, J in Offutt vs U.S., ; expressed his view as follows: "It is a mode of vindicating the magesty of law, in its active manifestation against obstruction and outrage." In Jennison vs Baker, at page 1006, it is stated: "The law should not be seen to sit by limply, while those who defy it go free, and those who seek its protection lose hope." Chinnappa Reddy, J. Speaking for the Bench in Advocate General, Bihar vs M.P. Khair Industries, ; citing those two decisions in the ases of Offut and Jennison (supra) stated thus: ". 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.
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 due 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 the administration of justice shall not be prevented, prejudiced, obstructed or interfered with." Krishna Iyer, J. in his separate Judgment in re section Mulgaokar (supra) while giving the broad guidelines in taking punitive action in the matter of Contempt of Court has stated: ". .if the Court considers the attack on the judge or judges scurrilous, offensive, intimidatory or malicious beyond condonable limits, the strong arm of the law must, in the name of public interest and public justice, strike a blow on him who 886 challenges the supremacy of the rule of law by fouling its source and stream." In the case of Brahma Prakash (supra), this Court after referring to various decisions of the foreign countries as well as of the Privy Council stated thus: "It will be an injury to the public if it tends to create an apprehension in the minds of the people regarding the integrity, ability or fairness of the Judge or to deter actual and prospective litigants from placing complete reliance upon the Court 's administration of justice, or if it is likely to cause embarrassment in the mind of the Judge himself in the discharge of his judicial duties.
It is well established that it is not necessary to prove affirmatively that there has been an actual interference with the administration of justice by reason of such defamatory statement; it is enough if it is likely, or trends in any way, to interfere with the proper administration of law." In Ashram M.Jain vs A.T. Gupta, the facts were thus: The petitioner who filed a special leave petition accompanying by an affidavit affirming the statement made in the said SLP indulged in wild and vicious diatribe against the then Chief Justice of the High Court of Maharashtra.
When the SLP was heard, this Court directed notice to be issued to the petitioner as to why he should not be committed for contempt under the .
After hearing the parties and then not accepting the unconditional apology of the petitioner, this Court convicted the petitioner for contempt and sentenced him to suffer simple imprisonment for a period of two months.
In that case, Chinnappa Reddy, J. speaking for the Bench said: "The strains and mortification of litigation cannot be allowed to lead litigants to tarnish, terrorise and destroy the system of administration of justice by vilification of judges.
It is not that judges need be protected; judges may well take care of themselves.
It is the right and interest of the public in the due administration of justice that has to be protected." 887 Reference may be made to a recent decision of this Court in M.B. Sanghi vs High Court of Punjab and Haryana, ; In that case, the appellant, a practising advocate having failed to persuade the learned Subordinate Judge to grant an ad interim injunction pending filing of a counter by the opposite party, made certain derogatory remarks against the learned Judge who instead of succumbing to such unprofessional conduct made a record of the derogatory remarks and forwarded the same to the High Court through the District Judge to initiate proceedings for Contempt of Court against the appellant.
The High Court holding that the remarks made on the learned Sub Judge are disparaging in character and derogatory to the dignity of the judiciary found the appellant guilty of Section 2 (c) (i) of the .
The appellant therein though denied to have made the remarks, however, offered an unqualified apology.
But the High Court without accepting the apology punished the appellant therein with a fine of Rs. 1,000.
Ahmadi, J. of this Court in his separate judgment has observed: "The tendency of maligning the reputation of judicial officers by disgruntled elements who fail to secure the desired order is ever on the increase and it is high time it is nipped in the bud.
And, when a number of the profession resorts to such cheap gimmiks with a view to browbeating the judge into submission, it is all the more painful.
When there is a deliberate attempt to scandalise which would shake the confidence of the litigating public in the system, the damage caused is not only to the reputation of the concerned judge but also to the fair name of the judiciary.
Veiled threats, abrasive behaviour, use of disrespectful language and at times blatant condemnatory attacks like the present one are often designedly employed with a view to taming a judge into submission to secure a desired order.
Such cases raise larger issues touching the independence of not only the concerned judge but the entire institution.
The foundation of our system which is based on the independence and impartiality of those who man it will be shaken if disparaging and derogatory remarks are made against the presiding judicial officers with impunity.
It is high time that we realise that the much cherished judicial independence has to be protected not only from the executive or 888 the legislature but also from those who are an integral part of the system." After having made the above observation, the learned judge concerned with the conclusion of Agarwal, J. dismissing the appeal and while doing so, he expressed his painful thought as follows: "When a member of the bar is required to be punished for use of contemptuous language it is highly painful it pleases none but painful duties have to be performed to uphold the honour and dignity of the individual judge and his office and the prestige of the institution.
Courts are generally slow in using their contempt jurisdiction against erring members of the profession in the hope that the concerned Bar Council will chasten its member for failure to maintain proper ethical norms.
If timely action is taken by the Bar Councils, the decline in the ethical values can be easily arrested.
" We are in full agreement with the above view.
Reverting to the facts of the case, the offending criticism and the scandalising allegations made by the appellant/contemner are most fatal and dangerous obstruction of justice shaking the confidence of the public in the administration of justice and calling for a more rapid and immediate punitive action.
These calculated contemptuous remarks and the sweeping allegations which we have extracted above are derogatory in character not only to the dignity of the learned Judges casting aspersions on their conduct in the discharge of their judicial functions but also wounds the dignity of the Court.
It is highly painful to note that the appellant/contemner who is none other than an Advocate practising in the same highest Court of the state after having failed to wrench a decision in his favour in his own cause which he prosecuted as party in person has escalatingly scandalised the Court by making libellous allegations which are scurrilous, highly offensive, vicious, intimidatory, malacious and beyond condonable limit.
Even a cursory reading of the remarks made against the learned Judge of the High Court unambiguously show that the potentially prejudicial utterances and the outrageous allegations rumbustiously and invectively made by the contemner with malacious design of attempting to impair 889 the administration of justice have struck a blow on the judiciary and also seriously sullied the image, dignity and high esteem which the office of the Judge of the High Court carries with it and thus impeded the course of justice by fouling its source and steam.
In our opinion, the incident in question is a flagrant onslaught on the independence of the judiciary, destructive of the orderly administration of justice and a challenge to the supremacy of the Rule of Law.
The maxim "Salus populi suprema lex", that is "the welfare of the people is the supreme law" adequately enunciates the idea of law.
This can be achieved only when justice is administered lawfully, judicially, without fear or favour and without being hampered and thwarted, and this cannot be effective unless respect for it is fostered and maintained.
To punish an Advocate for Contempt of court, no doubt, must be regarded as an extreme measure, but to preserve the proceedings of the Courts from being deflected or interfered with, and to keep the streams of justice pure, serene and undefiled, it becomes the duty of the Court, though painful, to punish the contemner in order to preserve its dignity.
No one can claim immunity from the operation of the law of contempt, if his act or conduct in relation to Court or Court proceedings interferes with or is calculated to obstruct the due course of justice.
In view of the above heinous type of scandalising the Court, we unhesitatingly confirm the finding of the High Court that the appellant/contemner has made himself guilty of criminal contempt.
Coming to the question of sentence, it appears from order of the High Court that the appellant had adopted a defiant attitude and tried to justify the aspersions made by him even without thinking it necessary to apologise.
Before this Court also, the appellant has neither expressed any contrition nor has he any repentance for the vicious allegations made against the learned Judges of the High Court.
But on the other hand, he has exhibited a dogged determination to pursue the matter, come what may.
A reading of his memorandum of grounds and the written and signed arguments show that he was ventured into another bout of allegations against the High Court Judges and persisted in his campaign of vilification.
His present conduct has aggravated rather than mitigating his offence.
890 Therefore, having regard to the sentencing policy that punishment should be commensurate with the gravity of the offence, we hold that the sentence of 2 months, imprisonment in no way calls for interference and accordingly the sentence is confirmed.
For the reasons aforementioned, the Criminal Appeal is dismissed.
N.P.V. Appeal dismissed.
[/INST]The appellants were alleged to have kidnapped, wrongfully confined and raped S, the daughter of PWs 5 and 6.
They were prosecuted for offences punishable under section 363, 366 and 376 of the Indian Penal Code.
S was examined before the Magistrate where she stated that because of the threat given by the appellants and as instructed by them she lodged a false report at the police station implicating some other persons, whereas infact she was kidnapped, wrongfully confined and raped by the appellants.
The Magistrate, discharged the first appellant, and committed the second appellant alone to take his trial.
On a revision preferred against the order of discharge of the first appellant both the appellants were 314 put up for trial before the third Additional Sessions Judge, Bhopal.
During the said trial both appellants were on bail.
The case was fixed for 21.8.1972 on which date the victim S was to be examined as a prosecution witness.
While the matter stood thus S lodged a report at the Police Station complaining that the second appellant had forcibly entered into the backyard of her house, but took to his heels when she raised a hue and cry.
However, it was alleged that on the night of 20.8.72, i.e. immediately before the day when the case was fixed and victim S was to be examined as a prosecution witness, the first appellant armed with a pistol and the second appellant with a `farsa ' entered into the house of S and the first appellant fired a shot causing instantaneous death of section The appellants were prosecuted for murder.
The Sessions Judge acquitted both the appellants.
The State preferred an appeal before the High Court.
The High Court allowed the appeal, set aside the acquittal order and convicted the first appellant under Section 302 and the second appellant under section 302, read with Section 34 IPC and sentenced each of them to undergo imprisonment for life.
The appellants preferred an appeal to this Court under section 379 of the Code of Criminal Procedure and Section 2 (a) of the and it was contended on their behalf (i) that the High Court erred in reviewing the evidence and reversing the order of acquittal; (ii) that the prosecution has failed to prove the motive of the crime; (iii) the victim 's parents were inimical towards the appellants and their evidence cannot be relied upon because they were interested witness.
Dismissing the appeal, this Court, HELD : 1.
The Trial Court was wrong in jettisoning the entire evidence in a very scanty and unsatisfactory manner with unsound reasoning.
Whilst the Trial Court 's conclusion was arrived at by abjuring the unimpeachable and reliable evidence of parents of the deceased on speculative reasons and unreasonable grounds, the contrary conclusion of the High Court based on the evolution of the evidence does not suffer from any illegality or manifest error or perversity nor is it erroneous.
Further, independent analysis of the evidence by this Court shows that there are absolutely no substan 315 tial and compelling reasons to brush aside the testimony of these two eye witnesses and to take a contrary finding to that of the High Court.
[331 C D; F G] 1.1 The organic synthesis of the events, circumstances and facts of the case lead only to one conclusion, namely, that the prosecution has satisfactorily proved the guilt of the accused beyond any shadow of doubt and consequently the judgment of the High Court does not call for any interference.
[334 C D E} Tarachand vs State of Maharashtra, ; = ; ; Kishan and Ors.
vs State of Maharashtra.
; ; Mahebub Beg and Ors.
vs State of Maharashtra, (S.C.) ; Babu vs State of UP.
, ; 2 S.C.R. 771; Podda Narayana and Ors.
vs State of Andhra Pradesh, ; [1975] Supp.
S.C.R. 84; Ram Kumar Pande vs The State of Madhya Pradesh, ; 3 S.C.C. 815; Rajendra Prasad State of Bihar A I R SC 10 59 = = [1977]3 SCR 68; Kishore Singh and Anr.
vs The State of Madhya Pradesh, A.I.R. 1977 S.C. 2267 = [1978] 1.S.C.R. 635; Bhajan Singh and Ors.
vs State of Punjab, [1978] 4 S.C.C. 77; Dinanath Singh & Ors.
vs State of Bihar, A.I.R. 1980 S.C. 1199 = ; Pattipati Venkaiah vs State of Andhra Pradesh ; Sita Ram and Ors.
vs State of U.P., [1979] 2 S.C.C. 656; Rajput Ruda Meha and Ors.
vs State of Gujarat, ; referred to.
Roop Singh and ors.
vs State of Punjab; , = ; ; Dargahi and ors.
vs State of U.P., A.I.R. 1973 S.C. 2695 = ; Barati vs State of U.P., ; = [1974] 3 S.C.R. 570; G.B. Patel vs State of Maharashtra, A.I.R. 1979 S.C. 135 = ; ; Kanwali vs State of U.P. ; referred to. 2.
There is overwhelming evidence both oral and documentary in clearly establishing a strong motive for the appellants to put an end to the life of the deceased.
The several impelling circumstances attending the case namely, the prior incident of kidnapping and rape, the conduct of the deceased in giving her statement supporting the case of the prosecution, the lodging of the complaint by S against the second appellant and lastly the posting of the case for recording the evidence of S when taken in conjunction with the evidence of parents of the victim unevasively and unerringly show that these two appellants had strong motive to snap the life thread 316 of the victim so that she could not give evidence on the next date in the case of kidnaping and rape.
[327 C D E; 328 A D C] State of Punjab vs Pritam Singh. ; relied on.
Interested witnesses are not necessarily false witnesses though the fact that those witnesses have personal interest or stake in the matter must put the court on its guard, that the evidence of such witnesses must be subjected to close scrutiny and the Court must access the testimony of each important witness and indicate the reasons for accepting or rejecting it and that no evidence should be at once disregarded simply because it came from interested parties.
[330 A B] Siya Ram Rai vs State of Bihar, ; Sarwan Singh vs State of Punjab, ; Birbal vs Kedar, ; = ; ; Gopal Singh v State of U.P. A I R 1979 S.C.1822=[1978] 3 S.C.C. 327; Hari Obulla Reddy & Ors.
vs State of Andhra Pradesh, ; Anvaruddin & Ors.
vs Shakoor & Ors., [1990] 2 Judgments today S.C. 83; relied on.
3.1 The evidence of parents of the deceased cannot be thrown over board simply on the ground that their evidence is of the interested party because when the occurrence had taken place inside the house, that too at dead of night, it would be futile to expect of the prosecution to produce independent outsiders as witnesses.
The parents of the victim are the natural and probable eye witnesses as the incident had occurred in the odd hours inside their house.
Being the parents of the victim, they would be the least disposed to falsely implicate the appellants or substitute them in place of the real culprit.
[330 D; 328 E; 331 E] 3.2 The chronology of events narrated and the factual conspectus recounted by the parents of the deceased are unshakable and the intrinsic quality of the evidence of these two witnesses compel this Court to implicitly rely on their testimony and to accept the same.
In spite of the fact that these two witnesses have been subjected to intensive and incisive cross examination, nothing tangible has been brought for discarding their testimony.
No doubt, the earlier conduct of the appellants in kidnapping and forcibly raping their daughter, the victim should have inflicted deeper wounds in minds of these two witnesses, but that cannot in any way destroy the value of their evidence which is cogent and trustworthy.
[330 H; 331 A B] 317
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<s>[INST] Summarize the judgementivil Appeal Nos.
992997 of 1990.
From the Judgment and Order dated 30.8.
1988 of the Allahabad High Court in W.P. Nos.
12572 of 1984.
6512/85, 12574/84, 17966/180.
12152,84 and 12159 of 1984.
K.K. Venugopal, S.N. Misra, Rajinder Sachhar, Soli J. Sorabjee, V.M. Tarkunde, S.S. Ray, O.P. Rana, Govind Muk hoti, P.C. Kapur, B.P. Sahu, P.N. Misra, Krishna Pd., B.P. Singh, A.K. Goel.
J.M. Khanna, Ms. Shafali Khanna, section Mar kandeya, Ashok Sharma, G.S. Gift Rao, Mrs. C. Markandeya, W.A. Nomani, G. Seshagiri, S.K. Mehta, Aman Vachher, Atul Nanda, N.D. Tyagi, Raju Ramachandran, D. Pillai, Raja Ram Agarwal, Sanjay Parekh, S.N. Mira and A.K. Goel for the appearing parties.
The Judgment of the Court was delivered by RANGANATH MISRA, J.
We have heard counsel for the par ties at considerable length but piece meal spread over a number of days.
Special Leave granted 205 Five cooperative societies with membership of Government servants mostly of ' the lower strata filed six separate writ petitions before the Allahabad High Court challenging the Notification under section 4(1) and section 17(1) of the Land Acquisition Act (1 of 1894) on several grounds.
The principal contentions before the High Court were two fold: (1) the cooperative societies consisting Of the low paid Government servants having acquired the land for the purpose of providing residential accommodation to their members, the Ghaziabad Development Authority constituted by the State of Uttar Pradesh for the same purpose should not have been permitted to acquire the said land to their prejudice; and (2) there was no justification for depriving the petitioners of their right to representation under section 5A of the Acquisition Act in the facts and circumstances of the case.
The High Court by a common judgment dated 30th August, 1988, dismissed the writ petitions by negativing the several contentions raised on behalf of the petitioners.
It may be pointed out that on behalf of the Neelam Sahakari Awas Samiti Ltd. two writ petitions were filed while each of the other four societies had filed one writ petition.
That is how six Special Leave Petitions were filed before this Court and have now been converted into appeals on grant of leave.
Ghaziabad, within the State of Uttar Pradesh, virtually bordering Delhi is located at a distance of 28 kilometers from the New Delhi Railway Station in the trans Jamuna area.
It has of late become, apart from being a Railway junction,.
an industrial area as also an agglomeration sufficiently developed to call it a township.
A Master Plan has been drawn up for the area and some portions have been developed while the lands of the five cooperative societies have not yet been improved on account of the pendency of this group of cases.
In course of the hearing of these appeals we were satis fied about the genuineness of the grievance advanced on behalf of the members through their respective cooperative societies and took the view that the members of the coopera tive societies should not be denied residential accommoda tion for which they had taken effective steps before the acquisition for the Development authority was notified.
We took into consideration the total number of members as also the number of eligible members; the total area which the members had acquired and entrusted to the cooperative socie ties for construction; the capacity of the members to pay for the construction now charged by the Development authori ty; the need of planned development of the area.
; and all other relevant facts and circumstances placed by all the parties before 206 us and formed the opinion that it would be sufficient to meet the requirement of members of these societies if each one of them was provided with a plot limited to an area of 80 square yards.
Total members entitled to allotment are 1739.
Whether it should be individual plots or double storeyed construction should be permitted was seriously debated before us but we have come to the ultimate conclusion that instead of single storey construction double storey constructions would be convenient and economical.
The interest of the members represented by their respective cooperative societies and the nature of the housing complex contemplated by the Devel opment authority have to be kept in view and the ultimate decision, keeping the interest of both, has to be taken.
Counsel for the Development authority had canvassed before us that instead of confining construction of flats to two storeys, the normal pattern of five or six storeys could be adopted.
High rise construction for the poor section of the society would not be convenient in old age many would have movement problem; many of the necessities for living would be difficult to secure.
We have, therefore, decided that the construction must be confined to two storeys only and the members of their respective societies shall make their own adjustment of the ground floor and 1st floor allotments.
About 20 acres of land would be necessary if the double storey construction with an area of 80 square yards is adopted.
Society wise particulars are provided below: section No. Name of cooperative Total members Area society entitled to in acres allotment 1.
Sarkari Karamchari Evam 230 2.54 Mitregan Sahakari Awas Samiti Ltd. 2.
Kendriya Karamchari Evam 523 5.77 Mitregan Sahakari Awas Samiti Ltd. 3.
Ghaziabad Shiromani 298 3.29 Sahakari Awas Samiti Ltd. 4.
Neelain Sahakari Awas 245 2.70 Samiti Ltd. 207 5.
Asha Pushpa Vihar Sahakari 443 4.87 Awas Samiti Ltd. 1739 19.17 Members entitled 1739 Total area 19.17 acres (rounded to 20 acres) This area of 20 acres is inclusive of land for laying of the roads and other requirements contemplated under the development scheme.
For convenience and adjustment we are of the view that two more acres of land be made available to the five cooperative societies to be shared by amicable adjustment by them.
Thus from the acquisition Notification 22 acres of land shall stand deleted and shall be released in accordance with the extent indicated for each of the five cooperative societies.
The identification of the land to be so released shall be made within four weeks from the date of pronouncement of the order by mutual arrangement.
We direct that when the land shall be so identified, the order of release from acquisition by appropriate description of the land shall be made; sketch maps showing the identified land shall also be signed by parties to avoid future litigation and made over to each of the societies.
We commend that all the five cooperative societies may form themselves into a federation for the purpose of ensur ing appropriate development of the area and sharing either in common or by division the 2.83 acres of extra land which is directed to be released from acquisition.
It has been agreed that development charges for sewer age, electricity, road connections and the like shall be provided by the Development authority @ Rs. 100 per square yards and internal development shall be done by the socie ties themselves.
In raising the construction, the bye laws and regulations of the Development authority shall be strictly followed.
We hope and trust that the Development authority shall extend its cooperation in every manner to the societies to effectuate the directions made by us.
We look forward to the fulfillment of the dreams of each of the members of the society in the matter of having a residential accommodation.
208 As soon as the lands are identified and sketch maps are delivered as directed above the interim orders made by this Court shall stand dissolved.
The appeals are disposed of without any order for costs.
P.S.S. Appeals allowed.
[/INST]The appellant cooperative societies consisting of 1739 low paid Government servants had acquired certain land in Ghaziabad for the purpose of providing residential accommo dation to their members.
Subsequently, the said land was notified for acquisition under sections 4(1) and 7(1) of the Land Acquisition Act for the Ghaziabad Development Authori ty.
Representations made by the appellants under section 5A of the Act were rejected.
In the writ petitions, filed under Article 226 of the Constitution, it was contended for the appellant societies that the Development Authority constituted by the State for the same purpose should not have been permitted to acquire the said land to their prejudice, and that there was no justification for depriving them of their right to represen tation under section 5A of the Act.
The High Court dismissed the writ petitions.
Allowing the appeals by special leave, the Court, HELD: 1.
The members of the appellant societies should not be denied residential accommodation for which they had taken effective steps before the acquisition for the Ghazia bad Development Authority was notified.
[205G] 2.1 Keeping in view the number of eligible members, the total area which they had acquired and entrusted to the societies for construction, the capacity of the members to pay for the construction now charged by the Development Authority, the need for planned development of the area and all other relevant facts, it would be sufficient if each one of them was provided with an area of 80 sq. yards.
[205G H; 206A] 204 2.2 High rise construction for the poor sections of the society would not be convenient.
If the double storey con struction with an area of 80 sq.
yards is adopted about 20 acres of land, inclusive of land for laying of the roads and other requirements contemplated under the development scheme, would be necessary.
For convenience and adjustment two more acres of land shall be made available to the socie ties to be shared by amicable adjustment by them.
Thus, from the acquisition notification 22 acres of land shall stand deleted and shall be released inaccordance with the extent indicated for each of the societies.
The identification of the land to be so released shall be made within four weeks from the date of pronouncement of the order by mutual ar rangements.
The order of release bearing appropriate de scription to follow and sketch maps to be signed by the parties.
[206D; 207C E] 3.
The development charges for sewerage, electricity, road connections and the like shall be provided to the Development Authority at the rate of Rs.100 per sq. yard and internal development shall be done by the societies them selves.
In raising the construction, the bye laws and regu lations of the Development Authority shall be strictly followed, (207G)
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<s>[INST] Summarize the judgementCivil Appeal No. 490 of 1860.
Appeal by special leave from the judgment and order dated October 6, 1958, of the Punjab High Court in Civil Misc.
No. 28 of 1958(File 'A ').
Mohan Behari Lal, for the appellant.
N. section Bindra and P. D. Menon, for the respondent No. 1.
Radhey Lal Agarwal and V.N. Sethi, for respondent No.2.
December 5.
The Judgment of the Court was delivered by DAS GUPTA, J.
The appellant, Jetha Nand (Betab) was enrolled as an Advocate in the Chief Court of Sind on May 14, 1947.
He came away to India at the end of the year 1948 and practised in the courts at Delhi.
On October 8, 1956 an order was passed by the Chief Justice of the Punjab High Court prohibiting the appellant from practising as an 963 Advocate in the courts at Delhi.
On November 8, 1956 the appellant presented an application to the High Court in which he contended that by virtue of his having been enrolled as an Advocate in the Chief Court of Sind he was entitled to practice in all the subordinate courts within the territory of India.
This petition was however rejected by a Full Bench of the Punjab High Court on the view that the appellant could not after the partition of India be considered to be an Advocate enrolled under the provisions of the Bar Councils Act.
Against this order the present appeal has been preferred on special leave granted by this Court.
The petitioner 's case is that as immediately before the partition of India he was entitled to practise in any court in British India his right to practise in those Courts continued to exist even when on partition of India, "British India" ceased to exist and provinces of India took their place; and when thereafter on the formation of the Indian Union under the Constitution these provinces became States of India but those same courts continued, his right to practise in those courts also continued.
On behalf of the respondents it is contended that the petitioner 's right to practise in courts which were not under the Chief Court of Sind ceased as soon as Sind ceased to form part of India and the Chief Court of Sind ceased to be a High Court in India.
As the appellant bases his claim on section 14 (1) (b) of the , it is necessary to examine first the scheme of that Act.
This Act was passed to provide for the constitution and incorporation of Bar Councils for certain courts in British India, to confer powers and impose duties on such Bar Councils and to amend the law relating to legal practitioners entitled to practise in the courts.
It extended to the whole of British 964 India but was in the first instance made applicable to only certain named High Courts the High Court at Calcutta, and the High Courts at Madras, Bombay, Allahabad, Patna and Rangoon.
It was also provided (section 1, sub s.2) that the Act shall apply to such other High Court within the meaning of cl. 24 of section 3 of the as the Governor General in Council may, by notification in the Gazette declare to be High Courts to which this Act applies.
Sections 2,17, 18 and 19 were to come into force at once; but as regards the other provisions it was enacted that they could come into force in respect of any High Court to which the Act applied on such date as the Governor General in Council might by notification direct.
Section 2 defined Advocate as "an advocate" entered in the roll of advocates of a High Court under the provisions of this Act and "High Court" as "a High Court to which this Act applies".
Sections 3, 4 and 5 deal with the constitution and incorporation of Bar Councils.
Section 8 makes it the duty of every High Court to prepare and maintain a roll of advocates of the High Court and also provides that no person shall be entitled as of right to practise in any High Court unless his name is entered in the roll of the advocates of the High Court.
Section 10 empowers the High Court to reprimand, suspend or remove from practice any advocate of the High Court whom it finds guilty of professional and other misconduct.
The manner in which such action can be taken is dealt with in sections 10, 11, 12 and 13.
Of these, section 12 provides inter alia that when any advocate is reprimanded or suspended under this Act a record of the punishment shall be entered against his name in the roll of the Advocates of the High Court and when an Advocate is removed from Practice his name shall forthwith be struck of the roll.
Section 14 provides inter alia that an advocate shall be entitled as of right to practise in any other Court in British India.
965 It is not disputed before us that the Governor General by notification in the Gazette of India did declare the Chief Court of Sind to be a High Court to which this Act applied and that by another notification he also directed that all the provisions of the Act would come into force in respect of the Chief Court of Sind on some date long before 1947.
Consequently, even though these notifications have not been placed before us we must proceed on the bases that on May 14, 1947, when the appellant was enrolled as an advocate in the Chief Court of Sind he was an advocate for the purposes of the and so was entitled as of right to practise in any subordinate courts in what then was British India.
The question is whether this right continued to exist after Sind ceased to form a part of India.
It appears to us clear that when section 2 defines advocate as "an advocate entered in the roll of advocates of High Court", it means an advocate who has been entered in such roll of advocates and whose name continues to be on that roll.
When, for example, the name of the advocate is removed from the roll under section 12 (7) he ceases to be an advocate within the meaning of section 14 in spite of the fact that his name was once entered in that roll.
An advocate entered in the roll of advocates can therefore mean only one whose name continues to be entered in that roll.
What is the position if the High Court ceases to exist, by reason of abolition or otherwise ? The only possible answer to this question is that if the High Court ceases to exist; the roll which used to be maintained by it has also no legal existence and consequently a person whose name was in that roll, is no longer an advocate within the meaning of section 14 or any other section of the Act.
That appears to be exactly the position in the present case.
The Chief Court of Sind was a High Court within the meaning of sections 3 to 19 of the by reason of the notification made by the Governor General in Council under section 1 sub section 2 of the Act.
It would be absurd 966 to think that when Sind ceased to form part of India the Chief Court of Sind still continued to be a High Court for the purposes of Indian law.
All doubts in the matter have however been set at rest by the provisions of the Indian (Adaptation of Existing Indian Laws) Order, 1947.
In this connection it is necessary to recall section 18 sub section
18 sub section
3 of the Indian Independence Act which provides that the law of British India and of the several parts thereof existing immediately before the appointed day shall, so far as applicable and with the necessary adaptations, continue as the law of each of the new Dominions and the several parts thereof until other provision is made by laws of the Legislature of the Dominion in question or by any other legislature or other authority having power in that behalf.
Many adaptations were in fact found necessary to remove complications and confusions which might otherwise have arisen.
Of the several adaptation orders made we are concerned here with the Adaptation Order No.16 which was called the India (Adaptation of Existing Indian laws) Order, 1947.
In this Order, the appointed dated was defined as August 15, 1947.
Section 5 of the Order is in these words : "Any reference in an existing Indian law to a High Court which as from the appointed day ceases to be a High Court for any part of the Dominion of India, shall (a) if the reference be to the High Court of Judicature at Lahore, be replaced by a reference to the High Court of East Punjab, and (b) in any other case, be omitted.
" The Chief Court of Sind (a High Court within the meaning of the ) having ceased as from August 15, 1947 to be a High Court for any part of the Dominion of India references to that Court as one to which the Act applied must be omitted in the application of the Indian Bar 967 Councils Act, 1926 after that date.
In other words, the Chief Court of Sind which was a High Court for the purposes of the up to the August 14, 1947 ceased to exist as a High Court for the purposes of the with effect from the 15th day of August, 1947.
The necessary consequence of this is that the roll maintained by the Chief Court of Sind was from August 15, 1947 no longer a roll maintained by a High Court within the meaning of the and thus any person whose name was entered on the roll of the Chief Court of Sind ceased to be an advocate for the purpose of section 14 of the and therefore ceased to have the right under that section to practise in courts in India.
There can be no doubt whatsoever that in making this adaptation in section 5 of the India (Adaptation of Existing Indian Laws) Order, 1947 the intention of the authority making the order was not only to ensure that rights will not in future accrue on the basis of a High Court now in Pakistan having been formerly a High Court in India but also to prevent the future exercise of any right that may have become vested in any person on such a High Court having been a High Court in India.
This conclusion is inevitable from the absence of any saving clause in the Adaptation Order.
Thus, even though the appellant had a right on the 14th August, 1947 to practise in the courts subordinate to any High Court in India such a right ceased to exist after the Adaptation Order mentioned above.
We need merely add that if the appellant 's contention was correct, the anomalous position would have arisen that there would be no court in India which could take disciplinary action against him, in the event of misconduct.
The scheme of the Bar Councils Act is as has been emphasised 968 earlier, that each High Court in the country should have disciplinary jurisdiction over the Advocates on its rolls.
The provisions of the Adaptation order have maintained this position.
In our opinion, the High Court rightly rejected the appellant 's application.
The appeal is accordingly dismissed.
In the circumstances of the case we make no order as to costs.
But the appellant who has filed the appeal as a pauper is directed to pay the court fees which would have been paid by him if he had not been permitted to appeal as a paper.
Appeal dismissed.
[/INST]The appellant J who was enrolled as an advocate in the Chief Court of Sind in May 1947 came to India at the end of the year 1948, and practiced in the Courts at Delhi.
The Chief Justice of Punjab High Court prohibited the appellant from practicing as an advocate in the Courts of Delhi.
At 962 the time the appellant was enrolled he was an advocate for the purposes of the , and so was entitled as of right to practice in any subordinate courts in what then was British India.
The question was whether this right continued to exist, after Sind ceased to form a part of India. ^ Held, that the Chief Court of Sind which was a High Court for the purposes of , upto August 14, 1947, ceased to exist as a High Court for the purposes of the , with effect from August 15, 1947, by virtue of section 5 of the India (Adaptation of Existing Indian Law) Order, 1947.
The necessary consequence of this was that the Roll maintained by the Chief Court of Sind was from August 15, 1947, no longer a roll maintained by a High Court within the meaning of the , and any person whose name was entered on the Roll of the Chief Court of Sind ceased to be an advocate for the purposes of section 14 of the , and therefore ceased to have the right under that section to practice in courts of India.
In the present case even though the appellant had a right on August 14, 1947, to practice in the courts subordinate to any High Court in India, such a right ceased to exist after the India (Adaptation of Existing Indian Laws) Order, 1947.
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<s>[INST] Summarize the judgementAppeals Nos. 34 and 35 of 1969.
Appeals by special leave from the judgment and order dated August 5, 1968 of the Punjab and Haryana High Court in Income tax Reference No. 40 of 1964.
K. C. Puri, K. L. Mehta, section K. Mehta and section section Hussain, for the appellant (in both the appeals).
B. Sen, P. L. Juneja, Badri Das Sharma for R. N. Sachthey, for the respondent (in both the appeals).
The Judgment of the Court was delivered by P. Jaganmohan Reddy, J.
These two Appeals are by Special Leave against the Judgment Of the Punjab & Haryana High Court answering the Reference under Section 66(1) of the Indian Income tax Act 1922 (hereinafter referred to as 'the Act ') against the assessee the Appellant.
The Appellant who was admittedly a Ruler of the erstwhile Faridkot State challenged the assessments made against him for the years 1946 47 and 1947 48 with respect to which the accounting years were Vikram year 2002 and.2003 corresponding to the period 13th April 1945 to 12th April 1946, and 13th April 1946 to 12th April 1947 respectively.
The; assessment in each of these years was made under Sec.
34 read with Sec. 23 of the Act, as the assessee 's income from dividends and interest and capital gains earned by the assessee during the relevant accounting year in what was then British India had not been brought to tax.
The assessee objected to these proceedings and contended before the Income tax Officer that he 'being a Ruler of the Faridkot State was immune from taxation on every source of income.
He could not therefore, by virtue of his sovereignty be treated as an assessee for any purpose under the Act.
It was also contended that the notices under Sec. 34 were time barred.
The Income tax Officer however, rejected these objections and held that though under the 18 International Law the Rulers of Indian States were sovereigns and immune from Municipal Laws of other countries, there was no exemption at far as the personal incomes of the Rulers are concerned from being taxed under the Act.
In that view he held that notices under Sec.
34 were valid and accordingly made an assessment.
The Appeal to the Appellate Assistant Commissioner was without success, though similar contentions were raised before him with particular reference to the privileges which the Rulers enjoyed under International Law both in respect of Civil and Criminal matters.
The assessee appealed against this order to the Income tax Appellate Tribunal where, however,, there was a divergence of view between the two Members and therefore the matter was referred to the President of the Tribunal.
After considering the decisions in regard to the exemption of the sovereign from all Civil and Criminal Laws of another State, the Judicial Member held that no assessment could be made on the assessee under the Act as he was the Ruler of a sovereign State during the assessment years under consideration.
In this view he did not express any opinion on the question of the legality of the proceedings under Sec.
34 of the Act.
The Accountant Member however, after considering the various provisions in the Act whereby exemption was granted to the Rulers in regard to certain types of income and the various decisions held that the assessee was liable to assessment in respect of his personal income arising or accruing to him from British India from his private properties.
He also held that the proceedings under Sec.
34 of the Act were perfectly legal and valid.
In view of the difference of opinion,, the matter was referred to the President of the Tribunal under Sec. 5A(7) of the Act on the following question "Whether on the facts and in the circumstances of the case the assessee was immune from tax under the Indian Income tax Act on his private income viz., dividends and interest income as also the Capital Gains earned in British India.
" The President of the Tribunal held in favour of the assessee by relying on a decision of the Andhra Pradesh High Court in the case of H. E. H. Mir Osman Ali Khan Bahadur Nizam & Raj permukh of Hyderabad vs Commissioner of Income Tax(1), where it was stated thus : "Indisputably, a sovereign ruler enjoys immunity from taxation under International Law and it is only in cases where this rule is superseded by express words that this should be denied to him.
If a legislature wants to depart from these principles and bring such (1) Case No. 35 of 1959.
19 ruler to tax, there must be clear indication in the enactment itself.
In the absence of such express words, the statute must be interpreted in conformity With International Law.
Simply because the Municipal Law did ' not provide for such an exemption, the principles of International Law should not be regarded as having been superseded".
In the aforesaid view the Andhra Pradesh High Court had held that notwithstanding the fact that His Exalted Highness the Nizam had lost the character of a sovereign ruler after 26 10 1950, he is still immune from taxation in respect of the income derived by him prior to that date.
Following this decision the President held that the assessee was immune from taxation under the Act on his private income.
In view of this decision on an application by the Revenue under Sec.
66(1) of the Act the following question was referred to the High Court : "Whether on the facts and circumstances of the case, the assessee was not liable to tax under the Indian; Income tax Act, 1922, in respect of his personal income accruing or arising to him in British India in the two assessment years 1946 47 and 1947 48." The High Court relying upon the decision of this, court in Commissioner of Income tax, Andhra Pradesh vs H. E. H. Mir Osman Ali Bahadur(1), which reversed the decision of the Andhra Pradesh High Court referred to and relied upon by the President of the Tribunal held against the assessee.
It is contended before us that the facts and circumstances in the Nizam 's case are totally different and the decision of this Court is clearly distinguishable.
The learned Advocate contends that in that case the assessments related to the assessment years 1950 51 and 1951 52, the corresponding accounting year for which was the, period between 1st April 1949 and 31st March 1950, and 1st April 1950 and 31st March 1951 respectively, which years being after the inauguration of the Constitution on 26th January 1950, clearly make the Act which was made applicable from 1st April 1950 to all the Part B States, applicable to the assessee.
But it is submitted that in the case before us there could be no ques tion of Act being made applicable to Faridkot State as the assessment years and the accounting years are prior to the inauguration of the Constitution and the application of the Act.
The learned Advocate cited a large number of decisions in support of his contention that the Native States in India had International.
(1) 20 personality and their Rulers had 'immunity similar to those that were accorded to any other Head of a State under International Law.
It was also argued that though these princely States in India may have been 'protected States; it was not necessary for the recognition of the privileges and immunities of the Rulers of such States to possess all the attributes of sovereignty and complete independence in support of which the decisions of Mighall ,vs Sultan of Jahore(1), Duff Development Co. Ltd. vs Govt.
of Kelantan & Anr.(2), Stathem vs Stathem & H. H. the Gaekwad of Baroda(3), were referred to.
It was therefore contended that in this country also the position was the same as that recognised by the Common Law of England for which proposition, decisions were referred to from Punjab Recorder onwards.
A reference was also made to several cases pertaining more specifically to the immunity enjoyed by the Rulers from payment of Income tax on the basis of their status under International Law.
These are : The Patiala State Bank vs Commissioner of Income tax, Bombay(4), Rani Amrit Kunwar vs Commissioner of Income tax, C.P. & U.P.(5), The Accountant General, Baroda State vs Commissioner of Income tax, Bombay City(6), A. H. Wadia, as Agent of the Gwalior Durbar vs Commissioner of Income Tax, Bombay (7), and Maharaja Bikram Kishore of Tripura vs Province of Assam (8).
On behalf of the Revenue reliance is placed on Commissioner of Income tax Andhra Pradesh vs H. E. H. Mir Osman Ali Bahadur(9), to sustain the Judgment under appeal and it is conceded that if this decision was not applicable to the facts and circumstances of this case, the position as contended by the assessee would be that the Indian Rulers prior to the Constitution were granted immunity from taxation, and in any case this was so in respect of the income from the property of the State as, distinct from the private or personal property of the Ruler though there were observations in some of the cases that it was difficult 'to distinguish public or private property owned by a ruler.
At this stage we think it necessary to advert to one argument .adduced on behalf of the assessee namely that the Income tax authorities particularly the Income tax Officer, had accepted the International status of the assessee and the immunity from .taxation of income from public property, but only rejected the claim for such immunity in respect of income from private or Personal property.
It is therefore contended that the status of (1) [1894] I. Q. B. 149.
(3) (1912) Probate 92.
(5) XIV ITR 561.
(7) XVII ITR 63.
(9) 59 I.T.R. (2) (4) XI ITR 617.
(6) XVI ITR 78.
(8) XVII ITR 220.
(9) 59 I.T.R.666 21 the assessee as an international personality is not in issue before.us s, what is in issue is whether his income from private property is exempt from taxation.
We do not think this contention has, validity, because the High Court has specifically While rejecting, the second contention addressed on behalf of the assessee ruled;, that the status of the assessee as a ruler of the Indian State could. ' not be equated with that of a sovereign in international law.
Even the reference to the High Court does not limit or circumscribe the matter for consideration as contended for but on the, other hand enables us to deal with the question whether as an, erstwhile ruling prince the assessee can at all be entitled to the. immunity from taxation.
In considering the question referred to by the Tribunal it,, may be useful to examine briefly the basis and extent of the privilege and immunity enjoyed by Head of State in International Law, particularly having regard to the lengthy arguments.
addressed before us.
In International Law the Head of a State,.
represent* the State as such and not as an individual representing his own rights.
In that capacity he enjoys certain extra, territorial privileges in other States which are friendly and in peace, known as the receiving States, with the State he represents.
These are, ceremonial honours for himself, the Members of his, family and his retinue; special protection to his person, and ' exemption from Criminal jurisdiction; the grant of extra terri toriality, on the basis that one sovereign does not have any powerover the other, such as immunity from filing of suits against him except where he is himself a plaintiff and from.
other civil processes; exemption from taxation rating and other fiscal enactments and the invilobility of immovable property in which he of, the representatives of the State accorded diplomatic immunity.
reside etc.
Some of these privileges and immunities are political and are generally the subject of executive and administrative instructions such as ceremonial honours, Police protection.
exemption from customs in accessability of their residences to officers of Justice, Police or Revenue officials unless consented to by them.
There are yet others in relation to the applicability of the Municipal Laws, the immunity from which are either recognised by the Common Law and which Courts will not enforce as.
in England or are dealt with by those laws themselves by affording the necessary exemption.
There are yet others which may be regulated by Treaties or international covenants.
Whatever may be the various aspects of the immunity and privileges enjoyed by the Heads of the State under the Laws of the Country where questions relating to them arise, what we are concerned with at the very thresh hold of this argument dealing with the immunity is whether the rulers of the erstwhile native States as.
22 they were called enjoyed the same or similar privileges as those ,of the Heads of States recognised as Members of the family of nations ln International Law.
It is clear from the very nature of the native States in 'India that they were subject to the sovereignty and protection of British Crown.
While their relations with the Crown were governed by treaties, though initially on terms of equality, as time went by and the British Crown in India ,became paramount, the relationship between it and the Rulers ,became unequal with the result that these treaties became subject to the reservation that they could be disregarded where the interests of the British Empire or those of the subjects of the native States were involved.
When the Nizam claimed equality with the British Crown, the then Viceroy Lord Reading informed him on 27th March 1926 that "The sovereignty of the British Crown is supreme in India and therefore no Ruler of an Indian State can justifiably claim to negotiate with the British Government on an equal.
footing".
After giving a few illustrations to negative the claim of the Nizam, the Viceroy proceeded to observe "other illustrations could be added no less inconsistent than the foregoing with the suggestion that the Government of your Exhalted Highness and the British Government stand on a plane of equality . (1).
This paramountcy was described by Shah, J, as he then was, as "brazen faced autocracy" in H. H. Maharajadhiraj Madhav Rao Jivaji Rao Bahadur of Gwalior etc.
vs Union of India (2).
What then becomes of the claim of these States or their rulers to recognition.
as International personality.
The answer to this specific question is furnished even towards the end of the 19th Century.
The status of these native States as International personalities was negatived.
in the Notification of the Government published in Gazette of India Part 1, dated 21st August, 1891 at page 485, which was a resolution containing a proclamation regarding the trial of accused persons in Manipur and the regrant ,of the Manipur State.
In this regard the following passage at page 488 is of interest : "The principles of the International law have no bearing upon the relations between the Government of India as representing the Queen Empress on the one hand, and the Native States under the suzerainty of Her Majesty on the other.
The paramount supremacy of the former presupposes and implies the subordination of the latter.
In the exercise of their high prerogative, the Government of India have, in Manipur as in other protected States, the unquestioned right to remove by (1) Vide Appendix I of the White Paper on Indian States.
(2) ; 161. 23 .lm15 administrative order any person whose presence in the State, may seem objectionable.
They also have the right to summon a Darbar through their political representative for the purpose of declaring their decision upon matters connected with the expulsion of the ex Maharaja. through their Officers." After stating that any one resisting the decision and not complying with orders will be liable to arrest, the declaration went on to say "In the opinion of the Governor General in Council any armed and violent resistance to such arrest was an act of rebellion, and can no more be justified by a plea of self defence than could resistance to a police officer armed with a Magistrate 's warrant in British India.
" In the recent case of this Court in H. H. Maharajadhiraja Madhav Rao Jivaji Rao Scindia Bahadur of Gwalior(1), referred to above the majority expressed the view that "the States had no International personality".
Nonetheless the status of these rulers in England was recognised as being on par with other Rulers in the matter of personal immunity from being sued in their Courts.
In so far as British India was concerned these were governed partly by Acts of the Legislatures particularly the provisions contained in Civil Procedure Codes and by Notifications of the executive under taxation laws as well as by executive or administrative instructions relating to their privileges.
It is therefore apparent that in so far as this country is concerned the immunity from legal proceedings which is recognised in the common law has been the subject matter of legislation under which the ruling princes of India, notwithstanding that they were not recognised as International personalities, were however accorded this immunity.
433 of the Code of Civil Procedure of 1882 and subsequently Sections 84 to 87 of the Civil Procedure Code of 1908 deal with these matters.
Gajendragadkar, C.J., in Mirza Ali Akbar Kashani vs United Arab Republic & Anr.(2), cited with approval the observations of Strachey, J, in Chandulal Khushalji vs Awed Bim Umar Sultan Nawaz Jung Bahadur(3), as correctly representing the result of the provisions of Sec.
433 as much as of those contained in Sec.
86(1).
It may be mentioned that Strachey, J, after pointing out that in India before the enactment of Sec.
433 of the Code, the privilege of independent sovereign princes stood on exactly the same footing as in England, observed (1) ; 161.
(2) ; (3) at 371 372. 24 .lm15 "No doubt the question of privilege now depends on the construction of Sec. 433, and I am alive to the danger of pressing too far an analogy between a rule of international law and a specific enactment of the Legislature.
" It is apparent from a perusal of Sec. 86 of the Civil Procedure Code that there is no absolute prohibition against a Ruler of a foreign State being sued in India.
A Ruler can be sued with the consent of the Central Government certified in writing by a Secretary to that Government.
It is also provided that such consent should not be given unless it appears to the Central Government that the Ruler has instituted a suit in the Court against the person desiring to sue him or by himself or another, trades within the local limits of the jurisdiction of the Court, or, is in posses sion of immovable property situate within those limits and is to be sued with reference, to such property or for money charged thereon, or has expressly or impliedly waived the privilege accorded to him by this Section.
In view of these provisions the several cases cited by the learned Advocate for the assessee which deal with immunity from suits against ruling princes under the English law have no application.
In so far as the question whether there exists a rule of international law exempting a State, or the property which it owns, from taxation by a foreign State, is concerned, there seems to be no uniform practice followed by the various States.
It is however suggested that immunity from taxation "appears as a logical accompaniment of the principle of immunity of foreign State owned property from judicial process" and on this basis it is sought to be contended that even personal, private property of the Head of a State is exempt.
It is unnecessary for us to examine this position because even if there was such an immunity the Rulers of an Indian State could only avail of it, if they are recognised as international personalities which, as we have seen, they are not.
Any exemptions which they may be given, must, in our view be under the relevant taxing Acts.
The learned Advocate for the Assessee however points out that if the Rulers of Indian State were not exempted from tax apart from the statute, there was no need to make a provision in Sec. 3 of the Bengal Agricultural Income tax Act IV of 1944, specifically making every Ruler of an Indian State liable to Agricultural Income tax.
On the other hand it would appear to us that this provision would itself militate against the assumption of immunity from taxation of the property of the Rulers and at any rate the legislature may have been acting ex abundanti cautale.
It may however be noticed that in so far as the Income tax Act is 25 concerned exemption of the Income of the Ruters derived from Central Government securities was specifically given under Sec.
60 of the Act which implies that the Rulers were not exempt from other provisions of law.
This position also finds support from a case cited by the learned Author on the "Immunity from taxation on foreign owned Property" in the Americal Journal of International Law XLI at page 239, where the Suppreme Court of Ceylon in the Suprintendent of the Government Soap Factory, Bangalore vs Commissioner of Income tax, held that the profits ade in Ceylon by the Mysore Government Soap Factory could be taxed by Ceylon without violation of international law.
The Ceylon Court held that the State of Mysore had no position in international law and could not,invoke any immunity arising by virtue of international law ' In any case so far as, immunity from taxation of the income from personal property of the Rulers of the Native States is concerned this is now concluded by a decision of this Court in the Commissioner of Income Tax, Andhra Pradesh ',v.
H.E.H. Mir Osman Ali Bahadur(1).
In that case the question directly arose as to whether the Ruler of the Hyderabad State prior to 26th January '50 could claim immunity from taxation under international law, namely whether the assessee enjoyed immunity from taxation under the Act in respect of income which accrued or arose to him, and which was received by him upto 26th January 1950.
The learned Advocate for, the revenue had contended that under the International law, a foreign sovereing was not immune from taxation in respect of his private properties situated in the Taxing State; even if there was such an immunity under the international law, the assessee being under the suzerainty or ,he paramountcy of the British Crown, had never enjoyed the status of a sovereign as understood in the international law and, therefore, was not governed by that law; and that in any event, as on January 26, 1950, the date when he became liable to tax, he was no longer a sovereign and therefore he could not claim exemption under the international law.
Respondent 's Advocate claimed that the assessee was not liable to Income tax on the ground that under the Act, income tax was charged on the assessee 's income received during the accounting year and that as during the accounting year the assessee was a ruling chief, he was exempt from taxation under the international law.
He argued that under the international law, as understood by English Courts, a foreign sovereign was exempt from taxation, that the said interpretation of the law had become the common law of England and that the said common law was the law of India before the Constitution and it continued to have force thereafter reason of Article 372.
(1) 256SupCI/72 26 We have noticed these contentions to show that there is no validity in the submission of the learned Advocate for the assessee, that that question did not directly arise in that case because the Nizam was being assessed in respect of assessment year 1950 1951 and 1951 52, when he was not a ruling prince.
This Court specifically dealt with this matter as can be seen from the observations of Subba Rao J, as he then was at page 670 "International ' law vis a vis the liability of a sovereign to taxation in respect of his private property is in a process of evolution '.
It has not yet become cry stallized." After referring to Halsbury 's Laws of England, 3rd Edition, Volume 20, page, 589 and Oppenheim 's International Law, 8th Edition, Volume 1, page 759 and the Article on immunity from taxation of foreign State owned property in the American Journal of International Law, to which we have already adverted,.
observed "that the question is not free from difficulty and that it requires serious consideration when it directly arises for decision.
Assuming for the purposes of these, appeals that a foreign sovereign who has acquired an international personality has such an immunity from taxation, he proceeded to examine the question whether His Exalted Highness the Nizam had ever acquired international personality.
After examining the position he concluded at page 675 : ".
that Hyderabad State did not acquire international personality under the international law and So its Ruler could not rely upon international.
law for claiming immunity front taxation of his personal properties".
We are not here concerned with the alternative argument in that case, that the Act having applied to the State of Hyderabad , after the inauguration of the Constitution on `6h January '50, the charge as well as the manner of computation of income did not depend on the pre existing law but only upon the provisions of the Act because in these appeals that question does not arise.
in view of this legal position we do not propose to burden this Judgment with any detailed examination.
of the several decisions of the High Courts which were prior to the decision of this Court cited by the learned Advocate in support of the proposition that the ruling chief of an Indian State has the same immunity from taxation as enjoyed by other foreign sovereigns.
Two of 'those cases arose under the where different considerations were applicable (The Patiala State Bank vs C.I.T., Bombay(1), A. H. Wadia, as Agent of the Gwalior Durbar vs C.I.T., Bombay (2).
At any rate in one other case i.e. in Maharaja Bikram Kishore of Tripura vs Province of Assam(3), a distinction was sought to be drawn (1) XI I.T.R. 617.
(2) XVII I.T.R.63.
(3) XVIT I.T.R. 220.
27 between the property of the State and the private property of the ruler.
In that case the question whether the income derived from Chakla Roshanabad Estate was liable to tax under Assam Agricultural Income tax Act, by assessment upon the State of Tripura or by assessment on the ruler of Tripura.
It was held that the Chakla Roshanabad was the State property and not personal property of the then ruling Raja who held it in his capacity as a Ruler.
No doubt in the other two cases refunds were not given for tax deducted at source on the assumption that, the Rulers were not assessees.
In the view we have taken the answer of the High Court to the reference was clearly right and the appeals are accordingly dismissed with costs one set.
S.N. Appeals dismissed.
[/INST]In the last general election to the Lok Sabha the appellants were declared elected and the respondents, who were the unsuccessful candidates challenged the validity of the election on the ground that the ruling party had rigged the election.
According to the respondents many ballot papers were chemically treated so that the mechanically stamped marks in favour of the successful candidates by using invisible ink emerged and the mark actually put at the time of polling disappeared after a few days.
It was alleged that this was done as a result.
of conspiracy between the ruling party and the Election Commission, and that the Election Commission took certain unusual steps for facilitating the substitution of chemically treated ballot papers.
There was no direct evidence of the allegations and the respondents sought to probabilise their version by alleging that the colour of a large number of ballot papers was different from the colour of the original ballot papers, and that at the time of counting, it was noticed that the marking was uniform and at an identical spot in each of the ballot papers in favour of the appellants.
The trial Judge permitted inspection of all the ballot papers polled.
In appeal to this Court it was contended that : (1) that the allegations of the respondent were propaganda stunts wholly devoid of truth; (2) that the attention of the Returning Officer was not invited to the alleged strange features at the time of counting, and (3) that the scrutiny of ballot papers could not be allowed as it violates the secrecy of the ballot.
Dismissing the appeals, HELD: (1) Assuming that the allegation made was mere propaganda it was in the public interest that the allegations are required into the propaganda exposed.
Merely because allegations made are difficult to accept they cannot be dismissed summarily.
In all such matters the court 's aim should be to render complete justice between parties.
If the allegations made raise issues of public importance greater care and circumspection is necessary.
The allegation that the electoral process has been fouled is a very serious allegation and is a challenge to the integrity and impartiality of the Election Commission and a challenge to the survival of democratic institutions.
[180 G H; 181 A B; 182 B C] (2) Assuming that the persons concerned did not inform the Returning Officers of what they observed at the time of counting, it does not estop the respondents from taking the pleas in the election petitions.
It is only a circumstance to be considered on the question of value to be attached to the allegation.
Even assuming that the respondents made the allegations as a result of not merely observing certain facts at the time of counting but on the basis of various rumours, that by itself is not sufficient to brush aside the allegations.
[181 G H] (3) No rigid rules have been laid nor can he laid down for allowing inspection of ballot papers.
The overriding test is the interests of justice, depending on the facts of each case.
A judge while deciding the question 178 of inspection of ballot papers must bear in mind the importance of the secrecy of ballot.
Secrecy of ballot is important but doing justice is more important and it would be more so if what is at stake is the interests of society.
The allegations in support of the prayer for inspection must not be vague or indefinite.
They must be supported by material facts and the prayer made must be a bona fide one.
Further, the allegations regarding the chemical treatment of ballot papers in the present case, cannot be proved in any other manner than by inspection.
[182 C D; 184 E G] But the High Court erred in permitting a general inspection of the ballot papers.
It would be sufficient if some substantial number of ballot papers polled by each of returned candidates are selected from different bundles and compared with the ballot papers cast in favour of the respondents.
If the trial Judge thereafter comes to the conclusion that the matter should be further probed into he may take evidence on the points in issue including the evidence of expert witnesses, and thereafter, decide if it was necessary direct a general inspection of the ballot papers.
[185 F H] Ram Sewak Yadav vs Hussain Kamil Kidwai & ors.
, , Dr. Jagjit Singh vs Giani Kartar Singh, A.I.R. and Jitendra Bahadur Singh vs Krishna Behari & Ors., ; , referred to.
</s>
|
<s>[INST] Summarize the judgement: Criminal Appeal No. 10 of 1979.
Appeal by Special Leave from the Judgment and Order dated 12 10 1978 of the Madhya Pradesh High Court in Criminal Revision No. 336 of 1978.
622 D. N. Mukherjee and N. R. Choudhary for the Appellant.
Dalveer Bhandari for Respondent No. 1.
The Judgment of the Court was delivered by CHINNAPPA REDDY, J.
On the report of the Station House Officer, Manak Chowk, Ratlam, that there was a dispute between Mathuralal and Bhanwarlal concerning a house situated in Kambalpatti, Ghas Bazar, Ratlam, which was likely to cause a breach of the peace, the Sub Divisional Magistrate, Ratlam, passed a preliminary order under Section 145(1) of the Code of Criminal Procedure 1973, on Ist March, 1978.
On 2nd March, 1978, the learned Magistrate attached the subject of dispute under Section 146(1) Criminal Procedure Code considering the case to be one of emergency.
Thereafter, when the learned Magistrate wanted to proceed with the enquiry under Section 145 Criminal Procedure Code, an objection was raised by Mathuralal that such an enquiry was incompetent once the subject of the dispute had been attached under Section 146 Criminal Procedure Code.
The objection was overruled by the learned Magistrate.
Successive Revisions taken before the Sessions Judge and the High Court having borne no fruit, Mathuralal has filed the present appeal by special leave of this Court.
The High Court, we may mention here, thought that the matter was concluded against the appellant by the decision of this Court in Chandu Naik & Ors.
vs Sitaram B. Naik & Anr.(1) Shri Mukherji, learned counsel for the appellant urged that under Section 146 of the Criminal Procedure Code of 1973, an attachment of the subject of dispute could be effected in three situations: (i) if the Magistrate at any time after making the order under Section 145(1) considered the case to be one of emergency, or (ii) if he decided that none of the parties was then in such possession as was referred to in Section 145, or (iii) if he was unable to satisfy himself as to which of them was then in such possession of the subject of dispute.
The attachment so effected, regardless of the situation consequent upon which it was effected, was to subsist until a competent Court determined the rights of the parties with regard to the person entitled to possession.
This, he urged, clearly indicated that after an attachment was effected it was the Civil Court and not the Magistrate that was to have further jurisdiction in the matter.
He contrasted the provisions of Section 146(1) of the present code with the provisions of Section 146(1) and the third proviso to Section 145(4) of the Criminal Procedure Code of 1898 as amended by Act 26 of 1955.
He drew our 623 attention to the circumstance that the third proviso to Section 145(4) of the old Code empowered the Magistrate, if he considered the case one of emergency, to attach the subject of dispute pending his decision under that Section, while Section 146(1) of the previous Code empowered the Magistrate to attach the subject of dispute if the Magistrate was of the opinion that none of the parties was then in possession or if the Magistrate was unable to decide as to which of them was in such possession and thereafter to refer to the Civil Court for decision the question whether any and which of the parties was in possession of the subject of dispute.
Therefore, he said, under the previous Code, in the case of attachment because of emergency the Magistrate was himself competent to decide the question of possession and in the other two cases he was to refer the dispute to the Civil Court, whereas, under the present Code, in all the three situations the Magistrate was to leave the matter for adjudication by the Civil Court.
Thus, the submission of Shri Mukherji was that while under the previous Code it was permissible to attach the subject of dispute pending enquiry by the Magistrate as contemplated by Section 145, such attachment pending decision by the Magistrate was not permissible under the provisions of the present Code.
According to him so soon as the Magistrate effected an attachment he had nothing further to do except await the decision or the directions of the Civil Court.
Though at first blush there appeared to be force in the submissions of Shri Mukherji, a closer scrutiny of the provisions of Sections 145 and 146 exposes their unsoundness.
It may perhaps be desirable, at this stage to extract the provisions of Sections 145 and 146, to the extent that they are relevant, in the Code of 1898 before it was amended in 1955, in the Code of 1898 after it was amended in 1955 and in the Code of 1973: 624 (a) 145 (1) Whenever a District Magistrate, Sub divisional Magistrate or Magistrate of the first class is satisfied from a police report or other information that a dispute likely to cause a breach of the peace exists concerning any land or water or the boundaries thereof, within the local limits of his jurisdiction, he shall make an order in writing, stating the grounds of his being so satisfied, and requiring the parties concerned in such dispute to attend his Court in person or by pleader, within time to be fixed by such Magistrate, and to put in written statements of their respective claims as respects the fact of actual possession of the subject of dispute.
(2). . (3) A copy of the order shall be served in manner provided by this Code for the service of a summons upon such person or persons as the Magistrate may direct, and at least one copy shall be (b) 145 (1) Whenever a District Magistrate, Sub divisional Magistrate or Magistrate of the first class is satisfied from a police report or other information that a dispute likely to cause a breach of the peace exists concerning any land or water or the boundaries thereof, within the local limits of his jurisdiction, he shall make an order in writing, stating the grounds of his being so satisfied, and requiring the parties concerned in such dispute to attend Court in person or by pleader, within a time to be fixed by such Magistrate and to put in written statements of their respective claims as respects the fact of actual possession of the subject of dispute and further requiring them to put in such documents, or to adduce, by putting in affidavits, the evidence of such persons, as they rely upon in support of such claims.
(2). . (3) A copy of the order shall be served in manner provided by this Code for the service of a summons upon such person or persons as the Magistrate may direct, and at least one copy shall be (c) 145 (1) Whenever an Executive Magistrate is satisfied from a report of a police officer or upon other information that a dispute likely to cause a breach of the peace exists concerning any land or water or the boundaries thereof, within his local jurisdiction, he shall make an order in writing, stating the grounds of his being so satisfied, and requiring the parties concerned in such dispute to attend his Court in person or by pleader, on a specified date and time, and to put in written statements of their respective claims as respects the fact of actual possession of the subject of dispute.
(2). . (3) A copy of the order shall be served in manner provided by this Code for the service of a summons upon such person or persons as the Magistrate may direct, and at least one copy shall be 625 published by being affixed to some conspicuous place at or near the subject of dispute.
(4) The Magistrate shall then, without reference to the merits or the claims of any of such parties to a right to possess the subject of dispute, peruse the statements so put in, hear the parties, receive all such evidence as may be produced by them, respectively, consider the effect of such evidence, take such further evidence (if any) as he thinks necessary, and, if possible, decide whether any and which of the parties was at the date of the order before mentioned in such possession of the said subject: Provided that. .
Provided also that, if the Magistrate considers the case one of emergency, he may at any time attach the subject of dispute, pending his decision under this section.
(5) Nothing in this section shall preclude any party so required to attend, or any other person interested, from showing that no such dispute as aforesaid exists published by being affixed to some conspicuous place at or near the subject of dispute.
(4) The Magistrate shall then, without reference to the merits or the claims of any of such parties to a right to possess the subject of dispute, peruse the statements, documents and affidavits, if any, so put in, hear the parties and conclude the inquiry, as far as may be practicable, within a period of two months from the date of the appearance of the parties before him and, if possible, decide the question whether any and which of the parties was at the date of the order before mentioned in such possession of the said subject: Provided that. .
Provided further that. .
Provided also that, if the Magistrate considers the case one of emergency, he may at any time attach the subject of dispute, pending his decision under this section.
(5) Nothing in this section shall preclude any party so required to attend, or any other person interested, from showing that no such dispute as aforesaid exists published by being affixed to some conspicuous place at or near the subject of dispute.
(4) The Magistrate shall then, without reference to the merits or the claims of any of such parties to a right to possess the subject of dispute, peruse the statements so put in, hear the parties, receive all such evidence as may be produced by them, take such further evidence, if any, as he thinks necessary, and, if possible, decide whether any and which of the parties was, at the date of the order made by him under sub section (1), in possession of the subject of dispute: Provided that. . (5) Nothing in this section shall preclude any party so required to attend, or any other person interested, from showing that no such dispute as aforesaid exists 626 (a) or has existed; and in such case the Magistrate shall cancel his said order, and all further proceedings thereon shall be stayed, but, subject to such cancellation, the order of the Magistrate under sub section (1) shall be final.
(6) If the Magistrate decides that one of the parties was or should under the first proviso to sub section (4) be treated as being in such possession of the said subject, he shall issue an order declaring such party to be entitled to possession thereof until evicted therefrom in due course of law, and forbidding all disturbance of such possession until such eviction and when he proceeds under the first proviso to sub section (4), may restore to possession the party forcibly and wrongfully dispossessed.
(7). . (8). . (9). . (10). . (146) (1) If the Magistrate descides that none of the parties was then in such possession, or is unable to satisfy himself (b) or has existed; and in such case the Magistrate shall cancel his said order, and all further proceedings thereon shall be stayed, but, subject to such cancellation, the order of the Magistrate under sub section (1) shall be final.
(6) If the Magistrate decides that one of the parties was or should under the 2nd proviso to sub section (4) be treated as being in such possession of the said subject, he shall issue an order declaring such party to be entitled to possession thereof until elected therefrom in due course of law, and forbidding all disturbance of such possession until such eviction and when he proceeds under the second proviso to sub section (4), may restore to possession the party forcibly and wrongfully dispossessed.
(7). . (8). . (9). . (10). . (146) (1) If the Magistrate is of opinion that none of the parties was then in such possession, of the subject of dispute, he (c) or has existed; and in such case the Magistrate shall cancel his said order, and all further proceedings thereon shall be stayed, but, subject to such cancellation, the order of the Magistrate under sub section (1) shall be final.
(6) (a) If the Magistrate decides that one of the parties was or should under the proviso to sub section (4) be treated as being in such possession of the said subject, he shall issue an order declaring such party to be entitled to possession thereof until evicted therefrom in due course of law, and forbidding all disturbance of such possession until such eviction and when he proceeds under the first proviso to sub section (4), may restore to possession the party forcibly and wrongfully dispossessed.
(b). . (7). . (8). . (9). . (10). . (146) (1) If the Magistrate at any time after making the order under sub section (1) of Section 145 considers the case to be 627 as to which of them was then in such possession of the subject of dispute, he may attach it until a competent Court has determined the rights of the parties thereto, or the person entitled to possession thereof: Provided that the District Magistrate or the Magistrate who has attached the subject of dispute may withdraw the attachment at any time, if he is satisfied that there is no longer any likelihood of a breach of the peace in regard to the subject of dispute.
(2) When the Magistrate attaches the subject of dispute, he may, if he thinks fit and if no receiver of the property, the subject of dispute, has been appointed by any Civil Court appoint a receiver thereof, may attach it, and draw up a statement of the facts of the case and forward the record of the proceeding to a Civil Court of competent jurisdiction to decide the question whether any and which of the parties was in possession of the subject of dispute at the date of the order as explained in sub section (4) of section 145; and he shall direct the parties to appear before the Civil Court on a date to be fixed by him: Provided that the District Magistrate or the Magistrate who has attached the subject of dispute may withdraw the attachment at any time, if he is satisfied that there is no longer any likelihood of a breach of the peace in regard to the subject of dispute.
(1A). . (1B). . (1C). . (1D). . (1E). . (2) When the Magistrate attaches the subject of dispute, he may, if he thinks fit and if no receiver of the property, the subject of dispute, has been appointed by any Civil Court appoint a receiver thereof, one of emergency, or if he decides that none of the parties was then in such possession as is referred to in section 145, or if he is unable to satisfy himself as to which of them was then in such possession of the subject of dispute until a competent court has determined the rights of the parties thereto with regard to the person entitled to the possession thereof : Provided that such Magistrate may withdraw the attachment at any time if he is satisfied that there is no longer any likelihood of breach of the peace with regard to the subject of dispute.
(2) When the Magistrate attaches the subject of dispute he may, if no receiver in relation to such subject of dispute, has been appointed by any Civil Court, make such arrangements as he considers proper for 628 (a) who subject to the control of the Magistrate, shall have all the powers of a receiver appointed under the Code of Civil Procedure.
Provided that, in the event of a receiver of the property, the subject of dispute, being subsequently appointed by any Civil Court, possession shall be made over to him by the receiver appointed by the Magistrate, who shall thereupon be discharge.
(b) who subject to the control of the Magistrate, shall have all the powers of a receiver appointed under the Code of Civil Procedure.
Provided that, in the event of a receiver of the property, the subject of dispute, being subsequently appointed by any Civil Court, possession shall be made over to him by the receiver appointed by the Magistrate, who shall thereupon be discharge.
(c) looking after the property or if he thinks fit, appoint a receiver thereof, who shall have, subject to the control of the Magistrate all the powers of a receiver appointed under the Code of Civil Procedure, 1908 (5 of 1908): Provided that in the event of a receiver being subsequently appointed in relation to the subject of dispute by any Civil Court, the Magistrate (a) shall order the receiver appointed by him to hand over the possession of the subject of dispute to the receiver appointed by the Civil Court and shall thereafter discharge the receiver appointed by him; (b) may make such other incidental or consequential orders as may be just.
629 Quite obviously, Sections 145 and 146 of the Criminal Procedure Code together constitute a scheme for the resolution of a situation where there is a likelihood of a breach of the peace because of a dispute concerning any land or water or their boundaries.
If Section 146 is torn out of its setting and read independently of Section 145, it is capable of being construed to mean that once an attachment is effected in any of the three situations mentioned therein, the dispute can only be resolved by a competent Court and not by the Magistrate effecting the attachment.
But Section 146 cannot be so separated from Section 145.
It can only be read in the context of Section 145.
Contextual construction must surely prevail over isolationist construction.
Otherwise, it may mislead.
That is one of the first principles of construction.
Let us therefore look at Section 145 and consider Section 146 in that context.
Section 145 contemplates, first, the satisfaction of the Magistrate that a dispute likely to cause a breach of the peace exists concerning any land or water or their boundaries, and, next, the issuance of an order, known to lawyers practising in the Criminal Courts as a preliminary order, stating the grounds of his satisfaction and requiring the parties concerned to attend his Court and to put in written statements of their respective claims as regards the fact of actual possession of the subject of dispute.
A preliminary order is considered so basic to a proceeding under Section 145 that a failure to draw up a preliminary order has been held by several High Courts to vitiate all the subsequent proceedings.
It is by making a preliminary order that the Magistrate assumes jurisdiction to proceed under Sections 145 and 146.
In fact, the first of the situations in which an attachment may be effected under Section 146 of the 1973 Code has to be "at any time after making the order under sub section (1) of Section 145" while the other two situations have, necessarily, to be at the final stage of the proceeding initiated by the preliminary order.
Now, the preliminary order is required to enjoin the parties not only to appear before the Magistrate on a specified date but also to put in their written statements.
Sub section (3) of Section 145 prescribes the mode of service of the preliminary order on the parties.
Sub section (4) casts a duty on the Magistrate to peruse the written statements of the parties, to receive the evidence adduced by them, to take further evidence if necessary and, if possible, to decide which of the parties was in possession on the date of the preliminary order.
If the Magistrate decides that one of the parties was in possession he is to make a final order in the manner provided by sub section (6).
Provision for the two situations where the Magistrate is unable to decide which of the parties was in possession or where he is of the view that neither of them was in possession is made in Section 146 630 under which he may attach the subject of dispute until the determination of the rights of parties by a competent Court.
The scheme of Sections 145 and 146 is that the Magistrate, on being satisfied about the existence of a dispute likely to cause a breach of the peace, issues a preliminary order stating the grounds of his satisfaction and calling upon the parties to appear before him and submit their written statements.
Then he proceeds to peruse the statements, to receive and to take evidence and to decide which of the parties was in possession on the date of the preliminary order.
On the other hand if he is unable to decide who was in such possession or if he is of the view that none of the parties was in such possession he may say so.
If he decides that one of the parties was in possession, he declares the possession of such party.
In the other two situations he attaches the property.
Thus a proceeding begun with a preliminary order must be followed up by an enquiry and end with the Magistrate deciding in one of three ways and making consequential orders.
There is no half way house, there is no question of stopping in the middle and leaving the parties to go to the Civil Court.
Proceeding may however be stopped at any time if one or other of the parties satisfies the magistrate that there has never been or there is no longer any dispute likely to cause a breach of the peace.
If there is no dispute likely to cause a breach of the peace, the foundation for the jurisdiction of the magistrate disappears.
The magistrate then cancels the preliminary order.
This is provided by Section 145 sub section (5).
Except for the reason that there is no dispute likely to cause a breach of the peace and as provided by Section 145(5), a proceeding initiated by a preliminary order under Section 145(1) must run its full course.
Now, in a case of emergency, a magistrate may attach the property, at any time after making the preliminary order.
This is the first of the situations provided in Section 146(1) in which an attachment may be effected.
There is no express stipulation in Section 146 that the jurisdiction of the magistrate ends with the attachment.
Nor is it implied.
Far from it.
The obligation to proceed with the enquiry as prescribed by Section 145 sub section 4 is against any such implication.
Suppose a magistrate draws up a preliminary order under section 145(1) and immediately follows it up with an attachment under Section 146(1), the whole exercise of stating the grounds of his satisfaction and calling upon the parties to appear before him and submit their written statements becomes futile if he is to have no further jurisdiction in the matter.
And yet he cannot make an order of attachment under Section 146(1) on the ground of emergency without first making a preliminary order in the manner prescribed by Section 145(1).
There is no reason why we should adopt a construction which will lead to 631 such inevitable contradictions.
We mentioned a little earlier that the only provision for stopping the proceeding and cancelling the preliminary order is to be found in Section 145(5) and it can only be on the ground that there is no longer any dispute likely to cause a breach of the peace.
An emergency is the basis of attachment under the first limb of Section 146(1) and if there is an emergency, no one can say that there is no dispute likely to cause a breach of the peace.
Let us examine if a comparative study of the provisions as they stood, before 1955 and after 1955 under the old Code and as they now stand under the 1973 Code lead us to a conclusion other than that indicated in the preceding paragraph.
From the comparative table of the provisions, it is seen that there were two principal changes made by the 1955 amendment.
The first was that the preliminary order was also to require the parties to put in documents and the affidavits of such persons as they intended to rely upon in support of their claims.
The magistrate was to decide the case on a consideration of the written statements the documents and the affidavits put in by the parties and after hearing them.
The position earlier was that the parties had the right to adduce evidence and the magistrate could take further evidence if he so desired.
The second change was that in the two situations where he was unable to satisfy himself as to which of the parties was in possession or where he decided that none of the parties was in possession, after attaching the property, the magistrate was himself to refer the dispute to the Civil Court instead of leaving it to the parties to go to the Civil Court.
He was to obtain the finding of the Civil Court and thereafter conclude the proceeding under Section 145 Criminal Procedure Code in conformity with the decision of the Civil Court.
The revised procedure introduced by the 1955 amendment was not found to work satisfactorily and, therefore, it was, apparently, thought desirable to revert to the old procedure.
The provisions of Sections 145 and 146 of the 1973 Code are substantially the same as the corresponding provisions before the 1955 amendment.
The only noticeable change is that the second proviso to Section 145(4) (as it stood before the 1955 amendment) has now been transposed to Section 146 but without the words "pending his decision under this Section" and with the words "at any time after making the order under Section 145(1)" super added.
The change, clearly, is in the interests of convenient draftsmanship.
All situations in which an attachment may be made are now mentioned together in Section 146.
The words "pending his decision under this section" have apparently been omitted as unnecessary since Section 145 provides how the proceeding initiated by a preliminary order must pro 632 ceed and end and therefore an attachment made 'at any time after making under Section 145(1) ' can only continue until the termination of the proceeding.
At the termination of the proceeding, if he finds one of the parties was in possession as stipulated, the magistrate must make an order as provided in Section 145(6) and withdraw the attachment as provided in Section 146(1) since there can be no dispute likely to cause a breach of the peace once an order in terms of Section 145(6) is made.
In our view, it is wrong to hold that the magistrate 's Jurisdiction ends as soon as an attachment is made on the ground of emergency.
A large number of cases decided by several High Courts some taking one view and the other a different view were read to us.
We do not consider it necessary to refer to them except to acknowledge that we derived considerable assistance from the judgment of Lahiri, J., in Kshetra Mohan Sarkar vs Paran Chandra Mandal(1), in arriving at our conclusion.
We may also add that the question now at issue did not arise for consideration in Chandu Naik & Ors.
vs Sitaram B. Naik & Anr.
(supra).
What was decided there was that a proceeding under Section 145 Criminal Procedure Code did not abate because of Section 8 of the Maharashtra Vacant Land (Prohibition of unauthorised Occupation and Summary Eviction) Act, 1975.
In the result the appeal is dismissed.
P.B.R. Appeal dismissed.
[/INST]The Kerala Building Tax Act, 1975 passed by the State Legislature under Entry 49 of List II (Taxes on lands and buildings) is imposed as a non recurring tax on buildings, constructed on or after April 1, 1973, the "capital value" of which exceeds Rs. 20,000/ .
The term "capital value" is defined to mean the value arrived at by multiplying the 'annual value" of a building by sixteen.
"Annual value" means the gross annual rent on which the building may, at the time of completion, be expected to let from month to month or from year to year.
Section 6 provides that the annual value of a building shall be the annual value fixed for that building in the assessment books of the local authority (which includes a Municipal Corporation or a municipality and so on) within whose area the building is situate.
Section 6(4) provides that in determining the annual value of a building regard must be had to the location of the building, the nature and quality of the structure of the building, the capability of the building and so on.
An assessee objecting to the assessment of building tax assessed or denying the liability may appeal to the Appellate Authority under section 11.
But no appeal lies unless the building tax due has been paid.
Although no appeal lies from the decision of the Appellate Authority, provision is made for reference to the District Court on a question of law and the District Collector is given power to revise the order of the Appellate Authority and the Government has the power of revision against the order of the District Collector.
Jurisdiction of Civil Court is barred by, section 27 of the Act.
The High Court, having upheld the validity of the Act, the appellants in their appeals impugned the view of the High Court.
It was contended on behalf of the appellants that (1) the tax levied on buildings being a tax on the capital value of the assets falls within the scope of entry 86 of List I of the Seventh Schedule and, therefore, is beyond the legislative competence of the State Legislature; (2) the Act was unconstitutional in that it imposed a tax on buildings retrospectively (over a period of 2 years of its enactment); (3) it was not merely a tax on buildings but a tax on the buildings, and lands of those buildings; (4) the method of determining the capital value of a building on the basis of its annual value is hypothetical and arbitrary and is, therefore, unconstitutional.
^ HELD: 1 There is no force in the argument that the State Legislature was not competent to impose a tax on the buildings under entry 49 of List II.
[818 B] (a) Article 366(28) defines tax to include imposition of any tax whether general, local or special.
The word "tax" in its widest sense includes all money 805 raised by taxation and includes tax levied both by the Central and State Legislatures as well as rates and charges levied by local authorities [815 D E] (b) The term "assets" referred to in entry 86 of List I means "Property in general, all that one owns.
" If a tax is levied on "all that one owns" or his total assets, it would fall within the purview of entry 86 and therefore would be outside the legislative competence of the State Legislature.
On the other hand, if a tax is directly imposed on "buildings" it will bear direct relation to the buildings owned by the assessee.
Though the building owned by an assessee is a component of his total assets, the tax under entry 86 will not bear any direct or definable relation to his building.
A tax on "buildings" is, therefore, a direct tax on buildings as such.
It is not a personal tax without reference to any particular property.
[815 H, 816 A B] (c) A tax has two elements: the person, thing or activity on which it is imposed and the amount of the tax.
The amount of tax may be measured in many ways.
There is a distinction between the subject matter of a tax and the standard by which the amount of tax is measured.
Thus a building may be the subject matter of a tax like wealth tax (entry 86 List I) or it may also be the subject of a direct tax under entry 49 of List II.
The two taxes being separate and distinct, the do not over lap each other.
Therefore the tax imposed in the instant case is well within the competence of the legislature.
[816 E Fl Sudhir Chandra Nawn vs Wealth Tax officer Calcutta & Ors., ; ; Assistant Commissioner of Urban Land Tax and ors.
vs The Buckingham and Carnatic Co. Ltd., Etc., ; referred to.
(d) It is settled law that the quantum of tax levied by the taxing statute and the conditions subject to which it is levied are matters within the competence of the legislature and so long as the tax is not confiscatory or extortionate the reasonableness of the tax cannot be questioned in a court of law.
[828 D E] Rai Ramkrishan & Ors.
vs The State of Bihar, ; ; Kunnathat Thathunni Moopil Nair vs The State of Kerala & Anr., ; referred 2(a).
The Act is not retrospective in the strictly technical sense of the term.
A statute is deemed to be retrospective, when it takes away or impairs any vested right acquired under existing laws or creates a new obligation in respect F ' of the transactions or considerations already past.
The Act, though passed in April 1975, had imposed a tax on buildings with retrospective effect from April 1973.
By so doing it has not taken away or impaired any vested right of the owner of the building acquired under any existing law.
Absence of an earlier taxing statute cannot be said to create a "vested right" under any existing law.
Nor has any new obligation or disability been attached in respect of any earlier tax transaction.
If the language of the enactment shows that the legislature thought it expedient to authorise the making of retrospective rates, it can fix the period as to which the rate may be retrospectively made.
[828 D H] Bradford Union vs Wilts, ; The Tata Iron & Steel Co Ltd. vs The State of Bihar, ; referred to.
(b) The choice of the legislature to impose a tax on buildings with effect from April 1, 1973 cannot be said to be discriminatory.
The choice of a date as a basis for classification cannot be dubbed as arbitrary even if no particular reason is forthcoming unless it is shown that it was capricious or whimsical 15 625SCI/79 806 Similarly unless it is shown that the fixing of the date is very wide of the reasonable mark the decision of the legislature must be accepted.
[819 C D] In the instant case, after the 1961 Act was struck down by this Court in 1968 the Government declared its intention to introduce a fresh Bill so as to bring a new Act into force from April 1970.
After its introduction in the Assembly it was referred to a Select Committee which recommended that the Act should be brought into force from April 1, 1973.
Two ordinances giving effect to the provisions of the draft Bill were promulgated and eventually the Bill became an Act in April, 1975.
These facts would not show that the choice of the date of April 1, 1973 was unreasonable or that it was wide of the reasonable mark.
[819 E G] 3(a).
What entry 49 of List II permits is the levy of "taxes on lands and buildings.
" It is permissible Under this entry to levy a tax either on lands as well as buildings, or on lands, or on buildings, if the legislature decides to impose a tax only on buildings, the tax would be imposed on all that goes to make or constitute a building.
[820 B C] (b) The word "building" means "that which is built; a structure.
edifice;" The natural and ordinary meaning of a "building" is, a "a fabric of which it is composed, the ground upon which its walls stand and the ground embraced within those walls.
" Entry 49 includes the side of the building as its component part.
[820 C D] (c) The definition of the term "building" in the Act makes it clear that a house, outhouse, garage or any other structure cannot be erected without the ground on which it is to stand.
The expression "building" includes the fabric of which it is composed, the ground upon which its walls stand and the ground within those walls because the ground would not have a separate existence, apart from the building.
The ground referred to in Entry 49 List II would not be the subject matter of a separate tax, apart from the tax on the building standing on it.
That being so there is no occasion to tax the site separately or to ascertain its value and add it to the value of the fabric.
[820 F G] (d) This is also the position in the case of appurtenances.
An appurtenance belongs to the building concerned and has no existence of its own.
An appurtenance, it its true sense, is an integrated part of the building to which it belongs.
[826 F G] (e) In the matter of fixing the annual value of the building under section 6 regard must be had to the "location of the building" and the "value of the land on which the building constructed", but it does not bear on the annual value of the ground of the building which does not have an existence of its own apart from the building.
It is therefore futile to contend that as factors (a) and (f) of sub section 4 of section 6 refer to the location of the building and the value of the land, the law recognises the separate existence or entity of the ground on which the buildings stands, so that the tax imposed under it is a tax both on lands and buildings and both entities should be separately recognised and determined, and taxed as such [821 C E] 4(a) When the State Legislature had decided to impose a tax, it was open to it to decide how best to levy it.
One of the usual modes of levying tax is to make provision for determining the "rate", or annual value of the building.
Rateable value is the same as the net annual value of the building.
But 807 if the Legislature decides to levy a tax on buildings once for all or, as a "non recurring tax on buildings, it has to go beyond the annual value, and work out the capital value which could be done on the basis of capital cost of construction of the building or its market value or on the basis of rent arrived at by what is known as "higgling of the market" multiplying it by a number which would best serve the purpose of determining the value of the building and then to specify the rate of tax on it.
[822 C F] (b) If the Legislature chose to adopt the annual value as the basis for working out the capital value it cannot be blamed for it because besides other advantages it is readily available from the records of local authorities and is a quite simple and reliable basis to work upon.
[828 B C] (c) The various methods of properly valuation are the various facets to a difficult problem and no one method is perfect or final or above criticism.
The multiple of sixteen adopted cannot be said to suffer from any constitutional or legal infirmity.
[830 G H] (d) The capital value of a building is not merely the cost of its bricks and mortar.
It may be difficult to provide a ready or convenient basis of taxation.
There can be no objection if the Legislature decides to levy the annual value of a building and prescribes a uniform formula for determining its capital value.
The four well accepted methods for arriving at the annual value of the building, are: (I) The "competitive or comparative method ' '; (2) the 'profits basis"; (3) the "contractor 's method"; and (4) the "unit method".
These four methods can be applied either singly or in combination.
[823 B E] (e) The fundamental object of each of these methods is to find out the rent which the tenant might reasonably be expected to pay for a building.
It is the expectation which is to be reasonable and not necessarily the rent tor the reasonable expectation would exclude any so called black market rent.
But there is no rule of law as to the method of valuation to be adopted for determining the annual value of a building.
If the Legislature selects the method of determining the annual value on the basis of rent, that is the best evidence of value.
If it has been fixed by the higgling of the market there is neither reason nor authority for holding that it is hypothetical or arbitrary.
[823 G H, 824 A B] (f) The provisions of the Act, taken together, contain the entire scheme for the levy and collection of the building tax on the capital value of building.
The expression "capital value" is not the cost of construction of the building or its market value as wealth but is only a working expression which, roughly stated, is the taxable value of the building.
The State Legislature was quite competent to select that as the basis for assessing the building tax.
[824 D E] (g) There is no inherent illegality if the gross income of the property were to be capitalised for the purpose of determining the value of the property.
firstly, because there is nothing to prevent the Legislature from making the expected gross annual rent and thereby the annual value of a building from being the unit for multiplication by sixteen for arriving at its capital value for charging tax under section 5.
Secondly, by virtue of section 6 the annual value forms the basis for determining the capital value of the building for the purposes of the Act.
However what is really taken as the annual value under the determining in section 2(a) is not the gross annual rent but the net rent after allowing for the 808 cost of its repairs etc.
It is not therefore factually correct to say that the annual value of the buildings in the State is determined on the basis of their gross annual rent without any deduction on account of repairs.
Nor is it correct to say that the determination of the capital value was arbitrary as it was arrived at by multiplying the gross annual rent by sixteen.
The gross value of a building is often made the datum point by statute and there is nothing unusual or illegal about it particularly when there are statutable deductions from it.
[825 C H] (h) Section 6(1) accepts the annual value of a building in the books of the local authorities as correct.
But that would not justify the argument that doing so is illegal or unreasonable as long as it can be shown that what is entered in the assessment books of the local authorities has been arrived at in accordance with a satisfactory procedure laid down for it in the statutes concerned.
If the procedure prescribed in that Act is unexceptionable, there is nothing illegal or unconstitutional if another taxing statute provides that the annual value fixed by it shall be accepted as correct and would From the basis for the calculation of any other tax permissible under another statute.
such cases there is no necessity for providing another machinery in the other Act and Rules.
Moreover sections 9 to 16 of the Act contain the procedure and the machinery for the assessment of the building tax on the returns filed under sections 7 and 8.
These provisions are adequate in all respects and are not open to challenge.
[831 F H, 832 A B] 5.
(a) The argument that the capital value of a building is bound to differ according to its location, amenities and appurtenances etc.
and that ascertainment of the capital value by multiplying the annual value by sixteen is discriminatory and violative of article 14, loses sight of the fact that the Legislature has defined the annual value to mean the annual rent at which a building may be expected to let.
[833 H, 834 A B] (b) A building in an important locality with attractive appurtenance is expected to fetch a higher rent than a building without those advantages.
The definition capital value provides for the levy of a higher building tax on buildings on which such levy would be justified, because the incidence of the levy would depend on the capacity of the building to fetch the rent.
[834 B C] 6.
There is no force in the argument that when section 29 says that in fixing the fair rent of a building under section S of the Rent Control Act, the rent control court would not take into consideration the building tax payable under the Act and that this makes the provision extortionate because it prevents the owner from passing on the liability to the tenant.
The tax being a non recurring tax, the question of passing it on to the tenant by splitting it up in proportion to the number of years of the tenancy cannot arise.
There is no provision in the Rent Control Act under which a building tax could be taken into consideration in fixing the fair rent.
[834 D F] 7.
Section 18 which provides that tax may be paid in certain prescribed number of instalments and the proviso to section 11(1) which deals with appeals should be read harmoniously.
If an assessee is entitled to pay the building tax in instalments, he would not be disentitled to file an appeal if he has paid those instalments as and when they fell due.
[834 G Hl 809
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