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<s>[INST] Summarize the judgementAppeal No. 162 of 1952.
Appeal from the Judgment and Order dated the 7th day of June, 1951, of the High Court of Judicature at Calcutta in Income tax Reference No. 60 of 1950 arising out of the Order dated the 22nd day of November, 1949, of the Income tax Appellate Tribunal in I.T.A. Nos. 1026 and 1027 of 1948 49 N. C. Chatterjee for the appellant.
Porus A. Mehta for the respondent.
November, 11.
The Judgment of the Court was delivered by, BHAGWATI J.
This appeal from the judgment And order of the High Court of Judicature at Calcutta with leave under section 66 A (2) of the Indian Income tax Act raises an interesting question as to the line of demarcation between capital expenditure and revenue expenditure.
On the 14th November, 1938, the appellant company acquired from the Government of Assam a lease of certain limestone quarries, known as the Komorrah quarries situated in the Khasi and Jaintia Hills District for the purpose of carrying on the manufacture of cement.
The lease was for 20 years commencing on the 1st November, 1938, and ending on the 31st October, 1958, with a clause for renewal for a further term of 20 years.
The rent reserved was a half yearly rent certain of Rs. 3,000 for the first two years and thereafter a half yearly rent certain of Rs. 6,000 with the provision for payment of further royalties in certain events.
In addition to these rents and royalties two further sums were payable under the special covenants contained in clause& 4 and 5 of the lease as " protection fees ".
Under clause 4 the protection was in respect of another group of quarries called the Durgasil area, the lessor undertaking not to grant any lease, permit or prospecting licence regarding the limestone to any other party 976 therein without a condition that no limestone should be used for the manufacture of cement in consideration of a sum of Rs. 5,000 payable annually during the whole period of the lease.
Under clause 5 a further protection was given in respect of the whole of the Khasi and Jaintia Hills District, a similar undertaking being given by the lessor in consideration of a sum of Rs. 35,000 payable annually but only for 5 years from the 15th November, 1940.
In the accounting years 1944 45 and 1945 46 the company paid its lessor sums of Rs. 40,000 in accordance with these two covenants and claimed to deduct the sums in the computation of its business profits under the provisions of section 10(2) (xv) of the Income tax Act in the assessments for the assessment years 1945 46 and 1946 47.
The Income tax Officer, the Appellate Assistant Commissioner and the Appellate Tribunal rejected the contention of the company and the following question, as ultimately reframed, was at the instance of the company referred by the Tribunal to the High Court for its decision : " Whether, in the circumstances of the case, the two sums of Rs. 5,000 and Rs. 35,000 paid under clauses 4 and 5 of the deed of the 14th November, 1938, were rightly disallowed as being expenditure of a capital nature and so not allowable under section 10(2) (xv) of the Indian Income tax Act ".
The High Court answered the question in the affirmative and hence this appeal.
Clauses 4 and 5 of the deed of lease may be here set out : 4.
The lessee shall pay to the lessor Rs. 5,000 (Rupees five thousand) only annually during the period of the lease on November 15th starting from November 15th, 1938, as a protection fee.
In consideration of that protection fee the lessor undertakes not to allow any person or company any lease permit or prospecting licence for limestone in the group of quarries as described in Schedule 2 and delineated in the plan thereto annexed and therein coloured blue called the Durgasil area without a condition in such 977 lease permit or prospecting licence that no limestone ,shall be used for the manufacture of cement.
5.Besides the above protection fee the lessee shall pay to the lessor annually the sum of Rs. 35,000 (Rupees thirty five thousand) only for five years starting from the 15th day of November, 1940, as a further protection fee so long as the total amount of limestone quarried by the lessee in a year does not exceed 22,00,000 maunds per year whether quarried in the area of this lease or elsewhere or obtained by purchase from other quarries in the Khasi and Jaintia Hills by the lessees.
If, however, in any year the total amount of limestone converted into cement at the lessee 's Sylhet,Factory exceed 22,00,000 maunds the lessee will be entitled to an abatement at the rate of Rs. 20 for every 1,000 maunds quarried in excess of 22,00,000 maunds and the lessee shall pay the sum of Rs. 35,000 less the abatement calculated on the basis hereinbefore mentioned.
Limestone which is not converted into cement at the lessee 's factory in Sylhet district will not entitle the lessee to any abatement in the protection fee.
The lessor in consideration of the said payment undertakes not to allow any person or company any lease permit or prospecting licence for limestone in the whole of Khasi and Jaintia Hills district without a condition in such lease permit or prospecting licence that no limestone extracted shall be used directly or indirectly for the manufacture of cement.
The lessor will be empowered to terminate this agreement for the payment of a protection fee at any time after it has run for 5 years by giving six month,% ' notice in writing by registered letter addressed to 11, Clive Street, Calcutta but the lessee will not be entitled to terminate this agreement during the currency of the lease except with the consent of the lessor.
It is not clear as to what was meant by the last provision contained in clause 5, the lessee in the event of his having paid the sum of Rs. 35,000 for the 5 years having nothing else to do but enjoy the benefit of the covenant on the part of the lessor during the subsequent period of the lease.
This provision is however immaterial for our purposes.
978 The line of demarcation between capital expenditure and revenue expenditure is very thin and learned Judges in England have from time to time pointed out the difficulties besetting that task.
Lord Macnaghten a Dovey vs Cory(1), administered the following warning: I do not think it desirable for any tribunal to do that which Parliament has abstained from doing that is, to formulate precise rules for the guidance or embarrassment of business men in the conduct of business affairs.
There never has been, and I think there never will be, much difficulty in dealing with any particular case on its own facts and circumstances; and, speaking for myself, I rather doubt the wisdom of attempting to do more." Rowlatt J. also expressed himself much to the same effect in Countess Warwick Steamship Co. Ltd. vs Ogg(1): " It is very difficult, as I have observed in previous cases of this kind, following the highest possible authority, to lay down any general rule which is both sufficiently accurate and sufficiently exhaustive to cover all or even a great number of possible cases, and I shall not attempt to lay down any such rule.
" Certain broad tests have however been attempted to be laid down and the earliest was the one indicated in the following observations of Bowen L.J. in the course of the argument in City of London Contract Corporation vs Styles (3) : " You do not use it 'for the purpose of ' your concern, which means, for the purpose of carrying on your concern, but you use it to acquire the concern.
" The expenditure in the acquisition of the concern would be capital expenditure; the expenditure in carrying on the concern would be revenue expenditure.
Lord Dunedin in Vallambrosa Rubber Co., Ltd. vs Farmer ( 4), suggested another criterion at page 536 : Now, I don 't say that this consideration is absolutely final or determinative, but in a rough way I think it is not a bad criterion of what is capital (1) , 488.
(2) [1924] 2 K.B. 292, 298.
(3)(1887) , 243.
(4)(1910) , 536.
979 expenditure as against what is income expenditure to say that capital expenditure is a thing that is a going to be spent once and for all, and income expenditure is a thing that is going to recur every year.
" This test was adopted by Rowlatt J. in Ounsworth (Surveyor of Taxes) vs Vickers Ltd. (1), and after quoting the above passage from the speech of Lord Dunedin he observed that the real test was between expenditure which was made to meet a continuous demand for ex.
penditure as opposed to an expenditure which was made once for all.
He however suggested in the course of his judgment another view point and that was whether the particular expenditure could be put against any particular work or whether it was to be regarded as an enduring expenditure to serve the business as a whole, thus laying the foundation for the test prescribed by Viscount Cave L.C. in Atherton 's case (2).
Atherton vs British Insulated and Helsby Cables Ltd. (2), laid down what has almost universally been accepted as the test for determining what is capital expenditure as distinguished from revenue expenditure.
Viscount Cave L.C. there observed at page 192: "But there remains the question, which I have found more difficult, whether apart from the express prohibitions, the sum in question is (in the words used by Lord Sumner in Usher 's case(3) ), a proper debit item to be charged against incomings of the trade when computing the profits of it; or, in other words, whether it is in substance a revenue or a capital expenditure.
This appears to me to be a question of fact which is proper to be decided by the Commissioners upon the evidence brought before them in each case ; but where, as in the present case, there is no express finding by the Commissioners upon the point, it must be determined by the Courts upon the materials which are available and with due regard to the principles which have been laid down in the authorities.
Now, in Vallambrosa Rubber Company vs Farmer (4).
Lord Dunedin, as Lord President of the Court of Session, expressed the opinion that "in a rough way" it was (1)(1915) (2)(1925) (3)(19I4) (4)(19IO) 536, 980 "not a bad criterion of what is capital expenditure as against what is income expenditure to say that capital expenditure is a thing that is going to be spent once and for all and income expenditure is a thing which is going to recur every year" ; and no doubt this is often a material consideration.
But the criterion suggested is not, and was obviously not, intended by Lord Dunedin to be a decisive one in every case; for it is easy to imagine many cases in which a payment, though made "once and for all", would be properly chargeable against the receipts for the year. .
But when an expenditure is made, not only once and for all.
but with a view to bringing into existence an asset or an advan tage for the enduring benefit of a trade, I think that there is very good reason (in the absence of special circumstances leading to an opposite conclusion) for treating such an expenditure as properly attributable not to revenue but to capital." Viscount Haldane however in John Smith & Son vs Moore (H. M. Inspector of Taxes) (1), suggested another test and that was the test of fixed or circulating capital, though even there he observed that it was not necessary to draw an exact line of demarcation between the fixed and circulating capital.
The line of demarcation between fixed and circulating capital could not be defined more precisely than in the description of Adam Smith of fixed capital as what the owner turns to profit by keeping it in his own possession, and circulating capital as what he makes profit of by parting with it and letting it change masters.
This test was adopted by Lord Hanworth M.R. in Anglo Persian Oil Co. vs Dale (2), where he observed: " I am inclined to think that the question whether the money paid is provided from the fixed or the circulating capital comes as near to accuracy as can be suggested.
Lord Cave 's test, that where money is spent for an enduring benefit it is capital, seems to leave open doubts as to what is meant by "enduring" . . . . (1) , 282.
(2) ,138.
981 It seems rather that the cases of Hancock (1) and of Mitchell vs B. W. Noble, Ltd. (2) and of Mallet vs Staveley Coal & Iron Co. (3), give illustrations that the test of fixed or circulating capital is the true one; and where, as in this case, the expenditure is to bring back into the hands of the company a necessary ingredient of their existing business important, but still ancillary and necessary to the business which they carry onthe expenditure ought to be debited to the circulating capital rather than to the fixed capital, which is em.
ployed in and sunk in the permanent even if wasting assets of the business.
" This preference of his was reiterated by Lord Hanworth M.R. in Golden Horse Shoe (New) Ltd. vs Thurgood (H. M. Inspector of Taxes) "The above cases serve to establish the difficulty of the question rather than to affirm any principle to be applied in all cases.
Indeed, in the last case cited, Atherton vs British Insulated and Helsby Cables Ltd. (5) Lord Cave says that a payment 'once and for all ' a test which had been suggested by Lord Dunedin in Vallambrosa Rubber Company ' vs Farmer(1), was not true in all cases, and he found authority for that statement in Smith vs Incorporated Council of Law Reporting for England and Wales (7) and the Anglo Persian case(8 ) already referred to is another.
The test of circulating, as contrasted with fixed capital, is as good a test in most cases, to my mind, as can be found ; but that involves the question of fact, was the outlay in the particular case from fixed or circulating capital ?" Romer L.J. at page 300 pointed out the difficulties in applying this test also.
"Unfortunately, however, it is not always easy to determine whether a particular asset belongs to the one category or the other.
It depends in no way upon what may be the nature of the asset in fact or in law.
Land may in certain circumstances be circulating (2) (2) (1927] 1 K.B. 719.
(3) (1928] 2 K.B. 405.
(4) , 298. 125 (5) , 192.
(6) (7) (8) 982 capital.
A chattel or a chose in action may be fixed capital.
The determining factor must be the nature of the trade in which the asset is employed.
The land upon which a manufacturer carries on his business is part of his fixed capital.
The land with which a dealer in real estate carries on his business is part of his circulating capital.
The machinery with which a manufacturer makes the articles that he sells is part of his fixed capital.
The machinery that a dealer in machinery buys and sells is part of his circulating capital, as is the coal that a coal merchant buys and sells in the course of his trade.
So, too, is the coal that a manufacturer of gas buys and from which he extracts his gas. " In Van Den Berghs, Limited vs Clark (H. M. Inspector of Taxes)(1), Lord Macmillan however veered round to Viscount Cave 's test and expressed his disapproval of the test of fixed and circulating capital.
He reviewed the various authorities and stated : " My Lords, if the numerous decisions are examined and classified, they will be found to exhibit a satisfactory measure of consistency with Lord Cave 's principle of discrimination.
" As regards the test of fixed and circulating capital he observed, at page 432 : " I have not overlooked the criterion afforded by the economists ' differentiation between fixed and circulating capital which Lord Haldane invoked in John Smith & Son vs Moore(1), and on which the Court of Appeal relied in the present case, but I confess that I have not found it very helpful. " The Privy Council in Tata Hydro Electric Agencies, Limited, Bombay vs Commissioner of Income tax, Bombay Presidency and Aden(1), pronounced at page 226: "What is money wholly and exclusively laid out for the purposes of the trade ' is a question which must be determined upon the principles of ordinary commercial trading.
It is necessary, accordingly, to attend (1) ; (2) , (3) (1937) L.R, 64 I.A. 215.
983 to the true nature of the expenditure, and to ask oneself the question, is it a part of the company 's working expenses; is it expenditure laid out as part of the process of profit earning ?" In the case before them they came to the conclusion that the obligation to make the payments was undertaken By the appellants in consideration of their acquisition of the right and opportunity to earn profits, i.e., of the right to conduct the business and not for the purpose of producing profits in the conduct of the business.
The distinction was thus made between the acquisition of an income earning asset and the process of the earning of the income.
Expenditure in the acquisition of that asset was capital expenditure and expenditure in the process of the earning of the profits was revenue expenditure.
This test really is akin to the one laid down by Bowen L.J. in The City of London Contract Corporation Ltd. vs Style8(1).
Dixon J. expressed a similar opinion in Sun Newspapers Limited and the Associated Newspapers Limited vs The Federal Commissioner of Taxation(1), at page 360: " But in spite of the entirely different forms, material and immaterial, in which it may be expressed, such sources of income contain or consist in what has been called a 'profit yielding subject," the phrase of Lord Blackburn in United Collieries Ltd. vs Inland Revenue Commissioners(3).
As general conceptions it may not be difficult to distinguish between the profit yielding subject and the process of operating it.
In the same way expenditure and outlay upon establishing, replacing and enlarging the profit yielding subject may in a general way appear to be of a nature entirely different from the continual flow of working expenses which are or ought to be supplied continually out of the returns of revenue.
The latter can be considered, estimated and determined only in relation to a period ,or interval of time, the former as at a point of time.
For the one concerns the instrument for earning profits (1) (2) (1038) ; (3) , 220.
984 and the other the continuous process of its use or employment for that purpose.
These are the three criteria adopted for distinguishing capital expenditure from revenue expenditure though it must be said that preponderance of opinion is to be found in support of Viscount Cave 's test as laid down in Atherton 's case(1).
Viscount Cave 's test has also been adopted almost universally in India: vide Munshi Gulab Singh & Sons V. Commissioner of Income tax(2), Commissioner of Income tax, Bombay vs Century Spinning, Weaving & Manufacturing Co. Ltd.(1), Jagat Bus Service, Saharanpur vs Commissioner of Income tax, U. P. & Ajmer Merwara(4), and Commissioner of Income tax, Bombay vs Finlay Mills Ltd.(5).
In Commissioner of Income tax, Bombay vs Century Spinning, Weaving & Manufacturing Co., Ltd.(3), Chagla J. observed, at page 116: " The legal touchstone which is almost invariably applied is the familiar dictum of Viscount Cave in Atherton 's case(1). .
Romer L.J. felt that this definition had placed the matter beyond all controversy see remarks in Anglo Persian Oil Co. 's case(6).
But Lord Macmillan in Van Den Bergh 's case(1), felt that Romer L.J. had been unduly optimistic and the learned Law Lord was of the opinion that the question whether a particular expenditure fell on one side of the line or other was a task of much refinement.
But on the whole I think that the definition of Viscount Cave is a good working definition ; and if one were to supplement it with the definition suggested by Mr. Justice Lawrence in Southern vs Borax Consolidated Ltd.(1), whether an expenditure had in any way altered the original character of the capital asset, we have a legal principle which can be applied to any set of given facts.
(1) (1925) to T.C. 155.(5) (1952] S.C.R. 11.
(2) [1945]14 I.T.R. 66.(6) (3) ; (4) [1942] 10 I.T.R. Suppl.
1, 6. 985 In Benarsidas Jagannath, In re(1), a Full Bench of the Lahore High Court attempted to reconcile all these decisions and deduced the following broad test for distinguishing capital expenditure from revenue expenditure.
The opinion of the Full Bench was delivered by Mr. Justice Mahajan as he then was, in the terms following: " It is not easy to define the term 'capital expenditure ' in the abstract or to lay down any general and satisfactory test to discriminate between a capital and a revenue expenditure.
Nor is it easy to reconcile all the decisions that were cited before us for each case has been decided on its peculiar facts.
Some broad principles can, however, be deduced from what the learned Judges have laid down from time to time.
They are as follows : 1.
Outlay is deemed to be capital when it is made for the initiation of a business, for extension of a business, or for a substantial replacement of equipment: vide Lord Sands in Commissioners of Inland Revenue vs Granite City Steamship Company(1).
In City of London Contract Corporation vs Styles(1), at page 243, Bowen L.J. observed as to the capital expenditure as follows : " You do not use it 'for the purpose of ' your concern, which means, for the purpose of carrying on your concern, but you use it to acquire the concern.
Expenditure may be treated as properly attributable to capital when it is made not only once and for all, but with a view to bringing into existence an asset or an advantage for the enduring benefit of a trade: vide Viscount Cave L.C. in Atherton vs British Insulated and Helsby Cables Ltd.(1).
If what is got rid of by a lump sum payment is an annual business expense chargeable against revenue, the lump sum payment should equally be regarded as a business expense, but if the lump sum payment brings in a capital asset, then that puts the business on another footing altogether.
Thus, if labour saving machinery was acquired, the cost of such acquisition cannot be (1) (3) (2) , 14.
(4) 986 deducted out of the profits by claiming that it relieves the annual labour bill, the business has acquired anew asset, that is, machinery.
The expressions 'enduring benefit ' or 'of a permanent character ' were introduced to make it clear that the asset or the right acquired must have enough durability to justify its being treated as a capital asset.
3.Whether for the purpose of the expenditure, any capital was withdrawn, or, in other words, whether the object of incurring the expenditure was to employ what was taken in as capital of the business.
Again, it is to be seen whether the expenditure incurred was part of the fixed capital of the business or part of its circulating capital.
Fixed capital is what the owner turns to profit by keeping it in his own possession.
Circulating or floating capital is what he makes profit of by parting with it or letting it change masters.
Circulating capital is capital which is turned over and in the process of being turned over yields profit or loss.
Fixed capital, on the other hand, is not involved directly in that process and remains unaffected by it".
This synthesis attempted by the Full Bench of the Lahore High Court truly enunciates the principles which emerge from the authorities.
In cases where the expenditure is made for the initial outlay or for extension of a business or a substantial replacement of the equipment, there is no doubt that it is capital expenditure.
A capital asset of the business is either acquired or extended or substantially replaced and that outlay whatever be its source whether it is drawn from the capital or the income of the concern is certainly in the nature of capital expenditure.
The question however arises for consideration where expenditure is incurred while the business is going on and is not incurred either for extension of the business or for the substantial replacement of its equipment.
Such expenditure can be looked at either from the point of view of what is acquired or from the point of view of what is the source from which the expenditure is incurred.
If the expenditure is made for acquiring or bringing into existence an. asset or advantage for the enduring benefit of the 987 business it is properly attributable to capital and is of the nature of capital expenditure.
If on the other hand it is made not for the purpose of bringing into existence any such asset or advantage but for running the business or working it with a view to produce the profits it is a revenue expenditure.
If any such asset or advantage for the enduring benefit of the business is thus acquired or brought into existence it would be immaterial whether the source of the payment was the capital or the income of the concern or whether the payment was made once and for all or was made periodically.
The aim and object of the expenditure would determine the character of the expenditure whether it is a capital expenditure or a revenue expenditure.
The source or the manner of the payment would then be of no consequence.
It is only in those cases where this test is of no avail that one may go to the test of fixed or circulating capital and consider whether the expenditure incurred was part of the fixed capital of the business or part of its circulating capital.
If it was part of the fixed capital of the business it would be of the nature of capital expenditure and if it was part of its circulating capital it would be of the nature of revenue expenditure.
These tests are thus mutually exclusive and have to be applied to the facts of each particular case in the manner above indicated.
It has been rightly observed that in the great diversity of human affairs and the complicated nature of business operations it is difficult to lay down a test which would apply to all situations.
One has therefore got to apply these criteria, one after the other from the business point of view and come to the conclusion whether on a fair appreciation of the whole situation the expenditure incurred in a particular case is of the nature of capital expenditure or revenue expenditure in which latter event only it would be a deductible allowance under section 10(2) (xv) of the Income tax Act.
The question has all along been considered to be a question of fact to be determined by the Income tax authorities on an application of the broad principles laid down above and the courts of law would not ordinarily interfere with such findings of fact if they have 988 been arrived at on a proper application of those principles.
The expression "once and for all" used by Lord Dunedin has created some difficulty and it has been contended that where the payment is not in a lump sum but in instalments it cannot satisfy the test.
Whether a payment be in a lump sum or by instalments, what has got to be looked to is the character of the payment.
A lump sum payment can as well be made for liquidating certain recurring claims which are clearly of a revenue nature, and on the other hand payment for purchasing a concern which is prima facie an expenditure of a capital nature may as well be spread over a number of years and yet retain its character as a capital expenditure.
(Per Mukherjea J. in Commissioner of Income tax vs Piggot Chapman & Co.(1).
The character of the payment can be deter mined by looking at what is the true nature of the asset which has been acquired and not by the fact whether it is a payment in a lump sum or by instalments.
As was otherwise put by Lord Greene M.R. in Henriksen (Inspector of Taxes) vs Grafton Hotel Ltd.(2): "The thing that is paid for is of a permanent quality although its permanence, being conditioned by the length of the term, is shortlived.
A payment of this character appears to me to fall into the same class as the payment of a premium on the grant of a lease, which is admittedly not deductible".
The case of Tata Hydro Electric Agencies Ltd., Bombay vs Commissioner of Income tax, Bombay Presidency and Aden(3) affords another illustration of this principle.
It was observed there: "If the purchaser of a business undertakes to the vendor as one of the terms of the purchase that he will pay a sum annually to a third party, irrespective of whether the business yields any profits or not, it would be difficult to say that the annual payments were made solely for the purpose of earning the profits of the business".
(1) [1949] 171.T.R. 3I7.
(3) (193 7) L. R. 64 1, A 215.
(2) 989 The expression "once and for all" is used to denote an expenditure which is made once and for all for procuring an enduring benefit to the business as distinguished from a recurring expenditure in the nature of operational expenses.
The expression "enduring benefit" also has been judicially interpreted.
Romer L.J. in Anglo Persian Oil Company, Limited vs Dale(1) agreed with Rowlatt J. that by enduring benefit is meant enduring in the way that fixed capital endures: "An expenditure on acquiring floating capital is not made with a view to acquiring an enduring asset.
It is made with a view to acquiring an asset that may be turned over in the course of trade at a comparatively early date".
Latham C. J. observed in Sun Newspapers Ltd. & Associated Newspapers Ltd. vs Federal Commissioner of Taxation(2): "When the words 'permanent ' or 'enduring ' are used in this connection it is not meant that the advantage which will be obtained will last for ever.
The distinction which is drawn is that between more or less recurrent expenses involved in running a business and an expenditure for the benefit of the business as a whole e.g "enlargement of the goodwill of a company permanent improvement in the material or immaterial assets of the concern".
To the same effect are the observations of Lord Greene M. R. in Henriksen (H.M. Inspector of Taxes) vs Grafton Hotel Ltd. (3 ) above referred to.
These are the principles which have to be applied in order to determine whether in the present case the expenditure incurred by the company was capital expenditure or revenue expenditure.
Under clause 4 of the deed the lessors undertook not to grant any lease, permit or prospecting license regarding limestone to any other party in respect of the group of quarries called the Durgasil area without a condition therein that no limestone shall be used for the manufacture of (1) (1932] 1 K.B. 124, 146.
(2) ; , 355.
126 (3) 990 cement.
The consideration of Rs. 5,000 per annum was to be paid by the company to the lessor during the whole period of the lease and this advantage or benefit was to enure for the whole period of the lease.
It was an enduring benefit for the benefit of the whole of the business of the company and came well within the test laid down by Viscount Cave.
It was not a lump sum payment but was spread over the whole period of the lease and it could be urged that it was a recurring payment.
The fact however that it was a recurring payment was immaterial, because one bad got to look to the nature of the payment which in its turn was determined by the nature of the asset which the company had acquired.
The asset which the company had acquired in consideration of this recurring payment was in the nature of a capital asset, the right to carry on its business unfettered by any competition from outsiders within the area.
It was a protection acquired by the company for its business as a whole.
It was not a part of the working expenses of the business but went to appreciate the whole of the capital asset and make it more profit yielding.
The expenditure made by the company in acquiring this advantage which was certainly an enduring advantage was thus of the nature of capital expenditure and was not an allowable deduction under section 10(2)(xv) of the Income tax Act.
The further protection fee which was paid by the company to the lessor under clause 5 of the deed was also of a similar nature.
It was no doubt spread over a period of 5 years, but the advantage which the company got as a result of the payment was to enure for its benefit for the whole of the period of the lease unless determined in the manner provided in the last part of the clause.
It provided protection to the company against all competitors in the whole of the Khasi and Jaintia Hills District and the capital asset which the company acquired under the lease was thereby appreciated to a considerable extent.
The sum of Rs. 35,000 agreed to be paid by the company to the lessor for the period of 5 years was not a revenue expenditure which was made by the company for working the capital asset which it had acquired.
It was no 991 part of the working or operational expenses of the company.
It was an expenditure made for the purpose of acquiring an appreciated capital asset which would no doubt by reason of the undertaking given by the lessor make the capital asset more profit yielding.
The period of 5 years over which the payments were spread did not make any difference to the nature of the acquisition.
It was none the less an acquisition of an advantage of an enduring nature which enured for the benefit of the whole of the business for the full period of the lease unless terminated by the lessor by notice as prescribed in the last part of the clause.
This again was the acquisition of an asset or advantage of an enduring nature for the whole of the business and was of the nature of capital expenditure and thus was not an allowable deduction under section 10(2)(xv) of the Act.
We are therefore of the opinion that the conclusion reached by the Income tax authorities as well as the High Court in regard to the nature of the payments was correct and the sums of Rs. 40,000 paid by the company to the lessors during the accounting years 1944 45 and 1945 46 were not allowable deductions under section 10(2)(xv) of the Act.
The appeal therefore fails and must be dismissed with costs.
Appeal dismissed.
[/INST]Section 10(2)(xv) of the Indian Income tax Act, 1922, uses the term 'capital expenditure ' for which no allowance is given to the assessee.
The term 'capital expenditure ' is used as contrasted with the term 'revenue expenditure in respect of which the assessee is entitled to allowance under section 10(2) (xv) of the Act.
As pointed out by the Full Bench of the Lahore High Court in Benarsidas Jagannath, In re [(1946) it is not easy to define the term 'capital expenditure ' in the abstract or to lay down any general and satisfactory test to discriminate between a capital and a revenue expenditure.
Though it is not easy to reconcile all the decided cases on the subject, as each case had been decided on its peculiar facts, some broad principles could be 973 deduced from what the learned judges have laid down from time to time: (1)Outlay is deemed to be capital when it is made for the initiation of a business, for extension of a business, or for a substantial replacement of equipment: vide Lord Sands in Commissioners of Inland Revenue vs Granite City Steamship Company ( and City of London Contract Corporation vs Styles ( (2)Expenditure may be treated as properly attributable to capital when it is made not only once and for all, but with a view to bringing into existence an asset or an advantage for the enduring benefit of a trade: vide Viscount Cave, L.C., in Atherton vs British Insulated and Helsby Cables Ltd. ([1926] If what is got rid of by a lump sum payment is an annual business expense chargeable against revenue, the lump sum payment should equally be regarded as a business expense, but if the lump sum payment brings in a capital asset, then that puts the business on another footing altogether.
Thus, if labour saving machinery was acquired, the cost of such acquisition cannot be deducted out of the profits by claiming that it relieves the annual labour bill, the business has acquired a now asset, that is, machinery.
The expressions 'enduring benefit ' or 'of a permanent character ' were introduced to make it clear that the asset or the right acquired must have enough durability to justify its being treated as a capital asset.
(3)Whether for the purpose of the expenditure, any capital was withdrawn, or, in other words, whether the object of incurring the expenditure was to employ what was taken in as capital of the business.
Again, it is to be seen whether the expenditure incurred was part of the fixed capital of the business or part of its circulating capital.
Fixed capital is what the owner turns to profit by keeping it in his own possession.
Circulating or floating capital is what he makes profit of by parting with it or letting it change masters.
Circulating capital is capital which is turned over and in the process of being turned over yields profit or loss.
Fixed capital, on the other hand, is not involved directly in that process and remains unaffected by it.
One has got to apply these criteria, one after the other from the business point of view and come to the conclusion whether on a fair appreciation of the whole situation the expenditure incurred in a particular case is of the nature of capital expenditure or revenue expenditure in which latter event only it would be a deductible allowance under section 10(2)(xv) of the Indian Income tax Act, 1922.
The question has all along been considered to be a question of fact to be determined by the Income_ tax Authorities on an application of the broad principles laid down above and the Courts of law would not ordinarily interfere with such findings of 124 974 fact if they have been arrived at on a proper application of those principles.
The assessee acquired from the Government of Assam a lease for 20 years (with a clause for renewal) in respect of certain limestone quarries situated in Khasi and Jaintia Hills.
In addition to the rents and royalties for lease the assessee as the lessee had to pay two further sums as protection fees ' under the covenants contained in clauses 4 and 5 of the lease.
Under clause 4 the portection was in respect of another group of quarries called the Durgasil area, and the lessor undertook not to grant for this area any lease, permit or prospecting licence regarding limestone to any other party except with a condition that no limestone should be used for the manufacture of cement.
This protection was given in consideration of a sum of Rs. 5,000 annually payable by the assessee during the whole period of the lease.
Under clause 5 a further protection was given by the lessor to the lessee in respect of the whole of the Khasi and Jaintia Hills District for which lessee was to pay annually Rs. 35,000 to the lessor for 5 years.
According to these covenants the assessee in his capacity as the lessee paid the lessor a sum of Rs. 40,000 for the accounting years 1944 45 and 1945 46.
Held, that the sum of Rs. 40,000 was a capital expenditure inasmuch as it was incurred for the acquisition of an asset or advantage of an enduring nature for the whole of the business and Was no part of the working or operational expenses for carrying on the business of the assesses.
Accordingly the payment of Rs. 40,000 was not an allowable deduction under section 10(2)(xv) of the Indian Income tax Act, 1922.
Countess Warwick Steamship Co. Ltd. vs Ogg [1924] 2 K.B. 292), City of London Contract Corporation vs Styles [18871 , Vallambrosa Rubber Co., Ltd. vs Farmer ( , Ounsworth (Surveyor of Taxes) vs Vickers Limited ( [19151 , Atherton vs British Insulated and Helsby Cables, Ltd. ([1925] , Usher 's case ( , John Smith & Son vs Moore (H. M. Inspector of Taxes), ( [19211 , Anglo Persian Oil Co. vs Dale ( , Golden Horse Shoe (New) Ltd. vs Thurgood (H. M. Inspector of Taxes), ( [1933]18 T.C. 280).
Van Den Berghs, Limited vs Clark (H. M. Inspector of Taxes) (I 19341 ; , Tata Hydro Electric Agencies, Limited, Bombay vs Commissioner of Income tax, Bombay Presidency and Aden ([19371 L.R. 64 I.A. 215), Sun Newspapers Ltd. and the Associated Newspapers Ltd. vs The Federal Commissioner of Taxation ([1938] 61 C.L.R. 337), Munshi Gulab Singh and Sons.
vs Commissioner of Income tax ([1945] , Commissioner of Income tax, Bombay vs Century Spinning Weaving and Manufacturing Co. Ltd. ([1946] , Jagat Bus Service Saharanpur vs Commissioner Of Income tax, U.P. & Ajmer Merwara ([1949] , Commissioner of Income tax, Bombay vs Finlay Mills Ltd., ([1952] S.C.R. 11), Commissioner of Income tax vs Piggot Chapman. & Co. 975 ( and Henriksen (Inspector of Taxes) vs Grafton Hotel Ltd. ( , referred to.
Benarsidas Jagannath, In re, ( , approved.
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<s>[INST] Summarize the judgementAppeal No. 358 of 1958.
645 Appeal by special leave from the judgment and order dated 8th March, 1956, of the former Bombay High Court in I.T.R. No. 55 of 1955.
A. N. Kripal and D. Gupta, for the appellant.
N. A. Palkhivala and B. P. Maheshwari, for the respondents.
November 24.
The Judgment of the Court was delivered by KAPUR, J.
This is an appeal by special leave against the judgment and order of the High Court of Bombay in Income tax Reference No. 55 of 1955, in which two questions of law were stated for opinion and both were answered in favour of the assessee and against the Commissioner of Income tax who is the appellant before us and the assessee is the respondent.
The facts of this case are these: The respondent is a registered firm carrying on business as commission agents in Bombay.
For purposes of its business it borrowed money from time to time from Banks on joint promissory notes executed by it and by others with joint and several liability.
On September 26, 1949, the respondent borrowed Rs. 1,00,000 from the Bank of India on a pronote executed jointly with one Kishorilal.
Out of this amount a sum of Rs. 50,000 was taken by the respondent for purposes of its business and the rest by Kishorilal.
Kishorilal however failed to meet his liability and became a bankrupt.
The respondent had therefore to pay the Bank the whole amount, i.e., Rs. 1,00,000 with interest.
Out of the amount taken by Kishorilal the respondent received in the accounting year, from the Official Assignee, a sum of Rs. 18,805 and claimed the balance, i.e., Rs. 31,740 as deduction.
The accounting year was from August 26, 1949 to July 17, 1950, the assessment year being 1951 52.
This claim was disallowed both by the Income tax Officer as well as the Appellate Assistant Commissioner.
On Appeal to the Income tax Appellate Tribunal this sum was allowed ,as an allowable deduction under section 10(2)(xv) of the Income tax Act and as business loss.
82 646 At the instance of the Commissioner a case was stated to the High Court of Bombay by the Income tax Appellate Tribunal.
In the statement of the case which was agreed to by both parties the Tribunal said: "For the purpose of his business, he borrows from time to time money on joint and several liability from banks.
The Commercial practice is to borrow money from banks on joint and several liability.
An illustration will explain what we mean.
A and B require Rs. 50,000 each.
They find that the Bank would not advance Rs. 50,000 to each on his individual security.
They however, find that the Bank would be prepared to advance Rupees one lach on their joint and several liability.
They take Rupees one lac on joint and several liability and then divide the money equally between themselves.
" It also found that the Banks advanced monies to some constituents on their personal security also but they had to pay a higher rate of interest than when the money was borrowed on joint and several responsibility; that Rs. 1,00,000 borrowed from the Bank was in accordance with the commercial practice of Bombay.
On these facts the following two questions of law were referred to the High Court: "(1) Whether the assessee 's claim is sustainable under section 10(2)(xv) of the Act? (2) Whether the assessee 's claim that the loss was a business loss and, therefore, allowable as a deduction in computing the profits of the assessee 's business is sustainable under law?" Both these questions were answered in favour of the respondent and against the appellant.
Counsel for the Commissioner challenged the findings of the Tribunal in regard to the existence of commercial practice in Bombay but this ground of attack is not available to him because not only did the Tribunal give this finding in its Order, but in the agreed statement of the case also this finding was repeated as is shown by the passage quoted above.
The High Court also has proceeded on the basis of this commercial practice.
In the judgment under appeal the learned Chief Justice said: 647 "The finding of the Tribunal is clear and explicit that what the assessee was doing was not something out of the ordinary, but in borrowing this money on joint and several liability he was following a practice which was established as a commercial practice.
Therefore, the transaction was clearly in the course of the business and incidental to the business and it is this transaction which resulted in a loss to the assesses, he having to pay the liability of the surety.
" Therefore this appeal has to be decided on the basis that a commercial practice of financing business by borrowing money on joint and several liability was established.
It was argued on behalf of the appellant that this court in Madan Gopal Bagla vs Commissioner of Income Tax, West Bengal (1) had decided against the allowability of such losses.
But the facts of that case when carefully scrutinised are distinguishable and the decision does not support the contentions of the appellant.
No doubt certain features of that case and the present one are similar but they differ in essential features.
In that case the assessee was a timber merchant who obtained a loan of Rs. 1 lac from the Bank of India on the joint security of himself and one Mamraj, which the assessee paid off.
Mamraj also obtained a loan of Rs.
I lac on the joint security of himself and the assessee.
Mamraj became an insolvent and the assessee had to pay the whole of the amount borrowed with interest thereon.
The assessee there received a certain amount of money by way of dividends from the Receiver and the balance he wrote off as bad debt in the assessment year and claimed it as an allowable deduction under section 10.
The High Court there held that the debt could not be said to be a debt in respect of the business of the assessee as he was not carrying on the business of standing surety for other persons nor was he a money lender, he being simply a timber merchant; that it had not been established nor was it alleged that he was in the habit of standing surety for other persons "along with them for purposes of securing loans for their use and benefit" and even if money (1) ; 648 had been so borrowed and there had been a loss the loss would have been a capital loss and not a business loss to the assessee.
This statement of the law was approved by this Court but there mutuality, as an essential ingredient of the custom established, was found to be lacking as is shown by the following passage from the judgment of the court.
"The custom stated before the Appellate Assistant Commissioner was that persons carrying on business in Bombay used to borrow monies on joint security from the Banks in order to facilitate getting financial assistance from the Banks and that too at lower rates of interest.
A businessman could procure financial assistance from the Banks on his own, but he would in that case have to pay a higher rate of interest.
He would have to pay a lower rate of interest if he could procure as surety another business man, who would be approved by the Bank.
This, however, did not mean that mutual accommodation by businessmen was necessarily an ingredient part of that custom.
A could procure B, C or D to join him as surety in order to achieve this objective, but it did not necessarily follow that if A wanted to procure B, C or D to thus join him as surety he could only do so if he in his own turn joined B, C or D as surety in the loans which B, C or D procured in their turns from the Banks for financing their respective businesses.
Unless that factor was established, the mere procurement by A of B, C or D as surety would not be sufficient to establish the custom sought to be relied upon by the appellant so as to make the transaction of his having joined Mumraj Rambhagat as surety in the loan procured by Mumraj Rambhagat from Imperial Bank of India, a transaction in the course of carrying on his own timber business and to make the loss in the transaction a trading loss or a bad debt of the timber business of the appellant.
" Continuing at page 558 it was observed: "There were thus elements of mutuality and the essential ingredient in the carrying on of the money lending business, which were elements of the custom 649 proved in that case, both of which are wanting in the present case before us." Mr. Palkhivala for the respondent rightly argued that Madan Gopal Bagla 's case (1) was decided against the assessee because the custom of persons standing surety for each other for borrowing money and the element of mutuality which was an essential ingredient in the case of Commissioner of Income Tax, Madras vs section A. section Ramaswamy Chettiar (2) was not proved.
In the latter case it was established that there was a well recognised custom amongst Chettiars of raising funds for their business of money lenders by the execution of joint pronotes and that if a loss was sustained by one of the executants having to pay the whole on account of inability of the other it was a deductible loss.
The appellant also relied on a judgment of the Madras High Court in Commissioner of Income Tax vs section R. Subramanya Pillai (3).
In that case the assessee was a book seller who from time to time jointly with another person borrowed money out of which he employed a portion in his business.
One of such amounts borrowed was Rs. 16,200 out of which the assessee took Rs. 10,450 for his business needs and the other debtor took the balance.
The latter became insolvent and the assessee had to pay the whole of the money borrowed and claimed it as allowable deduction under section 10(2)(xi) or section 10(2)(xv) of the Act or as business loss and it was hold that he was not entitled, because the loss sustained by the assessee was too remote from the business of book selling carried on by him and was not sufficiently connected with the trade and therefore fell outside the range of those amounts which could properly be brought into profit and loss account of the business.
The decision in Commissioner of Income Tax vs section A. section Ramaswamy Chettiar (2) was there distinguished on the ground that the decision must be confined to its own peculiar facts and did not apply to business as the one in Subramanya Pillai 's Case (3).
The following passage from (1) ; , (2) (3) 650 the judgment of Viswanatha Sastri, J., in that case is relevant: "But there the business was one of money lending and the Court found that according to the wellknown and well recognised mercantile custom of Nattukottai bankers, they were in the habit of raising 'funds which formed the stock in trade of their money lending business by the execution of joint promissory notes in favour of bankers.
That was apparently the usual technique of obtaining credit adopted by the Nattukottai Chetti community money lenders.
In the context this Court held that where a Nattukottai Chetti money lender paid off in their entirety the debts jointly due by him and another as a result of the latter 's inability to pay, the loss sustained as a result of this transaction was a loss of the moneylending business itself and therefore a deductible item in computing profits.
" In the instant case it has been found that there was a well recognised commercial practice in Bombay of carrying on business by borrowing money from Banks on joint and several liability.
It was also found that by so doing the borrower could borrow money at a lower rate of interest than he otherwise would have paid; that the respondent had, in accordance with the commercial practice, borrowed the money, the whole of which he had to return because the joint promisor Kishori Lal had become bankrupt; mutuality was also held proved.
It cannot be said that the essential feature of the case now before us is in principle different from that of the Commissioner of Income tax vs Ramaswamy Chettiar (1).
In both cases the finding is that there is mutuality and custom of borrowing money on joint pronotes for the carrying on of business.
In our opinion in the circumstances proved in the present case, and on the facts established and on the findings given, the respondent was rightly held to be entitled to deduct the loss which was suffered by him in the transaction in dispute.
Counsel for the assessee drew our attention to a (1) 651 Privy Council judgment Montreal Coke and Manufacturing Co. vs Minister of National Revenue (1) but that, case can have no application to the facts of the present case because it was found there as a fact that the assessees 's financial arrangements were quite distinct from the activities by which they earned their income and expenditure incurred in relation to the financing ' of their business was not expenditure in the earning of their income within the statute.
It was then contended that the loss of the respondent was a 0capital loss and for this again reliance was placed on the judgment of this Court in Madan Gopal Bagla 's case (2 ) and particularly on the observation at page 559 where Bhagwati, J., quoted with approval the observations of the High Court in the judgment but as we have pointed out the facts of that case are distinguishable and what was said there has no application to the facts and circumstances proved in the present case.
In our view the judgment of the High Court is right and we therefore dismiss this appeal with costs.
Appeal dismissed.
[/INST]For the purposes of its business the respondent borrowed a certain sum of money from the Bank of India on a pronote executed jointly by him and one Kishorilal in accordance with a commercial practice of carrying on business by borrowing money from Banks on joint and several liability.
The money was divided half and half between the respondent and Kishorilal but Kishorilal failed to pay off his liability as he became a bankrupt and the respondent had to pay the whole amount to the Bank.
The respondent, however, received from the Official Assignee a part of the sum taken by the Kishorilal leaving a balance still unpaid.
The respondent 's claim to deduct this unpaid balance under section 10(2)(XV) of the Income tax Act was refused by the Income tax Officer and the Appellate Assistant Commissioner but was allowed by the Income tax Appellate Tribunal on appeal.
On a reference made at the instance of the appellant the High Court decided the question in favour of the respondent assessee.
On appeal by the appellant by special leave, Held, that the view taken by the High Court was correct.
On the finding that there was a well establised Commercial practice of financing business by borrowing money on joint and several liability and by so doing the respondent could borrow at a lower rate of interest, and that there was mutuality between the borrowers for standing surety for each other for loans taken for business purposes, the respondent assessee in computing his business profits was entitled to deduct the loss suffered by him in paying the sum not paid by his co borrower.
Commissioner of Income tax vs Ramaswami Chettiar, , applied.
Madan Gopal Bagla vs Commissioner of Income tax, West Bengal, ; , Commissioner or Income tax vs section R. Subramanya Pillai, distinguished.
Montreal Coke and Manufacturing Co. vs Minister of National Revenue, [1945] 13 I.T.R. Supp. 1, not applicable.
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<s>[INST] Summarize the judgementN: Criminal Appeal Nos.
543 545 of 1979.
Appeals by special leave from the judgment and order dated the 15th April, 1978 of the Madhya Pradesh High Court in Criminal Revision No. 701/77, 105/78 & 103/78 respectively.
H.K. Puri for the Appellant.
R.K. Garg, Sunil Kumar Jain and V.J. Era for Respondents Nos. 1, 2, 5 & 6.
S.K. Gambhir and Vijay Mansaria for the State.
The following Judgments were delivered CHINNAPPA REDDY, J. I agree with my brother A.P. Sen that the order passed by the High Court should be set aside and that the Magistrate should be directed to record the plea of the accused under Sec.
251 Criminal Procedure Code and thereafter, to proceed with the trial according to law.
The facts leading to these appeals have been stated in the judgments of both my brethren A.P. Sen and Baharul Islam and it is unnecessary for me to state them over again.
The prayer in the application before the High Court was merely to quash the order dated November 30, 1977 of the learned Chief Judicial Magistrate, Bhopal and not to quash the complaint itself as the High Court has done.
But, that was only a technical defect and we do not take serious notice of it in an appeal under article 136 of the Constitution where we are very naturally concerned with substantial justice and not with shadow puppetry.
The position now is this: The news item in the Blitz under the caption 'MISA Rape in Bhopal Jail ' undoubtedly contained serious imputations against the character and conduct of the complainant.
In order to attract the 9th Exception to Sec.
499 of the Indian Penal Code, the imputations must be shown to have been made (1) in good 631 faith, and (2) for the protection of the person making it or of any other person or for the public good. 'Good Faith ' is defined, in a negative fashion, by Sec.
52 Indian Penal Code as follows: "Nothing is said to be done or believed in 'Good faith ' which is done or believed without due care and attention".
The insistence is upon the exercise of due care and attention.
Recklessness and negligence are ruled out by the very nature of the definition.
The standard of care and attention must depend on the circumstances of the individual case, the nature of the imputation, the need and the opportunity for verification, the situation and context in which the imputation was made, the position of the person making the imputation, and a variety of other factors.
Good faith, therefore is a matter for evidence.
It is a question of fact to be decided on the particular facts and circumstances of each case.
So too the question whether an imputation was made for the public good.
In fact the 1st Exception of Sec.
499 Indian Penal Code expressly states "Whether or not it is for the public good is a question of fact". 'Public Good ' like 'Good faith ' is a matter for evidence and not conjecture.
In Harbhajan Singh vs State of Punjab, this Court observed (at p. 244): "Thus, it would be clear that in deciding whether an accused person acted in good faith under the Ninth Exception, it is not possible to lay down any rigid rule or test.
It would be a question to be considered on the facts and circumstances of each case. what is the nature of the imputation made, under what circumstances did it come to be made; what is the status of the person who makes the imputation; was there any malice in his mind when he made the said imputation; did he make any enquiry before he made it; are there reasons to accept his story that he acted with due care and attention and was satisfied that the imputation was true? These and other considerations would be relevant in deciding the plea of good faith made by an accused person who claims the benefit of the Ninth Exception".
Again in Chaman Lal vs The State of Punjab this Court said (at p. 916): 632 "In order to establish good faith and bona fide it has to be seen first the circumstance under which the letter was written or words were uttered; secondly, whether there was any malice; thirdly, whether the appellant made any enquiry before he made the allegations; fourthly, whether there are reasons to accept the version that he acted with care and caution and finally whether there is preponderance of probability that the appellant acted in good faith".
Later the Court said (at p. 918): "Good faith requires care and caution and prudence in the background of context and circumstances.
The position of the person making the imputation will regulate the standard of the person making the imputation will regulate the standard of care and caution".
Several questions arise for consideration if the Ninth Exception is to be applied to the facts of the present case.
Was the Article published after exercising due care and attention? Did the author of the article satisfy himself that there were reasonable grounds to believe that the imputations made by him were true? Did he act with reasonable care and a sense of responsibility and propriety? Was the article based entirely on the report of the Deputy Secretary or was there any other material before the author? What steps did the author take to satisfy himself about the authenticity of the report and its contents? Were the imputations made rashly without any attempt at verification? Was the imputation the result of any personal ill will or malice which the author bore towards the complainant? Was it the result of any ill will or malice which the author bore towards the political group to which the complainant belonged? Was the article merely intended to malign and scandalise the complainant or the party to which he belonged? Was the article intended to expose the rottenness of a jail administration which permitted free sexual approaches between male and female detenus? Was the article intended to expose the despicable character of persons who were passing off as saintly leaders? Was the article merely intended to provide salacious reading material for readers who had a peculiar taste for scandals? These and several other questions may arise for consideration, depending on the stand taken by the accused at the trial and how the complainant proposes to demolish the defence.
Surely the stage for deciding these questions has not arrived yet.
Answers to these questions at this stage, even before the plea of the 633 accused is recorded can only be a priori conclusions. 'Good faith ' 'public good ' are, as we said, questions of fact and matters for evidence.
So, the trial must go on.
SEN, J.
This appeal, by special leave, is directed against an order of the Madhya Pradesh High Court dated April 15, 1978 quashing the prosecution of the respondent, R.K. Karanjiya, Chief Editor, Blitz, for an offence under section 500 of the Indian Penal Code for publication of a news item in that paper which was per se defamatory, on the ground that he was protected under Ninth Exception to section 499 of the Code.
During the period of Emergency the appellant, who is a senior lawyer practising at Bhopal, was placed under detention under s.3 (1) (a) (ii) of the and was lodged in the Central Jail, Bhopal.
There were several other detenus belonging to the opposition parties lodged along with him in the same jail, including three lady detenus, viz., Smt.
Uma Shukla, Smt.
Ramkali Misra, Advocate and Smt.
Savitha Bajpai, later State Minister, Public Works Department.
The husband of Smt.
Uma Shukla, a practising advocate at Bhopal, was not detained.
Shukla was released on parole for a week between June 10 and 18, 1976.
On her return to the jail it was found that she had conceived.
She was examined on July 30, 1976, by a lady doctor, Dr. (Mrs) N.C. Srivstava, Woman Asst.
Surgeon and the pregnancy was reported to be six weeks old.
Shukla was again released on parole in the month of August 1976 and on August 24, 1976, she got the pregnancy terminated by Dr. (Mrs) Upadhayay at the Zanana Hamidia Hospital, Bhopal with the written consent of her husband under s.3 of the Medical (Termination of Pregnancy) Act, 1976.
While the order of detention of the appellant was still in operation, there was an ex parte confidential enquiry held by Shri S.R. Sharma, I.A.S. Deputy Secretary (Home) Government of Madhya Pradesh, into the circumstances leading to the pregnancy of Smt.
Shukla.
The Enquiry Officer by his report dated November 3, 1976, apparently held that the pregnancy was due to illicit relations between the appellant and Smt.
Shukla, during their detention in the Central Jail.
On December 25, 1976, the Blitz, in its three editions in English, Hindi and Urdu simultaneously flashed a summary of the report and the story as given out was that (i) there was a mixing of male and female detenus in the Central Jail, Bhopal, (ii) the appellant had the opportunity and access to mix with Smt.
Shukla freely, and (iii) Smt.
Shukla became pregnant through the 634 appellant.
The news item was per se defamatory.
It is somewhat surprising that the Enquiry Report, which was a document of highly confidential nature, should have found its way to the Press.
With the revocation of Emergency, the appellant along with the other political detenus was released from detention.
On his release, the appellant lodged a criminal complaint for defamation against the respondent, R.K. Karanjia.
The respondent, on appearing before the Magistrate, moved an application under section 91 of the Code of the Criminal Procedure, 1973, praying that the report of the Enquiry Officer be sent for as it was likely to be lost or destroyed.
On August 23, 1976 the learned Magistrate allowed the application and directed that the report with the concerned file be produced.
The State Government, however, did not comply with the direction and by an application dated December 31, 1977, claimed privilege in respect of the Enquiry Report which still awaited consideration.
On October 29, 1977 when the case was fixed for recording the plea of the accused under section 251 of the Code, the respondent moved an application stating that the plea should be recorded only after the Enquiry Report was produced.
The learned Magistrate by his order dated November 30, 1977, rejected the said application of the respondent as to the summoning of the records and directed the accused persons to appear in person or through counsel for explaining to them the substance of the accusation and also for recording their pleas.
Thereafter, the respondent filed a revision before the High Court under section 397 of the Code for setting aside the order of the learned Magistrate and alternatively under section 482 of the Code, if it were held to be an interlocutory order.
The revision was heard by a learned Single Judge and it appears that the Government Advocate made available a copy of the Enquiry Report for the perusal of the learned Judge.
The learned Judge by his order dated April 15, 1978, quashed the proceedings on the ground that the respondent 's case "clearly falls within the ambit of exception 9 of section 499 of the Indian Penal Code".
In reaching that conclusion, he observed that "it would be abuse of the process of the court if the trial is allowed to proceed which ultimately would turn out to be a vexatious proceeding".
The reasoning advanced by him was as follows: The real question to ask is, did the applicants publish the report for public good, in public interest and in good faith? My answer is in the affirmative.
It was a publication 635 of a report for the welfare of the society.
A public institution like prison had to be maintained in rigid discipline; the rules did not permit mixing of male prisoners with female prisoners and yet the report said the prison authorities connived at such a thing, a matter which was bound to arouse resentment and condemnation.
The balance of public benefit lay in its publicity rather than in hushing up the whole episode.
Further, there was good faith in the publication.
The source on which the publishers acted was the proper source on which they were entitled to act and they did so with care and circumspection.
The report further shows that the publication had been honestly made in the belief of its truth and also upon reasonable ground for such a belief, after the exercise of such means to verify its truth as would be taken by a man of ordinary prudence under like circumstances.
(emphasis added) It is somewhat strange that the learned Judge should have made public the contents of a document in respect of which the State Government claimed privilege.
The order recorded by the High Court quashing the prosecution under section 482 of the Code is wholly perverse and has resulted in manifest miscarriage of justice.
The High Court has pre judged the whole issue without a trial of the accused persons.
The matter was at the stage of recording the plea of the accused persons under section 251 of the Code.
The requirements of section 251 are still to be complied with.
The learned Magistrate had to ascertain whether the respondent pleads guilty to the charge or demands to be tried.
The circumstances brought out clearly show that the respondent was prima facie guilty of defamation punishable under section 500 of the Code unless he pleads one of the exceptions to section 499 of the Code.
The offending article which is per se defamatory, is as follows: MISA RAPE IN BHOPAL JAIL (By Blitz Correspondent).
Blitz: A shocking sex scandal involving a top RSS leader of M.P. was discussed at a secret meeting of Jan Sangh MLAs and MPs here recently.
The alleged escapades of 55 years old Sewakram Sobhani, a close confidant of RSS Chief Bhausaheb Devras, with the young wife of another RSS man in the Bhopal Central Jail, where both were detained under MISA, have rocked RSS Jan Sangh circles of the State.
636 According to a report submitted to the State Government by a Deputy Secretary in the Home Deptt.
who inquired into the grisly affair, Sobhani was reportedly responsible for making Mrs. Uma Shukla, 22 year old wife of a lawyer Yogesh Shukla, pregnant.
Abortion? When this was discovered she was quietly released on parole and, at her own request, taken for abortion to the Sultania Zanana Hospital.
After discharge she refused to rejoin her husband but stayed during the remaining period of her parole in the hide out of the 'total revolutionaries ' in the Professor 's Colony.
She returned to jail later and was transferred to the Hoshangabad Jail, while Sobhani was sent to the Raipur Central Jail.
The Official report throws light on how Sobhani allegedly enticed Mrs. Shukla with the help of a high official of the Bhopal Central Jail despite a ban on contacts between male and female detenus.
The jail official, himself a close sympathiser of the RSS allowed Sobhani to meet her frequently in his office and their love sessions were in his anteroom.
Yogesh Shukla has made a representation to the State Government alleging that Sobhani had committed adultery with his wife and demanded action against the jail authorities for permitting a "rape" of his wife.
It is for the respondent to plead that he was protected under Ninth Exception to section 499 of the Code.
The burden, such as it is, to prove that his case would come within that exception is on him.
The ingredients of the Ninth Exception are that (1) the imputation must be made in good faith, and (2) the imputation must be for the protection of the interests of the person making it or any other person or for the public good.
We are completely at a loss to understand the reasons which impelled the High Court to quash the proceedings.
The respondent, in his revision directed against the order of the learned Magistrate dated November 30, 1977, asserted in paragraph 5 that the case pre eminently a fit case for quashing the impugned order either in the revisional jurisdiction of the High Court or in the exercise of its inherent powers under section 482 of the Code to prevent the abuse of 637 the process of law and to secure the ends of justice.
The prayer made in the revision was in these terms: The applicants pray that the impugned order be quashed and the learned Magistrate be directed to persue the report which he has sent for under section 91, Criminal Pro.
Code and pass suitable orders according to law.
All that the respondent wanted is that learned Magistrate should not proceed to record the plea of the accused persons under section 251 of the Code without perusing the Enquiry Report under section 91 of the Code.
There was no application made before the High Court under section 482 of the Code for quashing the prosecution itself.
The averment contained in paragraph 4 that the Blitz only published a concise summary from the findings reached by the Deputy Secretary (Home) who was the Enquiry Officer appointed by the Government and, therefore, it was the duty of the learned Magistrate, to go through the report for himself and hold that no accusation had been made and the question of explaining it to the accused did not arise and the proceedings were liable to be dropped because no ingredients constituting an offence under section 500 of the Code had been made out, must be read in conjunction with paragraph 5 and in support of the limited prayer made in revision.
This cannot be construed as invoking the High Court 's powers under section 482 of the Code for quashing the whole proceedings.
We have considerable doubt about the propriety of the High Court making use of the Enquiry Report which has no evidentiary value and in respect of which the Government claimed privilege.
The application made by the Government claiming privilege still awaited consideration.
While the Government claimed privilege at one stage, it appears to have waived the claim and produced the Enquiry Report and made the contents public.
There was no factual basis for the observations made by the High Court underlined by me, except the Enquiry Report.
The contents of the Enquiry Report cannot be made use of unless the facts are proved by evidence aliunde.
There is also nothing on record to show that the accused persons made any enquiry of their own into the truth or other wise of the allegations or exercised due care and caution for bringing the case under the Ninth Exception.
The Enquiry Report cannot by itself fill in the lacunae.
A bare perusal of the offending article in Blitz shows that it is per se defamatory.
There can be no doubt that the imputation 638 made would lower the appellant in the estimation of others.
It suggested that he was a man devoid of character and gave vent to his unbridled passion.
It is equally defamatory of Smt.
Shukla in that she was alleged to be a lady of easy virtue.
We need not dilate on the matter any further.
It is for the accused to plead Ninth Exception in defence and discharge the burden to prove good faith which implies the exercise of due care and caution and to show that the attack on the character of the appellant was for the public good.
In Sukro Mahto vs Basdeo Kumar Mahto & Anr this Court observed: The ingredients of the Ninth Exception are first that the imputation must be made in good faith; secondly, the imputation must be for protection of the interest of the person making it or of any other person or for the public good.
Good faith is a question of fact.
So is protection of the interest of the person making it.
Public good is also a question of fact.
After referring to the two earlier decisions in Harbhajan Singh vs State of Punjab and Chaman Lal vs State of Punjab the Court held that there must be evidence showing that the accused acted with due care and caution. "He has to establish as a fact that he made enquiry before he made the imputation and he has to give reasons and facts to indicate that he acted with due care and attention and was satisfied that the imputation was correct.
The proof of the truth of the statement is not an element of the Ninth Exception as of the First Exception to section 499.
In the Ninth Exception the person making the imputation has to substantiate that his enquiry was attended with due care and attention and he was thus satisfied that the imputation was true.
" The High Court appears to be labouring under an impression that journalists enjoyed some kind of special privilege, and have greater freedom than others to make any imputations or allegations, sufficient to ruin the reputation of a citizen.
We hasten to add that journalists are in no better position than any other person.
Even the truth of an allegation does not permit a justification under First Exception unless it is proved to be in the public good.
The question 639 whether or not it was for public good is a question of fact like any other relevant fact in issue.
If they make assertions of facts as opposed to comments on them, they must either justify these assertions or, in the limited cases specified in the Ninth Exception, show that the attack on the character of another was for the public good, or that it was made in good faith: per Vivian Bose, J. in Dr. N.B. Khare vs M.R. Masani and Ors.
As the matter is of great public importance, it would, perhaps, be better to quote the well known passage of Lord Shaw in Arnold vs King Emperor (2) The freedom of the journalist is an ordinary part of the freedom of the subject, and to whatever lengths the subject in general may go, so also may the journalist, but, apart from statute law, his privilege is no other and no higher.
The responsibilities which attach to this power in the dissemination of printed matter may, and in the case of a conscientious journalist do, make him more careful: but the range of his assertions, his criticisms, or his comments, is as wide as, and no wider than, that of any other subject.
No privilege attaches to his position.
For these reasons, we must set aside the order passed by the High Court and direct the Magistrate to record the plea of the accused persons under section 251 of the Criminal Procedure Code, 1973 and thereafter, to proceed with the trial according to law.
BAHARUL ISLAM, J. Had there been no subsequent development after the impugned judgment of the High Court, I could have persuaded myself to agree to the order proposed by my Brother Sen, J., but after the Inquiry Report has been released by the Government and placed before us I regret my inability to agree to the order of sending back the case to the Magistrate as proposed by my Brother, and proceed to give my own judgment.
The facts material for the purpose of disposal of these appeals may be stated thus: During the period of Emergency between June 1975 and March 1976 the appellant, Shri Sewakram Sobhani, an advocate, was one of the detenus under the Main 640 tenance of Internal Security Act, 1976 (hereinafter 'MISA ') and lodged in the Bhopal Central Jail.
There were also three women detenus including Smt.
Uma Shukla and Smt.
Ramkali Mishra, Advocate.
The husband of Smt.
Uma Shukla was a practising advocate at Bhopal.
He was not a detenu.
Uma Shukla became pregnant while in detention in the aforesaid Central Jail and abortion was carried out in the month of August, 1976 in the Zanana Hamidi Hospital to relieve her of the pregnancy.
This circumstance created an uproar and an inquiry into the affairs had to be held by Shri S.R. Sharma, Dy.
Secretary (Home), Government of Madhya Pradesh, (hereinafter 'Sharma ') who submitted his report dated 7.10.1976 to the Government.
Respondent No. 1 is the Chief Editor of the Blitz and respondent No. 5 was, at the relevant time, Bhopal Correspondent of the Blitz.
Respondents 2, 3 and 4 are persons connected with the Blitz Weekly publication.
The Blitz weekly is published in three languages, viz., English, Hindi and Urdu.
The Blitz weekly dated 25.12.76 published a news item purported to be a summary of the report submitted by Sharma in its Urdu and Hindi editions.
The appellant took exception to the publication and filed a criminal case for defamation against the respondents under Sections 500 and 501 of the Penal Code.
The Magistrate issued processes to the respondents.
The respondents appeared before the Magistrate and made an application on 23.8.77 under Section 91 of the Code of Criminal Procedure, 1973 (hereafter 'the Code ') requesting the court, before arriving at a conclusion whether it should proceed further with the case or not, to call for (a) the original Enquiry Report submitted by Sharma on 7.10.76; (b) the statement of witnesses recorded by Sharma, (c) the original complaint; and (d) documents of the jail Department including letters from the Government to the Department (Vide para 4 of Annexure D to the Special Leave Petition).
The Magistrate called for the original Inquiry Report dated 7.10.76 submitted by Sharma to the Government, and then posted the case for production of the said records by the Government and recording the plea of the respondents.
The Government failed to produce the inquiry report before the Magistrate whereupon the Magistrate issued a notice to the Government to show cause as to why contempt proceedings should not be initiated against them.
The Magistrate, however, did not wait for the receipt of the report and wanted to record the plea of respondents.
641 The respondents then filed an application before the High Court of Madhya Pradesh under Section 397/401 read with Section 482 of the Code.
It was alleged by the respondents that the Deputy Home Secretary in his report came to the following conclusions : (1) There was free mixing of male and female prisoners in the Bhopal Central Jail ; (2) Shri Sewakram Sobhani had opportunity and also availed of the opportunity and mixed very freely with Smt.
Uma Shukla; and (3) Smt.
Uma Shukla became pregnant through Shri Sewak Ram Sobhani.
It may be mentioned that the Government later on produced the inquiry report before the High Court but claimed privilege.
The learned High Court presumably perused the report before passing the impugned order.
It may also be mentioned that although the Government claimed privilege in respect of the report at that time, it appears, they subsequently, after the impugned order of the High Court, waived the claim of privilege, and released the inquiry report; for, in fact, a copy of the report has been annexed and is available in the paper book of these appeals before us as Annexure `A '. 5.
The submission of the appellants is that the impugned order of the High Court is beyond its revisional jurisdiction.
The submission is that the respondents prayed for quashing the order of the Magistrate proceeding to record their plea before the inquiry report was produced by the Government, but the High Court has wrongly quashed the complaint itself.
On the other hand the reply of the respondent is that although there was no specific prayer in the petition, the petition was also made for quashing the criminal case under Section 500/501 of the Penal Code pending before the Magistrate.
The respondents ' submission is that they are not guilty for the impugned publication in view of Exception 9 to Section 499 of the Penal Code.
A perusal of the respondents ' petition before the High Court and its impugned judgment justifies the factual submission of the respondents, namely, that their application before the High 642 Court (Copy Annexure C) was under Section 482 as well as Sections 397 and 401 of the Code, and that the respondents claimed and canvassed the protection under the Ninth Exception of Section 499 of the Penal Code.
For, para 6 of the Judgment of the High Court reads : "The applicants feeling aggrieved have come to this Court for quashing the complaint, since they contend that the publication would squarely fall within exception 9 of Section 499 of the Indian Penal Code.
The applicants further contend that the report of the Deputy Secretary (Home) is the document on the basis of which the reporting was done and unless that is got produced and inspected, the defence of exception 9 cannot be made out. (Emphasis added) 7.
The omission in the prayer portion of a petition of a part of the claim, particularly in a criminal case, is not fatal.
The High Court in its revisional jurisdiction can always grant suitable relief justified by law as well as facts and circumstances of a particular case.
That a part, Article 136 of the Constitution of India gives wide powers to the Supreme Court to grant special leave to appeal from any judgment, decree, determination, sentence or order in any cause or matter passed or made by any court or tribunal in the territory of India.
The power is discretionary and therefore to be sparingly exercised.
This power is to be exercised to meet ends of justice, to enhance justice and remove miscarriage of justice in a particular case.
It does not exercise such powers for academic reasons but for practical purposes.
The High Court in the impugned order has held that "it would be abuse of the process of the court if the trial is allowed to proceed or alternatively to turn out to be vexatious proceeding" and therefore quashed the complaint.
Such an order would be warranted under Section 482 of the Code of Criminal Procedure if the merit of the case before the High Court justified it.
We have therefore to examine whether the respondents ' case falls within the ambit of the Ninth Exception to Section 499 of the Penal Code as held by the High Court.
643 9.
The appellant has not submitted before us that the summary of the report published in the Blitz is not a correct summary of the Inquiry Report.
The copy of the Report, Annexure A, shows that a complaint was received from one Shri Krishsan Gopal Maheshari, advocate, alleging certain objectionable activities and misconduct on the part of the appellant and Shrimati Uma Shukla.
Annexure A also shows that the Inquiry Officer Sharma, examined several witnesses including Shri Yogesh Shukla, husband of Smt.
Uma Shukla.
Para 4 of the report reads : "The following points are in dispute : (a) whether as alleged by the complainant there was free mixing of female members with male members detained under MISA; (b) in case (a) is in the affirmative, whether Shri Sewakram Sobhani had an opportunity to mix freely with Smt.
Uma Shukla; (c) in case (a) and (b) are in the affirmative when, how and through whom Smt.
Uma Shukla a MISA detenu conceived".
His findings are "(a) There was a free mixing of male and female prisoners in the Bhopal Central Jail; (b) Shri Sewakram Sobhani had opportunity and also availed of opportunity and mixed very freely with Smt.
Uma Shukla; (c) Smt.
Uma Shukla became pregnant through Shri Sewakram Sobhani".
It, therefore, appears that the impugned publication is a correct summary of the report and no submission has been made to the contrary by the appellant before us.
The only question is whether the publication falls within the Ninth Exception to Section 499 of the Penal Code, as claimed by the respondents.
644 Before we do that, we must not be oblivious of the fact that the Inquiry Report in question was a privileged document; it is now an unprivileged open document as indicated above.
The High Court proceeded on the footing that if the document is not produced to be utilized by the accused, the benefit would go to him.
Section 499 defines `defamation '.
It is as follows: "section 499.
Whoever, by words either spoken or intended to be read, or by signs or by visible representations makes or publishes any imputation concerning any person intending to harm, or knowing or having reason to believe that such imputation will harm the reputation of such person, is said, except in the cases hereinafter defame that person".
The Ninth Exception reads: "It is not defamation to make an imputation on the character of another provided that the imputation be made in good faith for the protection of the interests of the person making it, or of any other person, or for the public good".
The Ninth Exception requires, inter alia, that the imputation made must be in good faith for the public good.
`Good faith ' has been defined in Section 52 of the Penal Code as: "52.
Nothing is said to be done or believed in "good faith" which is done or believed without due care and attention", The definition is expressed in negative terms.
Normally proof of an exception lies on the person who claims it; but the definition of the expression "good faith" indicates that lack of good faith has been made a part of the offence which the prosecution has to establish beyond reasonable doubt.
On the other hand the mere proof by the accused of the report to be an authentic document is enough; it will create a doubt in the mind of the Court as to the lack of "good faith" on the part of the accused.
The inquiry was made and the report prepared by a highly responsible officer and submitted to the Government.
It was in pursuance of a complaint made by one of the citizens pointing 645 out laxity in observance of jail rules and highly objectionable practices of some of the prisoners and seeking improvement in jail administration.
The object was to see improved conditions, and maintenance of certain standard of moral conduct by prisoners, in jail.
If the complaint and the consequent inquiry report be for public good, and the respondents had reasons to believe its contents to be true, they will be protected under the Ninth Exception.
Even if the burden of proof of `good faith ' be on the accused `good faith ' need not be proved beyond reasonable doubt.
Once this is done, whether the publication was for public good would be a matter of inference.
The Dy.
Secretary (Home) examined Shri Bhandari, Editor of Prach who was a MISA detenu as witness No. 1, complainant Maheshwari as witness No. 2, Smt.
Ramkali Mishra, an advocate, and a member of Jana Sangha, another MISA detenu, as witness No. 4, Dr. Hamid Quireshi, another MISA detenu as witness No. 6, Shri Ramesh Chand Shrivastava an `independent ' witness as witness No. 7, and Shri Yogesh Shukla, husband of Smt.
Uma Shukla as witness No. 3.
Most of the said witnesses, it appears, were the party colleagues of the appellant and his co MISA detenus.
I must not be understood to suggest the contents of the inquiry report are true; it is an exparte inquiry report; it might be the result of political rivalry, as alleged by the appellant, but it appears that political rivalry, if any, was between the members of the appellant 's party and not between the party in power and party in opposition.
The comment of Mr. Sharma on the evidence of witness No. 3 is as follows: "Shri Yogesh Shukla witness No. 3 has categorically stated that he had no connection with his wife and that she became pregnant through Shri Sobhani, Advocate and got the child aborted.
It is worth consideration as to why the husband will come up with such an open allegation against his own wife, unless there be no very strong reasons for such a conviction.
Normally, no husband, even though his wife may have conceived through somebody else will like to see his name being scandalised.
Shri Yogesh Shukla witness No. 3 is an advocate, quite an educated person and we can safely presume that he knows the consequences of his statement and also their legal and moral implications on his profession.
Such an open scandalous statement against 646 his own wife could not but be a result of very strong abhoration or an outcome of utter desperation.
It could also be an expression of a naked truth.
" The entire report is exhaustive, reasoned and based on evidence.
A perusal of the report will normally lead one to believe the imputations.
If that be so, it cannot be said that the respondents published the report or its summary without due care and attention.
This establishes `good faith ' as required by the Ninth Exception to Section 499 of the Penal Code.
From what has been stated above, the publication obviously appears to be for public good.
The appellant submitted that he wanted an opportunity to clear himself of the imputations made against him by adducing evidence before the Magistrate to establish the falsity of the imputations made in the publication.
We are not concerned with the truth or falsity of the imputations published.
Even if the findings in the report be proved to be false, the respondents will be protected.
Sending back the case to the Magistrate to record the respondents ' plea after the perusal of the Inquiry Report will, in my opinion, be an exercise in futility and abuse of the process of the criminal court.
The appellant may seek his remedy, if any, in the Civil Court.
The learned High Court, therefore, in my opinion committed no error in quashing the complaint.
The appeal is dismissed.
ORDER In view of majority judgments, the appeals are allowed.
P.B.R. Appeals allowed.
[/INST]The appellant, a commissioned officer in the Indian Air Force, on a General Court Martial was cashiered and sentenced to suffer rigorous imprisonment for six years.
Later the Central Government remitted the unexpired portion of the punishment of rigorous imprisonment.
Subsequently, he was appointed by the Indian Institute of Technology for a project work on a purely temporary basis and subject to verification of his character and antecedents from the Government and subject to the further condition that his services could be terminated on 24 hours notice in writing by either side.
On a reference by the I.I.T., the Ministry of Defence by its letter dated November 19, 1977 invited attention to the Ministry of Home Affairs Memorandum dated May 14, 1965 to the effect that persons who were dismissed from service were disqualified from future employment under the Government but left it open to the I.I.T. whether it would follow that principle in the case of the appellant.
The Professor under whom the appellant was working recommended the retention of the appellant in service.
The I.I.T. did not accept the said recommendation and by its order dated January 21,1978 terminated the appellant 's services on the expiry of 24 hours.
A writ petition filed by the appellant challenging the validity of the said order was dismissed in limine by the Delhi High Court and hence the appeal by special leave.
Dismissing the appeal, the Court, ^ HELD: The relief claimed by the appellant for reinstatement to his post in the Institute must be denied for the reasons, namely, (a) the appointment was temporary only and could be terminated on 24 hours notice; (b) the Professor incharge of the project passed away subsequently in June 1978 and, therefore, the project in which he was engaged was finally closed and (c) the period for which the appellant 's post of Senior Research Assistant had been, created had come to an end.
[43 D E]
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<s>[INST] Summarize the judgementCivil Appeal No. 281 of 1959.
Appeal by special leave from the judgment and order dated October 12, 1955, of the former Nagpur High Court in Misc.
Petition No. 288 of 1954.
H. R. Khanna and R. H. Dhebar, for the appellants.
section N. Kherdekar and A. G. Ratnaparkhi, for respondent No. 1 1961.
November 20.
The Judgment of the Court was delivered by SHAH, J.
Out of a total area of 2,375 acres 3 gunthas of Dhanora an Izara village in Taluka 712 Pusad in the State of Madhya Pradesh 2,283 acres and 28 gunthas is assessed land and the remaining 91 acres and 15 gunthas is unassessed.
One Surat Singh who was the proprietor of the village, by sale deed dated May 24, 1947, conveyed an undivided half share in the village to Yeshwant Madhao Mahajan hereinafter called Mahajan for Rs. 25,000/ and on the same day executed a kabulayat (lease deed) for five years in respect of the same land for cultivation at an annual rental of Rs. 3,000/ .
The Legislature of the Madhya Pradesh State enacted the Madhya Pradesh Abolition of Proprietary Rights (Estates, Mahals, Alienated Lands) Act, 1 of 1951 hereinafter called the Act to provide for acquisition of the rights of proprietors in estates, mahals, alienated villages and alienated lands in Madhya Pradesh and to make provision for other matters connected therewith.
The Act was brought into operation on March 14, 1951.
The Compensation Officer, Yeotmal started an enquiry about assessment of compensation in respect of the village Dhanora which had vested by the operation of section 3 of the Act in the State Government.
Before the Compensation officer, Mahajan claimed to retain possession of a half share in all the fallow lands in the village which had been leased by him under the deed (kabulayat) dated May, 24, 1947, to Surat Singh on the plea that these lands were "home farm".
This claim was rejected by the Compensation Officer and the order of the Compensation Officer was confirmed in appeal by the Additional Settlement Commissioner.
Mahajan then applied to the High Court of Judicature at Nagpur under article 226 of the Constitution for a direction quashing the order of the Additional Settlement Commissioner and the Compensation Officer and for a declaration that the lands mentioned in Schedule A attached to the petition be declared home farm and for a writ of mandamus against the State of Madhya Pradesh to deliver possession of all the lands mentioned in that Schedule.
713 The High Court quashed the order of the Additional Settlement Commissioner in so far as it related to the undivided half share in Survey Nos. 1 to 91 except those in possession of the specified tenants and also those already recognised as home farm and directed the Compensation Officer to decide the claim made by Mahajan in the light of the law laid down in the judgment.
Against the order passed by the High Court, the Additional Settlement Commissioner and the State of Bombay, which had by virtue of the States Reorganization Act, 1956, been substituted for the State of Madhya Pradesh, have appealed to this Court with special leave.
The dispute in this appeal relates to a half share in those lands in the village which had remained fallow on the date of the notification under section 3 of the Act.
By virtue of the sale deed dated May 24, 1947, Mahajan was the proprietor of the undivided half share in the entire village and under the kabulayat he had granted to Surat Singh a lease for cultivation of the undivided half share purchased by him.
Undoubtedly the lands specified in Schedule A to the petition were on the crucial date lying fallow.
The question which falls to be determined is whether those lands can be regarded home far": if they be so regarded, by virtue of section 4(2) of the Act Mahajan will be entitled to retain possession of those lands.
Section 3 of the Act provides, in so far as it is material, that "on and from a date to be specified by a notification by the State Government in this behalf, all proprietary rights in an estate, mahal, alienated village or alienated land, as the case may be, in the area specified in the notification, vesting in a proprietor of such estate, mahal, alienated village, alienated land, or in a person having interest in such proprietary right through the proprietor, shall pass from such proprietor or such other person to and vest in the State for the purposes of the State free of all encumbrances." Section 4(1) sets out the 714 consequence of the vesting.
By cl.
(a) of section 4(1), all rights, title and interest vesting in the proprietor or any person having interest in such proprietary right through the proprietor in such area including land (cultivable or barren), cease and are vested in the State for the purposes of the State free from all encumbrances.
But sub section 2 provides that "Notwithstanding anything contained in subsection (1), the proprietor shall continue to retain the possession of his home stead, home farm land. . . " . 'Home farm land ' is defined, in so far as it is material, in section 2(g) as: "(1) x x x x x x (2) x x x x x x (3) in relation to Berar, all land included in holdings which is (i) under the personal cultivation of the superior holder including land allowed to lie fallow in accordance with the usual agricultural practice; (ii) held by a lessee from the superior holder; and (iii) held by a tenant from the superior holder other than a specified tenant.
" 'Land ' is defined as "including land covered with water.
" Section 7 authorises the Deputy Commissioner to take charge of all lands, other than occupied lands and home stead lands, and of all interests vesting in the State under section 3 on the date of the vesting, and, by section 8, duty is imposed on the State Government to pay every proprietor, who is divested of proprietary rights, compensation in accordance with the rules contained in Schedule I. Mahajan was undoubtedly at the date of vesting the superior holder of the half share in the fallow lands which were held by Surat Singh as lessee from him.
Prima facie the claim of Mahajan 715 was covered by cl.
(g) (3) (ii) of section 2 of the Act, and Mahajan was entitled to the benefit of the exception in section 4 (2).
But counsel for the State contends that in respect of an undivided interest in land, the superior holder is not entitled to the benefit of section 4(2), because it is not a "holding.
" Alternatively, he contends that the land which is, at the date of vesting, lying fallow otherwise than in accordance with the usual agricultural practice can never be regarded as home farm.
" In our view, there is no substance in either of these contentions.
Schedule A to the petition sets out the description of the various lands which Mahajan claimed should be treated as "home farm" land.
Each of these lands is assessed.
The expression 'holding ' is not defined in the Act, but by cl.
(d) of section 2 expressions not defined in the Act in relation to Berar but used or explained in the Berar Land Revenue Code, 1928, have the meaning assigned to those expressions in the latter Act.
The Berar Land Revenue Code defines 'holding ' as "(a) a parcel of land separately assessed to land revenue; and(b) in reference to land held by a tenant a parcel of land held from a landlord under one lease or set of conditions.
" Evidently, the survey numbers included in Schedule A to the petition were "holdings" within the meanings of the Berar Land Revenue Code and therefore within the meaning of that expression as used in the Act.
It is true that Mahajan was not entitled to the entire area of each of these holdings but by the definition in the Act all lands included in holdings in Berar, provided they fulfil the conditions in cl.
(i), (ii) or (iii) of sub cl.
(3), are "home farm" lands.
In other words a part of the holding or an undivided interest in the holding may also be "home farm" land if it otherwise fulfils the requirements of cl.(i) (ii) or (iii) of sub cl.(3).
That a half share in the village which is included in the Schedule to the petition was granted 716 to Surat Singh on lease for cultivation cannot be gain said in view of the express covenants of the kabulayat.
Certain lands in the village, it is true, were lying fallow wholly or partially at the date of the vesting, but the lands having been granted in lease for cultivation, in our judgment, they are by virtue of section 4(2) to be retained in the possession of the proprietor, provision of cl.(1) of section 4 notwithstanding.
By sub section
(2) of section 4 all "home farm" lands are to remain in possession of the proprietor: there is no express exclusion of lands lying fallow from the benefit of section 4 (2) and none such can be implied either from the scheme of the Act or the context in which section 4 (2) occurs.
If Mahajan had remained in occupation as proprietor and had allowed the lands to remain fallow they may have vested in the State and Mahajan may not have been entitled to claim the benefit of section 4 (2) unless his case fell under cls.
(i) and (iii) of section 2 (g)(3), but the grant of a lease for cultivation evidences an intention on the part of Mahajan that the land be converted to agricultural purposes and default on the part of the lessee to cultivate those lands will not, deprive the lessor proprietor of the benefit granted to him by the statute.
In our view, the High Court was right in holding that the words of cl.
(ii) of section 2(g) (3) were explicit and a survey number which was lying fallow but was held by a lessee from the superior holder fell within the definition of "home farm.
" The appeal, therefore, fails and is dismissed with costs.
Appeal dismissed.
[/INST]An arbitration agreement was filed in court under section 20 of the , and an order of reference was made thereon.
The arbitrator entered upon the reference and in due course filed his award in court.
The award was however, unstamped and on objection raised that no judgment 476 could be passed on such an award, the trial court passed an order remitting the award to the arbitrator for re submitting it to the court on duly stamped paper.
The High Court took the view that want of stamp would be an illegality apparent on the face of the award, which could therefore be remitted under section 16(1) (c) of the Act. ^ Held, that all unstamped award cannot be remitted under section 16(1) (c) of the , to the arbitrator to get it stamped, because want of stamp is a defect dehors the award or the decision of the arbitrator and does not amount to an illegality apparent upon the face of it within the meaning of that section.
Ramkumar vs Kushalchand, A.I.R. 1928 Nag.
166 and Lakshmichand vs Kalloolal, 1956 N.L.J. 504, disapproved.
Nani Bala Saha vs Ram Gopal Saha, A.I.R. 1945 Cal.
19, approved.
Held, further, that after making an award the arbitrator is functus officio, and section 151 of the Code of Civil Procedure cannot therefore give the court power to direct the arbitrator to make a fresh award and re submit it after writing it on proper stamp paper.
Mordue vs Palmer, , relied on.
Dubitante, it is doubtful if the fees and charges mentioned in section 14(1) of the Arbitration act, 1940, include the stamp duty payable on the award.
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<s>[INST] Summarize the judgementivil Appeal No. 3081 of 1988.
From the Judgment and Order dated 25.
1985 of the Punjab and Haryana High Court in Civil Revision No. 2457 of 1985.
R.K. Jain and Ms. Abha Jain for the Appellant.
K.C. Sharma and R.K. Virmani for the Respondent.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J.
Special leave granted.
The appeal is disposed of herein after hearing counsel for both the parties.
The appellant landlord filed a suit for possession in the Civil Court of Hissar in Haryana.
The respondent is the tenant in the shop situated at Raj Guru Market which had PG NO 531 been rented out to the respondent in 1978.
The suit was filed on the basis that the respondent was in arrears of rent from lst December, 1982 to 3lst May, 1982 and the tenancy of the respondent had been terminated by giving him notice.
The suit was filed for recovery of possession on the termination or expiry of the period of tenancy.
It was filed because of Section 1(3) of the Haryana Urban (Control of Rent and Eviction) Act, 1973 (hereinafter referred to as 'the Act ').
The Act was passed with the object to control the increase of rent of certain buildings and rented land situated within the limits of urban areas and the eviction of tenants therefrom.
For our present purpose, it would suffice if we bear in mind two relevant provisions.
Section 1(3) of the Act provides as follows : "Nothing in this 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 its completion.
" Section 13 of the Act deals with the eviction of tenants and sub section (1) thereof provides that the tenant in possession of a building or a rented land shall not be evicted therefrom except in accordance with the provisions of that section.
The section thereafter enumerates the statutory grounds for eviction upon which eviction is permitted which incidentally are more or less similar statutory ground all over the country.
On or about 15th February, 1983, the respondent tenant filed his written statement.
In November, 1984, the respondent tenant moved an application for dismissal of the suit of the appellant stating that the shop in question was constructed in June, 1974 as such the period of ten years had elapsed by June, 1984 in terms of section l(3) of the Act.
and, as such, the immunity from the application of the had expired.
The suit under the Act is not maintainable and the Jurisdiction of the Civil Court stands barred.
The learned Sub Judge, Hissar.
held that the decree was not necessary to be passed within the exemption period of ten years under section 1(3) of the Act.
the learned Sub Judge accordingly dismissed the respondent 's application.
Aggrieved thereby, the tenant respondent preferred a revision to the High Court of Punjab and Haryana.
The High Court held that as the suit had not been decreed within the period of ten years, the building in question came within the operation of the Act and as such the Rent Act was applicable and the Civil Court had no jurisdiction.
In the PG NO 532 premises, the learned Judge of the High Court dismissed the suit pending before the Sub Judge.
Aggrieved thereby the appellant has come up in appeal to this Court.
More or less identical provisions of the U. P. Act had come up for consideration before this Court in the case of Vineet Kumar vs
Manal Sain Wadhera, [l984] 3 S.C.C. 352.
The only point that was urged before this Court in that decision was whether the premises which was not ten years ' old on the date of the suit and was exempted from the operation of the new Rent Act, could be governed by it if ten years expired during the pendency of the litigation.
The relevant provisions of the U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972 provided as follows: "20.
Bar of suit for eviction of tenant except on specified grounds.
(1) Save as provided in sub section [2).
no suit shall be instituted for the eviction of a tenant from a building, notwithstanding the determination of his tenancy by efflux of time or on the expiration of a notice to quit or in any other manner.
Provided that nothing in this sub section shall bar a suit for the eviction of a tenant on the determination of his tenancy by efflux of time where the tenancy for a fixed term was entered into by or in pursuance of a compromise or adjustment arrived at with reference to a suit, appeal, revision or execution proceeding, which is either recorded in court or otherwise reduced to writing and signed by the tenant.
" In Vineet Kumar vs Mangal Sain Wadhera, [supra], the respondent landlord filed a suit for eviction and for arrears of rent and damages, inter alia, on the grounds that the building in question was not covered by the U.P. Urban Buildings [Regulation of Letting, Rent and Eviction] ct, 1972 in view of the exemption granted to new buildings under section 2 [2] of the said Act and that the defendant appellant had defaulted in payment of rent.
The tenant had resisted the claim on the ground that having regard to the date of construction of the building, it was covered ' by the Act, that the plaint having not been amended so as to bring the suit under the Act, it was barred by section 20 and that term was no default in payment of rent.
As mentioned hereinbefore, during the pendency of the litigation the exemption granted under section 2 [2] expired.
The question was whether the premises which was not ten years ' old on the PG NO 533 date of the suit and was exempted from the operation of the Rent Act, would be governed by it if ten years expired during~, the pendency of the litigation.
Allowing the appeal, this Court held that the appellant must get benefits of the Act which became applicable to the premises in question during the pendency of the litigation.
That would not affect the cause of action in that case.
It was held that the contention that the Court had to decide the case on the basis of cause of action that accrued prior to the date of filing the suit and not on a new cause of action was not sustainable.
It was further held that normally amendment in plaint is not allowed if it changes the causes of action.
However, where the amendment 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 limitation.
This Court observed that processual justice required that the events and developments subsequent to the institution of proceedings must be taken into consideration in appropriate cases to promote substantial justice.
Vineet Kumar 's case (supra] was discussed and explained by this Court in Nand Kishore Marwah und others vs Sammundri Devi, [1987] 4 S.C_ '.C. 382.
This Court held that in view of section 2(2) of the 1972 Act, if an assessment is made of the newly built house then the date of completion of the building, the date from which 10 years have to be computed will be the date on which the first assessment was made.
Therefore, the period of 10 years have to be computed from October.
This Court further hold that if a tenant is entitled to the advantage of sections 39 and 40 of the Act and the period of 10 years elapses during the pendency of the eviction suit or appeal before this Court (which is the continuation of the suit), then the tenant would be entitled to the benefits of the Act.
This Court further held that within 10 years as provided for in section 2(2) restriction on the institution of suit as provided for in section 20 (1) will not be applicable.
It was held that during the pendency of the litigation even if 10 years expired the restriction under section 20 will not be attracted as the suit had been instituted within 10 years.
It is well settled that the rights of the parties will have to be determined on the basis of the rights available to them on the date of the suit.
This Court pointed out that the attention of the Court had not been drawn to the decision of this Court in Om Prakash Gupta vs Dig.
Vijendrapal Gupta; , This Court referred to the words used in section 20 of the said Act which emphasised that "no suit shall be instituted for eviction." 'This clearly indicates that the restriction put under section 20 of the said Act is to the institution of the suit itself and, therefore, it is clear that if the provision of PG NO 534 this Act applies then no suit for eviction can be instituted except on the grounds specified in the sub sections of that section of the Act.
This applies more so in the instant case where the section 13 of the Act provides that the tenant in possession of a building or a rented land shall not be evicted therefrom except in accordance with the provisions of this section.
Those provisions would not be applicable to a suit instituted within 10 years from the date of the completion of the building in question.
That is the plain meaning of the expression "use".
It was further to be borne in mind that in finding out the plain meaning of the expression "use"z the language, the background, the context, the purpose, these all have to be borne in mind.
In Ram Saroop Rai vs Lilavati, ; , Krishna lyer, J. has explained the section 2(2) of the U. P. Act as follows ; "The legislature found that rent control law has a chilling effect on new building construction, and so, to encourage more building operations, amended the statute to release, from the shackle of legislative restriction, 'new constructions ' 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 proceedings within ten years of completion ? ' 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 curiam neminem gravabit" an act of Court shall prejudice no, man.
Therefore, having regard to the time normally consumed for adjudication, the 10 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 10 years and even then within that time it may not be disposed of.
That will make the 10 years holidays 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 interpretation in a social amelioration legislation is an imperative irrespective of anything else.
Judicial time and energy is more often than not consumed in finding what is the intention of the Parliament or in other wards, the will of the people.
Blackstone tells us that the fairest and most rational method to interpret the will of the legislator is by exploring his inten tions at PG NO 535 the time when the law was made, by signs most natural and probable.
And these signs are either the words, the context, the subject matter, the effects and consequence, or the spirit and reason of the law.
(Underlined by the Court).
See Commentaries on the Laws of England (facsimile of lst edition of 1765, University of Chicago Press, 1979 Vol. 1, p. 59).
Mukherjea, J. as the learned Chief justice then was, in Poppatlal Shah vs State of Madras, ; said that each word, phrase or sentence was to be construed in the light of purpose of the Act itself.
But words must be construed with imagination of purpose behind the said Judge Learned Hand, long time ago.
It appears, therefore, that though we are concerned with seeking of intention, we are rather looking to the meaning of the words that the legislator has used and the true meaning of what words as was said by Lord Reid in Black Clawson International Ltd. vs Papierwerke Waldhof Aschaffenburg A G, [1975] Appeal Cases 591 at 613.
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 10 years which is in reality ability, then there would be empty reasons.
In our opinion,bearing in mind the well settled principle that the rights of the parties crystallise on the date of the institution of the suit as enunciated by this Court in Om Prakash Gupta vs Dig Vijendrapal Gupta, (supra), the meaningful construction must be that the exemption would apply for a period of 10 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 10 years.
Once rights crystallise the adjudication must be in accordance with law.
In that view of the matter, we are of the opinion that the High Court was in error in the view it took.
The judgment and order of the High Court are set aside and the order of the learned Sub Judge is restored.
The suit will now proceed in accordance with law in the light of the observations herein as expeditiously as possible.
The costs of the appeal will be the costs of the suit.
N.V.K. Appeal allowed.
[/INST]The appellant landlord filed a civil suit against the respondent tenant for possession of a shop which had been rented out by him in 1978.
The suit was filed on the basis that the respondent was in arrears of rent from lst December, 1981 to 31st May,1982, that the tenancy had been terminated by giving a suit notice, and that section 1(3) of the Haryana Urban (Control of Rent and Eviction) Act, 1973_exempted the building from the purview of the Act.
On or about 15th February, 1983, the respondent tenant filed his written statement, and in November, 1984, moved an application for dismissal of the suit stating that the shop in question was constructed in June 1974 and as such, the period of 10 year had elapsed by June 1984 in terms of section 1 [3] of the Act and as such, the immunity from the application of the Act having expired, the suit under the Act is not maintainable, and that the jurisdiction of the Civil Court was barred.
The Sub Judge held that the decree was not necessary, to be passed within the exemption period of 10 years under section 1 (3) of the Act, and accordingly dismissed the respondent 's application.
The respondent preferred a revision petition to the High Court , which held that as the suit had not been decreed within the period of 10 years, the building in question came within the operation of the Act and as such, PG NO 528 PG NO 529 the rent Act was applicable and the Civil Court had no jurisdiction.
The High Court allowed the petition and consequently dismissed the suit pending before the Sub Judge.
The landlord appealed to this Court by Special Leave.
Allowing the appeal and remanding the case, HELD: l.(a) The rights of the parties will have to be determined on the basis of the rights available to them on the date of the suit.
The Judgment and Order of the High Court set aside, and order of the Sub Judge restored.
The suit to proceed in accordance with law.
{533G 535F] (b) Section 13 of the Act provides that the tenant in possession of a building or a rented land shall not be evicted therefrom except in accordance with the provisions of the said Section.
Those provisions world not be applicable under Section 1(3) to a suit instituted within 10 years from the date of the completion of the building in question.
{534B} (c) It is well settled that no man should suffer because of the fault of the Court or delay in the procedure.
"Actus curiam neminem gravabit ' ' an act of Court shall prejudice no man.
[534E] (d) Having regard to the time normally consumed for adjudication, the 10 years exemption or holiday from the application of the Rent Act would become illusory, if the suit has to he filed within that time and be disposed of finally.
[534F] (e) It is common knowledge that unless a suit is instituted soon after the date of letting, it world never be disposed of within 10 years and even then within that time it may not be disposed of.
That will make the 10 years holiday from the Rent Act illusory and provide no incentive to the landlords to build new holiday to solve problem of shortages of houses.
The purpose of the legislation would thus be defeated.
[534G] (f) Bearing in mind the well settled principle, that the rights of parties crystallise on the date of the institution of the suit, the meaningful construction must be that the exemption world apply for a period of 10 years and will continue to be available until the suit is disposed of or adjudicated.
Such suit or proceedings must be instituted within the stipulated period of 10 years.
Once rights crystallise the adjudication must be in accordance with law.
[535E] PG NO 530 Vineet Kumar vs Mangal Sain Wadhera, [1984] 3 S.C.C. 352; Nand Kishore Marwah and Ors.
vs Samundri Devi, ; ; Om Prakash Gupta vs Dig.
Vijendrapal Gupta, ; ; Ram Saroop Rai vs Lilavati, ; , referred to.
2.(a) Purposive interpretation in a social amelioration legislation is an imperative irrespective of anything else.
[534G] (b) Judicial time and energy is more often than not consumed in Finding what is the intention of the Parliament or in other words, the will of the people.
The fairest and most rational method to interpret the will of the legislator is by exploring his intentions at the time when the law was made, by signs most natural and probable and these signs are either the words, the context, the subject matter, the effects and consequences or the spirit and reasons of the law.
[534H 535A] (c) Each word, phrase or sentence has to be construed in the light of the purpose of the Act itself but words must be construed with imagination of purpose behind them.
Though the Court is concerned with seeking of intention, it is rather looking to the meaning of the word that the legislator has used and the true meaning of the words used.
{535B} Poppatlal Shah vs State of Madras, ; and Black Clawson International Ltd. vs Papierwerke Walnhof Aschaffenburg A G, {1975] A.C. 591 at 613.
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<s>[INST] Summarize the judgementAppeals Nos. 412 and 413 of 1956.
Appeals by special leave from the judgment and order dated October 17, 1955, of the Patna High Court in M.J.C. No. 577 of 1953, made on reference by the Board of Revenue, Bihar in Appeals Nos. 495 and 496 of 1952.
1358 M. C. Setalvad, Attorney General, for India, Rajeshwari Prasad and section P. Varma, for the appellant.
Mahabir Prasad, Advocate General for the State of Bihar and R. C. Prasad, for the respondent.
February 19.
The Judgment of Das, C.J. Venkatarama Aiyar, section K. Das and Sarkar, JJ. ",as delivered by Das C. J. Bose, J. delivered a separate judgment.
DAS C. J.
These two appeals, which have been filed with the special leave granted by an order made by this Court on April 3, 1956, and which have been consolidated together by the same order, are dire led against the judgment pronounced by the Patna high Court on October 17, 1955, in Miscellaneous Judicial Case No. 577 of 1953, deciding certain questions refer.
red to it by the Board of Revenue, Bihar under section 25 of the Bihar Sales Tax Act, 1947 (No. XIX of 1947) hereinafter referred to as the 1947 Act.
The said references arose out of two orders passed by the Board of Revenue in revision of two sales tax assessment orders made against the appellant company.
The appellant company is a company incorporated under the Indian Companies Act.
Its registered office is in Bombay; its factory and works are at Jamshedpur in the State of Bihar and its head sales ' office is in Calcutta in the State of West Bengal.
It has store yards in the States of Madras, Bombay, West Bengal, Uttar Pradesh, Hyderabad, Madhya Pradesh, Punjab and Andhra.
It carries on business as manufacturer of iron and steel and is a registered dealer under the 1947 Act, the registration No. being section C. 905.
Its course of dealing is thus described in the judgment under appeal: " The intending purchaser has to apply for a permit to the Iron and Steel Controller at Calcutta, who forwards the requisition to the Chief Sales Officer of the assessee working in Calcutta.
The Chief Sales Officer thereafter makes a "works order" and for.
wards it to Jamshedpur.
The " works order " mentions the complete specification of the goods required.
1359 After the receipt of the "works order" the Jamshedpur factory initiates a " rolling " or " manufacturing " programme.
After the goods are manufactured, the Jamshedpur factory sends the invoice to the Controller of Accounts who prepares the forwarding notes, and on the basis of these forwarding notes, railway receipts are prepared.
The goods are loaded in the wagons at Jamshedpur and despatched to various stations, but the consignee in the railway receipt is the assessee itself and the freight also is paid by the assessee.
The railway receipts are sent either to the branch offices of the assessee or to its bankers, and after the purchaser pays the amount of consideration, the railway receipt is delivered to him.
These facts are admitted and the correctness of these facts are not disputed by the State of Bihar.
" The appellant company was separately assessed for two periods: (1) from July 1, 1947 to March 31, 1948, and (2) from April 1, 1948 to March 31, 1949.
For the first period the appellant company filed a return under section 12(1) of the 1947 Act before the Sales Tax Officer showing a gross turnover of Rs. 12,80,15,327 8 5.
From this gross turnover the appellant company claimed to deduct a sum of Rs. 2,88,60,787 13 0 being the amount of valuable consideration for the goods manufactured at Jamshedpur in the State of Bihar but sold, delivered and consumed outside that State on the ground that in none of the transactions in respect of the said sum did the property in the goods pass to the purchasers in the State of Bihar.
The appellant company further claimed a deduction of Rs. 1,10,87,125 13 0 on account of railway freight, actually paid by it for the despatch of the goods.
The Sales tax Officer, by his assessment order dated July 22, 1949, disallowed both the claims for deduction and, on the other hand added a sum of Rs. 13,66,496 11 0, being the amount of sales tax realised by the appellant company from its purchasers, to its taxable turnover and assessed the appellant company to sales tax amounting to Rs. 15,31,374 5 9.
For the second period the appellant company filed a return showing a gross turnover of Rs. 21,64,45,450 0 0. 1360 From this gross turnover the appellant company claimed a deduction of Rs. 10,71,66,233 11 0 being the amount of valuable consideration for goods manufactured at Jamshedpur in the State of Bihar, but sold, delivered and consumed outside that State on the same ground as hereinbefore mentioned.
The appellant company also claimed a deduction of Rs. 40,89,973 9 0 on account of railway freight actually paid by it for the despatch of the goods.
The Sales Tax Officer by his assessment order dated September 24, 1949, disallowed both the claims and added the sum of Rs. 22,37,919 4 0, being the amount of sales tax realised by the appellant company from its purchasers, to its taxable turnover and assessed the appellant company to sales tax amounting to Rs. 28,30,458 6 0.
Against these two assessment orders the appellant company preferred two appeals under section 24 of the 1947 Act to the Commissioner of Sales Tax of Chota Nagpur who, on April 29, 1950, dismissed both the appeals.
The appellant company went up to the Board of Revenue on two revision applications against the two orders of the Commissioner.
The Board of Revenue,by its order dated August 30, 1952, confirmed the orders of the Commissioner with certain modifications and remanded the cases to the Sales Tax Officer.
The appellant company applied under section 25 of the 1947 Act to the Board of Revenue in Reference Cases Nos. 495 and 496 of 1952 for reference of certain questions of law to the High Court.
By a common order dated October 5, 1953, made in the said two references the Board of Revenue referred the following questions of law to the High Court for its decision " (1) Is the Bihar Sales Tax Act, 1947, as amended in 1948, ultra vires the Provincial Legislature in view of the extended meaning of the expression taxes on sale of goods given in the Act in the light of the provisions of the Government of India Act, 1935 ? (2)Are the provisions of section 2(g) of the 1947 Act ultra vires the Provincial Legislature ? 1361 (3) Is it legal to include sales tax in the taxable turnover of an assessee like the petitioner ? (4) Was the Bihar Sales Tax (Amendment) Act of 1948 legally extended to Chotanagpur ? (5) Were the levy and collection of sales taxes for periods prior to the 26th January 1950, under the Sales Tax Act then in force rendered illegal by the provisions of the Constitution ? (6) Was the Commissioner, who passed orders, in appeal, after the Constitution came into force, bound to decide the appeal according to the provisions of the Constitution in respect of taxes levied or sought to be levied for periods prior to the 26th January, 1950, when the Constitution came into force ?" Out of these six questions, question No. 3 was decided in favour of the appellant company and the respondent State has not preferred any appeal against that decision or questioned its correctness.
Question No. 4 was not pressed before the High Court and does not survive before us.
Questions Nos. 1, 2, 5 and 6 were decided against the appellant company and the two consolidated appeals are directed against the High Court 's decision on these questions.
It will be noticed that questions Nos.
I and 2, in effect, raise the same problem, namely, as to the vires of the 1947 Act and questions Nos. 5 and 6 are concerned with the validity of the retrospective levy of sales tax by reason of the amendment of section 4 of the 1947 Act.
The following points, as formulated by the learned Attorney General appearing for the appellant company, have been urged before us in support of these appeals: " (1) The tax levied under section 4(1) read with section 2(g), second proviso, cl.
(ii), is not a tax on sale within the meaning of Entry 48 in List II of the Seventh Schedule to the Government of India Act, 1935.
(2) The doctrine of nexus is not applicable to sales tax.
(3) In any event the nexus in the present case is not real and sufficient but is illusory.
1362 (4)Having regard to the provisions of the law mentioned above, the tax levied is in the nature of duty of excise rather than a tax on sale.
(5)The retrospective levy by reason of the amendment of section 4(1) destroys its character as a sales tax and makes it a direct tax on the dealer instead of an indirect tax to be passed on to the consumer.
" In order to appreciate the arguments that have been advanced before us on the points noted above, it is necessary to refer to the relevant statutory provisions, which were in force at the material times.
Section 99, of the Government of India Act, 1935, authorised a Provincial Legislature, subject to the provisions of that Act, to make laws for the Province or for any part thereof.
Section 100(3) of that Act provided that, subject to the two preceding sub sections, the Provincial Legislature had, and the Federal Legislature had not, power to make laws for any Province or any part thereof with respect to any of the matters enumerated in List 11 of the Seventh Schedule to that Act.
The matter enumerated in Entry 48 in List II was as follows: " Taxes on the sale of goods and on advertisements.
" It is in exercise of this legislative power that the Provincial Legislature of Bihar passed the 1947 Act which received the assent of the Governor General on June 21, 1947, and came into force on July 1, 1947, by virtue of a notification made in the official gazette under section 1(3) of the said Act.
The relevant portion of section 4(1) of the 1947 Act, which was the charging section, was, prior to its amendment hereinafter mentioned, expressed in the following terms: " Subject to the provisions of sections 5, 6, 7 and 8 and with effect from such date as the Provincial Government may, by notification in the official gazette, appoint, being not earlier than 30 days after the date of the said notification, every dealer whose gross turnover during the year immediately preceding the commencement of this Act on sales which had taken place both in and outside Bihar exceeded Rs. 10,000 shall be liable to pay tax under this Act 1363 on sales which have taken place in Bihar after the date was notified.
" It should be noted that, although the 1947 Act came into force on July 1, 1947, by virtue of a notification published in the official gazette under section 1(3) thereof, the charging section quoted above did not come into operation because, by its own terms, it required a further notification in the official gazette to bring it into effect.
For some reason, not apparent on the record, the Provincial Government did not issue any notification as contemplated by section 4(1).
To cure this omission Ordinance III of 1948 was promulgated by the Governor amending section 4(1)(a) of the 1947 Act.
Section 4(1), as amended, read as follows: " Subject to the provisions of sections 5, 6, 7 and 8 and with effect from the commencement of this Act, every dealer, whose turnover during the year immediately preceding the date of such commencement, on sales which have taken place both in and outside Bihar exceeded Rs. 10,000, shall be liable to pay tax under this Act on sales which have taken place in Bihar on and from the date of such commencement.
" On March 22, 1949, Ordinance III of 1948 was replaced by Bihar Sales Tax (Amendment) Act, 1948 (VI of 1949) hereinafter referred to as the amending Act.
Section 16 of this amending Act provided that the substituted section 4(1) should form part of the 1947 Act and should always be deemed to have formed part thereof with effect from its commencement, that is to say, from July 1, 1947, as hereinbefore mentioned.
Two things should be noted, namely, (1) that the person sought to be charged was every dealer whose gross " turnover" during the specified period on " sales " which had taken place both in and outside Bihar exceeded Rs. 10,000 and (2) that the liability to pay tax was on " sales " which had taken place in Bihar on and from the date of such commencement.
This takes us back to section 2(g) which defines " sale ".
The material part of the definition of " sale ", previous to the amendment made by the amending Act, 173 1364 read as follows: " 'Sale ' means, with all its grammatical variations and cognate expressions, any transfer of property in goods for cash or deferred payment or other valuable consideration, including a transfer of property in goods involved in the execution of contract but does not include a mortgage, hypothecation, charge or pledge: Provided . . . . . . . . .
Provided further that notwithstanding anything to the contrary in the Indian (III of 1930), the sale of any goods which are actually in Bihar at the time when, in respect thereof, the contract of sale as defined in section 4 of that Act is made, shall, wherever the said contract of sale is made be deemed for the purpose of this Act to have been made in Bihar.
. . . . . . . . . .
Section 2 of the amending Act amended section 2(g) of the 1947 Act by substituting a new proviso to cl. (g) for the original second proviso thereto.
The material part of section 2(g), thus amended, read as follows: " 'Sale 'means, with all its grammatical variations and cognate expressions, any transfer of property in goods for cash or deferred payment or other valuable consideration, including a transfer of property in goods involved in the execution of contract but does not include a mortgage, hypothecation, charge, or pledge: Provided . . . . . . . . .
Provided further that notwithstanding anything to the contrary in the Indian (111 of 1930), the sale of any goods (i) which are actually in Bihar at the time when, in respect thereof, the contract of sale as defined in section 4 of that Act is made, or (ii) which are produced or manufactured in Bihar by the producer or manufacturer thereof, shall, wherever the delivery or contract of sale is made, be 1365 deemed for the purposes of this Act to have taken place in Bihar.
The amending Act by section 3 substituted for the old sub section
(1) of section 4 of the 1947 Act the following sub ' section, namely: " (1) Subject to the provisions of sections 5, 6, 7 and 8 and with effect from the commencement of this Act, every dealer whose gross turnover during the year immediately preceding the date of such commencement, on sales which have taken place both in and outside Bihar exceeded Rs. 10,000 shall be liable to pay tax under this Act on sales which have taken place in Bihar on and from the date of such com mencement: Provided that the tax shall not be payable on sales involved in the execution of a contract which is shown to the satisfaction of the Commissioner to have been entered into by the dealer concerned on or before the 1st day of October, 1944.
" Although the amending Act received the assent of the Governor General on March 15, 1949, it came into force on October 1, 1948, as provided in section 1(2) thereof.
Section 16 of the amending Act, however, provided that the amendment made by section 3 should form part and should be deemed always to have formed part of the 1947 Act as if the said Act had been enacted as so amended from the commencement thereof, that is to say, from July 1, 1947.
The 1947 Act was further amended in 1951 by Bihar Act VII of 1951 and again in 1953 by Bihar Act XIV of 1953, but we are not, in the present case, concerned with those amendments.
Although the charging section, namely, section 4(1), as amended, operates from July 1, 1947, the definition of sale as amended, became operative only from October 1, 1948.
Therefore, the definition of " sale ", as it stood prior to the amendment, was applicable to all sales made by the appellant throughout the first period hereinbefore mentioned, i.e., the period from July 1, 1947 to March 31, 1948 and also to those made during the period from April 1, 1948 to October 1, 1948, which was only a portion of the second 1366 period hereinbefore mentioned and the amended definition applied to all sales made by the appellant during the remaining portion of the second period, i.e., from October 1, 1948 to March 31, 1949.
Bearing in mind the relevant provisions of the 1947 Act as they stood both before and after the amendment and the period of their applicability we now proceed to consider the points urged before us by the learned Attorney General appearing for the appellant company.
Points Nos. 1 and 4: It will be convenient to take up those two points together for they have been dealt with together by the learned Attorney General.
The validity of section 4(1) read with section 2(g), second proviso, is challenged in two ways.
In the first place it is urged that section 100(3) of the Government of India Act, 1935 read with Entry 48 in List II of the Seventh Schedule thereto authorised the Legislature of Bihar to make a law with respect to tax on the sale of goods. " Sale of Goods ", as a legal topic, has well defined and well understood implications both in English and Indian Law.
The English Common Law relating to sale of goods has been codified in the English Sale of Goods Act, 1893.
In India the matter was originally governed by the provisions of Chapter VII of the .
Those provisions have since been replaced by the Indian Sale of Goods Act, Act III of 1930.
Our attention has been drawn to section 4 of the Indian Sale of Goods Act which clearly makes a distinction between a sale and an agreement for sale.
It is pointed out that that section groups " sales " and " agreements to sell " under the single generic name of " contract of sale ", following in this respect the scheme of English Sale of Goods Act, 1893, and that it treats " sales " and "agreements to sell " as two separate categories, the vital point of distinction between them being that whereas in a sale there is a transfer of property in goods from the seller to the buyer, there is none in an agreement to sell.
It is then urged, on the authority of a decision of this Court in the Sales Tax Officer, Pilibhit vs Messrs. Budh Prakash 1367 Jai Prakash (1) that there having thus existed at the time of the enactment of the Government of India Act, 1935, a well defined and well established distinction between a " sale " and an " agreement to sell " it would be proper to interpret the expression " sale of goods " in Entry 48 in the sense in which it was used in legislation both in England and in India and to hold that it authorised an imposition of a tax only when there was a completed sale involving the transfer of title in the goods sold.
Reference is then made to the decision of the Federal Court in the case of Province of Madras vs Boddu Paidanna and Sons (2) where the Federal Court at page 101 observed that in the case of sales tax the liability to tax arose on the occasion of a sale " which Patanjali Sastri C. J. in his judgment in the State of Bombay vs United Motors (India) Ltd. (3) described as " the taxable event.
" The argument is that the Bihar Legislature could only make a law imposing a tax on the sale of goods, that is to say, on a concluded sale involving the transfer of property in the goods sold from the seller to the buyer as contemplated by the Sale of Goods Act.
The Bihar Legislature could not, by giving an extended definition to the word "sale", extend its legislative power under Entry 48 in List II of the Seventh Schedule to the Government of India Act, 1935, so as to impose a tax on anything which is short of a sale.
For our present purpose no exception need be taken to the proposition thus formulated and indeed in Budh Prakash Jai Prakash 's case (1) this Court struck down that part of the definition of it sale " in section 2(h) of the Uttar Pradesh Sales Tax Act, 1948, which enlarged the definition of " sale " so as to include " forward contracts".
But is the position the same here? We think not.
It will be noticed that section 4(1) imposed on the dealer the liability to pay a tax on " sale " as defined in section 2(g).
Both before and after the amendment of section 2(g) the principal part of the definition meant the transfer of the property in goods.
All that the second proviso did was not to extend the (1) ; , 247.
(2) (3) ; , 1088.
definition of "" sale but only to locate the I" sale " in certain circumstances mentioned in that proviso in Bihar.
The basis of liability under s 4(1) remained as before, namely, to pay tax on " sale .
The fact of the goods being in Bihar at the time of the contract of sale or the production or manufacture of goods in Bihar did not by itself constitute a " sale " and did not by itself attract the tax.
The taxable event still remained the " sale " resulting in the transfer of ownership in the thing sold from the seller to the buyer.
No tax liability actually accrued until there was a concluded sale in the sense of transfer of title.
It was only when the property passed and the " sale " took place that the liability for paying sales tax under the 1947 Act arose.
There was no enlargement of the meaning of " sale " but the proviso only raised a fiction on the strength of the facts mentioned therein and deemed the " sale " to have taken place in Bihar.
Those facts did not by themselves constitute a" sale " but those facts were used for locating the situs of the sale in Bihar.
It follows, therefore, that the.
provisions of section 4(1) read with section 2(g), second proviso, were well within the legislative competency of the Legislature of the Province of Bihar.
The vires of section 4(1) read with section 2(g), second proviso, is also questioned on the ground that it is in reality not a tax on the sale of goods but is in substance a duty of excise within the meaning of Entry 45 in List I of the Seventh Schedule to the Government of India Act, 1935, with respect to which the Provincial Legislature could not, under section 100 of that Act, make any law.
Our attention is drawn to cl.
(ii) of the second proviso which contemplated a sale of the goods by the producer or manufacturer thereof.
It is urged that, according to this clause, tax was not imposed on all sales of goods produced or manufactured in Bihar, but was imposed only on those goods produced or manufactured in Bihar which were sold by the producer or manufacturer.
It is pointed out, as and by way of an illustration, that if the goods produced or manufactured in Bihar were taken out of the Province of Bihar and then gifted away by the producer or 1369 manufacturer to a person 'outside Bihar and that person sold the goods, he would not be liable under the proviso.
This argument, however, overlooks the fact that under cl.
(ii) the producer or manufacturer became liable to pay the tax not because he produced or manufactured the goods, but because he sold the goods.
In other words the tax was laid on the producer or manufacturer only qua seller and not qua manufacturer or producer as pointed out in Boddu.
Paidanna 's case (1).
In the words of their Lordships of the Judicial Committee in Governor General vs Province of Madras (2), " a duty of excise is primarily a duty levied on a manufacturer or producer in respect of the commodity manufactured or produced.
It is a tax on goods and not on sales or the proceeds of sale of goods.
" If the goods produced or manufactured in Bihar were destroyed by fire before sale the manufacturer or producer would not have been liable to pay any tax under section 4 (1) read with section 2 (g), second proviso.
As Gwyer C. J. said in Boddu Paidanna 's Case (1) at page 102 the manufacturer or producer would be "liable, if at all, to a sales tax because he sells and not because he manufactures or produces; and he would be free from liability if he chose to give away everything which came from his factory.
" In our judgment both lines of the argument advanced by the learned Attorney General in support of points and 4 are untenable and cannot be accepted.
Re. point No. 2: The theory of nexus has been applied in support of tax legislation in more cases than one, not only in this country but also in Australia and England.
In Wanganui Rangitikei Electric Power Board vs Australian Mutual Provident Society (3) Dixon J. observed: " So long as the statute selected some fact or circumstance which provided some relation or connection with New South Wales, and adopted this as the ground of its interference, the validity of an enactment. . would not be open to challenge." The same learned Judge in Broken Hill South Ltd. vs (1) (3) ; , 600.
(2) (1945) L.R. 721.A. 91, 103.
1370 Commissioner of Taxation (N. section W.)(1), said at page 375: " If a connection exists, it is for the legislature to decide how far it should go in the exercise of its ,powers.
As in other matters of jurisdiction or authority courts must be exact in distinguishing between ascertaining that the circumstances over which the power extends exist and examining the mode in which the power has been exercised.
No doubt there must be some relevance to the circumstance in the exercise of the power.
But it is of no importance upon the question of validity that the liability imposed is, or may be, altogether disproportionate to the territorial connection.
" Even the dissenting Judge Rich J. accepted the theory of nexus at page 361: " I do not deny that once any connection with New South Wales appears, the legislature of that State may make that connection the occasion or subject of the imposition of a liability.
But the connection with New South Wales must be a real one and the liability sought to be imposed must be pertinent to that connection.
" The Estate Duty Assessment Act 1914 1928 which charged estate duty on moveable properties situate abroad which had passed from a deceased person domiciled in Australia by gift intervivos made by him within a year of his death was not struck down for extra territoriality but was upheld as constitutional in The Trustees Executors and Agency Co. Ltd. vs The Federal Commissioner of Taxation (2).
The nexus theory was applied in full force in Governor General vs Raleigh Investment Co. (3); Wallace Brothers and Co. Ltd. vs Commissioner of Income Tax, Bombay City (4) and A. H. Wadia vs Commissioner of Income Tax, Bombay (5).
In Raleigh Investment Co. 's case(3) the assessee company was a company incorporated in England.
Its registered office was in England.
It held shares in nine Sterling Companies incorporated (1) ; (2) ; (3)[1944) F.C.R. 229.
(4) (5) 1371 in England.
Those nine Sterling Companies carried on business in British India and earned income, profits or gains in British India and declared and paid dividends in England to its shareholders including the assessee company.
Tile assessee company was charged to income tax under section 4 (1) of the Indian Income tax Act.
It should be noted that the assessee company was not resident in British India, carried on no business in British India and made no income, profits or gains out of any business carried on by it in British India.
It invested its money and acquired shares in England in the nine Sterling Companies which were English Companies.
It was only when those nine Companies declared and paid dividends in England that the assessee company really earned its income, profits or gains, out of its investments in England in shares of nine Sterling Companies.
The circumstance that the nine Sterling Companies derived their income, profits or gains, out of business carried on by them in British India out of which they paid dividends to the assessee company was regarded as sufficient nexus so as to fasten the tax liability on the assessee company in respect of the income, profits or gains, it derived from the nine Sterling Companies.
Even such a distantly derivative connection with the source of income was held as a sufficient nexus to enable the British Indian tax autho rities to charge the assessee company with income tax.
The conclusions reached by Spens C. J. in Raleigh Investment Co. 's case, (1) are formulated thus at page 253: " If some connection exists, the legislature is not compelled to measure the taxation by the degree of benefit received in particular cases by the taxpayer.
This affects the policy and not the validity of the legislation ".
In Wallace Brothers case (2) the connection of the assessee company with British India was not so remote as in Raleigh Investment Co. 's case (1), for in the former case the assessee company was a partner in a (1) 174 (2) 1372 firm which carried on business in British India but that connection was held to be sufficient nexus to bring to British Indian tax not only the income, profits or gains made by the assessee as a partner in the firm but also its income, profits or gains which accrued without British India in the previous year.
In Wadia 's case (1), also an income tax case, it was held that a law imposing a tax cannot be impugned on the ground that it is extra territorial, if there is a connection between a person who is subjected to a tax and the country which imposes that tax.
The connection must, however, be a real one and the liability sought to be imposed must be pertinent to that connection.
At page 140 Chief Justice Kania observed: " Generally, States can legislate effectively only for their own territories, but for purposes of taxation and similar matters, a State makes laws designed to operate beyond its territorial limits." The learned Attorney General points out that the three last mentioned cases in which the nexus theory was applied were income tax cases and submits that that principle cannot be extended to sales tax laws.
He points out that in Bengal Immunity Co. Ltd. vs The State of Bihar (2) this Court expressly left open the question, whether the theory of nexus applied to legislation with respect to sales tax.
The passage at page 639 relied upon by the learned Attorney General only refers to the fact that the different State Legislatures considered themselves free to make a law imposing tax on sales or purchases of goods provided the State concerned had some territorial nexus with such sales or purchases and went on to say that the question whether they were right or wrong in so doing had not been finally decided by the courts.
That passage, properly understood, can hardly be said to indicate that the theory of nexus does not apply to sales tax legislation at all.
The drift of the meaning of the passage was that the sufficiency of the different next relied on by the different States had not been tested by the courts.
The passage strongly relied upon by the learned Attorney General is to be (1) (2) 1373 found at page 708 where Bhagwati J. after referring to the earlier cases, observed : " It is a moot point whether this theory of territorial connection or nexus which has been mainly applied in income tax cases, is also applicable to sales tax legislation, the sphere of income tax legislation and sales tax legislation being quite distinct.
Whereas in the case of income tax legislation the tax is levied either on a person who is within the territory by exercising jurisdiction over him in personam or upon income which has accrued or arisen to him or is deemed to have or arisen to him or has been derived by him from sources within the territory and it is, therefore, germane to enquire whether any part of such income has accrued or arisen or has been derived from a source within the territory, in the case of sales tax legislation it is the sale or purchase of goods which is the subject matter of taxation and it cannot be predicated that the sale or purchase takes place at one or more places where the necessary ingredients of sale happen to be located.
The theory of territorial connection or nexus was not put to the test at any time prior to the enactment of the Constitution and it is not necessary also for us to give a definite pronouncement on the subject.
" Apart from the fact that the concluding words in the passage quoted above may be read as indicating that the observations were obiter, it appears to us to be too late in the day to contend that the theory of nexus does not apply to sales tax legislation at all.
Indeed an examination of the decisions of this Court will clearly show that the applicability of the theory of nexus to sales tax legislation has been clearly recognised by this Court.
In The State of Bombay vs The United Motors (India) Ltd. (1) this Court bad to interpret the true meaning of the explanation to article 286(1)(a) of the Constitution.
That explanation created a fiction locating the situs of a sale or purchase in the State in which the goods had actually been delivered as a result of such sale or purchase for the purpose of consumption in that (1) ; , 1088.
1374 State notwithstanding the fact that, under the general law relating to sale of goods, the property in the goods had, by reason of such sale or purchase, passed in another State.
This Court by a majority then held that in view of the fiction created by the explanation the sale which was in reality an inter State sale became an intrastate sale and consequently the delivery and consuming State had the, right to impose tax on that sale.
It is true that that decision has been departed from in the Bengal Immunity Co. 's case (1) on the question of the interpretation of article 286 of the Constitution, but on the point we are now discussing that decision clearly implies a recognition of the applicability of the nexus theory to the imposition of sales tax.
The observations of Patanjali Sastri C. J. on the question of nexus in that case cannot, therefore, be said to be unnecessary for the decision of that case.
In Poppatlal Shah vs The State of Madras (2) Mukherjea J. delivering the unanimous judgment of the Constitution Bench of this Court definitely applied the theory of nexus to sales tax legislation.
Support for that conclusion was found directly in the decision of the Judicial Committee in Wallace Brothers and Co. Ltd. vs Commissioner of Income Tax, Bombay City (3) which, it was said, had been applied by this Court to sales tax legislation in the United Motors ' case (4), but it is quite clear that the decision had, independently of the United Motors ' case (4), adopted the principle of Wallace Brothers and Co. 's case (3) to sales tax legisla tion.
In a recent case, The State of Bombay vs R.M.D. Chamarbaugwala(5), which was concerned with tax on cross word competition, this Court applied the theory of nexus and upheld the legislative competency of the Bombay Legislature to impose tax on the gambling competitions.
At page 901 this Court said: " The doctrine of territorial nexus is well established and there is no dispute as to the principles.
As enunciated by learned counsel for the petitioners, if there is a territorial nexus between the person sought to be charged and the State seeking to tax him the (1) (3) (5) ; ,901.
(2) ; (4) ; , 1088.
1375 taxing statute may be upheld.
Sufficiency of the territorial connection involve a consideration of two elements, namely, (a) the connection must be real and not illusory and (b) the liability sought to be imposed must be pertinent to that connection.
It is conceded that it is of no importance on the question of validity that the liability imposed is or may be altogether disproportionate to the territorial connection.
In other words, if the connection is sufficient in the sense mentioned above, the extent of such connection affects merely the policy and not the validity of the legislation.
" Applying these principles to the facts of that case this Court came to the conclusion that they constituted sufficient territorial nexus which entitled the State of Bombay to impose a tax on the gambling that took place within its boundaries and that the law could not be struck down on the ground of extra territoriality.
It is not necessary for us on this occasion to lay down any broad proposition as to whether the theory of nexus, as a principle of legislation, is applicable to all kinds of legislation.
It will be enough, for disposing of the point now under consideration, to say that this Court has found no apparent reason to confine its application to income tax legislation but has extended it to sales tax and to tax on gambling and that we see no cogent reason why the nexus theory should not be applied to sales tax legislation.
The learned Attorney General submits that the theory of nexus cannot be applied to sales tax legislation because such legislation is concerned with a tax on the transaction of sale,, that is to say, a completed sale and to break up a sale into its component parts and to take one or more of such parts and to apply the theory to it will.
mean that the State will be entitled to impose a tax on one or more of the ingredients or constituent elements of the transaction of sale which by itself or themselves will not amount to a sale.
This argument overlooks the fact that the provisions of the sales tax legislation we are considering limit its charging section to " sale ".
In order to attract the charging section there must be a completed 1376 sale involving the transfer of property in the goods sold from the seller to the buyer.
The nexus theory does not impose the tax.
It only indicates the circumstance in which a tax imposed by an act of the ,Legislature may be enforced in a particular case and unless eventually there is a concluded sale in the sense of passing of the property in the goods no tax liability attaches under the Act.
One or more of the several ingredients constituting a sale only furnished the connection between the taxing State and the "sale".
The learned Attorney General also said that one and the same transaction of sale may be taxed by different States by applying the nexus theory and there will be multiple taxation which will obstruct the free flow of inter State trade.
There is no force in this argument, for article 286(2) of the Constitution, as it stood originally, was a complete safeguard against such eventuality and after the amendment of that Article and the relevant entries in the Legislative List such contingency will not arise.
In our opinion the arguments advanced by the learned Attorney General on this point cannot be accepted.
Re. point No. 3: The learned Attorney General next contends that in any case the nexus must be real and pertinent to the subject matter of taxation.
He contends that the presence of the goods in Bihar referred to in the old second proviso, which is reproduced in el.
(i) of the second proviso as amended, is of no consequence.
The production or manufacture, according to him, has no connection with and never enters into the transactions of sale.
He relies on the observations of Chief Justice Gwyer in Boddu Paidanna 's case (1), at page 102, namely, that " a sale bad no necessary connection with manufacture or production." That observation was made by the learned Chief Justice in order to emphasise the fact that the tax levied on the first sale by the manufacturer or producer was a tax imposed on him qua seller and not qua manufacturer or producer.
The question whether the fact of production or manufacture of goods may legitimately form a nexus between the transaction of sale and the taxing (1) 1377 State was not in issue in that case at all.
It is un necessary in this case to lay down any hard and fast test as to the sufficiency of nexus which will enable a State to impose a tax or to enumerate the instances of such connection.
For the purpose of the present, case it is sufficient to state that in a sale of goods the goods must of necessity play an important part, for it is the goods in which, as a result of the sale, the property will pass.
In our view the presence of the goods it the date of the agreement for sale in the taxing State or the production or manufacture in that State of goods the property wherein eventually passed as a result of the sale wherever that might have taken place, constituted a sufficient nexus between the taxing State and the sale.
In the first case the goods are actually within the State at the date of the agreement for sale and the property in those goods will generally pass within the State when they are ascertained by appropriation by the seller with the assent of the purchaser and delivered to the purchaser or his agent.
Even if the property in those goods passes outside the State the ultimate sale relates to those very goods.
In the second case the goods, wherein the title passes eventually outside the State, are produced or manufactured in Bihar and the sale wherever that takes place is by the same person who produced or manufactured the same in Bihar.
The producer or manufacturer gets his sale price in respect of goods which were in Bihar at the date when the important event of agreement for sale was made or which were produced or manufactured in Bihar.
These are relevant facts on which the State could well fasten its tax.
If the facts in the Raleigh Investment Co. 's case (1), were sufficient nexus there is no reason why the facts mentioned in the proviso should not also be sufficient.
Whatever else may or may not constitute a sufficient nexus, we are of opinion that the two cases with which we are concerned in this case are sufficient to do so.
Re. point No. 5: The argument on this point is that sales tax is an indirect tax on the consumer.
The (1) [1044] F.C.R. 229.
1378 idea is that the seller will pass it on to his purchaser and collect it from them.
If that is the nature of the sales tax then, urges the learned Attorney General, it cannot be imposed retrospectively after the, sale transaction has been concluded by the passing of title from the seller to the buyer, for it cannot, at that stage, be passed on to the purchaser.
According to him the seller collects the sales tax from the purchaser on the occasion of the sale.
On that time goes past, the seller loses the chance of realising it from the purchaser and if it cannot be realised from the purchaser, it cannot be called sales tax.
In our judgment this argument is not sound.
From the point of view of the economist and as an economic theory, sales tax may be an indirect tax on the consumers, but legally it need not be so.
Under the 1947 Act the primary liability to pay the sales tax, so far as the State is concerned, is on the seller.
Indeed before the amendment of tile 1947 Act by the amending Act the sellers had no authority to collect the sales tax as such from the purchaser.
The seller could undoubtedly have put up the price so as to include the sales tax, which he would have to pay but he could not realise any sales tax as such from the purchaser.
That circumstance could not prevent the sales tax imposed on the seller to be any the less sales tax on the sale of goods.
The circumstance that the 1947 Act, after the amendment, permitted the seller who was a registered dealer to collect the sales tax as a tax from the purchaser does not do away with the primary liability of the seller to pay the sales tax.
This is further made clear by the, fact that the registered dealer need not, if he so pleases or chooses, collect the tax from the purchaser and sometimes by reason of competition with other registered dealers he may find it profitable to sell his goods and to retain his old customers even at the sacrifice of the sales tax.
This also makes it clear that the sales tax need not be passed on to the purchasers and this fact does not alter the real nature of the tax which, by the express provisions of the law, is cast upon the seller.
The buyer is under no liability to pay sales tax in addition to the agreed sale price 1379 unless the contract specifically provides otherwise.
See Love vs Norman Wright (Builders) Ltd. (1).
If that be the true view of sales tax then the Bihar Legislature acting within its own legislative field had the powers of a sovereign legislature and could make its law prospectively as well as retrospectively.
We do not think that there is any substance in this contention either.
For reasons stated above none of the contentions urged by the learned Attorney General in support of these appeals can be sustained.
The result, therefore, is that these appeals must be dismissed with costs.
BOSE J.
With great respect I cannot agree.
It will not be necessary to elaborate my point of disagreement at length because this is pro Constitution legislation and much of what we decide in this case wilt not affect post Constitution Acts.
Put very shortly, my view is this.
First, a State can only impose a tax on the sale of goods.
It has no power to tax extra territorially, therefore it can only tax sales that occur in the State itself.
With great respect I feel it is fallacious to look to the goods, or to the elements that constitute a sale, because the power to tax is limited to the sale and the tax is not on the goods or on the agreement to sell or on the price as such but only on the sale.
Therefore, unless the sale itself takes place in the State, the State cannot tax.
That brings me to the next point, the situs of a sale.
Now I know that this is a matter on which many different views are possible but what is clear to me is that a sale cannot have more than one situs.
It is not a mystical entity that can be one in many and many in one at one and the same time, here, there and everywhere all at once nor is it a puckish elf that pops up now here, now there and next everywhere.
It is a very mundane business transaction, of the earth.
earthy.
It can have only one existence and one situs.
Opinions may differ on where that is and how it is to be determined, but it is our duty, as the supreme authority on the law of the land, to choose (1) I75 1380 one of those many views and say that that is the law of our land and that in India the situs is determined in this way or that and, having determined it, make it uniform for the whole country.
I am conscious that the selection must be arbitrary, but for all that, it must be made.
Left to myself, I would have preferred Chesbire 's view about the proper law of the contract set out by him in Chapter VIII of his book on Private International Law, 4th edition.
I referred to this in The Delhi Cloth and General Mills Co. Ltd. vs Harnam Singh(1).
I quote him again: "The proper law is the law of the country in which the contract is localised.
Its localisation will be indicated by what may be called the grouping of its elements as reflected in its formation and in its terms.
The country in which its elements are most densely grouped will represent its natural seat." He is not dealing with this question.
He is dealing with International Law and the difficulties that arise in dealing with contracts whose elements are grouped in different States with different, and often conflicting, laws.
He is developing the theme that for any one contract there should be but one law to govern it in all its stages and that the most logical conclusion is to select the law of the country in which the contract has its natural seat.
But whether his view is accepted or any of the others that he discusses, he stresses the need for one objective rule and contends strongly that the choice should not be left to the parties to the deal, even as I say that it should not be left to the States.
He quotes an American Judge, at page 203 of his book, who says that " Some law must impose the obligation, and the parties have nothing whatsoever to do with that, no more than with whether their acts are torts or crimes.
" Now none of that is of immediate application here but it contains the germ of an idea and points to the embarrassment and folly of letting differing laws run amuck in governing a single transaction.
Following up that thought I would say that we are dealing here with a Constitution Act that speaks with one voice (1) , 418. 1381 and authority throughout the land.
It tells the various States, as one day some international voice that will rule the world will say to the peoples in it, " you may do this and may not do that " ; and " this " and " that " mean, but one thing everywhere.
One writ runs throughout the land and it has but one meaning and one voice.
" When I say that you may only legislate for your own territory and that you may tax certain sales, you must realise that the meaning that I give to I sale ' is the meaning that my Supreme Court shall give to it and that it cannot mean differing things in different areas ; and you must realise that the only sales that you may tax are the ones that lie in your own territory.
My Supreme Court shall determine where a sale is situated and once that is determined it cannot be situated anywhere else.
If it does not happen to be in your territory you cannot tax it.
" Our present Constitution did not adopt Cheshire 's view.
It made another choice.
In the old Explanation to article 286 (now repealed) it selected the place where the goods are actually delivered, as a direct result of the sale or purchase, as the situs.
Well, so be it.
That is as good as any other and I would have been as happy to select that as any of the other possibilities.
But what I do most strongly press is that a Constitution Act cannot be allowed to speak with different voices in different parts of the land and that a mundane business concept well known and well understood cannot be given an ethereal omnipresent quality that enables a horde of hungry hawks to swoop down and devour it simultaneously all over the land: " some sale; some hawks " as Winston Churchill would say.
I would therefore reject the nexus theory in so far as it means that any one sale can have existence and entity simultaneously in many different places.
The States may tax the sale but may not disintegrate it and, under the guise of taxing the sale in truth and in fact, tax its various elements, one its head and one its tail, one its entrails and one its limbs by a legislative fiction that deems that the whole is within its claws simply because, after tearing it apart, it finds a hand 1382 or a foot or a heart or a liver still quivering in its grasp.
Nexus, of course, there must, be but nexus of the entire entity that is called a sale, wherever it is deemed to be situate.
Fiction again.
Of course, it is fiction, but it is a fiction as to situts imposed by the Constitution Act and by the Supreme Court that speaks for it in these matters and only one fiction, not, a dozen little ones.
My point is simple.
If you are allowed to tax a dog it must be within the territorial limits of your taxable, jurisdiction.
You cannot tax it if it is born elsewhere and remains there simply because its mother was with you at some point of time during the period of gestation.
Equally, after birth, you cannot tax it simply because its tail is cut off (as is often done in the case of certain breeds) and sent back to the fond owner, who lives in your jurisdiction, in a bottle of spirits, or clippings of its hair.
There is a nexus of sorts in both cases but the fallacy lies in.
thinking that the entity is with you just because a part that is quite different from the whole was once there.
So with a sale of a motor car started and concluded wholly and exclusively in New York or London or Timbuctoo.
You cannot tax that sale just because the vendor lives in Madras, even if the motor car is brought there and even assuming there is no bar on international sales, for the simple reason that what you are entitled to tax is the sale, and neither the owner nor the car, therefore unless the sale is situate in your territory, there is no real nexus.
And once it is determined objectively by the Constitution Act or in Supreme Court how and where the sale is situate, its situs is fixed and cannot be changed thereafter by a succession of State legislatures each claiming a different situs by the convenient fiction of deeming.
The only question is whether it is too late in the day to take this view because of our previous decisions and those of the Federal Court.
I say not, for, though there is a consensus of opinion that there must be a territorial nexus and that it must not be illusory, no decision that I know of says that when you are given the right to tax a certain thing which is a composite 1383 entity, quite separate and distinct from the various elements of which it is composed, you may tear that whole apart and seize on some, element that is quite a different thing from that which you are entitled to tax and hold that the taxable entity is in your State simply because at some relevant point of time one of the ingredients that went to make up the whole but which is a separate and distinct thing from the whole, as different from it as chalk is from cheese, happened to be within your clutches.
I do not intend to analyse the cases on this point because it is pointless to pursue a matter that will only be of academic interest.
All I will do therefore is to say that the question of nexus has been referred to in the following cases and that none of them reaches a decision on this particular point.
These cases are Governor General in Council vs Ratleigh Investment Co., Ltd. (1), A. H. Wadia vs Commissioner of Income tax, Bombay Poppatlal Shah vs The Slate of Madras (3), State of Travencore Cochin vs Shanmugha Vilas Cashew Nut Factory (4), and The Bengal Immunity Co., Ltd. vs The State of Bihar (5).
I would allow the appeals.
ORDER OF THE COURT.
In view of the opinion of the majority, the appeals are dismissed with costs.
Appeals dismissed.
(1) [1944] 229, 247, 253.
(2) [1048] F.C.R. 121, 153, 154, 165.
(3) ; (4) [1954]S.C.R. 53, 101.
(5) , 708, 768, 769.
[/INST]The appellant company, carrying on business as manufacturer of iron and steel, with its factory and works at Jamshedpur in Bihar, was assessed to sales tax for two periods prior to the Constitution, under the Bihar Sales Tax Act, 1947 (No. XIX Of 1947), enacted by the Bihar Legislature in exercise of its exclusive power under the Government of India Act, 1935.
The company used to send its goods from Jamshedpur to various parts of India.
In the railway receipt the company itself figured as the consignee, it paid the freight and the receipt was sent either to its branch offices or bankers to be handed over to the purchaser when he paid the price.
From the amounts shown as gross turn over in the two returns for the two periods, the company claimed deduction of certain amounts, being the valuable consideration for the goods manufactured in Bihar but sold, delivered and consumed outside, on the ground that in none of the transactions in respect of the said sums did property in the goods pass to the purchasers in Bihar.
The appellant claimed further deductions on account of the railway freight paid by it.
The Sales Tax Officer disallowed both the claims and added the amounts of sales tax realised by the appellant from its purchasers to the taxable turnover.
The company appealed against the orders of assessment, but the Commissioner of Sales Tax dismissed its appeals.
The Board of Revenue, in revision, confirmed the orders of the Commissioner with certain modifications and remanded the matters to the Sales Tax Officer.
On the appellant 's application for reference of certain questions of law, the Board referred them to the High Court.
One of them related to the legality of adding the Sales Tax to the turn over and was answered in favour of the appellant and the respondent did not appeal.
The other questions decided by the High Court against the appellant related to the vires of the Act and the validity of retrospective levy of sales tax under section 4(1) of the Act.
The appellant 's contentions in the appeals were that the tax levied under section 4(1) read with section 2(g) second proviso, cl.
(II), of the Act, was not a sales tax within the meaning of Entry 48 in List II of the Seventh Schedule to the Govern ment of India Act, 1935, but was in the nature of excise duty 172 1356 which a provincial legislature had no power to impose, that the theory of territorial nexus was inapplicable to sales tax and, in any case, there was no real or sufficient nexus in the present cases and that retrospective levy of the sales tax under section 4(1) Of the Act destroyed the indirect nature of the tax, thus making it a direct tax on the dealer which could not be passed on to the consumer: Held, (per Das, C. J., Venkatarama Aiyar, section K. Das and A.K. Sarkar, jj., Bose, J. dissenting), that the contentions raised on behalf of the appellant must be negatived.
The provisions of section 4(1) read with section 2(g), second proviso, of the Bihar Sales Tax Act, as amended by the Bihar Sales Tax (Amendment) Act, 1948, (VI Of 1949), were within the legislative competence of the Legislature of the Province of Bihar.
Both before and after the amendment, the word 'sale ' as used in section 4(1) and as defined by section 2(g) of the Act, meant the transfer of property in the goods sold.
The second proviso added by the amending Act did not extend that meaning so as to include a contract of sale.
What it actually did was to lay down certain circumstances in which a sale, although completed elsewhere, was to be deemed to have taken place in Bihar.
Those circumstances did not constitute the sale, but only located the situs of the sale.
Sales Tax Officer, Pilibhit vs Messrs. Budh Prakash jai Prakash; , , distinguished.
Nor was it correct to contend that the tax levied under section 4(1) read with section 2(g) Of the Act was in the nature of excise duty.
Under cl.
(ii) of the second proviso to section 2(g) of the Act the producer or manufacturer became liable to pay the tax not because he produced or manufactured the goods but because he sold them.
Province of Madras vs Boddu Paidanna and Sons, [1942] F.C.R. go and Governor General vs Province of Madras, (1945) L.R. 72 I.A. 91, referred to.
There can be no doubt that the theory of territorial nexus does apply to sales tax legislation.
Although sales tax can be levied only on a completed sale, this theory has its use in indicating the circumstances in which the tax may be enforced in a particular case.
One or more of the several ingredients of a sale may furnish the connection between the taxing State and the sale.
State of Bombay vs United Motors (India) Ltd., [1953] S.C.R. 1069, Poppatlal Shah vs The State of Madras, [1953] S.C.R. 677 and The State of Bombay vs R.M.D. Chamarbaugwala, ; , relied on.
Bengal Immunity Co. Ltd. vs The State of Bihar, , considered.
Case law reviewed.
1357 As in a sale of goods, the goods must necessarily play an important part, the circumstances mentioned in the proviso to section 2(g) of the Act, namely, the presence of the goods in Bihar at the date of the agreement of sale or their production or manufacture there must be held to constitute a sufficient nexus between the taxing province and the sale wherever that might take place.
Governor General vs Raleigh Investment, , relied on.
Province of Madras vs Boddu Paidanna and Sons, [1942] F.C.R. go, distinguished.
It would not be correct to contend that the theory of nexus might lead to multiple taxation or obstruct inter State trade.
Article 286(2) of the Constitution and the relevant entries in the Legislative List are a complete safeguard to any such contingency.
Although as a matter of economic theory, sales tax maybe an indirect tax realisable from the consumer, it need not be legally so and is not so under the Bihar Sales Tax Act, 1947, which imposes the primary liability on the seller.
A buyer, moreover, is not bound to pay sales tax over and above the agreed sale price unless he is by contract bound to do so.
There can, therefore, be no scope for the argument that the retrospective enforcement of the tax under section 4(1) of the Act could destroy the character of the tax or that it was beyond the legislative competence of the Bihar Legislature.
Love vs Norman Wright (Builders) Ltd., L.R. (1944) 1 K.B. 484, referred to.
Per Bose, J. Sales tax can be imposed only on the sale.
It is, therefore, wrong to look to the goods or the agreement to sell or any other elements that constitute a sale in order to impose the tax.
A State can tax a sale of goods that takes place within its boundary.
It has no power to tax extra territorially, and since a completed sale can have only one situs no State Legislature can be allowed to break up a sale into its component parts, which are separate and distinct from the sale itself, and by an application of the theory of nexus claim that ,,he sale wholly took place within it.
The nexus can only be in respect of the entire sale, wherever it may take place and not of its several parts.
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<s>[INST] Summarize the judgementN: Criminal Appeal No. 245 of 1975.
Appeal by Special Leave from the Judgement and order dated 25 3 1975 of the Delhi High Court in Criminal Appeal No. 122/72.
Harjinder Singh for the Appellant.
E. C. Agarwala and R. N. Sachthey for Respondent No. 1 V. section Desai, B. P. Maheshwari and Suresh Sethi for Respondent No. 2.
The Judgment of the Court was delivered by KOSHAL, J.
This is an appeal by special leave against a judgment of the High Court of Delhi dated 25th March, 1975 convicting the appellant of an offence under clause (i) of sub section (1) of section 16 read with clause (i) of section 7 of the (hereinafter called the Act) and sentencing him to rigorous imprisonment for six months and a fine of Rs. 1000/ , the sentence in default of payment of fine being rigorous imprisonment for three months.
The facts giving rise to the appeal may be briefly stated.
Food Inspector V. P. Anand, (P.W.2) visited the premises of Messrs Mebrose Ice Cream and Frozen Food Co. (which carries on business in Greater Kailash No.1, a locality of New Delhi and is hereinafter referred to as the Company) on the 22nd May 1970 and bought for 315 purposes of analysis a sample of chocolate ice cream from the appellant who was one of the employees of the Company.
An inventory of the sample was prepared by the Food Inspector and at the foot of the same the appellant made the following endorsement: "A sample of Chocbar Ice Cream (Chocolate Ice Cream) manufactured by Mebrose Ice Cream and Frozen Food Co., M 67, Greater Kailash, given as per above.
This Ice Cream Chocolate is of one lot.
This is prepared of covering Chocolate, vegetable ghee and Ice Cream.
" The sample was forwarded to the Public Analyst who thus details the conclusions arrived at by him on analysis thereof, in report exhibit PE: "Total solids by Weight : 45 per cent.
Protein by weight: 4.4 per cent.
Chocolate: Present.
Butyro refractometer reading at 40 degree C of the fat extracted from ice cream: 49.4.
Baudouin test of the extracted fat: Positive.
Melting point of the extracted fat: 34 degree C." In his report the Public Analyst further stated that in his opinion the sample was adulterated "as the Butyro refractometer reading at 40 degree C was round 6.4 in excess and the Baudouin test was found positive of the extracted fat. . " A complaint was lodged by the Municipal Corporation of Delhi against the appellant, the Company and its managing partner Avtar Singh in respect of an offence under section 7 read with section 16 of the Act.
The trial court acquitted the Company but convicted the other two accused, sentencing each of them to rigorous imprisonment for six months and a fine of Rs. 1000/ , the sentence in default of payment of fine being rigorous imprisonment for four months.
Both the convicts appealed to the Sessions Court and were acquitted by an order dated 9th March 1972 passed by an Additional Sessions Judge.
The Municipal Corporation of Delhi then knocked at the door of the High Court which upheld the acquittal of Avtar Singh but convicted and sentenced the appellant as aforesaid by the impugned judgment, mainly for the reasons reproduced below: "It is established on the record beyond doubt that this endorsement was made by Kishan Chand and it contains an admission that vegetable ghee was used in the preparation of 316 the ice cream sold by him.
The judgment of the learned Additional Sessions Judge reveals that the contention of the defence before him was that Vanaspati was used in the preparation of the relevant ice cream by way of emulsifier but the plea was misconceived because vegetable ghee cannot be made to serve as an emulsifying agent.
A reference to the Prevention of Food Adulteration Rules, 1955 shows that as per Rule 60 'brominated ' vegetable oil is one of the recognised emulsifying and stabilising agents but Rule 61 forbids addition of brominated vegetable oil to milk or cream and without milk and/or cream manufacture of ice cream is inconceivable.
Moreover, the stand of the accused from the very start has been that 'vegetable ghee ' had been used in the preparation of ice cream and not that any 'brominated ' vegetable oil got into the ice cream by way of an emulsifying or stabilising agent.
The evidence would not countenance the contention raised before us.
" 3. Having heard learned counsel for the parties at length we are of the opinion that the sample in question is not shown to have been adulterated within the meaning of the Act.
The case is admittedly governed by the Prevention of Food Adulteration Rules 1955 which have been framed by the Central Government in exercise of the powers conferred on it by section 23 of the Act and which are hereinafter called the Rules.
Rule 60 defines "emulsifying agents" and "stabilising agents" to mean substances which, when added to food, are capable of facilitating a uniform dispersion of oils and fats in aqueous media, or vice versa, and/or stabilising such emulsions.
The rule then proceeds to specify numerous agents of the type mentioned and they include brominated vegetable oils.
Rule 61 declares that no emulsifying or stabilising agents shall be used in any food except where their use is specifically permitted.
A proviso added to the rule states that certain emulsifying or stabilising agents, including brominated vegetable oils, shall not be used in milk and cream.
Appendix B to the Rules specifies the standard of quality of various articles of food.
Milk and milk products are dealt with in that Appendix under Group A.11 which is divided into various items.
Item A.11.01 which is further divided into sub items A 11.01.01 to A 11.01.11 contains definitions and standards of purity of various kinds of milk.
Item A.11.02 defines milk products thus: "MILK PRODUCTS means the products obtained from milk such as cream, malai, curd, skimmed milk curd, 317 chhanna, skimmed milk chhanna, cheese, processed cheese, ice cream, milk ices, condensed milk sweetened and unsweetened, condensed skimmed milk sweetened and unsweetened, milk powder, skimmed milk powder, partly skimmed milk powder, khoa, infant milk food, table butter and deshi butter.
" Then follow definitions of different kinds of milk products in sub items A.11.02.01 to A.11.02.21.
"Cream" is defined as follows in sub item A.11.02.02: "CREAM excluding sterilised cream means the product of cow or buffalo milk or of a combination thereof which contains not less than 25.0 per cent milk fat.
" Chocolate ice cream forms the subject matter of sub item A.11.02.08 which runs thus: "ICE CREAM, KULFI, AND CHOCOLATE ICE CREAM mean the frozen product obtained from cow or buffalo milk or a combination thereof or from cream, and/or other milk products, with or without the addition of cane sugar, eggs, fruits, fruit juices, preserved fruits, nuts, chocolate, edible flavours and permitted food colours.
It may contain permitted stabilizers and emulsifiers not exceeding 0.5 per cent by weight.
The mixture shall be suitably heated before freezing.
The product shall contain not less than 10.0 per cent milk fat, 3.5 per cent protein and 36.0 per cent total solids except that when any of the aforesaid preparations contain fruits or nuts or both, the content of milk fat may proportionately reduced but shall not be less than 8.0 per cent by weight.
"Starch may be added to a maximum extent of 5.0 per cent under a declaration on a label as specified in sub rule (2) of Rule 43. "The standards for ice cream shall also apply to softy ice cream." From the above examination of the provisions of Appendix B to the Rules, it is clearly made out that the standard of purity for each milk product has been separately laid down and that ice cream, kulfi and chocolate ice cream are treated as a class by themselves, which is different, for the purpose of purity from other milk products including cream.
The classification employed leaves no room for doubt that 318 when the proviso to rule 61 states that certain emulsifying and stabilising agents shall not be used in milk and cream, it prohibits the use of those agents only in milk and one of its products, namely, cream and not other milk products such as malai, dahi, cheese, ice cream and chocolate ice cream.
Had the rule making authority meant by the proviso to prohibit the use of the said agents in all milk products, the expression used would have been "shall not be used in milk and milk products" and not "shall not be used in milk and cream".
The prohibition contained in the proviso thus does not apply to ice cream, kulfi, chocolate ice cream covered by sub item A.11.02.08, wherein it is clearly stated that these three milk products may contain permitted stabilisers and emulsifiers not exceeding, 0.5 per cent by weight.
In equating the words "milk and cream" with milk and all its products, the high Court was clearly in error and this is so in spite of the fact that ice cream, kulfi and chocolate ice cream must have milk or cream as a necessary ingredient.
It follows that brominated vegetable oils could have formed a part of the chocolate ice cream sold by the appellant, to the extent 0.5 per cent by weight, without the article being treated as adulterated under the Rules.
Before the appellant could be convicted, therefore, it was incumbent on the prosecution to establish that the sample taken from him contained either brominated vegetable oils or other permitted stabilisers and emulsifiers exceeding 0.5 per cent by weight or that it did not conform to the prescribed standard in some other detail.
Apart from falling into the error of misreading rules 60 and 61, the High Court considered the sample taken from the appellant to be adulterated by reason of the stand he had taken from the very beginning to the effect that he had used "vegetable ghee" in the preparation of the chocolate ice cream and because, according to the High Court, "vegetable ghee" was not brominated vegetable oil.
This is again an erroneous approach to the problem in hand.
It was for the prosecution to prove affirmatively that the sample in, question contained an ingredient which made it adulterated and any stand taken by the accused could hardly be used as evidence, unless its truth was otherwise established which is not the case.
All that was made out from the evidence before the court was that the Butyro refractometer reading at 40 degree C was higher than the maximum prescribed for milk fat by 6.4 and that the Baudouin test was positive.
These two factors indicated that either vanaspati or milk fat to which til oil had been added was one of the ingredients of the sample.
There is not an iota of evidence on the record to show whether or not such til oil was brominated, which means that the prosecution had completely failed to prove that the ingredient objected to by it was a substance other than 319 a brominated vegetable oil or that if it was oil of that description its quantity was in excess of 0.5 per cent by weight.
The Butyro refractometer reading did no doubt except the maximum of the prescribed standard by 6.4 and the Baudouin test was also positive but these factors did not indicate the presence in the sample of brominated vegetable oil beyond the prescribed maximum of 0.5 per cent by weight or of unbrominated vegetable oils.
The sample of chocolate ice cream obtained by the Food Inspector from the appellant not having been shown to be adulterated, the appeal is accepted, the judgment of the High Court in so far as it relates to the appellant is reversed, the conviction recorded against and the sentence imposed upon the appellant by the High Court are set aside and he is acquitted of the charge.
The bail bond executed by him shall stand cancelled.
P.B.R. Appeal allowed.
[/INST]Rule 60 of the Prevention of Food Adulteration Rules, 1955 defines "emulsifying agents" and "stabilising agents" to mean substances which, when added to food, are capable of facilitating a uniform dispersion of oils and fats in acqueous media or vice versa and/or stabilising such emulsions.
One of the agents mentioned, among others, in the rule is brominated vegetable oils.
Rules 61 declares that no emulsifying or stabilising agents shall be used in any food except where they are used as specifically permitted.
The proviso to the rule states that certain emulsifying or stabilising agents including brominated vegetable oils shall not be used in milk and cream.
A food inspector visited an Ice cream factory and collected a sample of chocolate ice cream.
In the inventory of the sample prepared by him it was stated that "this is prepared of covering chocolate, vegetable ghee and ice cream".
The Public Analyst, to whom the sample was sent for analysis, stated that the sample was adulterated "as the butyro refractometer reading at 40 degree C was found 6.4 in excess and the Baudouin test was found positive of the extracted fat.
" The factory, its owner and the employee who sold the ice cream, were prosecuted under the Prevention of Food Adulteration Act.
The trial court acquitted the factory but convicted and sentenced both its owner and the employee.
On appeal the Additional Sessions Judge acquitted both the accused.
On further appeal the High Court acquitted the factory owner but convicted the employee (appellant before this Court).
The High Court pointed out that vegetable ghee could not be made to serve as an emulsifying agent because r. 61 forbids addition of brominated vegetable oil to milk or cream and without milk and/or cream manufacture of ice cream was inconceivable and that the appellant 's stand had been that vegetable ghee had been used and not that any brominated vegetable oil got into the ice cream by way of an emulsifying or stabilising agent.
Allowing the appeal, ^ HELD: 1 (a) The sample of ice cream obtained from the appellant was not shown to have been adulterated within the meaning of the Act and the Rules.
[316 D] (b) The prohibition contained in the proviso to r. 61 does not apply to ice cream, kulfi and chocolate ice cream covered by sub item A.11.02.08, wherein it is clearly stated that these three milk products may contain permitted stabi 314 lisers and emulsifiers not exceeding 0.5 per cent by weight.
Clearly, therefore, brominated vegetable oils could have formed a part of the chocolate ice cream to the extent of 0.5 per cent by weight, without the article being treated as adulterated under the rules.
What the proviso to r. 61 prohibits is the use of certain emulsifying and stabilising agents only in milk and one of its products, namely, cream and not in other milk products such a malai, dahi, cheese, ice cream and chocolate ice cream.
Had the intention of the rule been to prohibit the use of the said agents in all milk products, the expression would have been "shall not be used in milk and milk products" and not "shall not be used in milk and cream".
[318 C E] 2.
It was for the prosecution to prove affirmatively that the sample contained an ingredient which made it adulterated and any stand taken by the accused could hardly be used as evidence, unless its truth was otherwise established.
The prosecution had completely failed to prove that the ingredient objected to by it was a substance other than a brominated vegetable oil or that if it was oil of that description, its quantity was in excess of 0.5% by weight.
The analyst 's report did not indicate the presence in the sample of brominated vegetable oil beyond the prescribed maximum of 0.5% by weight or of unbrominated vegetable, oils.
[318G H]
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<s>[INST] Summarize the judgementAppeal No. 486 of 1963.
Appeal from the judgment and order dated September 27, 1962, of the Calcutta High Court in Appeal from Original Decree No. 424 of 1962.
S.Chaudhuri, R. C. Deb and section section Shukla, for the appellant.
Hari ' Prosonna Mukherjee, K. G. Hazra Chaudhari and D. N. Mukherjee, for the respondents Nos. 1 and 2.
August 14, 1963.
This is an appeal on a certificate granted by the High Court of Calcutta under article 133(1)(c) of the Constitution.
No preliminary objection having been taken as to the competency of the certificate, we have heard the appeal on merits.
The short facts giving rise to the appeal are these The appellant before us is Gurugobinda Basu who is a chartered accountant and a partner of the firm.
of auditors carrying on business under the name and style of G. Basu and Company.
This firm acted as the auditor of certain 313 companies and corporations, such as the Life Insurance Corporation of India, the Durgapur Projects Ltd., and the Hindustan Steel Ltd., on payment of certain remuneration.
The appellant was also a Director of the West Bengal Fi nancial Corporation having been appointed or nominated as such by the State Government of West Bengal.
The appointment carried with it the right to receive fees or remuneration as director of the said corporation.
In February March, 1962, the appellant was elected to the House of the People from Constituency No. 34 (Burdwan Parliamentary Constituency) which is a single member constituency.
The election was held in February, 1962.
There were two candidates, namely, the appellant and respondent No. 3 to this appeal.
The appellant was declared elected on March 1, 1962, he having secured 1,55,485 votes as against his rival who secured 1,23,015 votes.
This election was challenged by two voters of the said constituency by means of an election petition dated April 10, 1962.
The challenge was founded on two grounds : (1) that the appellant was, at the relevant time, the holder of offices of profit both under the Government of India and the Government of West Bengal and this disqualified him from standing for election under article 102 (1)(a) of the Constitution; and (2) that he was guilty of certain corrupt practices which vitiated his election.
The second ground was abandoned at the trial, and we are no longer concerned with it.
The election Tribunal held that the appellant was a holder of offices of profit both under the Government of India and the Government of West Bengal and was therefore disqualified from standing for election under article 102(1)(a) of the Constitution.
The Election Tribunal accordingly allowed the election petition and declared that the election of the appellant to the House of the People was void.
There was an appeal to the High Court under section 116 A of the Representation of the People Act, 1951.
The High Court dismissed the appeal, but granted a certificate of fitness under article 133(1) (c) of the Constitution.
The only question before us is whether the appellant was disqualified from being chosen as, and for being, a member of the House of the People under article 102(1)(A) of the Constitution.
The answer to the question depends 21 2 S C India/6 314 on whether the appellant held any offices of profit under the Government of India or the Government of any State other than such offices as had been declared by Parliament by law not to disqualify their holder.
It has not been seriously disputed before us that the office of auditor which the appellant held as partner of the firm of G. Basu and Company was an office of profit.
It has not been contended by the appellant before us that the office of profit which he held had been declared by Parliament by law not to disqualify the holder.
Therefore the arguments before us have proceeded entirely on the question as to the true scope and meaning of the expression "under the Government of India or the Government of any State" occurring in cl.
(a) of article 102(1) of the Constitution.
The contention on behalf of the appellant has been that on a true construction of the aforesaid expression, the appellant cannot be said to hold an office of profit under the Government of India or the Government of West Bengal.
On behalf of the respondents the contention is that the office of auditor which the appellant holds is an office of profit under the Government of India in respect of the Life Insurance Corporation of India, the Durgapur Projects Ltd. and the Hindustan Steel Ltd., and in respect of the West Bengal Financial Corporation of which the appellant is a Director appointed by the Government of West Bengal, he holds an office of profit under the Government of West Bengal.
These are the respective contentions which fall for consideration in the present appeal.
It is necessary to state here that if in respect of any of the four companies or corporations it be held that the appellant holds an office of profit under the Government, be it under the Government of India or the Government of West Bengal, then the appeal must be dismissed.
It would be unnecessary then to consider whether the office of profit which the appellant holds in respect of the other companies is an office of profit under the Government or not.
We would therefore take up first the two companies, namely, the Durgapur Projects Ltd., and the Hindustan Steel Ltd., which are 100% Government companies and consider the respective contentions of the parties before us in respect of the office of auditor which the appellant holds in these two companies.
If we hold that in 315 respect of any of these two companies the appellant holds an office of profit under the Government of India, then it would be unnecessary to consider the position of the appellant in any of the other companies.
It is not disputed that the Hindustan Steel Ltd., and the Durgapur Projects Ltd. are Government companies within the meaning of section 2(18) read with section 617 of tile Indian .
It has been stated before us that 100% of the shares of the Durgapur Projects Ltd. are held by the Government of West Bengal and 100% of the shares of the Hindustan Steel Ltd. are held by the Union Government.
We may now read section 619 of the Indian . "(1) In the case of a Government company, the following provisions shall apply, notwithstanding any thing contained in sections 224 to 233.
(2)The auditor of a Government company shall be appointed or re appointed by the Central Government ,on the advice of the Comptroller and Auditor General of India.
(3)The Comptroller and Auditor General of In dia shall have power (a)to direct the manner in which the company 's accounts shall be audited by the auditor appointed in pursuance of sub section (2) and to give such auditor instructions in regard to any matters relating to the performance of his functions as such : (b) to conduct a supplementary or test audit of the company 's accounts by such person or persons as he may authorise in this behalf; and for the purposes of such audit, to require information or additional information to be furnished to any person or persons so authorised, on such matters, by such person or persons, and in such form, as the Comptroller and Auditor General may, by general or special order, direct.
(4) The auditor aforesaid shall submit a copy of his audit report to the Comptroller and Auditor General of India who shall have the right to comment upon, or supplement, the audit report in such manner ,as he may think fit.
(5) Any such comments upon, or supplement 316 the audit report shall be placed before the annual general meeting of the company at the same time and in the same manner as the audit report.
" It is clear from the aforesaid provisions that not with standing section 224 of the Act which empowers every company to appoint an auditor or auditors at each annual general meetings, the appointment of an auditor of a Government company rests solely with the Central Government and in making such appointment the Central Government takes the advice of the Comptroller and Auditor General of India.
Under section 224(7) of the Act an auditor appointed under section 224 may be removed from office before the expiry of his term only by the company in general meeting, after obtaining the previous approval of the Central Government in that behalf.
The remuneration of the auditors of a company is to be fixed in accordance with the provisions of sub section
(8) of section 224.
It is clear however that sub section
(7) of section 224 does not apply to a Government company because the auditor of a Government company is not appointed under section 224 of the Act, but is appointed under sub section
(2) of section 619 of the Act.
It is clear therefore that the appointment of an auditor in a Government company rests solely with the Central Government and so also his removal from office.
Under sub section
(3) of section 619 the Comptroller and Auditor General of India exercises control over the auditor of a Government company in respect of various matters including the manner in which the company 's accounts shall be audited.
The Auditor General has also the right to give such auditor instructions in regard to any matter relating to the performance of his functions as such.
The Auditor General may conduct a supplementary or test audit of the company 's accounts.
by such person or persons as he may authorise in this behalf.
In other words, the Comptroller and Auditor General of India exercises full control over the auditors of a Government company.
The powers and duties of auditors in respect of companies other than Government companies are laid down in section 227 of the Act but by virtue of sub section
(1) of section 619 of the Act, the provisions in section 227 of the Act do not apply to a Government company because a Government company is subject to the provisions ,of section 619 of the Act.
Under section 619 A of the Act, where the 317 Central Government is a member of a Government company, an annual report of the working and affairs of the company has to be prepared and laid before both Houses of Parliament with a copy of the audit report and the comments made by the Comptroller and Auditor General.
Under section 620 of the Act the Central Government .may by notification direct that any of the provisions of the Act, other than sections 618, 619 and 639, shall not apply.
to any Government company.
The net result of the aforesaid provisions is that so far as the Durgapur Projects Ltd. and the Hindustan Steel Ltd. are concerned, the appellant was appointed an auditor by the Central Government; he is removable by the Central Gov ernment and the Comptroller and Auditor General of India exercises full control over him.
His remuneration is fixed by the Central Government under sub section
(8) of section 224 of the Act though it is paid by the company.
In these circumstances the question is, does the appellant hold an office of profit under the Central Government? We may now read article 102(1) of the Constitution.
(1) A person shall be disqualified for being chosen as, and for being, a member of either House of Parliament (a) if he holds any office of profit under the Government of India or the Government of any State, other than an office declared by Parliament by law not to disqualify its holder (b) (c) (d) We have stated earlier that the sole question before us is whether the office of profit which the appellant undoubtedly holds as auditor of the Durgapur Projects Ltd., and the Hindustan Steel Ltd. is or is not under the Government of India.
According to Mr. Chaudhuri who has argued the appeal on behalf of the appellant, the expression "under the Government, occurring in article 102(1)(a) implies sub ordination to Government.
His argument is that ordinarily there are five tests of such subordination, namely, (1) whe ther Government make , the appointment to the office; (2) whether Government has the right to remove or dis 318 miss the holder of office; (3) whether Government pays the remuneration; (4) what are the functions which the holder of the office performs and does he perform them for Government; and (5) does Government exercise any control over the performance of those functions.
His argument further is that the tests must all co exist and each must show subordination to Government so that the fulfillment of only some of the tests is not enough to bring the holder of the office under the Government.
According to him all the tests must be fulfilled before it can be said that the holder of the office is under the Government.
His contention is that the Election Tribunal and the High Court were in error in holding that the appellant was a holder of office under the Government, because they misconstrued the scope and effect of the expression "under the Government" in article 102(1)(a) of the Constitution.
He has contended that tests (3), (4) and (5) adverted to above are not fulfilled in the present case.
The appellant gets his remuneration from the company though fixed by Government; he performs functions for the company and he is controlled by the Comptroller and Auditor General who is different from the Government.
On behalf of the respondents it is argued that the tests are not cumulative in the sense contended for by the appellant, and what has to be considered is the substance of the matter which must be determined by a consideration of all the factors present in a case, and whether stress will be laid on one factor or the other will depend on the circumstances of each particular case.
According to the respondents, the tests of appointment and dismissal are important tests in the present case, and in the matter of a company which is a 100% Government company, the payment of remuneration fixed by Government, the performance of the functions for the company and the exercise of control by the Comptroller and Auditor General, looked at from the point of view of substance and taken in conjunction with the power of appointment and dismissal, really bring the holder of the office under the Government which appoints him.
One point may be cleared up at this stage.
On behalf of the respondents no question has been raised that the Durgapur Projects, Limited, or the Hindustan Steel, Limi 319 ted, is a department of Government or an emanation 'of Governments question Which was considered at some length in Narayanaswamy vs Krishnamurthi(1).
Learned counsel for the respondents has been content to argue before us on the basis that the two companies having been incorporated under the Indian are separate legal entities distinct from Government.
Even on that footing he has contended that in view of the provisions of section 619 and other provisions of the Indian , an auditor appointed by the Central Government and liable to be removed from office by the same Government, is a holder of an office of profit under the Government in respect of a company which is really a hundred per cent Government company.
We think that this contention is correct.
We agree with the High Court that for holding an office of profit under the Government, one need not be in the service of Government and there need be no relationship of master and servant between them.
, The Constitution itself makes a distinction between 'the holder of an office of profit under the Government ' and 'the holder of a post or service under the Government '; see articles 309 and 314.
The Constitution has also made a distinction between 'the holder of an office of profit under the Government ' and 'the holder of an office of profit under a local or other authority subject to the control of Government '; see article 58(2) and 66(4).
In Maulana Abdul Shakur vs Rikhab Chand and another(1) the appellant was the manager of a school run.
by a committee of management formed under,the provisions of the Durgah Khwaja, Saheb Act, 1955.
He was appointed by the administrator of the Durgah and was paid Rs. 100 per month.
The question arose whether he was disqualified to be chosen as a member of Parliament in view of article 102(1)(a) of the Constitution.
It was contended for the respondent in that case that under sections 5 and 9 of the Durgah Khwaja Saheb Act, 1955 the Government of India had the power of, appointment and removal of members of the committee of management as also the power to appoint the administrator in consultation with the committee; therefore the appellant was under the control and super (1) I.L.R. [1958] Mad 513.
(2) [1958] S.C.R. 387 320 vision of the Government and that therefore he was holding an office of profit under the Government of India.
This contention was repelled and this court pointed out the distinction between 'the holder of an office of profit under the Government ' and 'the holder of an office of profit under some other authority subject to the control of Government '.
Mr. Chaudhuri has contended before us that the decision is in his favour.
He has argued that the appellant in the present case holds an office of profit under the Durgapur Projects Ltd. and the Hindustan Steel Ltd. which are incorporated under the Indian ; the fact that the Comptroller and Auditor General or even the Government of India exercises some control does not make the appellant any the less a holder of office under the two companies.
We do not think that this line of argument is correct.
It has to be noted that in Maulana Abdul Shakur 's case(2) the appointment of the appellant in that case was not made by the Government nor was he liable to be dismissed by the Government.
The appointment was made by the administrator of a committee and he was liable to be dismissed by the same body.
In these circumstances this Court observed: "No doubt the Committee of the Durgah Endowment is to be appointed by the Government of India but it is a body corporate with perpetual succession acting, within the four corners of the Act.
Merely because the Committee or the members of the Committee are removable by the Government of India or the Committee can make bye laws prescribing the duties and powers of its employees cannot in our opinion convert the servants of the Committee into holders of office of profit under the Government of India.
The appellant is neither appointed by the Government of India nor is removable by the Government of India nor is he paid out of the revenues of India.
The power of the Government to appoint a person to an office of profit or to continue him in that office 'or revoke his appointment at their discretion and payment from out of Government revenues are important factors in determining whether that person is holding an office of profit under the Government though pay [1958] S.C.R. 387.
321 ment from a source other than Government revenue is not always a decisive factor.
But the appointment of the appellant does not come within this test.
" It is clear from the aforesaid observations that in Maulana Abdul Shakur 's case(1) the factors which were held to be ,,decisive were (a) the power of the Government to appoint a person to an office of profit or to continue him in that ,office or revoke his appointment at their discretion, and (b) payment from out of Government revenues, though it was pointed out that payment from a source other than Government revenues was not always a decisive factor.
In the case before us the appointment of the appellant :as also his continuance in office rests solely with the Government of India in respect of the two companies.
His remuneration is also fixed by Government.
We assume for the purpose of this appeal, that the two companies are statutory bodies distinct from Government but we must remember at the same time that they are Government com panies within the meaning of the Indian and 1000% of the shares are held by the Government.
We must also remember that in the performance of his functions the appellant is controlled by the Comptroller and Auditor General who himself is undoubtedly holder of an office of profit under the Government, though there are safeguards in the Constitution as to his tenure of office and removability therefrom.
Under article 148 of the Constitution the Comptroller and Auditor General of India is appointed by the President and he can be removed from office in like manner and on the like grounds as a judge ,of the Supreme Court.
The salary and other conditions of service of the Comptroller and Auditor General shall be such as may be determined by Parliament by law and until they are so determined shall be as specified in the Second Schedule to the Constitution.
Under cl.
(4) of article 148 the Comptroller and Auditor General is not eligible for further office either under the Government of India or under the Government of any 'State after he has ceased to hold his office.
(5) of the said Article lays down that subject to the provisions of the 'Constitution and of any law made by Parliament, the administrative powers of the Comptroller and Auditor (1)[1958] S.C.R. 387.
322 General shall be such as may be prescribed by rules made by the President after consultation with the Comptroller and Auditor General.
Under article 149 of the Constitution the Comptroller and Auditor General shall perform such duties and exercise such powers in relation to the accounts of the Union and of the States and of any other authority or body as may be prescribed by or under any law made by Parliament and, until provision in that behalf is so made, shall perform such duties and exercise such powers in relation to the accounts of the Union and of the States as were conferred on or exercisable by the Auditor General of India immediately before the commencement of the Constitution in relation to the accounts of the Dominion of India and of the Provinces respectively.
The reports of the Comptroller and Auditor General of India relating to the accounts of the Union have to be submitted to the President and the reports of the Comptroller and Auditor General relating to the accounts of 2 State have to be submitted to the Governor.
From the aforesaid provisions it appears to us that the Comptroller and Auditor General is himself a holder of an office of profit under the Government of India, being appointed by the President and his administrative powers arc such as may be prescribed by rules made by the President, subject to the provisions of the Constitution and of any law made by Parliament.
Therefore if we look at the matter from the point of view of substance rather than of form, it appears to us that the appellant as the holder of an office of profit in the two Government companies, the Durgapur Projects Ltd. and the Hindustan Steel Ltd., is really under the Government of India; he is appointed by the Government of India, lie is removable from office by the Government of India; he performs functions for two Government companies under the control of the Comptroller and Auditor General who himself is appointed by the President and whose administrative powers may be controlled by rules made by the President.
In Ramappa vs Sangappa(1) the question arose as to whether the holder of a village office who has a hereditary right to it is disqualified under article 191 of the ' Constitution, which is the counterpart of article 102, in the matter (1) [1959]1 S.C.R. 1167.
323 of membership of the State Legislature.
It was observed therein: "The Government makes the appointment to the office though it may be that it has under the statute no option but to appoint the heir to the office if he has fulfilled the statutory requirements.
The office is, therefore, held by reason of the appointment by the Government and not simply because of a hereditary right to it.
The fact that the Government cannot refuse to make the appointment does not alter the situation.
" There again the decisive test was held to be the test of appointment.
In view of these decisions we cannot accede to the submission of Mr. Chaudhury that the several factors which enter into the determination of this question the appointing authority, the authority vested with power to terminate the appointment, the authority which determines the remuneration, the source from which the remuneration is paid, and the authority vested with power to control the manner in which the duties of the office are discharged and to give directions in that behalf must all co exist and each must show subordination to Government and that it must necessarily follow that if one of the elements is, absent, the test of a person holding an office under the Government, Central or State, is not satisfied.
The cases we have referred to specifically point out that the circumstance that the source from which the remuneration is paid is not from public revenue is a neutral factor not decisive of the question.
As we have said earlier whether stress will be laid on one factor or the other will depend on the facts of each case.
However, we have no hesitation in saying that where the several elements, the power to appoint, the power to dismiss, the power to control and give directions as to the manner in which the duties of the office are to be performed, and the power to determine the question of remuneration are all present in a given case, then the officer in question holds the office under the authority so empowered.
For the reasons given above we have come to the conclusion that the Election Tribunal and the High Court were right in coming to the ' conclusion that the appellant as an auditor 'of the two Government companies ' held an 324 office of profit under the Government of India within the meaning of article 102(1)(a) of the Constitution.
As such he was disqualified for being chosen as, and for being, a member of either House of Parliament.
It is unnecessary to consider the further question whether he was a holder of an office of profit either under the Government of India or the Government of West Bengal by reason of being an auditor for the Life Insurance Corporation of India or a Director of the West Bengal Financial Corporation.
The appeal accordingly fails and is dismissed with costs.
Appeal dismissed.
[/INST]The appellant was found carrying 286 tolas of gold in running train between Kerla and Pali stations by the Sub Inspector of Barmer District.
After the gold was seized, criminal proceedings were instituted against the appellant.
The trial court acquitted the appellant but the High Court convicted him.
The appellant 's case in this Court was that the seizure of the gold from him had not been proved; that the Sub Inspector was not a Customs Officer for the place where the seizure was made, and so the 709 seizure was not under the Land Customs Act; and that, in any view of the case, the prosecution had failed to prove the necessary mens rea in the appellant.
Section 3 of the Land Customs Act authorises the Central Government to appoint by notification one person to be the Collector of Land Customs for any area adjoining a foreign frontier and specified in the notification.
The section also authorises the Central Government to appoint such other persons as it thinks fit to be customs officer for the same area by a similar notification.
The relevant notification issued was as follows: "1.
In exercise of the powers conferred by sub section (1) of section 3 of the (19 of 1924) read with the notification of the Government of India in the late Finance Deptt.
(Central Revenues) No. 5444, dated 1st December 1924, the Central Board of Revenue hereby appoints for the areas adjoining the Land Customs Frontier separating West Pakistan from India, the officers of the Government of Rajasthan specified in the Schedule hereto annexed, to be land Customs Officers within the jurisdiction of the Collector of Land Customs Delhi.
""The Schedule." "All officers of the Rajasthan Civil Police and the Rajasthan Armed Constabulary of and above the rank of Head Constable posted in the Districts of Barmer, Bikaner, Ganganagar, Jaisalmer and Jalore in the State of Rajasthan.
" Held, that the word "adjoining" in the above notification means the whole compact block consisting of the State of Punjab, Jammu and Kashmir and Rajasthan and the Union territories of Himachal Pradesh and Delhi as one area adjoining the West Pakistan Frontier, and that for this entire area one person was appointed the Collector of Land Customs.
Every officer, therefore, mentioned in the Schedule would be a Customs Officer not for any particular District mentioned in the Schedule but for the whole area which forms the jurisdiction of the Collector of Land Customs Delhi.
Since in the instant case, the Sub Inspector was an officer mentioned in the Schedule, he would be an officer for the entire area which formed the jurisdiction of the Collector of Land Customs, Delhi, including the place where the seizure was made, and was therefore, competent to make the seizure.
Held, further, that on the evidence the story of the re covery of gold from the appellant was true, and that the circumstances, manner, quantity and the form in which gold was carried, clearly showed that the appellant was smuggling gold knowingly and with the intention of evading the prohibition in force with respect to the import of gold into the country.
</s>
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<s>[INST] Summarize the judgementCivil Appeal No. 4139 of 1986.
From the Judgment and order dated 18.6.1986 of the Bombay High Court in Appeal No. 874 of 1983.
R.P. Bhatt and D.N. Misra for the Appellant.
25 L.C. Chogale, M.N. Shroff, K.M.M. Khan, R.F. Nariman, R. Karanjawala, Hardeep Singh, Mrs. Manek Karanjawala, S.V. Deshpande, A.S. Bhasme and A.M. Khanwilkar for the Responlents .
The Judgment of the Court was delivered by SEN, J.
By section 127 the Maharashtra Regional & Town Planning Act, 1966 enacts: " 127.
If any land reserved, allotted or designated for any purpose specified in any plan under this Act is not acquired by agreement within ten years from the date on which a final Regional plan, or final Development plan comes into force or if proceedings for the acquisition of such land under this Act or under the Land Acquisition Act, 1894, are not commenced within such period, the owner or any person interested in the land may serve notice on the Planning Authority, Development Authority or as the case may be, Appropriate Authority to that effect; and if within six months from the date of the service of such notice, the land is not acquired or no steps as aforesaid are commenced for its acquisition, the reservation, allotment or designation shall be deemed to have lapsed, and thereupon the land shall be deemed to be released from such reservation, allotment or designation and shall become available to the owner for the purpose of development or otherwise, permissible in the case of adjacent land under the relevant plan.
" The short point involved in this appeal by special leave from a judgment of a Division Bench of the Bombay High Court dated June 18, 1986, is whether the period of six months specified in section 127 of the Act is to be reckoned from the date of service of the purchase notice dated July 1, 1977 by the owner on the Planning Authority i.e. the Municipal Corporation of Greater Bombay here, or the date on which the requisite information of particulars furnished by the owner.
The late Dr. Eruchshaw Jamshedji Hakim was the former owner of a double storeyed building situate on land admeasuring 3645.26 square metres bearing the cadastral survey No. 176 of Tardeo, Bombay known as Dr. Hakimwadi.
The property is located at the junction of Falkland Road and Eruchshaw Hakim Road.
It 26 consists of several structures housing 24 small scale industries, 13 shops on the ground floor and 26 residential tenements on the first floor, facing the Falkland Road.
On the rear side of this building, there are several structures housing about 24 small scale industries.
The said Dr. Eruchshaw Jamshedji Hakim created a trust in respect of the properties and respondents nos.
6 9 i.e. respondents nos.
4 7 in the High Court, herein described as such are the present trustees appointed under the deed.
The Planning Authority published a draft Development Plan in respect of 'D ' ward where the property in dispute is situate.
In the Development Plan property of Dr. Eruchshaw Jamshedji Hakim was reserved for a recreation ground.
The Development Plan was finalised and sanctioned by the State Government on January 6, 1967.
The final development scheme came into effect from February 7, 1967 and thereunder the land was again reserved for recreation ground.
No action having been taken for acquisition of the land until January 1, 1977, the owners thereof i.e. the trustees served a purchase notice dated July, 1, 1977 on the Commissioner for Municipal Corporation of Greater Bombay either to acquire the same or release it from acquisition, and the same was received on July 4, 1977.
On July 28, 1977 the Corporation 's Executive Engineer wrote to respondents nos.
4 7 and asked for information regarding the ownership of the land and the particulars of the tenants thereof.
The letter stated that the relevant date under section 127 of the Act would be the date upon which this information was received.
The trustees for the time being the landlords of the property known as Hakimwadi by their lawyer 's letter dated August 3, 1977 conveyed that the date of six months stipulated by section 127 of the Act has to be computed from the date of the receipt from them of the information required.
Further, they stated that as the Planning Authority for Greater Bombay was the Municipal Corporation of Greater Bombay, it had p access to all the relevant records including the records pertaining to cadastral survey No. 176.
It was also appointed out that the Corporation had been assessing them to property tax in respect of the said property and issuing bills and receipts therefor and could not now question their title to ownership of the property.
It was further said that as regards the number of tenants, the inspection registers maintained by the Corporation 's Assessment Department, upon which the assessment of the rateable value of the various tenements was based, bear ample testimony.
It was next stated that the property was partly residential, partly commercial and partly meant for storage.
The trustees went on to say that they were not aware of any rule framed under the Act whereby the Planning 27 Authority could make an inquiry at that stage without taking a decision on the material question and thereby attempt to extend the time limit of six months stipulated in section 127.
The said letter was received by the Executive Engineer on August 16, 1977 and presumably the information required was furnished on August 16, 1977.
The Executive Engineer wrote to respondents nos.
4 7 stating that the period of six months allowed by section 127 of the Act would accordingly commence on August 4, 1977, the date when the requisite information was furnished.
Next, the Executive Engineer by his letter dated November 2, 1977 intimated respondents nos.
4 7 that the Municipal Corporation had accorded sanction to initiate acquisition proceedings in respect of the property in question under the Land Acquisition Act.
Thereafter, the Corporation passed a resolution dated January 10, 1978 for the acquisition of the land and made an application to the State Government dated January 31, 1978 for taking necessary steps.
The State Government being satisfied that the land was required for a public purpose issued the requisite notification dated April 7, 1978 under section 6 of the Land Acquisition Act, 1894 for acquisition of the land.
On July 17, 1978 respondent No. 1 Dr. Hakimwadi Tenants Association filed a petition in the High Court under article 226 of the Constitution for quashing the impugned notification.
A learned Single Judge (Pendse, J.) by his judgment dated September 21, 1983 allowed the writ petition on the ground that the Planning Authority having taken no steps for acquisition of land under section 126(1) of the Act read with section 6 of the Land Acquisition Act within 10 years from the date on which the final Development Plan came into force, the acquisition proceedings commenced by the State Government under sub section
(2) of section 126 at the instance of the Planning Authority were not valid inasmuch as the issuance of the impugned notification under section 6 of the Land Acquisition Act for the reservation of the property under the final Development Plan for a recreation ground was not within the period of six months as required under section 127.
According to the learned Single Judge, the period of six months prescribed under section 127 of the Act begin to run on the date of service of the purchase notice on the Corporation and therefore the Corporation had to take steps to acquire the property before January 4, 1978.
The Corporation not having taken any steps till the expiry of the period of six months, the resolution dated January 10, 1978 passed to acquire the property and the consequent notification dated April 7, 1978 were invalid and of no legal consequence In other words, he held that the commencement of the statutory period of six months was not dependent upon the directions issued by the officers 28 of the Planning Authority, nor could the officers extend the period fixed under section 127.
As regards the practice prevalent in the Corporation to compute the period of six months from the date of receipt of the information sought, he held that it was wholly unwarranted and entirely illegal.
He accordingly struck down the impugned notification under section 6 of the Land Acquisition Act and declared that the reservation of the land under the Development Plan had lapsed and it was open to the tenants of the property to claim that due to the lapse of reservation, the Planning Authority and the State Government had no jurisdiction to acquire the land in exercise of the powers under s.126 of the Act.
Aggrieved, the appellant carried an appeal to a Division Bench under section 15 of the Letters Patent.
Bharucha, J. speaking for himself and Desai, J. upheld the view of the learned Single Judge and held that the most crucial step was the application to be made by the Corporation to the State Government under section 126(1) of the Act for acquisition of the land, it ought to have been taken within the period of six months commencing from July 4, 1977, the date of service of the purchase notice.
That decision proceeds upon the view that the details of ownership or particulars of tenants are not required to be furnished in the purchase notice served by the owner or any person interested in the land.
All that is required is that the owner or the person interested in the land must inform the authority that the land reserved for any plan under the Act had not been acquired by agreement within 10 years from the date on which the plan came into force and that proceedings for acquisition of such land under the Land Acquisition Act had not been commenced within that period.
It was accordingly held that the purchase notice dated July 1, 1977 served by respondents nos.
4 7, the trustees, was a valid notice under section 127 of the Act and therefore the period of six months specified in section 127 commenced running from July 4, 1977, the date of service, and came to an end on January 4, 1978.
That being so, it was held that upon the expiry of the period of six months on January 3, 1978, the reservation of the land for recreation ground lapsed and it was released from such reservation.
According to the plain reading of section 127 of the Act, it is manifest that the question whether the reservation has lapsed due to the failure of the Planning Authority to take any steps within a period of six months of the date of service of the notice of purchase as stipulated by section 126, is a mixed question of fact and law.
It would therefore be difficult, if not well nigh impossible, to lay down a rule 29 of universal application.
It cannot be posited that the period of six months would necessarily begin to run from the date of service of a purchase notice under section 127 of the Act.
The condition pre requisite for the running of time under section 127 is the service of a valid purchase notice.
It is needless to stress that the Corporation must prima facie be satisfied that the notice served was by the owner of the affected land or any person interested in the land.
But, at the same time, section 127 of the Act does not contemplate an investigation into title by the officers of the Planning Authority, nor can the officers prevent the running of time if there is a valid notice.
Viewed in that perspective, the High Court rightly held that the Executive Engineer of the Municipal Corporation was not justified in addressing the letter dated July 29, 1977 by which he required respondents nos.
4 7, the trustees, to furnish information regarding their title and ownership, and also to furnish particulars of the tenants, the nature and user of the tenements and the total area occupied by them at present.
The Corporation had the requisite information in their records.
The High Court was therefore right in reaching the conclusion that it did.
In the present case, the Planning Authority was the Municipal Corporation of Greater Bombay.
It cannot be doubted that the Municipal Corporation has access to all land records including the records pertaining to cadastral survey No. 176 of Tardeo.
We are inclined to the view that the aforesaid letter dated July 28, 1977 addressed by the Executive Engineer was just as attempt to prevent the running of time and was of little or no consequence.
As was rightly pointed out by respondents nos.
4 7 in their reply dated August 3, 1977, there was no question of the period of six months being reckoned from the date of the receipt from them of the information requisitioned.
The Municipal Corporation had been assessing the trust properties to property tax and issuing periodic bills and receipts therefor and obviously could not question the title or ownership of the trust.
We are informed that the building being situate on Falkland Road, the occupants are mostly dancing girls and this is in the knowledge of the Corporation authorities.
The rateable value of each tenement would also be known by an inspection of the assessment registers.
We must accordingly uphold the finding arrived at by the High Court that the appellant having failed to take any steps, namely, of making an application to the State Government for acquiring the land under the Land Acquisition Act within a period of six months from the date of service of the purchase notice, the impugned notification issued by the State Government under section 6 of the Land Acquisition Act making the requisite declaration that such land was required for a public purpose i.e. for a recreation ground was invalid, null and void.
30 While the contention of learned counsel appearing for the appellant that the words 'six months from the date of service of such notice ' in section 127 of the Act were not susceptible of a literal construction, must be accepted, it must be borne in mind that the period of six months provided by section 127 upon the expiry of which the reservation of the land under a Development Plan lapses, is a valuable safeguard to the citizen against arbitrary and irrational executive action.
Section 127 of the Act is a fetter upon the power of eminent domain.
By enacting section 127 the legislature has struck a balance between the competing claims of the interests of the general public as regards the rights of an individual.
An analysis of section 126 would reveal that after publication of a draft regional plan, a development or any other plan or town planning scheme, any land is required or reserved for any of the public purposes specified therein, the Planning Authority, Development Authority or as the case may be, any Appropriate Authority may, except as provided in section 113A, at any time acquire the land either by agreement or make an application to the State Government for acquisition of such land under the Land Acquisition Act, 1894.
Sub section
(2) thereof provides that the State Government may on receipt of the applications contemplated by section 126(1) or if the Government (except in cases falling under section 49 and except as provided in section 113A) is itself of opinion that any land included in any such plan is needed for any public purpose, it may make a declaration to that effect in the final gazette, in the manner provided in section 6 of the Land Acquisition Act in respect of the said land.
The rule is subject to an exception.
Proviso to section 126(2) interdicts that no such declaration shall be made after the expiry of three years from the date of publication of the draft regional plan, development plan or any other plan.
Sub section
(3) deals with the procedure to be followed for acquisition of the land covered by a declaration under section 6 of the p Land Acquisition Act.
Sub section
(4) is of some relevance and reads as follows: "(4).
If a declaration is not made within the period referred to in sub section (2) or having been made, the aforesaid period expired on the commencement of the Maharashtra Regional and Town Planning (Amendment) Act, 1970, the State Government may make a fresh declaration for acquiring the land under the Land Acquisition Act, 1894, in the manner provided by sub sections (2) and (3) of this section, subject to the modification that the market value of the land shall be market value at the date of declaration in the official Gazette made for acquiring the land afresh.
" 31 The conjoint effect of sub sections
( 1), (2) and (4) of section 126 is that if no declaration is made within the period referred to in sub section
(2), that is to say, before the expiry of three years from the date of publication of the draft regional plan, development plan or any other plan, the compensation payable to the owner of the land for such acquisition, in that event, shall be the market value on the date of the fresh declaration under section 6 of the Land Acquisition Act i.e. the market value not at the date of the notification under section 4(1) of the Land Acquisition Act but the market value at the date of declaration under section 6.
That is one of the safeguards provided under the Act.
Another safeguard provided is the one under section 127 of the Act.
It cannot be laid down as an abstract proposition that the period of six months would always begin to run from the date of service of notice.
The Corporation is entitled to be satisfied that the purchase notice under section 127 of the Act has been served by the owner or any person interested in the land.
If there is no such notice by the owner or any person, there is no question of the reservation, allotment or designation of the land under a development plan of having lapsed.
It a fortiori follows that in the absence of a valid notice under section 127, there is no question of the land becoming available to the owner for the purpose of development or otherwise.
In the present case, these considerations do not arise.
We must hold in agreement with the High Court that the purchase notice dated July 1, 1977 served by respondents nos.
4 7 was valid notice and therefore the failure of the appellant to take any steps for the acquisition of the land within the period of six months therefrom, the reservation of the land in the Development Plan for a recreation ground lapsed and consequently, the impugned notification dated April 7, 1978 under section 6 of the Land Acquisition Act issued by the State Government must be struck down as a nullity.
Section 127 of the Act is a part of the law for acquisition of lands required for public purposes, namely, for implementation of schemes of town planning.
The statutory bar created by section 127 providing that reservation of land under a development scheme shall lapse if no steps are taken for acquisition of land within a period of six months from the date of service of the purchase notice, is an integral part of the machinery created by which acquisition of land takes place.
The word 'aforesaid ' in the collocation of the words 'no steps as aforesaid are commenced for its acquisition ' obviously refer to the steps contemplated by section 126(1).
The effect of a declaration by the State Government under sub section
(2) thereof, if it is satisfied that the 32 land is required for the implementation of a regional plan, development plan or any other town planning scheme, followed by the requisite declaration to that effect in the official gazette, in the manner provided by section 6 of the Land Acquisition Act, is to freeze the prices of the lands affected.
The Act lays down the principles of fixation by providing firstly, by the proviso to section 126(2) that no such declaration under sub section
(2) shall be made after the expiry of three years from the date of publication of the draft regional plan, development plan or any other plan, secondly, by enacting sub section
(4) of section 126 that if a declaration is not made within the period referred to in sub section
(2), the State Government may make a fresh declaration but, in that event, the market value of the land shall be the market value at the date of the declaration under section 6 and not the market value at the date of the notification under section 4, and thirdly, by section 127 that if any land reserved, allotted or designated for any purpose in any development plan is not acquired by agreement within 10 years from the date on which a final regional plan or development plan comes into force or if proceedings for the acquisition of such land under the Land Acquisition Act are not commenced within such period, such land shall be deemed to be released from such reservation, allotment or designation and become available to the owner for the purpose of development on the failure of the Appropriate Authority to initiate any steps for its acquisition within a period of six months from the date of service of a notice by the owner or any person interested in the land.
It cannot be doubted that a period of 10 years is long enough.
The Development or the Planning Authority must take recourse to acquisition with some amount of promptitude in order that the compensation paid to the expropriated owner bears a just relation to the real value of the land as otherwise, the compensation paid for the acquisition would be wholly illusory.
Such fetter on statutory powers is in the interest of the general public and the conditions subject to which they can be exercised must be strictly followed.
There still remain the other two points raised, namely, (i) There was waiver or abandonment of right by respondents nos.
4 7, the trustees, to question the validity of the acquisition proceedings; and (ii) There was inordinate delay or laches on the part of respondent No. 1 which disentitled it to grant of relief under article 226 of the Constitution.
We find it difficult to give effect to these contentions.
In order to deal with these questions, a few facts are to be stated.
The Executive Engineer of the Municipal Corporation by his letter dated November 2, 1977 addressed to the lawyer acting on be 33 half of respondents nos.
4 7, the trustees, to inquire whether they were prepared to sell the property in question situate at Cadastral Survey No. 176 of Taradeo.
In response thereto, respondents nos.
4 7 through their lawyer 's reply dated November 18, 1977 intimated that they were prepared to consider the sale of the property in its existing condition with all the structures tenanted or otherwise at an overall rate of Rs.650 per square metre.
This response was without prejudice and they expressly stated that the offer was made without admitting the power and authority of the appellant to acquire the land or to initiate the proceedings for acquisition.
Instead of accepting the same, the Executive Engineer by his letter dated January 11, 1978 wanted respondents nos.
4 7 to disclose the basis upon which they claimed price at the rate of Rs.650 per square metre.
While keeping respondents nos.
4 7 in suspense, the Municipal Corporation had in the meanwhile on January 10, 1978 passed a Resolution that necessary steps be taken to move the State Government for acquisition of the land and thereafter actually moved the Government by their letter dated January 31, 1978 to make the requisite declaration under section 6 of the Land Acquisition Act, 1894 i.e. the property in question was needed for, public purpose viz. a recreation ground under the Development Plan.
The State Government accordingly on April 7, 1978 on being satisfied that the property was needed issued the requisite impugned notification under section 6 of the Act.
Thereafter, the Special Land Acquisition officer on January 18, 1979 issued a general notice under section 9 of the Land Acquisition Act and the same was published at the site and also issued individual notices to the persons interested.
The hearing was fixed for February 26, 1979.
On February 22, 1979 i.e. four days before the hearing some of the tenants approached the Special Land Acquisition officer and applied for three months ' adjournment and accordingly the bearing was adjourned to April 24, 1979.
However, no claims for compensation were filed.
Nobody remained present at the hearing.
Accordingly, the Special Land Acquisition officer was constrained to issue fresh notices under section 9 on May 25, 1981.
Thereafter, the Municipal Corporation on the date fixed applied to the Special Land Acquisition officer to keep the proceedings in abeyance at the behest of some of the tenants who had applied to the Corporation for three months ' time.
In the circumstances, respondents nos.
4 7 moved the High Court under article 226 of the Constitution for a writ in the nature of mandamus requiring the Special Land Acquisition officer to make an award.
On January 20, 1981, the learned Government Advocate gave an undertaking before the High Court that the Special Land Acquisition officer would declare the award within a period of six months 34 and make payment of compensation within eight months.
In view of this, the High Court dismissed the writ petition as not pressed.
On these facts, it cannot be said that there was any waiver or abandonment of rights by respondents nos.
In order to constitute waiver, there must be voluntary and intentional relinquishment of a right.
The essence of a waiver is an estoppel and where there is no estoppel, there is no waiver.
Estoppel and waiver are questions of conduct and must necessarily be determined on the facts of each case.
In the present case, respondents nos.
4 7 had without admitting that the appellant had the authority or power to initiate the proceedings for acquisition, signified their willingness to sell the property subject to certain terms.
But the appellant did not accept the offer.
On the contrary, the appellant took further steps for the acquisition of the land by moving the State Government under section 126(1) of the Act to initiate acquisition proceedings by the issuance of a notification under section 6 of the land Acquisition Act.
In view of this, it cannot be said that the conduct of respondents nos.
4 7 was such as warrants an inference of relinquishment by a known existing legal right.
There is no question of estoppel, waiver or abandonment.
There is no specific plea of waiver, acquiescence or estoppel, much less a plea of abandonment of right.
That apart, the question of waiver really does not arise in the case.
Admittedly, the tenants were not parties to the earlier proceedings.
There is, therefore, no question of waiver of rights by respondents nos.
4 7 not would this disentitle the tenants from maintaining the writ petition.
The objection that there was undue delay in moving the High Court cannot prevail.
The reservation has lapsed, acquisition upon such reservation is bad and the delay in filing the petition, such as it is, can make no difference to this position in law.
In the result, the appeal fails and is dismissed with costs.
P.S.S. Appeal dismissed.
[/INST]% Section 127 of the Maharashtra Regional and Town Planning Act, 1966 provides that if any land reserved under the Act was not acquired by agreement within ten years from the date on which a final regional plan or final development plan came into force or if proceedings for the acquisition of such land under that Act or under the Land Acquisition Act, 1894 were not commenced within such period, the owner or any person interested in the land may serve notice on the appropriate authority to that effect and if within six months from the date of the service of such notice, the land was not acquired or no steps as aforesaid were commenced for its acquisition, the reservation should be deemed to have lapsed.
The Planning Authority, the Municipal Corporation of Greater Bombay, published a draft development plan reserving the land in dispute for a recreation ground.
The said plan was finalised and sanctioned by the State Government on January 6, 1967.
It came into effect from February 7, 1967 and thereunder the land was again reserved for recreation ground.
No action having been taken for acquisition of the land, the trustees of the land served a notice dated July 1, 1977 on the Commissioner for Municipal Corporation either to acquire the land or release it from acquisition.
The same was received by the latter on July 4, 1977.
On July 28, 1977 the Corporation 's Executive Engineer asked for information regarding the ownership of the land and the particulars of the tenants thereof from trustees respondents Nos. 4 7, and stated that the relevant date under section 127 cf the Act would be the date 22 upon which this information was received.
The trustees by their lawyer 's letter dated August 3, 1977 conveyed that the period of six months stipulated by section 127 has to be computed from the date of the receipt of the purchase notice by the Corporation, i.e. July 4, 1977 and stated that the Corporation had access to all the relevant records.
The requisite information was also provided therein.
The Executive Engineer wrote stating that the period of six months allowed by section 127 of the Act would commence on August 4, 1977, the date when the requisite information was furnished.
Thereafter the Executive Engineer by his letter dated November 2, 1977 inquired of the trustees whether they were prepared to sell the property in question to which the trustees quoted an overall rate of Rs.650 per square metre through their lawyer 's reply dated November 18, 1977.
They expressly stated that the offer was made without admitting the power and authority of the appellant to acquire the land or to initiate the proceedings for acquisition.
Instead of accepting the same, the Executive Engineer by his letter dated January 11, 1978 asked the respondents to disclose the basis for the rate of Rs.650 per sq.
metre.
The Corporation had, in the meanwhile passed a resolution on January 10, 1978 for the acquisition of the land and made an application to the State Government dated January 31, 1978 for taking necessary steps.
The State Government issued the requisite notification dated April 7, 1978 under section 6 of the Land Acquisition Act 1894 for acquisition of land.
On July 17, 1978, respondent No. 1, the tenants ' association, filed a petition in the High Court under article 226 of the Constitution for quashing the impugned notification.
The High Court held that the most crucial step was the application to be made by the Corporation to the State Government under section 126(1) of the Act for acquisition of the land within the period of six months commencing from July 4, 1977, the date of service of the purchase notice, and that upon the expiry of the said period on January 3, 1978, the reservation of the land had lapsed and it was released from such reservation.
It took the view that all that was required was that the owner or the person interested in the land must inform the Authority that the land reserved for any plan under the Act had not been acquired by agreement within ten years from the date on which plan came into force and the proceedings for acquisition of such land under the Land Acquisition Act had not been commenced within that period.
Consequently it struck down the impugned notification as invalid, null and void.
In the appeal to this Court by special leave it was contended that there was waiver or abandonment of right by respondents Nos. 4 7, 23 the trustees, to question the validity of the acquisition proceedings, and that there was inordinate delay or laches on the part of respondent No. 1 which disentitled it to grant of relief under article 226 of the Constitution.
Dismissing the appeal, ^ HELD: 1.
Section 127 of the Maharashtra Regional and Town Planning Act, 1966 is a fetter upon the power of eminent domain.
By enacting it the legislature has struck a balance between the competing claims of the interests of the general public as regards the rights of an individual.
[30B C] 2.
The condition pre requisite for the running of time under 127 of the Act is the service of a valid purchase notice.
In the instant case, the purchase notice dated July 1, 1977 was a valid notice.
The appellant having failed to take any steps for acquisition of the land within a period of six months therefrom the reservation of the land in the development plan for a public purpose lapsed and consequently the impugned notification dated April 7, 1978 issued by the State Government under section 6 of the Land Acquisition Act must be struck down as a nullity.
[29A B; 31D F] 3.1 The question whether the reservation has lapsed due to the failure of the planning authority to take any steps within a period of six months of the date of service of the notice of purchase as stipulated by section 127 is a mixed question of fact and law.
A rule of universal application cannot, therefore, be laid down.
[28G H] In the instant case the High Court found that the planning authority had failed to acquire the land reserved for the plan under the Act by agreement within ten years from the date on which the plan came into force and proceedings for acquisition of the land under the Land Acquisition Act had not been commenced within the period of six months from the receipt of notice from respondents Nos. 4 to 7, the trustees.
The Municipal Corporation had been assessing the trust properties to property tax and issuing periodic bills and receipts therefor and obviously could not question the title or ownership of the trust.
Accordingly, it struck down the impugned notification under section 6 of the Land Acquisition Act and declared that the reservation of the land under the development plan had lapsed.
[28E, 29F, 28B] 3.2 There was no question of the period of six months being 24 reckoned from the date of receipt from respondents of the information requisitioned.
Section 127 of the Act does not contemplate an investigation into the title by the officers of the Planning Authority, nor can the officers prevent the running of time if there is a valid notice.
The Executive Engineer of the appellant Corporation was not justified in addressing the letter dated July 28, 1977 calling upon respondents 13 Nos.
4 7, the trustees, to furnish information regarding their title and ownership, and also to furnish particulars of the tenants, the nature of user of the tenements and the total area occupied by them.
The Corporation had the requisite information in their records.
The Planning Authority was the Municipal Corporation.
The said letter was, therefore, just an attempt to prevent the running of time and was of little or no consequence.[29A, B E] 4.
In order to constitute waiver, there must be voluntary and intentional relinquishment of a right.
The essence of a waiver is an estoppel and where there is no estoppel, there is no waiver.
Estoppel and waiver are questions of conduct and must necessarily be determined on the facts of each case.
[34B] In the instant case, respondents Nos.
4 7 had without admitting that the appellant had the authority or power to initiate the proceedings for acquisition, signified their willingness to sell the property subject to certain terms.
But the appellant did not accept the offer.
On the contrary, the appellant took further steps for the acquisition of the land by moving the State Government under section 126(1) of the Act to initiate acquisition proceedings by the issuance of a notification under section 6 of the Land Acquisition Act.
It cannot, therefore, be said that the conduct of respondents Nos. 4 7 was such as warrants an inference of relinquishment of a known existing legal right.
[34B D] 5.
The tenants were not parties to the earlier proceedings.
They were, therefore, not disentitled from maintaining the writ petition.
The objection that there was undue delay in moving the High Court cannot prevail.
[34E F]
</s>
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<s>[INST] Summarize the judgementN: Criminal Appeal No. 400 of 1986 From the Judgment and order dated 12.2.1986 of the Punjab and Haryana High Court in Crl.
No. 202 M/86.
Dr. Y.S. Chitale, Ravinder Narain, D.N. Misra and P.K. Ram for the Appellants.
H.K. Puri and R.S. Sodhi for the Respondents.
The Judgment of the Court was delivered by SEN, J.
This appeal by special leave directed against the judgment and order of the Punjab & Haryana High Court dated February 12, 1986 raises a question of some importance.
The question is whether the Food Inspector, Faridkot was competent to lodge a complaint against the appellants under section 20(1) of the Act for commission of an offence punishable under section 16(1) (a) (ii) of the (for short 'the Act ') by virtue of the delegation of powers by the Food (Health) Authority, Punjab under notification dated September 7, 1972 purported to have been issued by him under r. 3 of the Prevention of Food Adulteration (Punjab) Rules, 1958.
965 Put very shortly, the essential facts are these.
Appellant No. 2, Messrs Food Specialities Limited is a company incorporated under the engaged in the business of manufacturing and selling various well known articles of food including New Maggi 2 minute noodles with sweet sour taste maker while appellant No. 1 A.K. Roy is the Manager, Quality Controller of the Company.
On December 14, 1984 at about 3.30 p.m. the Food Inspector, Faridkot purchased a sample of New Maggi Noodles from the shop of a general merchant for purposes of analysis The Public Analyst by his report dated January 17, 1985 opined that the said article of food contains carmosine and sunset yellow acid coal tar dye instead of caramel as described on the label and was therefore both adulterated as well as misbranded.
He further opined that the label of the article of food did not comply with the requirements of rr.
24 and 32 of the Prevention of Food Adulteration Rules, 1955 regarding the addition of extraneous colouring matter.
On February 1, 1985 the Food Inspector, Faridkot filed a complaint against the general merchant as well as the appellants for having committed an offence punishable under section 16(1) (a) (ii) of the Act for alleged violation of rr. 24, 28, 29 and 32 of the Prevention of Food Adulteration Rules, 1955 by virtue of the delegation of powers by the Food (Health) Authority under notification dated October 10, 1968 purported to have been issued by him under r. 3 of the Prevention of Food Adulteration (Punjab) Rules, 1958.
During the course of the proceedings, the appellants raised an objection inter alia that r. 3 of the Rules framed by the State Government in purported exercise of powers under section 24(2) read with section 20(1) of the Act, was ultra vires the State Government and alternatively by virtue of the authority derived under r. 3 of the said Rules, the Food (Health) Authority alone had the power to initiate prosecutions for an offence under the Act and therefore he could not legally by the impugned notification sub delegate his powers to launch the prosecutions to the Food Inspector.
The learned Sub Divisional Judicial Magistrate by his order dated December 4, 1985 rejected the preliminary objection raised as to the power of the Food Inspector to launch the prosecution under section 20(1) read with section 9 of the Act, on the ground that the State Government having delegated its powers to the Food (Health) Authority by framing r.3 under section 24(2)(e) of the Act, the Food (Health) Authority was competent to issue the impugned notification and therefore the complaint was validly lodged.
The learned Sub Divisional Judicial Magistrate further proceeded to frame charges against the appellants for having committed an offence punishable 966 under section 16(1) (a) (ii) of the Act.
Thereafter, the appellants moved the High Court by petition under section 482 of the Code of Criminal Procedure, 1973 for quashing the impugned order passed by the learned Sub Divisional Judicial Magistrate taking cognizance of the offence and the consequent framing of the charge by him.
High Court did not go into the question and dismissed the petition in limine, It is argued on behalf of the appellants that as a matter of construction the first part of section 20(1) of the Act makes it clear that a prosecution for offences under the Act not being an offence under section 14 or section 14A, can be instituted only by one of the following authorities, namely: (i) the Central Government or the State Government, or (ii) with the written consent of the Central Government or the State Government, or (iii) a person authorised in this behalf by a general or special order by the Central Government or the State Government, or (iv) with the written consent of a person so authorised.
It is urged that the opening words of section 20(1) 'No prosecution for an offence under this Act . shall be instituted except by ' being of a negative character, the requirements of the section are imperative and that a discretionary power must, in general, by exercised by the authority to which it has been committed.
Emphasis is placed on the words 'in this behalf ' in the second part of section 20(1) of the Act for the submission that the delegation of powers to launch a prosecution by the Central Government or the State Government, by general or special order, must be for a specific purpose in that behalf viz. to authorise the institution of prosecutions under the Act.
It was accordingly submitted that r. 3 of the Punjab Rules enables the Food (Health) Authority to sub delegate his power 'to authorise the launching of a prosecution for an offence under the Act ' to the Food Inspector, was ultra vires the State Government and could not be sustained on the terms of section 24(2) (e) i.e. the general power of the State Government under section 24(2) (e) of delegation of its powers and functions under the Act.
In reply, the learned counsel for the respondents contends that r.3 is in the nature of a general order in terms of section 20(1) of the Act and therefore the State Government has not only delegated its powers 'to launch a prosecution for an offence under the Act ' under section 20(1) to the Food (Health) Authority i.e. the Director of Health Services, Punjab but also under the said rule provision has been made for further sub delegation of his power to authorise the launching of prosecutions under s .
20(1) to the Food Inspectors.
In order to appreciate the contentions it is necessary to refer to 967 the relevant provisions.
Sub section
(1) of section 20 of the Act which is material for our purposes, provides as follows: "20(1).
Cognizance and trial of offences No prosecution for an offence under this Act, not being an offence under section 14 or section 14A shall be instituted except by, or with the written consent of the Central Government or the State Government or a person authorised in this behalf, by general or special order, by the Central Government or the State Government.
" Sub section
(1) of section 24 of the Act empowers the State Government to frame rules after consultation with the Committee and subject to the condition of previous publication, for the purpose of giving effect to the provisions of the Act not falling within the purview of section 23.
Sub section
(2) thereof provides that in particular and without prejudice to the generality of the foregoing power, the State Government may make rules for the purpose of giving effect to the provisions of the Act in matters not falling within the purview of section 23.
section 24(2) (e) of the Act provides: "24(2).
In particular, and without prejudice to the generality of the foregoing power, such rules may (e) provide for the delegation of the powers and functions conferred by this Act on the State Government or the Food (Health) Authority to subordinate authorities or to local authorities.
" In exercise of the powers under section 24(2) (e) of the Act, the Punjab Government framed the Prevention of Food Adulteration (Punjab) Rules, 1958.
R. 3 of the Rules reads as under: "Rule 3 Power of Food (Health) Authority The State Government may, by an order in writing delegate its powers to appoint Food Inspectors, to authorise a person to institute prosecutions for an offence under the Act and such other powers exercisable by it under the Act as may be specified in the order of the Food (Health) Authority of the State of Punjab" In accordance with r. 3, the State Government issued a notification dated October 10, 1968 purporting to delegate its powers and functions conferred by section 20(1) of the Act viz. to initiate prosecutions 968 for an offence under the Act, to the Food (Health) Authority, to the effect: "In pursuance of the provisions of rule 3 of the Prevention of Food Adulteration (Punjab) Rules, 1958, the President of India is pleased to delegate to the Food (Health) Authority its powers of appointment of Food Inspectors and to authorise institution of prosecution for an offence under the .
" In terms of the aforesaid notification, the Food (Health) Authority issued a notification dated September 7, 1972 authorising the Food Inspector, Faridkot to launch prosecution under section 20(1) for an offence under the Act, in these terms: "No. IV I Pb 72/7518 2(i) In exercise of the powers conferred by Section 9 of the (Act No. 37 of 1954) read with Rule 8 of the Prevention of Food Adulteration Rules 1955 and the powers delegated vide Punjab Government Notification No. 5575 HB/L 68/29659 dated 10th October, 1968, Shri Jagrup Singh is hereby appointed as Government Food Inspector for all the local areas in the District, in which the official is posted as Government Food Inspector.
In exercise of powers conferred by Section 20 of the (Act No. 37 of 1954) read with Punjab Government Notification No.5575 2HBI 1/68/29659 dated 10th October, 1968 the Director, Health Services, Punjab also authorises the above mentioned Food Inspector to institute prosecution against the persons committing offences under the said Act within the limits of local areas.
" In this appeal, two main questions arise, namely: (i) Whether r. 3 of the Prevention of Food Adulteration (Punjab) Rules, 1958 framed under section 24(2) (e) of the Act being contrary to the legislative mandate contained in section 20(1) of the Act, was ultra vires the State Government and therefore the impugned notification issued by the State Government dated October 10, 1968 purporting to delegate its powers under section 20(1) to the Food (Health) Authority viz. to authorise the institution 969 of prosecutions for an offence under the Act, was liable to be struck down.
Consequently, whether the impugned notification dated September 7, 1972 issued by the Food (Health) Authority authorising the Food Inspector, Faridkot to institute such prosecutions was illegal, bad in law and void ab initio.
(ii) Even if r. 3 of the said Rules could be regarded as a general order issued by the State Government in terms r of section 20(1) of the Act authorising the Food (Health) Authority to launch prosecutions for an offence under the Act by the framing of a rule under section 24(2) (e) of the Act, whether the Food (Health) Authority by the impugned notification dated September 7, 1972 could, in his turn, sub delegate his powers to the Food Inspector, Faridkot.
The ultimate question is whether the terms of section 20(1) of the Act do not postulate further delegation by the person authorised to institute prosecutions for an offence under the Act; he can only give his written consent to such prosecution.
It is common ground that the prosecution in the instant case has not been launched either by or with the written consent of the Central Government or the State Government.
It therefore becomes necessary to ascertain whether the Food Inspector, Faridkot was duly authorised to launch a prosecution.
The Food Inspector had been conferred powers of the State Government under section 20(l) of the Act viz. to initiate prosecutions for an offence under the Act, by the Food (Health) Authority i.e. the Director of Health Services.
A mere perusal of the impugned notification dated September 7,1972 makes it manifest that it was the Director of Health Services and not the State Government who had authorised the Food Inspector to launch prosecutions for an offence under the Act.
It is therefore clear that the Food Inspector is not a person who has been authorised by any general or special order issued by the Central Government or the State Government.
There would be no problem if the State Government were to issue a notification under section 20(l) of the Act conferring authority on the Food Inspector, Faridkot under section 20(l) to launch prosecutions for an offence under the Act as is the practice in the other States.
A careful analysis of the language of section 20(l) of the Act clearly shows that it inhibits institution of prosecutions for an offence under the Act except on fulfillment of one or the other or the two conditions.
Either the prosecutions must be instituted by the Central Government or the State Government or a person authorised in that behalf by the Central Government or the State Government, or the prosecutions 970 should be instituted with the written consent of any of the four specified categories of authorities or persons.
If either of these two conditions is satisfied, there would be sufficient authority for the institution of such a prosecution for an offence under the Act.
The provision contained in section 20(1) of the Act does not contemplate the institution of a prosecution by any person other than those designated.
The terms of section 20 (1) do not envisage further delegation of powers by the person authorised, except that such prosecution may be instituted with the written consent of the Central Government or the State Government or the person authorised.
The use of the negative words in section 20(1) "No prosecution for an offence under this Act . shall be instituted except by or with the written consent of" plainly make the requirements of the section imperative.
That conclusion of ours must necessarily follow from the well known rule of construction of inference to be drawn from the negative language used in a statute stated by Craies on Statute Law, 6th edn., p. 263 in his own terse language: "If the requirements of a statute which prescribe the manner in which something is to be done are expressed in negative language, that is to say, if the statute enacts that it shall be done in such a manner and in no other manner, it has been laid down that those requirements are in all cases absolute, and that neglect to attend to them will invalidate the whole proceeding.
" 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.
Other modes of performance are necessarily forbidden.
The intention of the Legislature in enacting section 20(1) was to confer a power on the authorities specified therein which power had to be exercised in the manner provided and not otherwise.
The first part of section 20(1) of the Act lays down the manner of launching prosecutions for an offence under the Act, not being an offence under section 14 or section 14A. The second part provides for delegation of powers by the Central Government or the State Government.
It enables that prosecutions for an offence under the Act can also be instituted with the written consent of the Central Government or the State Government or by a person authorised in that behalf, by a general or special order issued by the Central Government or the State 3 Government.
The use of the words 'in this behalf ' in section 20(1) of the Act shows that the delegation of such power by the Central Government or 971 the State Government by general or special order must be for a specific purpose, to authorise a designated person to institute such prosecutions on their behalf.
The terms of section 20( 1) of the Act do not postulate further delegation by the person so authorised; he can only give his consent in writing when he is satisfied that a prima facie case exists in the facts of a particular case and records his reasons for the launching of such prosecution in the public interest.
In the case of statutory powers the important question is whether on a true construction of the Act, it is intended that a power conferred upon A may be exercised on A 's authority by B. The maxim delegatus non potest delegare merely indicates that this is not normally allowable but the Legislature can always provide for sub delegation of powers.
The provision contained in sections 24(2) (e) enables the State Government to frame a rule for delegation of powers and functions under the Act but it clearly does not envisage any sub delegation.
That apart, a rule framed under section 24(2) (e) can only provide for delegation of minor administrative functions e.g. appointment of Food Inspectors, Food (Health) Authority etc.
In the case of important executive functions like the one contained in section 20(1) of the Act to authorise launching of prosecutions for an offence under the Act which is in the nature of a safeguard, the Courts may be disposed to construe general powers of delegation restrictively.
Keeping in view the language of section 20(1) and 24(2) (e) of the Act, r. 3 of the Punjab Rules can be treated to be a general order issued by the State Government to authorise the Food (Health) Authority i.e. the Director of Health Services to institute prosecutions for an offence under the Act.
Unfortunately, the draftsmen of r. 3 more or less employed the language of section 20(1) of the Act.
If r. 3 were to be literally interpreted, the words "to authorise the launching of prosecutions" may lead to the consequence that the Food (Health) Authority who had been delegated the power of the State Government under section 20(1) of the Act could, in his turn, sub delegate his powers to the Food Inspector.
Such a consequence is not envisaged by section 20(1) of the Act.
It is well settled that rules framed pursuant to a power conferred by a statute cannot proceed or go against the specific provisions of the statute.
It must therefore follow as a logical consequence that r. 3 of the Prevention of Food Adulteration (Punjab) Rules, 1958 must be read subject to the provisions contained in section 20(1) of the and cannot be construed to authorise sub delegation of powers by the Food (Health) Authority, Punjab to the Food Inspector, Faridkot.
If so construed, as it must, it would mean that the Food (Health) Authority was the 972 person authorised by the State Government to initiate prosecutions.
It was also permissible for the Food (Health) Authority being the person authorised under section 20(1) of the Act to give his written consent for the institution of such prosecutions by the Food Inspector, Faridkot as laid down by this Court in State of Bombay vs Parshottam Kanaiyalal, ; and The Corporation of Calcutta vs Md. Omer Ali & Anr., In the premises, the impugned notification dated September 7, 1972 issued by the Food (Health) Authority must be declared as ultra vires the Food (Health) Authority insofar as the purported to delegate his powers to institute prosecutions for an offence under the Act under section 20(1) to the Food Inspector, Faridkot.
It must accordingly follow that the Food Inspector, Faridkot was not competent to lodge the complaint against the appellants for having committed an offence punishable under section 16(1) (a) (ii) read with section 9 of the .
In the result, the appeal must succeed and is allowed.
The judgment and order passed by the High Court and that of the Sub Divisional Judicial Magistrate, Moga are set aside.
P.S.S. Appeal allowed.
[/INST]Section 20(1) of the dealing with cognizance and trial of offences provides that no prosecution for an offence under that Act shall be instituted except by, or with the written consent o ' he Central Government or the State Government or a person authorised in this behalf, by general or special order, by the Central or State Government.
Section 24(1) empowers the State Government to frame rules for the purpose of giving effect to the provisions of the Act, while section 24(2) (e) states that such rules may provide for the delegation of the powers and functions conferred by this Act on the State Government or the Food (Health) Authority to subordinate or local authorities.
Rule 3 of the Prevention of Food Adulteration (Punjab) Rules, 1958 framed by the State Government empowered the State Government to delegate its powers to appoint Food Inspectors, to authorise a person to institute prosecutions for an offence under the Act and such other powers exercisable by it under the Act as may be specified m the order of the Food (Health) Authority of the State.
962 In pursuance of the provisions of r. 3 of the Rules the State Government issued a Notification dated October 10, 1968 purporting to delegate its powers and functions conferred by section 20(1) of the Act to institute prosecutions for an offence under the Act, to the Food (Health) Authority.
In terms of that Notification the Food (Health) Authority issued a Notification dated September 7, 1972 authorising the Food Inspector, Faridkot to launch prosecutions under section 20(1) for an offence under the Act.
On February 1, 1985 the Food Inspector, Faridkot filed a complaint against the appellants for having committed an offence punishable under section 16(1) (a) (ii) of the Act for alleged violation of rr. 24, 28, 29 and 32 of the Prevention of Food Adulteration Rules, 1955.
During the course of the proceedings, the appellants raised an objection that r. 3 of the Prevention of Food Adulteration (Punjab) Rules, 1958 framed under section 24(2) (e) read with section 20(1) of the Act was ultra vires the State Government.
Alternatively it was urged that by virtue of the authority derived under r.3 the Food (Health) Authority alone had the power to institute prosecution for an offence under the Act and, therefore, he could not sub delegate his powers to launch the prosecution to the Food Inspector by the Notification dated September 7, 1972.
This preliminary objection was rejected by the Magistrate and he proceeded to frame charges against the appellants.
They thereupon moved the High Court under section 482 of the Code of Criminal Procedure, 1973 for quashing of the aforesaid order taking cognizance of the offence and consequent framing of the charge, but the High Court dismissed the petition in limine.
On the question whether the Food Inspector, Faridkot was competent to lodge a complaint against the appellants under section 20(1) of the Act by virtue of the delegation of powers by the Food (Health) Authority, Punjab under the Notification dated September 7, 1972 issued by him under r. 3 of the Prevention of Food Adulteration (Punjab) Rules, 1958.
Allowing the appeal by special leave, the Court, ^ HELD 1.
The notification dated September 7, 1972 issued by the Food (Health) Authority is ultra vires the Food (Health) Authority insofar as he purported to delegate his powers to institute prosecutions for an offence under the Act under section 20(1) to the Food Inspector, 963 Faridkot.
The latter was, therefore, not competent to lodge the complaint against the appellants.
[972B C] 2.1 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.
Other modes of performance are necessarily forbidden.
The intention of the Legislature in enacting section 20(1) was to confer power on the authority specified therein, which power had to be exercised in the manner provided and not otherwise.
[970E F] 2.2 The use of the negative words in section 20(1) that 'no prosecution for an offence under this Act.
shall be instituted except by, or with the written consent of plainly make the requirements of the section imperative.
They inhibit insufficient of prosecutions for an offence under the Act except where it is done by the Central Government or the State Government or a person authorised in that behalf by the Central Government or the State Government, or where the prosecution is instituted with the written consent of any of the four specified categories of authorities or persons.
If either of these two conditions is satisfied, there would be sufficient authority for the institution of such a prosecution for an offence under the Act.
[970C; 969G H; 970A B] Craies on Statute Law, 6th edn., p. 263 referred to.
The use of the expression 'in this behalf ' in section 20(1) shows that the delegation of such power by the Central Government or the State Government by general or special order must be for a specific purpose, to authorise a designated person to institute such prosecutions on their behalf.
The terms of the section do not postulate further delegation of powers by the person authorised.
He can only give his consent in writing when he is satisfied that a prima facie case exists in the facts of a particular case and records his reasons for the launching of such prosecution in public interest.
[966E; 971A B] 4.1.
Rules framed pursuant to a power conferred by a statute cannot proceed or go against the specific provisions of the statute.
The maxim delegatus non potest delegare merely indicates that sub delegation of powers is not normally allowable but the Legislature can always provide for it.
The provision contained in section 24(2) (e) of the Act enables the State Government to frame a rule for delegation of powers and functions under the Act but it clearly does not envisage any sub delegation.
[971C,D] 964 4.2.
Rule 3 of the Prevention of Food Adulteration (Punjab) Rules, 1958 must, therefore, he read subject to the provisions contained in section 20(l) of the .
It cannot be construed to authorise sub delegation of powers by the Food (Health) Authority, Punjab to the Food Inspector.
So construed, it means that in the instant case, the Food (Health) Authority was the person authorised by the State Government to initiate prosecutions.
[971G H; 972A] 4.3 It was open to the State Government to have issued a notification under section 20(1) conferring authority on the Food Inspector to launch prosecutions for an offence under the Act, as is the practice in other States.
The Food Inspector having been authorised by the Director of Health Service and not the State Government, he was not a person who had been authorised by any general or special order issued by the Central Government or the State Governments.
[969G H] State of Bombay vs Parshottam Kanaiyalal, ; & The Corporation of Calcutta vs Md. Omer Ali & Anr., referred to.
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<s>[INST] Summarize the judgementivil Appeal Nos. 2542 to 2544 of 1972.
Appeals by Special Leave from the Judgment and order dated 11 12 1970 of the Madras High Court in Civil Revision Petitions Nos.
1824 and 1825/65.
V. P. Raman, Adv.
and A. V. Rangam for the Appellant.
1123 A. T. M. Sampath for Respondent in C.A. 2542/72.
K. section Ramamurthi, Mrs. Saroja Gopalkrishnan for Respondent in C.A. 2542/72.
K. Jayaram and K. Ram Kumar for R. 1 in CA 2544/72.
K. Rajendra Choudhry for R. 2 in C.A. 2544/72.
The Judgment of.
the Court was delivered by KRISHNA IYER J.
The short point of law decided in the long judgment under appeal may justly be given short shrift.
But the batch of Civil Revision Petitions allowed by the High Court involves a legal issue of deep import from the angle of agrarian reform and surplus land available for distribution under its scheme that we deem it proper to discuss the core question at some length.
If the statutory construction which found favour with the High Court be correct the risk of reform legislation being condemned to functional futility is great, and so the State has come up in appeal by Special Leave challenging the High Court 's interpretation of section 22 of the Tamil Nadu Land Reforms (Fixation of Ceiling on land) Act, 1961 (for short, the Ceiling Act).
Presently, we will set out the skeletal facts relating to the civil appeals and the scheme of the Act designed for distributive justice in the field of agricultural land ownership, sufficient to disclose the purpose of the legislation, the mischief it intends to suppress, the reverse effect of the construction put on the key section (section 22) in the judgment under appeal and the consequent stultification of the objective of the Ceiling Act.
While dealing with welfare legislation of so fundamental a character as agrarian reform, the court must constantly remember that the statutory pilgrimage to 'destination social justice ' should be helped, and not hampered, by judicial interpretation.
For, the story of agrarian re distribution in Tamil Nadu, as elsewhere, has been tardy and zigzag, what with legislative delays, judicial stays and invalidations, followed by fresh constitutional amendments and new constitutional challenges and statutory constructions, holding up, for decades, urgent measures of rural economic justice which was part of the pledges of the Freedom struggle.
It is true that judges are constitutional invigilators and statutory interpreters; but they are also responsive and responsible to Part IV of the Constitution being one of the trinity of the nation 's appointed instrumentalities in the transformation of the socio economic order.
The judiciary in its sphere, shares the revolutionary purpose of the Constitutional order, and when called upon to decode social legislation must be animated by a goal oriented approach.
This is part of the dynamic of statutory intretation in the developing countries so that courts are not converted into rescue shelters for those who seek to defeat agrarian justice by cute transac 1124 tions of many manifestations now so similar in the country and illustrated by the several cases under appeal.
This caveat has become necessary because the judiciary is not a mere umpire, as some assume, but an activist catalyst in the constitutional scheme.
The Ceiling Act, in its structure and process, follows the common pattern.
The object is equitable distribution of land to the landless by relieving those who hold more than the optimum extent fixed by the law.
The success of the scheme depends on maximisation of surplus land to be taken over by the State from large landholders.
The strategy of fixing a severe ceiling on land holdings was expected to be paralysed by anticipatory strategems by landholders and so the legislature sought to outwit them and clamped down pre emptive restrictions on transfer whereby the surplus takeover would be sabotaged, Chapter II prescribes the ceiling on land holdings and Chapter III proscribes certain types of deleterious transfers and future acquisitions.
One such provision is section 22 which falls for immediate dissection.
The machinery for working out the scheme includes 'authorised officers ' defined in section 3(5) of the Ceiling Act.
The rest of the infrastructure for implementation of the statutory scheme is not material for our case nor the other chapters relating to compensation, exemptions and the like Chapter XI provides for appeals and revisions and the High Court, by virtue of section 83 read with section 115 of the Code of Civil Procedure, has jurisdiction to entertain revisions against orders of Land Tribunals which enjoy appellate powers over orders of authorised officers in the manner provided.
The present appeals are against a common order of the High Court allowing several revision petitions under section 115 C.P.C.
Now, the respondents before us in the several appeals are persons whose transfers have been held void by the authorised officer and the land Tribunal but upheld by the High Court on a narrow construction of section 22 of the Ceiling Act.
The alienations took many forms ranging from stridhana to bona fide sale but shared one common attribute that they were executed during the suspect spell, if one may say so, between the date of commencement of the Act and the notified date.
The legislature, in its realistic anxiety and pragmatic wisdom, demarcated a lethal zone viz., the period between the two dates stated above when all landholders with lands in excess of the ceiling would desperately salvage their surplus by resort to devices, some bona fide, some not, but all having the effect of frustrating the legislative objective of freezing holdings as on the date of commencement of the Act and seizing the surplus in terms cf the Act for eventual equitable distribution, after payment of statutory compensation.
1125 Before embarking on any further discussion of the project of interdicting transfers, as spelt out in section 22, we may read the provision: "Where on or after tho date of commencement of this Act, but before the notified date, any person has transferred any land held by him by sale, gift (other than gift made in contemplation of death), exchange, surrender, settlement or in any other manner except by request or, has effected a partition of his holding or part thereof, the Authorised officer within whose jurisdiction such land, holding of the major part thereof is situated may, after notice to such person and other persons affected by such transfer on partition and after such enquiry as he thinks fit to make declare the transfer or partition to be void if he finds that the transfer or the partition as the case may be, defeats any of the provisions of this Act.
" Three semantic alternatives compete for judicial acceptance.
The first, which appealed to the Land Tribunal is that all alienations during the dubious period specificated in section 22, if executed by a holder who, but for such shedding operation or alienation, would have had lands in excess of the ceiling prescribed by the Act, are void because they are sure to defeat the 'surplus ' provisions of the Act.
The second alternative, which swings to the other extreme but has met with the High Court 's approval, virtually salvages all such transfers save sham and mala fide ones, for only if they are obnoxious in that sense can they be caught in the coils of section 22.
The third possible construction, which is in between the two extremes and has been forcefully pressed before us by Shri K. section Ramamurthy, validates bona fide transfers even during the offending period, the reason being that regardless of their impact on the scheme of the Act or its provisions, the primary object is bona fide fulfilment of the alienor 's purposes such as discharge of pressing debts or borrowing to perform necessitous obligations and not to defeat or thwart the purposes or provisions of the Act.
The judicial choice from among these triple possibles depends on the rules of statutory interpretation.
In the present case the basic facts are beyond dispute.
The legislature had a defined plan of providing for a ceiling on land holding, taking over the balance and distributing it among the landless according to priorities.
In this perspective it defined the "date of the commencement of this Act in section 3(11) as meaning the 15th day of February, 1970.
It also defined in section 3(31) the notified date.
As stated earlier, the Ceiling Act had 1126 a chequered career in court and, indeed, at one stage the whole Act was struck down as unconstitutional.
However, now it is immune to attack having been included in the Ninth Schedule and there is no challenge to its vires before, us.
On account of extensive mischief done by alienations on a considerable scale calculated to undo the public policy behind agrarian reform the legislature felt the necessity to provide in section 22 that transfers made between 6 4 1960 and 2 10 1962 would be void if they defeated the provisions of the Act.
In all the cases before us the transfers which have been ignored by the Authorised officer fall within this interregnum.
That being admitted, the only question is whether the lethal effect of section 22 operates only in the case of transfers which are sham and specifically intended to defeat the Act or does not affect transfers which are otherwise bona fide or is so pervasive that if the effect of the transfer is to defeat the provisions of the Act, whatever the intent of the parties, the transfer is void and can be ignored vis a vis the Ceiling Act and the Authorised officer may legitimately proceed to compute the surplus area on this basis.
The learned judge adverted to an argument that the Act being a confiscatory one, the public authority "invested with the power to enquire into and to invalidate a transfer should act reasonably, and that such a power should be construed beneficently in favour of the subject who is affected by the statue (emphasis added).
This approach, sanctified by tradition and vintage jurisprudence, is inept and inapplicable when we consider agrarian reform legislation whose avowed purpose is to take away as much extent of land as policy dictates so that distribution thereof among the landless may be achieved.
When a whole legislation is geared to deprivation of property, subject to payment of compensation, rules which have frowned upon confiscatory legislation cannot apply at all.
We are concerned with a Re public created by the people of India, with a social transformation where the State is hot antagonistic to the citizen but harmonises individual interest with community good.
The jurisprudential principles in such a situation cannot be the same as have been inherited from a culture which postulates the State versus the subject.
We do not explore the aspect of the law further as we are satisfied that the answer to the specific question raised before us flows directly from a reading of the Section in the light of well established rules of interpretation.
Section 7 is a key provision and runs as follows: "on and from the date of commencement of this Act, no person shall, except as otherwise provided in this Act but 1127 subject to the provisions of Chapter VIII be entitled to hold land in excess of the ceiling area; Provided that in calculating the total of land held by any person, any extent in excess of the ceiling area and not exceeding half an acre in the case of wet land and one acre in the case of dry land shall, irrespective of the assessment of such land, be excluded.
" Section 8 directs every person who holds land in excess of 30 standard acres to submit a return with specified particulars.
Section 18 is the culmination and provides for the publication of a notification to the effect.
that the surplus land with each landholder is required for a public purpose.
Thereupon such land shall be deemed to have been acquired for a public purpose and shall vest in the Government.
Chapter III is a protective armour created by the statute with prohibitions and proscriptions.
In particular, section 22, which we have quoted earlier, contains an interdict.
If any transfer, contrary to its tenor, is created it can be voided by the Authorised officer.
The whole purpose is to make available land with Government for its equitable dispensation according to the statutory plan.
Section 94 is relevant in this context.
6 4 1960 is the date of commencement of the Act.
2 10 62 is the notified date.
Transfers in between these two dates have been executed by the respondents in the various appeals before us.
The concrete question is wether section 22 has the effect of rendering such transfers invalid ipso facto or whether there is need for further proof that such transfers are "sham, nominal and bogus".
The view taken by the High Court is that: " .
Section 22 seems to cover only those sham, nominal and bogus transfers which are only intended to defeat the provisions of the Act.
If the Legislative intention is also to invalidate all bona fide transactions during the relevant period, it would have made certain consequential provisions as to what are the rights of the transferor and the transferee in relation to the property conveyed, and how the resultant equities between the transferee and the transferor have to be worked out.
This view that section 22 will cover only transactions of sham, nominal and bogus character which are intended only to defeat the provisions of the Act will not be inconsistent with the object provided in section 7." 1128 The learned judge seems to take a liberal view that transactions entered into in anticipation of the Ceiling Act will not be hit by the provisions preventing such transfers except where they are mala fide or oolourable.
The reason partly turns on semantics and the court argue with logical support: "The word "defeat" normally means overcome, thwart, evade, frustrate, circumvent, bypass, disappoint, prevent, the accomplishment of the word "defeat" in Section 22 is one to be taken as having been used to import sinister, motive.
I Maxwell on the interpretation of statutes, twelfth edition, after stating that the Courts will not be astute to narrow the language of a statute so as to allow persons within its purview to escape its net, that the statute has to be applied to the substance rather than the mere from of transactions thus _ defeating any shifts and contrivances which parties may have devised in the hope of falling outside the Act.
" The conclusion categorically reached by the High Court virtually emasculates section 22 as we understand its object and import.
The learned judge winds up with these words: "on a due consideration of the matter, I hold that under section 22 of the Act the authorised officer is entitled to declare as void only those transfers which are sham and nominal entered into with the avowed object of defeating the provisions of the Act, without any bona fide intention to transfer title.
So in the light of the view expressed above the facts of each case have to be considered.
" Section 22, literally read leads only to one conclusion, that any transfer, bona fide executed or not, is liable to be declared void by the Authorised Officer "if he finds that the transfer defeats any of the provisions of this Act.
" There is not the slightest doubt that severally and cumulatively the provisions of the Act seek to make available the maximum extent of land, in excess of the ceiling, to be vested in Government for fulfilment of its purposes.
Chapter II contains a fasciculus of provisions in this behalf and if any transfer carves out of the surplus area some land, pro tanto, the provisions of the Act are defeated.
Indeed, it is not seriously disputed that such will be the conclusion if we do not read into the provisions either the condition that it does not apply to bona fide transfers, as Shri Ramamurthy would have it, or does not apply to any transfers other than sham, nominal or bogus transfers, as the High Court would have it.
A policy oriented interpretation tallies with the literal construction in the 1129 present case.
The mischief rule in Heydon 's case and the grammatical construction which is the Golden Rule converge to the same conclusion in the present case.
The policy of the law of land reform with drastic limit on holdings often drives large holders to evade by manouvres.
They make r .
gifts, execute sales or settlements, enter into other dealings to save their properties from being taken by the State.
May be in a few cases, the owner has real necessity.
But why sell only on The eve of land legislation? Why execute deeds, though for good purposes, only where the bill fixing ceilings is round the corner? By and large, the strategies of extrication of holdings from the arm of the law is the t reason that prompts sudden affection for making gifts, sudden realisation of debts due and sudden awareness of family necessity.
The legislature, astute enough not to be outwitted in its objective, puts a blanket ban on transfers which, in effect, defeat its provisions.
This may cause hardship to some but every cause claims martyrs.
Individual trauma is inevitable while ushering in a new economic order.
This is the rationale of section 22 of the Ceiling Act.
To alloy the sense of the text and to mi alien concepts is to debase the statutory metal.
Likewise, laws are not value free and so he reads the symbols of words best who projects in the process the values of the legislation as distinguished from his own.
Reading other values into the legislators ' words may judicially demonetize the statute and break me comity between constitutional instrumentalities.
The current and correct view of the interpretative process is that words must be given their 'literal ' or 'ordinary ' meaning unless there are compelling reasons, recognised by canons of construction, to the contrary.
It must be remembered that the judicial rule of law for interpreting statutes applies the grammatical approach, thereby to bring out the value judgment incorporated in the statute itself.
Some times it is called the 'equity of the statute '.
As Prof. R. B. Stevens of the Yale University has pointed out: "Whenever the judges support to depart from the literal or ordinary meaning, and apply the mischief rule or the golden rule, there is danger that in place of those irrelevant criteria, the canons of construction, they have more obviously substituted their own (perhaps more harmful) impressions, views, prejudices or predispositions.
Such conflicts between what Parliament intended and what the judges assumed Parliament to have intended have long been appreciated.
"(1) (I) Modern Law Review, Vol.
28,1965 p 525 16 409 SCI/79 1130 Those who have reflected on the meaning of meaning have said that words. "mean" nothing by themselves. (1).
They convey policy and the judge who interprets must seek the intent of the legislature by gaining an insight into this policy and making it manifest through the process of construction.
Looking at the words of section 22 in the light of the scheme, of prohibition of transfers to preserve the surplus lands for distribution, we find no justification for importing into section 22 more than its words convey.
The Section says what it means, nothing more, nothing else.
A simple scan of the provision reveals that any transfer, gift, surrender, settlement or other alienation referred to in the Section may be declared void by the Authorised officer "if he finds that the transfer or the partition. defeats any of the provisions of this Act.".
The trichotomy is obvious.
There must be a transfer or other alienation.
It must have taken place during the period mentioned in the Section.
It must have the effect of defeating any of the provisions, of the Act.
If these three elements are present, the Authorised officer must void the transfer.
There is no room for importing a fourth principal that the transfer should be 'sham, nominal or bogus '.
Nor indeed is there any additional consideration that if the transfer is bona, fide for family necessity or other urgency then it is good, even though it defeats the provisions of the Act.
We cannot amend the Section or dilute its imperatives, scared by the consequences or moved by extraneous sympathies.
Sub conscious forces and individual prepossessions have a subtle way of entering the interpretative verdict of the judge.
We have to be constantly careful to exclude such intrusions.
Moreover, when the whole purpose of the Section is, to prevent any alienation which defeats any of the purpose if visions of the Act, it is impermissible to introduce any requirement, other than is mentioned in the Section, as a condition for its operation.
Obviously, the provision seeks to provide social justice for the landless and it defeats the purpose if, by the interpretative process, soft Justice to large landholders is brought about.
We consider the 'literal ' meaning of the Section to be that any transfer or other alienation mentioned in the Section which reduces or impairs the otherwise available extent of surplus land beyond the ceiling "defeats. the provisions of this Act.
" This is the plain meaning of the Section which gives no room for doubt or justification for importation of any further condition like sham, bogus etc.
A return to the rules of strict construction, when the purpose of (I) C. Ogden and I. Richards, The Meaning of Meaning 9 (10th Edn. 1956) 1131 the statute needs it, is desirable, especially with a view to give effect A to the intention of the legislature.
We are reminded of Lord Denning 's interesting remarks in his recent book "The Discipline of Law" under heading "I am a Portia Man".
In justification of his view Russell LJ quoted a passage from Shakespeare.
It is worth recording because there are lessons to be drawn from it as there often are from Shakes peare. 'I may perhaps be forgiven for saying that it appears to me that Lord Denning MR has acceded to the appeal of Bessanio in the Merchant of Venice.
Bessanio "And, I beseech you, Wrest once the law to your authority: To do a great right, do a little wrong.
But Portia retorted: "It must not be; there is no power in Venice Can alter a decree established: It will be recorded for a precedent, And many an error, by the same example, Will rush into the State: it cannot be." Then said Russell LJ. 'I am a Portia man '.
I cannot believe that Russell LJ would be a 'Portia man ' if it meant aligning himself with Shylock in support of a strict law of penalties which could not be relieved by equity.
To be truly a 'Portia marl ' The lawyer should follow the way ill which Portia avoided an unjust decree.
Not to let the words of the deed be the masters: but so construe them adapt them as the occasion demands so as to do what justice and equity require.
This is how she turned the tables on Shylock: It is in this denouement that I would follow the example of Portia I too am a Portia man In the interpretation of section 22 we too are Portia men.
For this reason we reverse the view of the High Court that section 22 will not apply to nullify any transaction of transfer or partition unless it is further 1132 shown that it is sham, nominal or bogus.
Nor do we agree with Shri Ramamurthy that even if a Transaction defeats the ceiling provisions, it may still be valid if the transfer is, from an individual point of view, bona fide.
The short reply is that from the community 's angle, especially the landless community 's angle hungering for allotment, the alienation, however necessary for the individual, is not bona fide visa vis the community.
Therefore, we allow the appeal in the light of the interpretation we have adopted, restore the tribunal 's holding and rule that if any transfer defeats the provisions of the Act by reducing the extent of surplus land in excess of the ceiling available from any person such transaction bona fide or not, is void in the matter of computation of the permissible area and the surplus area.
May be, that the transaction may be good for other purposes or may not be.
The Authorised officer is within his power if he ignores it as void for purposes of section 22, section 7 and other ceiling related provisions.
The detailed discussion of the High Court on many other aspects of the Act do not affect the core of the matter and cannot deflect us from the conclusion we have arrived at.
The appeals are allowed but in the light of the earlier direction of the Court the State will pay the costs of the respondent.
P.B.R. Appeal allowed.
[/INST]A suit (No. 1262/53) Challenging the notification under Section 4 of the Land Acquisition Act dated 10 10 1952 issued by the former Government of Bombay and later another notification under Section 6 of the Act dated 14 8 1953 (issued during the pendency of the suit), notifying that the final plots Nos. 41.
42 and 43 were required for public purpose viz. State Transport was dismissed by the Trial Court on 28 1 1959.
The first and the second appeals having failed, the respondents came up to this Court.
This Court in its decision inter partes, Valji Bhai 's case struck down Section 6 notification on the ground that the acquisition being for the benefit of a Corporation, though for a public purpose was bad beeause no part of the compensation was to come out of the public revenue and the provisions of Part VII of the Act had not been complied with.
After the bifurcation of the erstwhile State of Bombay, the land acquisition proceedings came within the cognizance of Gujarat State.
The State by its letter dated 22 8 1966 decided to contribute towards compensation a sum of Re. 1/ which was subsequently raised to Rs. 500/ .
The Government felt that as long time has elapsed since the earlier report under Section 5A was submitted by the Collector, a fresh enquiry should be made.
Accordingly the Additional Special Land Acquisition Officer issued a notice dated 1 8 1966 intimating to the respondents that if they so desired they might submit their further objections on or before 16 8 1966.
Complying with this notice, the respondents submitted further objections on 31 8 1966 and they were also given a personal hearing.
After examining the enquiry report submitted by the enquiry officer the Government of Gujarat issued a notification under Section 6 on 10 10 1967.
The respondents questioned the validity and legality of this notification in the writ petition filed by them on 14 2 1968 on the only ground that it was issued more than 15 years after the date of Section 4 notification.
The High Court was of the opinion that if the power to make a declaration under Section 906 6 is exercised after an unreasonable delay from the date on which notification under Section 4 is issued such exercise of power would be invalid and it accordingly struck down the notification under Section 6 of the Act.
Hence the two appeals one by the State of Gujarat and the other by the Gujarat State Road Transport Corporation.
Allowing the appeals by certificate, the Court ^ HELD: 1.
The impugned section 6 notification was issued within the prescribed period introduced by the 1967 Amendment Act and, therefore could not be struck down on the only ground that the power to issue second section 6 notification was exercised after an unreasonable and unexplained delay.
Section 6 notification, dated 10th october 1967, therefore is valid and legal.[918G H, 919A] 2.
A combined reading of the provisions contained in sub section (2) of Section 4 with the one contained in the proviso to sub section (1) of Section 6 introduced by the Land Acquisition (Amendment and Validation) Act, (Central Act 13 of 1967) with effect from 20 1 1967 would make it clear that the Government would be precluded from making a declaration under section 6 after the expiry of a period of three years from the date of issue of a notification under Section 4 which may be issued after the Amendment Act came into force.
And in respect of those section 4 notifications which were issued prior to the commencement of the Ordinance i.e. 20 1 1967, any notification which is required to be issued under section 6 must be made within a period of two years whereafter as a necessary corollary all section 4 notifications issued prior to 20th January 1967 would stand exhausted and would not provide either a source of reservoir for issuing section 6 notification.
Consequently the mischief sought to be set at naught by the High Court by reading by necessary implication in the scheme of sections 4, 5A, and 6 the concept of exercise of statutory power within a reasonable time has been statutorily remedied.
The apprehensions of the High Court that if not checkmated by implying that such statutory power must be exercised within a reasonable time to curb arbitrary exercise of power to the detriment of a citizen have been taken note of by the legislature and fully met.
Absence of any decided case on the subject of which High Court took note could not permit an inference as has been done by the High Court that in the absence of a decided case the legislature would not remedy the possible mischief.
Legislature often does take note of a possible abuse of power by the executive and proceed to nip it in the bud by appropriate legislation and that has been done in this case.
There is now no more possibility of a gap of more than three years from the date on which section 4 notification is issued, otherwise it would be invalid as being beyond the prescribed period.
[916 G H, 917 A D] In the instant case, the notifications under section 4 was prior to the commeneement of the ordinance.
Therefore, the provision contained in sub section (2) of section 4 of the 1967 Amendment Act would be directly attracted.
The Government could, therefore, make a declaration within a period of two years from 20th January 1967.
The Government has in fact issued the impugned notification under section 6 on 10th October 1967 i.e. within the period prescribed by the Statute.
[917 E F] 907 3.When a period is prescuibed for exercise of power it manifests the legislative intention that the authority exercising the power within the prescribed time could not at least be accused of inaction or dithering and, therefore, such exercise of power could not be said to be bad or invalid on the only ground that there was unreasonable delay in the exercise of the power.
The very prescription of time inheres a belief that the nature and quantum of power and the manner in which it is to be exercised would consume at least that much time which the statute prescribes as reasonable and, therefore, exercise of power within the time could not be negatived on the only ground of unreasonable delay.
[917H, 918 A B] Therefore, in this case, there was no unreasonable delay in exercise of power and hence the exercise was neither bad nor invalid.
[918B] 4.
Once the legislature stepped in and prescribed a sort of limitation within which power to issue notification under section 6 could be exercised, it was not necessary to go in search of a further fetter on the power of the Government by raising the implication.
[918F G] In this case, the High Court by implication read a fetter on the power of the Government to issue section 6 notification within a reasonable time after the issue of section 4 notification after observing that there was no express provision that such power ought to be exercised within a reasonable time.
In raising this impliccation the High Court took into account the postulate that every statutory power must be exercised reasonably and a reasonable exercise of power implies its exercise within a reasonable time.
Coupled with it two other factors were taken into consideration such as the effect of issuing a section 4 notification on the rights and obligations of the owner of the land whose land is proposed to be acquured; the right of the Government to unilaterally cancel section 4 notification in the event of fall in prices; history of legislation; and delayed issue of section 6 notification would deny adequate compensation to the owner.
But by the time the High Court examined this matter the legislature had already introduced a provision by which the power to issue section 6 notification was to be exercised within the prescribed period of time.
At that stage there hardly arose a question of a search of the fetter on the power of the Government ignoring to some extent the express statutory provision.
[918C F] 5.
In the case of death of a party to a proceeding who is joined in his capacity as Karta of an undivided Hnndu family, if the undivided Hindu family continues to be in existence the succeeding Karta can be substituted for the deceased Karta of the family and that would be sufficient compliance with Order XXII Rule 4 of C.P.C. [911D E] In the insant case an application made under Order XXII Rules 10 C.P.C. made after the prescribed period of limitation and in order to avoid seeking condonation of delay for setting aside abatement is not correct.
[911E] [The Court, however, overruled the objection on this ground since the L.rs.
have already been substituted].
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<s>[INST] Summarize the judgement94 of 1955.
Petition under article 32 of the Constitution of India for the enforcement of Fundamental Rights.
643 Bishan Narain, Rameshwarnath, section N. Andley and P. L. Vohra, for the petitioner.
H. N. Sanyal, Additional Solicitor General of India, N. section Bindra and P. D. Menon, for the col respondents.
August 20.
The Judgment of the Court was delivered by HIDAYATULLAH, J.
This is a petition under article 32 of the Constitution challenging the imposition of Excise Duty on the petitioner by virtue of item No. 17 "Footwear" of the First Schedule to the (1 of 1944) with effect from February 28, 1954, and the calculation of the duty advaloram by including in the price, charges for freight, packing and distribution.
The petitioner, the British India corporation Ltd. is a public limited company which was formed to take over other companies and to amalgamate them.
Among the companies which the petitioner took over were Cooper Allan & Company Ltd., and the North West Tannery Company Ltd., b )that Kanpur.
These two Companies manufature shoes and other leather goods and operate as a single unit manufacturing the well known brand of "F L E X" shoes.
As a result of the financial proposals of the Central Government for the financial year 1952 55, a bill (No. 9 of 1954) was introduced in parliament on February 27,1954.
Under el. 8 of the Bill foot wear were proposed to be taxed at 10% advaloram if produced in any factory as defined in the factories Act, 1948 (63 of 1948).
When the Finance Act, 1954 (17 of 1954) was enacted, the Central Excises and Salt Act, 1954, was amended by the inclusion of item 17 in the Schedule, though in a slightly different form.
The item as finally enacted read as follows: 644 "17.
FOOTWEAR, produced in any factory including the precints thereof whereon fifty or more workers are working or were working on any day, of the preceding twelve months, and in any part of which manufacturing process is being carried on with the aid of power or is ordinarily so carried on, the total equivalent of such power exceeding two horse power.
"Footwear" includes all varieties of footwear,whether known boots shoes, sandals, chappals, or by any other name." {Ten percent "advalorem"} Under the provisions of the , (XVIof 1931), the duty was leviable from February 28, 1954, by virtue of a declaration in the Bill to that effect.
On the preceding day the Superintendent of Central Excise., Kanpur, deputed an Inspector of his department to obtain from the petitioner a declaration of all stock of footwear and requested that the Inspector be permitted to verify the stocks with a view to levying the Excise Duty on and from February 28, 1954.
As a ' result of the position of Excise Duty on footwear the petitioner was required to pay during the remaining ten months of 1954 a sum of RE;.
9,47,630/ as Excise Duty.
The petitioner produces in the two units above named, footwear for sale to the public and for supplies to the Government for the use of the Army and the Police.
The petitioner contends that though the Excise Duty paid by it was capable of being passed on to the consumer, it could not include it in the price at which shoes were sold to the public because of heavy competition by those free from such duty , though it did include the Excise Duty in the price of the footwear supplied to Government.
Thus Rs. 2 lacs odd were passed on to Government but Rs. 7 lacs odd were born 645 by the Company itself.
The petitioner contended before the Collector of Central Excise, Allahabad, that the calculation of the duty advalorem should not be, based on price including freight, packing and distribution charges paid to it, by its distributors in the outlying parts of India.
This contention of the petitioner was not accepted by the Collector.
The petitioner then took an appeal to the Central Board of Revenue but before the appeal could be disposed of, the petitioner filed this petition under Art, 32 of the Constitution praying for writ or writs to quash the order of the Collector of Central Excise, Allahabad, and writ or writs to prohibit Union Government.
The Central Board of Revenue and the Collector and Superintendent of Central Excise from enforcing the provisions of item 17 against petitioner and collecting the Excise Duty therein levied.
According to the petitioner, a distinction has been made in Item 17 above quoted between manufacturers of footwear employing more than 50 workers .or carrying on the manufacturing process with the aid of power exceeding 2 H.P. and other manufacturers.
According to the petitioner this amounts to discrimination because there is no reasonable basis for differentiating between manufacturers on the basis of number of workers or the employment of power above 2 H.P.
The petitioner contends that the essentials of the manufacture of footwear are the same whether one employs 50 or more workers or less.
The larger number of workers is merely needed because the out turn has to be greater but the number does not change the nature of the operations or the method of production.
Similarly, the need for than 2 H.P. arises if a larger number of mechanical units have to be worked and there is no essential difference between a large manufacturer 646 and a small manufacturer by reason of the employment of more power or less.
It is, therefore, contended that the imposition of Excise Duty on bigger manufacturers creates a discrimination in the trade which is neither just nor discernible and amounts to a violation of article 14 of the Constitution.
The levy of the Excise Duty in such circumstances is said to be both illegal and unconstitutional.
As a corrolary to this it is contended that the petitioner, which was already carrying on its business at a loss in view of the competition, is now further handicapped by having to bear a heavy Excise Duty which it cannot pass on to the consumer due to competition by those not paying the duty and is likely to go out of its business and that the levy of the Excise Duty in these circumstances amounts to a breach also of Art . 19 (1) (f) and (g) and 31 of the Constitution.
It is further contended that the duty advalorem ought to be calculated on the ex factory price and not on the price charged to the distributors which includes within itself the cost of packing and charges for freight and distribution commission.
It is contended that this is an error apparent on the face of the order of the Collector of Excise and the order deserves to be quashed by the issue of ' writ of certiorari or other appropriate writ.
Lastly, it is contended that the Finance Act, 1954 received the assent of the president on April 27, 1954, and must be deemed to have become law ,from that date.
The collection of Excise Duty from March, 1954, before the Finance Bill became law, is said to be illegal.
We shall deal only brie fly with these arguments as most of them have by now been considered and decided in other cases of this Court.
647 The contention that this duty does not amount to a duty of excise because it cannot be passed on by the petitioner to the consumer was not raised before us.
It was mentioned in the petition.
An Excise Duty is a duty on production and though according to the economists, it is an indirect tax capable of being passed on to the consumer as part of the price yet the mere passing on of the duty is not its essential Even if borne.
by the producer characteristic.
or manufacturer it does not cease to be a duty of excise.
The nature of such a duty was explained in the very first case of the Federal Court and subsequently in others of the Federal Court, the Privy Council and this Court, but this ground continues to be taken and we are surprised that it was raised again.
The contentions that the duty could not be collected before the passing of the Finance Act, 1954, has been the subject of an elaborate discussion in the recently decided case of this Court, M/s. Chotabhai Jethabhai Patel and Co. vs Union of India (1).
It is conceded that in view of the above decision the point is no longer open.
It is also conceded that the question whether in calculating the duty advalorem, the Collector of Excise was justified in including in the price the cost of packing, charges for freight and commission for distribution, or not, is a matter for the decision of the authorities constituted under the Act subject to such appeals and revisions as might lie but not a matter for consideration directly under article 32 of the constitution, in view of the recent decision of this Court in Smt.
Ujjam Bai vs State of U.P. (Civil Misc.
Petition No. 79 of 1959) decided on April 10, 1962.
It may be pointed out that the present petition was filed at a time when the appeal before the (1) (1962) Supp. 2 S.C.R. 1.
648 Board of Revenue was pending and there was a further right of revision to the Central Government.
This leaves over for consideration true challenge under article 14, 19 and 31 of the constitution.
The argument under each of these Articles is based on precisely the same facts viewed from different angles.
It is.
contended that there is a discrimination between big manufacturers of footwear and small manufacturers which is not based on any differential.
This discrimination, it is said, leads to the imposition of a heavy tax on the big manufacturers with a corresponding exemption in favour of the small manufacturers giving rise to a competition sufficient to put the big manufacturers out of the market.
The tax being illegal the levy amounts to a confiscation of the property of the petitioner.
It will thus be seen that the imposition of the duty is first challenged article 14 as a discrimination, next it is challenged under Article 19 as a deprivation of the right to acquire, hold and dispose of property or to carry on a business or trade and lastly the collection 'of duty is characterised as a confiscation of property without the authority of law under article 31.
The argument suffers from a fundamental fallacy in that it assumes that there can be no classification of manufacturers on the basis of the number of workers or the employment of power above a particular horse power.
Manufacturers who employ 50 or more workers can be said to form a well defined class.
Manufacturers whose manufacturing process is being carried on with the aid of power exceeding 2 H.P. are also a well defined class.
Legislation of this type depending upon the number of workers or the extent of power employed, is frequently to be found.
The most obvious example is the Factories Act which defines a factory with reference to the employment of a certain number of 649 workers or the employment of power.
The contention that size makes no difference is not valid.
It is well known that the bigger manufacturers are able to effect economics in their manufacturing process and their out turn being both large and rapid they are able to undersell am all manufacturers.
If this were not so mass production would lose all its advantages.
No doubt the manufacturers are now required to bear burdens which previously did not exist, like bonus, expenses on labour welfare etc.
but still the manufacturers, provided the business is well ran, can by mass production offer the same commodity at a competitive price as against small ' manufacturers and bear the burden as well.
Therefore, in imposing the Excise Duty, there was a definite desire to make an exemption in favour of the small manufacturer who is unable to pay the duty as easily, if at all, as the big manufacturer.
Such a classification in the interests of co operative societies, cottage industries and small manufacturers has often to be made to give an Impetus to them and save them from annihilation in competition with large industry.
It has never been successfully assailed on the ground of discrimination.
Recently, this Court in the Orient Weaving Mills (P) Ltd. vs The Union of India(1) considered a similar argument in relation to an exemption granted to societies working a few looms on co operative basis as against big companies working hundreds of looms.
exemption was held to be constitutional and the classification of co operative societies was held to be reasonable.
A similar consideration applies in the present case, where the exemption operates in respect of very small manufacturers employing not more than 50 workers and carrying on their manufacturing process with power not in excess of 2 H.P. This affords a protection to small concerns who, if they were made to pay the duty, would have to go out of business.
(1) (1962) Supp.
3 S.C.R. 481.
650 In our judgment the Schedule which is characterised as discriminative is based upon a reasonable classification and is validly enacted.
If the law is held to be valid the attack under articles 19 and 31 must also fail.
In view of what we have said above the petition must fail.
It will be dismissed with costs.
Petition dismissed.
[/INST]Under item No.17 of the Schedule to the , excise duty was levied on footwear produced in any factory employing 50 or more workmen and using power exceeding 2 H.P.
The petitioner contended that the imposition of duty on larger manufacturers only was dis criminatory and there was no reasonable basis for differentiating between manufacturers on the basis of number of workers or the employment of power above 2 H.P. and that the im. position of the heavy duty gave rise to a competition sufficient to put the big manufacturers out of business.
Held, that item 17 of the Schedule is based upon a reasonable classification and is validly enacted.
Manufacturers who employed 50 or more workers form a well defined class, so also manufacturers who.
use power exceeding 2 H.P.
In imposing the excise duty there is a definite desire to make an exemption in favoui of the small manufacturer who is unable to pay the duty as easily, if at all, as the big manufacturer, Such a classification in the interests of co operative societies cottage industries and small 'manufacturers has often the made to give an impetus to them and save them from annihilation in competition with large industry.
Orient Weaving Mills (P) Ltd. vs Union of India, (1962) Supp.
3 S.C.R .
481 referred to.
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<s>[INST] Summarize the judgementAppeal No. 105 of 1952.
Appeal from the Judgment and Decree dated the 16th September, 1949, of the High Court of Judicature at Madras (Subba Rao and Chandra Reddi JJ.) in Appeal No. 162 of 1946 arising out of Judgment and Decree dated the 30th November 1945 of the Court of the Subordinate Judge of Tanjore in Original Suit No. 34 of 1945.
section Ramachandra Iyer, for the appellant.
T. R. Srinivasan, for the respondents.
February 27.
The Judgment of the Court was delivered by MAHAJAN J.
One Thangathammal who was a dasi (dancing girl) lived in the Tanjore district in Madras State and died possessed of some properties.
She left her surviving three daughters, Saraswathi, Jagadambal and Meenambal.
Jagadambal filed the suit out of which 941 this appeal arises against her sisters for partition of the movable and immovable properties set out in the plaint and for allotment of a third share to her therein.
She alleged that her mother was married to one Thyagaraja Pillai, that the properties in suit were the stridhanam properties of her mother who died intestate on 26th July, 1943, and that according to the law or custom of the community to which the parties belonged she and her sisters were entitled to share equally the properties of her mother.
Saraswathi Ammal, the 1st defendant contested the suit.
She pleaded that her mother was not a married woman but a dasi who followed her hereditary occupation and was attached to Shri Saranatha Perumal temple at Tiruchurai in the Tanjore district, that of the three daughters the plaintiff and the 2nd defendant married and lived with their husbands, while she (1st defendant) was duly initiated as a dasi in the said temple and remained unmarried and that according to the law and custom of the community, the mother 's property devolved solely on her to the exclusion of the plaintiff and the 2nd defendant.
The 2nd defendant supported the 1st defendant 's case.
The material issue in the suit was issue No. 1 which was in these terms: " Who is the proper heir of Thangathammal.
Whether according to custom as set tip by the plaintiff, all the daughters are heirs, or according to the custom put forward by the 1st defendant, the unmarried daughters alone are entitled to inherit." The Subordinate Judge dismissed the suit holding that Thangathammal was a dasi and not a married woman, that according to the custom of the dasi community in South India, a dasi daughter is regarded as a nearer heir to the mother than a married daughter and that the 1st defendant was entitled to remain in possession of the suit properties.
Against this decision an appeal was taken to the High Court.
The High Court reversed the decree of the Subordinate Judge and held that the custom pleaded by the 1st defendant 942 was not proved and that the rule of propinquity of Hindu law as a rule of justice, equity and good conscience, governed the succession and the married and dasi daughters were equally entitled to the inheritance.
It was further held that a dasi daughter was not in the status of a maiden or unmarried daughter for purposes of succession to stridhanam property.
Leave to appeal to the Supreme Court was granted under article 133 of the Constitution.
After bearing the learned counsel for the appellant, we feel no hesitation in concurring with the decision of the High Court.
It was contended that the High Court was in error in holding that the custom set up by the defendant was not proved.
To prove the custom that a dasi daughter was a preferential heir and excluded her married sisters reliance was placed on, the evidence of some members of the community and reference was also made to certain instancese same kind of evidence was led by the plaintiff support of her case.
The evidence of both the parties on the the issue of custom is of an unsatisfactory and inconclusive character and from it no inference can be drawn of the existence of a uniform, certain and ancient custom prevailing in the community on this point.
Out of the defendant 's witnesses, the first witness, Rajagopal Pillai, deposed that his wife was the daughter of dasi Kamakshi who had six daughters of whom three were married and three were dasis, that on Kamakshi 's death, her dasi daughters alone would take the inheritance and that his wife, would be excluded.
This statement does not hurt him in any way as his wife will not be bound by what be might state.
His bald assertion about the custom in the community is not of much value.
He does not disclose any source of his information.
In cross examination he admitted that he did not know a single specific instance where such a custom was enforced .
The second witness on the point is the first defendant.
She stated that one Tulasi 's sister Mangalam got no share in her mother Ammani 's properties.
In cross examination it was admitted that Mangalam died about fort years ago, 943 i.e., some time before the defendant was born.
She could therefore have no personal knowledge about Ammani 's instance.
No written record of that inheritance is forthcoming.
Mangalams son Govindaswami Pillai appeared as D. W. 3.
He deposed that Mangalam 's mother Ammani had divided her properties between her dasi daughters in her lifetime.
The instance therefore is not an instance concerning succession and cannot be treated as relevant in this enquiry.
The 1st defendant further deposed to an instance in Srirangam when succession opened out on the death of dasi Chellappa.
It was said that her property was taken by her dasi daughter Visalakshi to the exclusion of her married daughters Marakatham and Rukmini and that the assets were worth a lakh of rupees.
One would have expected some written documents about that sucession if it took place in the manner deposed to.
In the absence of any evidence from the descendants of Chellappa and in the absence of any documentary evidence regarding that succession it is difficult to place any reliance on this so called instance.
Defendant No. I stated that her knowledge of it was only from hearsay, and the requirements of section 32 of the Evidence Act not being fulfilled, her evidence on this point cannot be treated as admissible.
The third witness, about whom reference has already been made, apart from deposing as to Mangalam 's instance also deposed about the instance of dasi Meenakshi.
Her daughter Jeevaratnam is married to the witness.
He said that Meenakshi 's dasi daughters inherited her property and that his wife was excluded.
The only property alleged to belong to Meenakshi was a house, the value of which is not known.
The succession is said to have occurred over twenty years ago.
None of the daughters of Meenakshi have been examined as witnesses in the case, to enable the court to find out the details about it and merely on the statement of this witness the instance cannot be held proved.
The fourth witness for the defendant is her non contesting sister.
She said nothing on the on the question of custom.
She, however, stated 944 that she was not entitled to a share in the assets of her mother.
When asked why she was making that statement, she said that she was saying so because her husband and some.
elders (whose names were.
not disclosed) had told her so.
Evidence of this character on the question of custom cannot be seriously considered.
Venugopal Pillai is the fifth,witness for the defendant.
He is the husband of the second defendant.
His evidence regarding the instance of Chellappa is purely, hearsay.
He deposed that he had learnt that a dasi 's married daughter is not entitled to claim a share as she is not her heir in the presence of a dasi daughter and therfore he told his wife not to claim a share.
He did not disclose the source of his information.
Janaki Ammal, the sixth witness, is a dasi.
She deposed that she has five daughters of whom two are married, one is a dasi and the other two are young girls and that according to their caste custom her properties on her death would devolve on her dasi daughters and that the married daughters must remain content with the presents given at their marriage.
In cross examination she admitted that she was deposing about the caste custom not from any specific instance in which the custom was observed but at the request of the defendant, and that she bad heard of this custom from her elders whose names she did not disclose.
She further admitted that she had an uncle living but she did not even ask him about the custom.
The witness, it appears, knows nothing about the custom and is giving evidence in order to oblige the defendant.
The next witness 'Who gave evidence on the issue is D. W. 8, Kamalathammal, a dasi.
Her mother was also a dasi.
She deposed that her mother 's properties were divided between her and her other dasi sister and Amba, her third sister, who was married, was not given a share.
In cross examination she admitted that Amba never asked for a share.
Neither was Amba produced, nor any written munici pal records showing that the witness actually inherited the property of her mother to the exclusion of Amba.
It is difficult to hold this incident proved merely on the 945 vague testimony of this witness.
Pappathi Ammal, the next witness in the case, is also a dasi.
She deposed that her father 's mother 's property devolved on her two dasi daughters on her death and that there was no married daughter in existence.
This evidence is of a neutral character and is not of much use on the question of custom pleaded in the case.
Apart from asserting that in this community dasi 's property devolves on her death only on the dasi daughters to the exclusion of married daughters, she cited the instance of Chellappa, a dasi of Srirangam.
It was elicited in cross examination that Chellappa left a house and landed properties.
No explanation is forthcoming why documentary evidence of revenue records about this instance has been withheld.
Oral evidences as to instances which can be proved by documentary evidence cannot safely be relied upon to establish custom, when no satisfactory explanation for withholding the best kind of evidence is given.
The last witness in the case is Rajamani Ammal, another dasi who does service in Sri Ranganathaswami temple.
She also referred to the instance of Chellappa.
She said that her jewels which were worth Rs. 1,000 would pass on her death to her dasi daughter.
She went to the length of saying that if a dasi leaves an only child who is a married woman, even then her properties will pass to a next heir such as a cousin and not a married daughter.
This is all the evidence led by the defendant to prove custom.
On this meagre and unsatisfactory material we cannot hold that the custom pleaded is proved.
The opinion evidence is not of a convincing character and evidence as to specific instances in support of the custom is really nil.
Our attention was also drawn to a decision of the Madras High Court in Shanmugathammal vs Gomathi Ammal(l) In that case the plaintiff, a member of the dasi community, claimed to succeed to her deceased maternal aunt and pleaded that the three surviving sisters of the deceased who were impleded as defendants were not entitled to inherit because one of them (1) 122 946 had been adopted by another dancing girl and the other two had become married.
The issue raised in the case was whether the custom set up by the plaintiff that among dancing women married women are excluded by a woman who continues to be ' a dasi is true, valid and enforceable.
Certain dasis gave evidence in support of the custom.
No evidence whatever was given to the contrary and the custom pleaded was held proved in the circumstances of that case.
Emphasis was laid on the circumstance that there was no evi dence whatsoever against the plaintiff and defendants 2 and 3 who denied the existence of the custom in their written statements did not venture to deny it on oath in the witness box.
The dasi community concerned in that case was a small one consisting originally of twenty houses of which only seven or eight were then in existence and in that situation it was said that the custom might well be one that was well recognized and so much a part of the consciousness of the community, that any dispute like the present dispute amongst so small a body of women would be an extremely rare occurrence and therefore impossible of proof and that the plaintiff could not reasonably be expected to search the presidency for witnesses to speak to some similar dispute in other places.
In our opinion, that decision does not furnish a good judicial instance in respect of the custom pleaded in the present case.
There is no evidence that the customs of that small community of dasis are applicable to the community of dasis in the present case which form a considerable community in this district.
Moreover, the case was decided on the peculiar circumstances of that case on very meagre materials and did not lay down any general custom of dasis on this point.
It is unnecessary to examine the plaintiff 's evidence in detail.
Suffice it to say that it is more than sufficient to rebut the evidence led by the defendant and it neutralizes its effect, if any.
In the absence of proof of existence of a custom governing succession the decision of the case has to rest on the rules of justice, equity and good conscience because admittedly no 947 clear text of Hindu law applies to such a case.
The High Court thought that the just rule to apply was one of propinquity to the case, according to which the married and dasi daughters would take the mother 's property in equal shares.
No exception can be taken to this finding given by the High Court.
No other rule was suggested to us leading to a contrary result.
It was argued that the dasis have a distinct status in Hindu society and, that a rule has been evolved by judicial decisions under which the state of degradation by itself furnishes a rule of preference in a competition between dasi daughters and married daughters.
The juidicial decisions referred to concern the community of prostitutes and the rule evolved concerning them has been abrogated by later decisions.
It was contended that though the said rule had been abrogated and was no, longer applicable to that community concerning which it was evolved, it should by analogy be applied to cases of succession to dasis.
Narasanna vs Oangu(1) was the first case cited.
There, an adopted niece of a prostitute dancing girl was preferred to a brother remaining in caste.
It was said that the legal relation between a prostitute dancing girl and her undegraded relations remaining in caste becomes severed and they are therefore not entitled to inherit the estate.
In Subbaratna Mudali vs Balakrishnaswami Naidu(2), the next, case cited, the facts were that a deceased woman Palani inherited the property in dispute from her mother Nagu, who inherited it from her mother Mottai who again inherited it from her father Arunachalam.
Arunachalam had two brothers Ramaswami and Mathurbutham and the question in that case was whether Mathurbutham 's daughter Seethai or Ramaswami 's daughter 's son Marudamuthu Mudali was the heir of Palani.
The learned judges held that Mathurbutham 's daughter was preferential heir to Ramaswami 's daughter 's son.
It was pointed out that the rule of preference based on degradation was no longer good law.
It was, however, (1) I.L.R. (2) 33 M.L.J. 207.
948 added that in cases of dancing girls the law remained as it was before.
Our attention was also drawn to certain observations in Subbaraya Pillai vs Ramaswami Pillai(1) at page 177, and to the decision in Balasundaram vs Kamakshi Ammal(2).
In the former case the learned Judges rejected the broad proposition that Degradation of a woman in consequence of her unchastity entails in the eye of the law cessation of the tie of kindred between her and the members of her natural family and also between her and the members of her husband 's family.
We think that decision on this point is sound in law.
Degradation of a woman does not and cannot sever the ties of blood and succession is more often than not determined by ties of blood than by the moral character of the heir.
In Balasundaram vs Kamakshi Ammal(2) it was held that the property acquired by the mother had been acquired by her as a married woman and notwithstanding her lapse into unchastity, it devolved on her daughters clothed with the ordinary character of property acquired by a Hindu female, that is to say, the daughters took a life estate in it.
The learned counsel attempted to persuade us to hold the custom pleaded proved by the assistance of decisions given in analogous cases and by applying the principles of the rules said to have been, enunciated in some of them.
Those cases were decided on their own facts and in some of them a rule was enunciated that degraded people are a class by themselves and their degraded relations are preferential heirs to the undegraded ones.
As already said, we cannot subscribe to the view that any such rule can be evolved merely on logical grounds.
Its existence can only be justified on the basis of established custom.
No trustworthy evidence has been led in this case to establish that the daughters of a dasi by marriage lose their right of inheritance and form a separate community.
The correct approach to a case where a party seeks to prove a custom is the one pointed out by their Lordships of the (1) I.L.R. (2) 949 Privy Council in Abdul Hussein Khan vs Soma Dero(1).
It was there said that it is incumbent on a party setting up a custom to allege and prove the custom on which he relies and it is not any theory of custom or deductions from other customs which can be made a rule of decision but only any custom applicable to the parties concerned that can be the rule of decision in a particular case.
It is well settled that custom cannot be extended by analogy.
It must be estabished inductively, not deductively and it cannot be established by a priori methods.
Theory and custom are antitheses, custom cannot be a matter of mere theory but must always be a matter of fact and one custom cannot be deduced from another.
A community living in one particular district may have evolved a particular custom but from that it does not follow that the community living in another district is necessarily following the same custom.
The last point taken by the learned counsel was that under Hindu law the 1st defendant as a maiden was entitled to preference over her married sisters.
Defendant No. I was admittedly married to the idol and she has been on her own show.
living a life of prostitution.
The text of the Mitakshara dealing with the case of a virgin can.
not be applied to her case.
[Vide Tara vs Krishna(1)].
It is inconceivable that when the sages laid down the principle of preference concerning unmarried daughters they would have intended to include a prostitute within the ambit of that text.
For the reasons given above we see no force in this appeal and it is dismissed with costs.
Appeal dismissed, Agent for appellant: section Subramaniam.
Agent for respondent No. I : M. section K. Aiyangar.
[/INST]One R was granted bail on his furnishing a personal bond and three sureties which he did.
On July 7, one of the sureties S applied for the discharge of his bond.
On July 9, R made an application that the appellants surety bond be accepted in place of S, and the same day the appellant filed his surety bond.
The appellant also filed an affidavit that he had property enough to satisfy the bond and a vakil also certified to that effect.
The bond was sent for verification to the Tehsil and after verification was formally accepted on August 20.
Subsequently R absconded and the appellant 's bond was forfeited.
The appellant contended that the forfeiture was illegal and that his bond was not properly accepted as no warrant was issued for the arrest of R when S applied for the discharge of his bond, as the bond of S was not formally discharged and as R had not executed a personal bond on the reverse of the form on which the appellant bad executed his bond.
56 Held, that the surety bond of the appellant had been.
properly accepted and the forfeiture was legally made.
The provisions of section 502 of the Code of Criminal procedure were meant for the continuity of the surety bond and for enabling the accused to offer another surety bonds; they were not conditions precedent for the acceptance of a fresh surety in place of an earlier one.
There was no occasion to issue a warrant for the arrest of R as he was present, in Court on July 7, when S applied for the discharge of his bond and may have intimated to the Court that lie would offer fresh surety on July 9.
The Court was interested in getting a fresh surety for letting R continue on bail and it did no wrong in accepting the appellant 's surety bond which was offered.
The bond of S stood cancelled and appellant 's bond took its place.
The bond of the appellant was really accepted on July 9 when the appellant filed the affidavit as required by section 499 (3) of the Code and the Vakil also certified as to his solvancy.
It was immaterial that the bond was formally accepted on August 20.
Further, it was not necessary that each surety should execute the surety bond on the reverse of the personal bond of the accused.
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<s>[INST] Summarize the judgementON: Criminal Appeal No. 214 of 1971.
(Appeal by Special Leave from the judgment and Order dated 27 7. 1970 of the Andhra Pradesh High.
Court in Criminal Appeals Nos. 26 and 27/69).
7 1234SCI/76 604 P. Parmeswara Rao and G. Narayana Rao for the Appellant.
A. Subba Rao for the Respondents.
This appeal by special leave is directed against a judgment of the High Court of Andhra Pradesh.
It arises out of these facts.
In Rompicherla village, there were factions belonging to three major communities viz., Reddys, Kammas and Bhatrajus.
Rayavarapu (Respondent No. 1 herein) was the leader of Kamma faction, while Chopparapu Subbareddi was the leader of the Reddys.
In politics, the Reddys were supporting the Con gress Party, while Kammas were supporters of Swatantra Party.
There was bad blood between the two factions which. were proceeded against under section 107, Cr.
In the Panchyat elections of 1954, a clash took place between the two parties.
A member of the Kamma faction was murdered.
Consequently, nine persons belonging to the Reddy faction were prosecuted for that murder.
Other incidents also ' took place in which these warring factions were involved.
So much so, a punitive police force was stationed in this village to keep the peace during the period from March 1966 to September 1967.
Sarikonda Kotamraju, the deceased person in the instant case, was the leader of Bhatrajus.
In order to devise protective measures against the onslaughts of their opponents, the Bhatrajus held a meeting at the house of the deceased, wherein they resolved to defend themselves against the aggressive actions of the respondents and their party men.
PW 1, a member of Bhatrajus faction has a cattle shed.
The passage to this cattle shed was blocked by the other party.
The deceased took PW 1 to Police Station Nekar ikal and got a report lodged there.
On July 22, 1968, the Sub Inspector of Police came to the village and inspected the disputed wail in the presence of the parties.
The Sub Inspector went away directing both the parties to come to the Police Station on the following morning so that a com promise might be effected.
Another case arising out of a report made to the police by one Kallam Kotireddi against Accused 2 and 3 and another in respect of offences under sections 324, 323 and 325, Penal Code was pending before a Magistrate at Narasaraopet and the next date for hearing fixed in that case was July 23, 1968.
On the morning of July 23, 1968, at about 6 30 a.m., PWs 1, 2 and the deceased boarded Bus No. AP 22607 at Rompicher la for going to Nekarikal.
Some minutes later, Accused 1 to 5 (hereinafter referred to as A1, A2, A3, A4 and A5) also got into the same bus.
The accused had obtained tickets for proceeding to Narasaraopet.
When the bus stopped at Nekar ikal Cross Roads, at about 7 30 a.m., the deceased and his companions alighted for going to the Police Station.
The five accused also got down.
The deceased and PW 1 went towards a Choultry run by PW 4, While PW 2 went to the roadside to ease himself.
A1 and A2 went towards the Coffee Hotel situate near the Choultry.
From there, they picked up heavy sticks and went after the deceased into the Choultry.
On seeing the accused.
P W 1 ran away towards a hut nearby.
The deceased stood up.
605 He was an old man of 55 years.
He was not allowed to run.
Despite the entreaties made by the deceased with folded hands, A 1 and A 2 indiscriminately pounded the legs and arms of the deceased.
One of the by standers, PW 6, asked the assailants as to why they were mercilessly beating a human being, as if he were a buffalo.
The assailants angri ly retorted that the witness was nobody to question them and continued the beating till the deceased became unconscious.
The accused then threw their sticks at the spot, boarded another vehicle, and went away.
occurrence was witnessed by PWs 1 to 7.
The victim was removed by PW 8 to Narasaraopet Hospital in a temporar.
There, at about 8.45 a.m., Doctor Konda Reddy examined him and found 19 in juries, out of which, no less than 9 were (internally) found to be grievous.
They were: 1.
Dislocation of distal end of proximal phalanx of left middle finger.
Fracture of right radius in its middle.
Dislocation of lower end of right ulna.
Fracture of lower end of right femur.
Fracture of medial malleolus of right tibia.
Fracture.
of lower 1/3 of right fibula.
Dislocation of lower end of left ulna.
Fracture of upper end of left tibia.
Fracture of right patella.
Finding the condition of the injured serious, the Doctor sent information to the Judicial Magistrate for getting his dying declaration recorded.
On Dr. K. Reddy 's advice, the deceased was immediately removed to the Guntur Hospital where he was examined and given medical aid by Dr. Sastri.
His dying declaration, exhibit P 5, was also recorded there by a Magistrate (PW 10) at about 8.05 p.m.
The de ceased, however, succumbed to his injuries at about 4.40 a.m. on July 24, 1968, despite medical aid.
The autopsy was conducted by Dr. P.S. Sarojini (PW 12) in whose opinion, the injuries found on the deceased were cummulatively sufficient to cause death in the ordinary course of nature.
The cause of death, according to the Doctor, was shock and haemorrhage resulting from multiple injuries.
The trial Judge convicted A 1 and A 2 under section 302 as well as under section 302 read with section 34, Penal Code and sen tenced each of them to imprisonment for life.
On appeal by the convicts, the High Court altered their conviction to one under section 304, Pt.
II, Penal Code and reduced their sentence to 'five years rigorous imprison ment, each.
Aggrieved by the judgment of the High Court, the State has come in appeal to this Court after obtaining special leave.
A 1, Rayavarappu Punnayya (Respondent 1) has, as reported by his Counsel, died during the pendency of this appeal.
This information is not contradicted by the Counsel appearing for the State.
This 606 appeal therefore, in so far as it relates to A , abates.
The appeal ' against A 2 (Respondent 2), however, survives for decision. 'The principal question that falls to be considered in this appeal is, whether the offence disclosed by the facts and circumstances established by the prosecution against the respondent, is 'murder ' or 'culpable homicide not amounting to murder '.
In the scheme of the Penal Code, 'culpable homicide ' is genus and 'murder ' its specie.
All 'murder ' is 'culpable homicide ' but not viceversa.
Speaking generally, 'culpable homicide ' sans 'special characteristics of murder ', is 'culpable homicide not amounting to.
murder '.
For the pur pose of fixing punishment, proportionate to the gravity of this generic offence, the Code practically recognises three degress of culpable homicide.
The first is, what may be called, culpable homicide of the first degree.
This is the gravest form of culpable homicide which is defined in section 300 as 'murder '.
The second may be termed as 'culpable homicide of the second degree '.
This is punishable under the l st part of section 304.
Then, there is 'culpable homicide of the third degree. ' This is the lowest type of culpable homicide and the punishment provided for it is, also, the lowest among the punishments provided for the three grades.
Culpa ble homicide of this degree is punishable under the second Part of section 304.
The academic distinction between 'murder ' and 'culpable homicide not amounting to murder ' has vexed the courts for more than a century.
The confusion is caused, if courts losing sight of the true scope and meaning of the terms used by the legislature in these sections, allow themselves to be drawn into minutae abstractions.
The safest way of approach to the interpretation and application of these provisions seems to be to keep in focus the key words used in the various clauses of sections 299 and 300.
The following comparative table will be helpful in appreciating the points of distinction between the two offences.
Section 299 Section 300 A person commits culpable homicide Subject to certain if the act by which the death exceptions culpable is caused is done homicide is murder if the act by which the death caused is done INTENTION (a) with the intention of causing death: (1) with the intention of causing death; or or (b) with the intention of (2) with the intention of causing such bodily injury causing such bodily inju as is likely to cause death; ry as the offender knows to or be likely to cause the death of person to whom the harm is caused; or (3) with the intention of causing bodily injury to any person and the bodily injury intended to be inflicted is sufficient in the ordinary course of nature to cause death; or 607 KNOWLEDGE (c) with the knowledge that (4) with the knowledge that the act likely to cause death.
the act is so imminently dangerous that it must in all probability cause death or such bodily injury as is likely to cause death, and without any excuse for incurring the risk of using death or such injury as is mentioned above.
Clause (b) of section 299 corresponds with cls.
(2) and (3) of section 300.
The distinguishing feature of the mens rea requi site under cl.
(2) is the knowledge possessed by the offend er regarding the particular victim being in such a peculiar condition or state of health that the intentional harm caused to him is likely to be fatal, notwithstanding the fact that ' such harm would not in the ordinary way of nature be sufficient to cause death of a person in normal health or condition.
It is noteworthy that the 'intention to cause death ' is not an essential requirement of el.
Only the intention of causing the bodily injury coupled with the offender 's knowledge of the likelihood of such injury caus ing the death of the particular victim, is sufficient to bring the killing within the ambit of this clause.
This aspect of cl.
(2) is borne out by illustration (b) appended to section 300.
Clause (b) of section 299 does not postulate any such knowl edge on the part of the offender.
Instances of cases falling under cl.
(2) of section 300 can be where the assailant causes death by a fist blow intentionally given knowing that the victim is suffering from an enlarged liver, or enlarged spleen or diseased heart and such blow is likely to cause death of that particular person as a result of the rupture of the liver, or spleen or the failure of the he,art, as the case may be.
If the assailant had no such knowledge about the disease or special frailty of the victim, nor an inten tion to.
cause death or bodily injury sufficient 'in the ordinary course of nature to cause death, the offence will not be murder, even if the injury which caused the death, was intentionally given.
In clause (3) of section 300, instead of the words 'likely to cause death ' occurring in the corresponding el.
(b) of section 299, the words "sufficient in the ordinary course of nature" have been used.
Obviously, the distinction lies between a bodily injury likely to cause death and a bodily injury sufficient in the ordinary course of nature to cause death.
The distinction is fine but real, and, if over looked, may result 'in miscarriage of justice.
The differ ence between cl.
(b) of section 299 and cl.
(3) of section 300 is one of the degree of probability of death resulting from the intended bodily injury.
To put it more broadly, it is the degree of probability of death which determines whether a culpable homicide is of the gravest, medium or the lowest degree.
The word "likely" in cl.
(b) of section 299 conveys the sense of 'probable ' as distinguished from a mere possibili ty.
The words "bodily injury. sufficient in the ordinary course of nature to cause death" mean that 608 death will be the "most probable" result of the injury having regard to the ordinary course of nature.
For cases to fall within cl.
(3), it is not necessary that the offender intended to cause death, So long as death ensues from the intentional.
bodily injury or injuries sufficient to cause death in the ordinary course of nature.
Rajwant and anr.
vs State of Kerala(2) is an apt illustra tion of this point.
In Virsa Singh vs The State of Punjab, (2) Vivian Bose j. speaking for this Court, explained the meaning ' and scope of Clause (3), thus (at p. 1500): "The prosecution must prove the following facts before it can bring a case under section 300, 3rdly '.
First, it must establish, quite objective ly, that a bodily injury is present;.
secondly the nature of the injury must be proved.
These are purely objective investigations.
It must be proved that there was an intention to inflict that particular injury, that is to say,.
that it was not accidental or unintentional or that some other kind of injury was intended.
Once these three elements are proved to be present, the enquiry proceeds further, and, fourthly it must be ,proved that the injury of the type just described made up of the three elements set out above was suffi cient to cause death in the ordinary course of nature.
This part of the enquiry is purely objec tive and inferential and has nothing to do with the intention of the offender." Thus according to the rule laid down in Virsa Singh 's case (supra) even if the intention of accused was limited to the infliction of a bodily injury sufficient to cause death in the ordinary course of nature and did not extend to the intention of causing death, the offence would be murder.
Illustration (c) appended to section 300 clearly brings out this point.
Clause (c) of section 299 and cl.
(4) of section 300 both require knowledge of the probability of the causing death.
It is not necessary for the purpose of this case to dilate much on the distinction between these corresponding clauses.
It will be sufficient to say that cl.
(4) of section 300 would be applicable where the knowledge of the offender as to the probability of death of a person or persons in general as distinguished from a particular person or persons being caused from his imminently dangerous act, approximates to a practical certainty.
Such knowledge on the part of the offender must be of the highest degree of probability, the act having been committed by the offender without any excuse for incurring the risk of causing death or such injury as aforesaid.
From the above conspectus, it emerges that whenever a court is confronted with the question whether the offence is 'murder ' or 'culpable homicide not.
amounting to murder, ' on ,the facts of a case, it will ' (1) A.I.R. 1966 S.C. 1874.
(2) ; 609 be convenient for it to approach the problem in three stages.
The question to be considered at the first stage would be, whether the accused has done an act by doing which he has caused the death of another.
Proof of such causal connection between the act of the accused and the death, leads to the second stage for considering whether that act of the accused amounts to "culpable homicide" as defined in section 299.
If the answer to this question is prima facie found in the affirmative, the stage for considering the operation of section 300, Penal Code is reached.
This is the stage at which the Court should determine whether the facts proved by the prosecution bring the case within the ambit of any of the four Clauses of the definition of murder ' contained in section 300.
If the answer to this question is in the negative the offence would be 'culpable homicide not amounting to murder ', punishable under the first or the second part of section 304, depending.
respectively, on whether the second or the third Clause of section 299 is applicable.
If this question is found in the positive, but the case comes, within any of the Exceptions enumerated in section 300, the offence would still be 'culpable homicide not amounting to murder ' punishable under the First Part of section 304, Penal Code.
The above are only broad guidelines and not cast iron imperatives.
In most cases, their observance will facilitate the task of the court.
But sometimes the facts are so inter twined and the second and the third stages so tele scoped into each other, that it may not be convenient,to give a separate treatment to the matters involved in the second and third stages.
Now let us consider the problem before us in the light of the above enunciation.
It is not disputed that the death of the deceased was caused by the accused, there being a direct causal connec tion between the beating administered by A 1 and A 2 to the deceased and his death.
The accused confined the beating to.
the legs and arms of the deceased, and therefore, it can be said that they perhaps had no "intention to cause death" within the contemplation clause (a) of section 299 or cl.
(1) of section 300.
It is nobody 's case that the instant case falls within el.
(4) of section 300.
This clause, as already noticed, is designed for that class of cases where the act of the offender is not directed against any particular individual but there is in his act that recklessness and risk of immi nent danger, knowingly and unjustifiably incurred, which is directed against the man in general, and places the lives of many in jeopardy.
Indeed, in all fairness, Counsel for the appellant has not contended that the case would fall under el.
(4) of section 300.
His sole contention is that even if the accused had no intention to cause death, the facts estab lished fully bring the case within the purview of cl.
(3) of section 300 and as such the offence committed is murder and nothing less.
In support of this contention reference has been made to Andhra vs State of Rajasthan(1) and Rajwant Singh vs State of Kerala (supra).
As against this, Counsel for the respondent submits that since the accused selected only non vital parts of the body of the deceased, for (1) A.I.R. 1966 S.C. 148.
610 inflicting the injuries, they could not be attributed the mens rea requisite for bringing the case under clause (3) of section 300; at the most, it could be said that they had knowl edge that the injuries inflicted by them were likely to cause death and as such the case falls within the third clause of section 299, and the offence committed was only "culpa ble homicide not amounting to murder", punishable under section 304, Part 11.
Counsel has thus tried to support the reason ing of the High Court.
The trial Court, 'as 'already noticed, had convicted the respondent of the offence of murder.
It applied the rule in Virsa Singh 's case (supra).
and the ratio of Anda vs State and held that the case was clearly covered by clause Thirdly of section 300.
The High Court has disagreed with the trail Court and held that the offence was not murder but one under section 304, Pt.
The High Court reached this conclusion on the following reasoning: (a) "There was no premeditation in the attack.
It was almost an impulsive act".
(b) "Though there were 21 injuries, they were all on the arms and legs and not on the head or other vital parts the body." (c) "There was no compound fracture to result in heavy haemorrhage; there must have been some bleeding".
(which) "according to PWI might have stopped with in about half an hour to one hour." (d) "Death that had occurred 21 hours later, could have been only due to shock and not due to haemorrhage also, as stated by PW 12. who conducted the autopsy.
This reference is strengthened by the evidence of PW 26 who says that the patient was under shock and he was treating him for shock by sending fluids through his vein.
From the injuries inflicted the accused therefore could not have intended to cause death.
" (e) "A1 and A2 had beaten the deceased with heavy sticks.
These beatings had resulted in fracture of the right radius, right femur, right tibia, right fibula, right patalla and left tibia and dislocation of. , therefore considerable force must have been used while inflicting the blows.
Accused 1 and 2 should have therefore inflicted these injuries with the knowledge that they are likely, by so beating, to cause the death of the deceased, though they might not have had the knowledge that they were so imminent ly dangerous that in all probability their acts would result in such injuries as are likely to cause the death.
The offence . is therefore culpable homicide falling under . section 299, I.P.C. punishable under section 304 Part II and not murder.
" 611 With respect we are unable to appreciate and accept this reasoning.
With respect, to be inconsistent, erroneous and largely speculative,It appears to us To say that the attack was not premeditated or pre planned is not only factually incorrect but also at war with High Court 's own finding that the injuries were caused to the deceased in furtherance of the common intention of A 1 and A 2 and therefore, section 34, I.P.C. was applicable.
Fur ther, the finding that there was no compound fracture, no heavy haemorrhage and the cause of the death was shock, only, is not in accord with the evidence on the record.
The best person to speak about haemorrhage and the cause of the death was Dr. P. section Sarojini (PW 12) who had conducted the autopsy.
She testified that ,the cause of death of the deceased was "shock and haemorrhage due to multiple in juries".
This categorical opinion of the Doctor was not assailed in cross examination.
In the post mortem examina tion report exhibit P 8, the Doctor noted that the heart of the deceased was found full of clotted blood.
Again in injury No. 6, which also was an internal fracture, the bone was visible through the wound.
Dr. D.A. Sastri, PW 26, had testified that he was treating Kotamraju injured of shock, not only by sending fluids through his vein, but also blood.
This part of his statement wherein he spoke about the giving of blood transfusion to the deceased, appears to have been overlooked by the High Court.
Dr. Kondareddy, PW 11, who was the first Medical Officer to examine the injuries of the deceased, had noted that there was bleeding and swelling around injury No. 6 which was located on the left leg 3 inches above the ankle.
Dr. Sarojini, PW 12, found fracture of the left tibia underneath this injury.
There could therefore, be no doubt that this was a compound fracture.
P.W. 11 found bleeding from the other abraded injuries, also.
He however found the condition of the injured grave and immediately sent an information to the Magistrate for recording his dying declaration.
PW 11 also advised immediate removal of the deceased to the bigger Hospital at Guntur.
There, also, Dr. Sastri finding that life in the patient was ebbing fast, took immediate two fold action.
First, he put the patient on blood transfusion.
Second, he sent an intimation for recording his dying declaration.
A Magistrate (PW 10) came there and recorded the statement.
These are all tell tale circumstances which unerring by show that there was substantial haemorrhage from some of the injuries involving compound fractures.
This being the case, there was absolutely no reason to doubt the sworn word of the Doctor, (PW 12) that the cause of the death was shock and haemorrhage.
Although the learned Judges of the High Court have not specifically referred to the quotation from page 289, of Modi 's book on Medical Jurisprudence and Toxicology (1961 Edn.) which was put to Dr. Sarojini in cross examination, they appear to have derived support from the same for the argument that fractures of such bones "are not ordinarily dangerous"; therefore, the accused could not have intended cause death but had only knowledge that they were likely by such beating to cause the death of the deceased.
It will be worthwhile to extract that quotation from Mody, as a reference to the same was made by Mr. Subba Rao before us, also.
612 According to Mody: "Fractures are not ordinarily dangerous unless they are compound, when death may occur from ,loss of blood, if a big vessel is wounded by the split end of a fractured bone.
" It may be noted, in the first place, that this opinion of the learned author is couched in too general and wide language.
Fractures of some vital bones, such as those of the skull and the vertebral column are generally known to be dangerous to life.
Secondly, even this general statement has been qualified by the learned author, by saying that compound fractures involving haemorrhage, are ordinarily dangerous.
We have seen, that some of the fractures under neath the injuries of the deceased, were compound fractures accompanied by substantial haemorrhage.
In the face of this finding, Mody 's opinion, far from advancing the conten tion of the defence, discounts it.
The High Court has held that the accused had no inten tion to cause death because they deliberately avoided to hit any vital part of the body, and confined the beating to the legs and arms of the deceased.
There is much that can be said in support of this particular finding.
But that find ing assuming it to be correct does not necessarily take the case out of the definition of 'murder '.
The crux of the matter is, whether the facts established bring the case within Clause Thirdly of section 300.
This question further narrows down into a consideration of the two fold issue :.
(i) Whether the bodily injuries found on the deceased were intentionally inflicted by the accused ? (ii) If so, were they sufficient to cause death in the ordinary course of nature ? If both these elements are satisfactorily established, the offence will be 'murder ', irrespective of the fact whether an intention on the part of the accused to cause death, had or had not been proved.
In the instant case, the existence of both these ele ments was clearly established by the prosecution.
There was bitter hostility between the warring factions to which the accused and the deceased belonged.
Criminal litigation was going on between these factions since long.
Both the factions had been proceeded against under section 107, Cr.
The accused had therefore a motive to beat the deceased.
The attack was premeditated and pre planned, although the interval between the conception and execution of the plan was not very long.
The accused had purchased tickets for going further to Narasaraopet, but on seeing the deceased, their bete noir, alighting at Nekarikal, they designedly got down there and trailed him.
They selected heavy sticks about 3 inches in diameter, each, and with those lethal weapons, despite the entreaties of the deceased, mercilessly pounded his legs and arms causing no less than 19 or 20 injuries, smashing at least seven bones.
mostly major bones, and dislocating two more.
The beating was administered in a brutal and reckless manner.
It was pressed home with an unusually fierce, cruel and sadistic determination.
When the human conscience of one of the shocked bystanders spontaneously cried out in protest as to why the accused were beating a human being as if he were a buffalo, the only echo it could draw from the assailants, 613 a minacious retort, who callously continued their malevolent action, and did not stop the beating till the deceased became unconscious.
May be, the intention of the accused was to cause death and they stopped the beating under the impression that the deceased was dead.
But this lone circumstance cannot take this possible inference to the plane of positive proof.
Nevertheless, the formidable weapons used by the accused in the beating, the savage manner of its execution, the helpless state of the unarmed victim, the intensity of the violence caused, the callous conduct of the accused in persisting in the assault even against the protest of feeling bystanders all, viewed against the background of previous animosity between the parties, irresistibly lead to the conclusion that the in juries caused by the accused to the deceased were intention ally inflicted, and were not accidental.
Thus the presence of the first element of Clause Thirdly of section 300 had been cogently and convincingly established.
This takes us to the second element of Clause (3).
Dr. Sarojini, PW 12, testified that the injuries of the deceased were cumulatively sufficient in the ordinary course of nature to cause death.
In her opinion which we have found to be entirely trustworthy the cause of the death was shock and haemorrhage due to the multiple injuries.
Dr. Sarojini had conducted the post mortem examination of the deadbody of the deceased.
She had dissected the body and examined the injuries to the internal organs.
She was therefore the best informed expert who could opine with authority as to the cause of the death and as to the suffi ciency or otherwise of the injuries from which the death ensued.
Dr. Sarojini 's evidence on this point stood on a better footing than that of the Doctors (PWs.
11 and 26) who had externally examined the deceased in his life time.
Despite this position, the High Court has not specifically considered the evidence of Dr. Sarojini with regard to the sufficiency of the injuries to cause death in the ordinary course of nature.
There is no reason why Dr. Sarojini 's evidence with regard to the second element of Clause (3) of section 300 be not accepted.
Dr. Sarojini 's evidence satisfacto rily establishes the presence of the second element of this clause.
There is therefore, no escape from the conclusion, that the offence committed by the accused was 'murder ', notwith standing the fact that the intention of the accused to cause death has not been shown beyond doubt.
In Anda vs State of Rajasthan (supra), this Court had to deal with a very similar situation.
In that case, several accused beat the victim with sticks after dragging him into a house and caused multiple injuries including 16 lacerated wounds on the arms and legs, a hematoma on the forhead and a bruise on the chest.
Under these injuries to the arms and legs lay fractures of the right and left ulnas, second and third metacarpal bones on the right hand and second metacar pal bone of the left hand, compound fractures of the right tibia and right fibula.
There was loss of blood from the injuries.
The Medical Officer who conducted the autopsy opined that the cause of the death was shock and syncope due to multiple injuries; that all the injuries collectively could be sufficient to cause death in the ordinary course of nature, but individually none of them was so sufficient.
614 Question arose whether in such a case when no signifi cant injury had been inflicted on a vital art of the body, and the weapons used were ordinary lathis, and the accused could not be said to have the intention of causing death, the offence would be 'murder ' or merely 'culpable homicide not amounting to murder '.
This Court speaking through Hidayatullah J. (as he then was), after explaining the comparative scope of and the distinction between sections 299 and 300, answered the question in these terms: "The injuries were not on a vital part of the body and no weapon was used which can be described as specially dangerous.
Only lathis were used.
It cannot, therefore, be said safely that there was an intention to cause the death of Bherun within the first clause of section 300.
At the same time, it is obvious that his hands and legs were smashed and numerous bruises and lacerated wounds were caused.
The number of injuries shows that every one joined in beating him.
It is also clear that the assailants aimed at breaking his arms and legs.
Looking at the injuries caused to Bherun in furtherance of the common intention of all it is clear that the injuries intended to be caused were sufficient to cause death in the ordinary course of nature, even if it cannot be said that his death was intended.
This is suffi cient to bring the, case within 3rdly of section 300." The ratio of Anda vs State of Rajasthan (supra) applies in full force to the facts of the present case.
Here, a direct causal connection between the act of the accused and the death was established.
The injuries were the direct cause of the death.
No secondary factor such as gangrene, tetanus etc., supervened.
There was no doubt whatever that the beating was premeditated and calculated.
Just as in Anda 's case, here also, the aim of the asailants was to smash the arms and legs of the deceased, and they succeeded in that design.
causing no less than 19 injuries, including fractures of most of the bones of the legs and the arms.
While in Anda 's case, the sticks used by the assailants were not specially dangerous, in the instant case they were unusually heavy, lethal weapons.
All these acts of the accused were pre planned and intentional, which, considered objectively in the light of the medical evidence.
were sufficient in the ordinary course of nature to cause death.
The mere fact that the beating was designedly con fined by the assailants to the legs and arms, or that none of the multiple injuries inflicted was individually suffi cient in the ordinary course of nature to cause death, will not exclude the application of Clause 3rdly of section 300.
The expression "bodily injury" in Clause 3rdly includes also its plural, so that the clause would cover a case where all the injuries intentionally, caused by the accused are cumula tively sufficient to cause the death in the ordinary course of nature, even if none of those injuries individually measures upto such sufficiency.
The sufficiency spoken of in this clause.
as a|ready noticed, is the high probability of death in the ordinary course of nature, and if such suffi ciency exists and death is caused and the injury causing it is intentional, the case would fail under Clause 3rdly of section 300.
All the conditions which are a pre requisite for the applicability of this clause have been established and the offence committed by the accused in the instant case was 'murder '.
615 For all the foregoing reasons, we are of opinion that the High Court was in error in altering the conviction of the accused respondent from one under section 302, 302/34, to that under section 304, Part II, Penal Code.
Accordingly we allow this appeal and restore the order of the trial Court convicting the accused (Respondent 2 herein) for the offence of murder, with a sentence of imprisonment for life.
Respondent 2, if he is not already in jail shall be arrested and committed to prison to serve out the sentence inflicted on him.
P.B.R. Appeal allowed.
[/INST]The respondent, who was an unsuccessful candidate in the general election to the State Assembly, impugned the appel lant 's election on the ground that he had committed a cor rupt practice within the meaning of section 100(1)(b) of the Representation of the People Act, 1950, in that he had printed and circulated a pamphlet maligning the respondent.
Allowing the petition, the High Court set aside the elec tion.
In appeal to this Court it was contended on behalf of the appellant as a preliminary objection (i) that since the election petition served on the appellant was not accompa nied by a copy of the impugned pamphlet, the petition _was liable to be dismissed and (ii) that the evidence of the Manager (P.W. 24) of the Press in which the pamphlet had been printed, being that of an accomplice could not be relied upon.
Dismissing the appeal, HELD: (1) (a) The petition could not have been dismissed in view of section 99 of the Code of Civil Procedure which clear ly says that a defect which does not affect the merits of the case or the jurisdiction of the Court cannot invalidate the decision.
[529 D] (b) It is well settled that failure to give particulars of printing of the pamphlet is not detrimental and cannot lead to the dismissal of the petition.
[529 D] Prabhu Narayan vs
A.K. Srivastava; , re ferred to.
In the instant case, the allegations of corrupt practice and particulars thereof given in the election petition were sufficiently clear and precise.
The affidavit conforms to the form prescribed for the purpose.
Moreover, the appel lant had an easy access to the Court record and could have no difficulty in gathering the necessary material to meet the case set up by the respondent by a reference to the leafet.
[529 C] (2) (a) The mere fact that P.W. 24 printed the offending leaflet could not clothe him with the character off a guilty associate or partner in the crime of corrupt practice within the meaning of section 123(4) of the Act.
[530 D] (b) Moreover, the omission on the part of P.W. 24 to send to the concerned District Magistrate a copy each of the declaration and the printed material as required by section 127 A(2) of the Act may lay him open to prosecution for art offence under sub section
(4) of that section but would not make him an accomplice or render his statement untrustworthy.
[530 F] In the instant case, P.W. 24 was neither an election agent of the appellant nor was there any allegation that he published the offending leaflet.
Despite the searching cross examination to which he was subjected, his credit had remained unshaken.
[530 E]
</s>
|
<s>[INST] Summarize the judgementCivil Appeal No. 2229 of 1978.
From the Judgment and Order dated 12 10 1978 of the Bombay High Court in Election Petition No. 2/78.
N.N. Keshwani and Ramesh N. Keshwani for the Appellant.
A.K. Ganguli for the Respondent.
The Judgment of the Court was delivered by VENKATARAMIAH, J.
This appeal is filed under section 116 A of the Representation of the People Act, 1951 (Act No. 43 of 1951) (hereinafter referred to as 'the Act ') against the judgment of the High Court of Bombay (Nagpur Bench) in Election Petition No. 2 of 1978 by which the election of the appellant to the Maharashtra Legislative Assembly from the Armori Constituency (No. 151) in Chandrapur District at the general election held in February, 1978 was set aside.
1137 The Armori Constituency was reserved for Scheduled Tribes.
The appellant and respondents Nos. 1 to 4 were the candidates at the election.
As the appellant secured the highest number of votes, he was declared as having been elected by the Returning Officer.
In his nomination paper, the appellant declared that he belonged to 'Mana ' community.
Respondents Nos. 1, 2 and 4 declared themselves as belonging to 'Pradhan ' community and respondent No. 3 claimed that he belonged to 'Raj Gond ' community.
After the result of the election was declared, respondent No. 1 who had secured the next highest number of votes at the election filed an election petition under section 81 of the Act before the High Court of Bombay calling in question the election of the appellant.
One of the grounds urged in the petition was that the appellant did not belong to any of the Scheduled Tribes specified in Part IX of the Schedule to the Constitution (Scheduled Tribes) Order, 1950 (hereinafter referred to as 'the Order ') as it stood at the time of the election and was not, therefore, qualified to be chosen to fill the seat which was reserved for Scheduled Tribes.
It was alleged that the appellant belonged to Kshatriya Bidwaik Mana community and not to the 'Mana ' community referred to in Entry No. 18 of Part IX of the Schedule to the Order.
Respondent No. 1 also claimed that in the event of the appellant 's election being declared as void, the Court should make a declaration that he (respondent No. 1) himself had been duly elected.
The High Court upheld the contention of respondent No. 1 that the appellant did not belong to any of the Scheduled Tribes referred to in Part IX of the Schedule to the Order and declared his election as void.
The other prayer made by respondent No. 1 that he should be declared as elected was, however, rejected.
Aggrieved by the judgment of the High Court, the appellant has come up in appeal to this Court.
It should be mentioned at this stage that in the general election held in the year 1967, the appellant was declared as a successful candidate from the very same constituency which was a constituency reserved for Scheduled Tribes at that time also and that on an election petition being filed against the appellant, the High Court held that he did not belong to any of the Scheduled Tribes mentioned in the appropriate part of the Schedule to the Order at that time and therefore he was not qualified to contest the election.
Accordingly his election was set aside.
In the appeal filed before this Court, the judgment of the High Court was affirmed vide Dina vs Narayan Singh.(1) In the course of the decision of this Court, it was held that the appellant belonged to 'Kshatriya Bidwaik Mana ' community and not to the 'Mana ' community 1138 referred to in Entry No. 12 of Paragraph 5 of Part VII A of the Schedule to the Order as it stood at the time of the said election for the reasons to which we shall advert hereafter.
In the election petition out of which this appeal arises, respondent No. 1 pleaded that the appellant belonged to 'Kshatriya Bidwaik Mana ' community which was not a tribe mentioned in the Schedule to the Order and that the appellant was not a member of the 'Mana ' community referred to in Entry No. 18 of Part IX of the Schedule to the Order as it stood at the time of the election in question.
It was further alleged that the said 'Mana ' community was a sub tribe of Gond tribe and it had no relationship with the 'Kshatriya Bidwaik Mana ' community to which the appellant belonged.
The appellant denied the above allegation that there were two types of Manas viz. (a) 'Mana ' a sub tribe of 'Gond ' referred to in Entry No. 18 of Part IX of the Schedule to the Order and (b) 'Kshatriya Bidwaik Mana ' community.
He further contended that the 'Mana ' community to which he belonged had been included in that Entry after the Schedule to the Order was amended by the Scheduled Castes and Scheduled Tribes Order (Amendment) Act, 1976.
In order to appreciate the rival contentions, it is necessary to make a brief survey of the law bearing on the question.
Article 332 of the Constitution provides that seats shall be reserved for the Scheduled Castes and the Scheduled Tribes, except the Scheduled Tribes in the tribal areas of Assam and Nagaland, in the Legislative Assembly of every State and that the number of seats for the Scheduled Castes and the Scheduled Tribes so reserved shall bear, as nearly as may be, the same proportion to the total number of seats in the Assembly as the population of the Scheduled Castes in the State or of the Scheduled Tribes in the State or part of the State, as the case may be, in respect of which seats are so reserved, bears to the total population of the State.
The expression 'Scheduled Tribes ' with which we are concerned in this case is defined in clause (25) of Article 366 of the Constitution as such tribes or tribal communities or parts of or groups within such tribes or tribal communities as are deemed under Article 342 to be Scheduled Tribes for the purposes of the Constitution.
Article 342(1) of the Constitution provides that the President may with respect to any State or Union territory and where it is a State after consultation with the Governor thereof, by public notification, specify the tribes or tribal communities or parts of or groups, within tribes or tribal communities which shall for the purposes of the Constitution be deemed to be Scheduled Tribes in relation to that State or Union Territory, as the case may be.
It was in pursuance of this constitutional provision that 1139 the President issued the Order specifying the tribes or tribal communities which should be deemed to be Scheduled Tribes in relation to the several parts of India.
Article 342(2) of the Constitution confers the power on the Parliament to modify by law the order issued under Article 342(1) by including in or excluding from the list of Scheduled Tribes specified therein any tribe or tribal community or part of or group within any tribe or tribal community.
Section 5(a) of the Act provides that a person shall not be qualified to be chosen to fill a seat in the Legislative Assembly of a State unless, in the case of a seat reserved for the Scheduled Tribes of that State he is a member of any of those tribes and is an elector for any Assembly constituency in that State.
The area in which the appellant and respondents Nos.
1 to 4 are residing is situate within the area known as Gadchiroli and Sironcha Tahsils of the Chandrapur District of the State of Maharashtra.
Prior to the amendment made in 1956, Entry No. 12 in the relevant part of the Schedule to the Order read as "Gond including Media (Maria) and Mudia (Muria)".
By the Scheduled Castes and Scheduled Tribes (Amendment) Act 63 of 1956, the said Entry No. 12 was substituted by Entry No. 12 in Paragraph (5) of Part VII A of the Schedule to the Order which was as follows: "12.
Gond, including Arakh or Arrakh Kandra Agaria Kalanga Asur Khatola Badi Maria or Koitar Bada Maria Koya Bhatola Khirwar or Khirwara Bhimma Kucha Maria Bhuta, Koilabhut Kuchaki Maria or Kollabhuti Bhar Madia (Maria) Bisonhorn Maria Mana Chota Maria Mannewar Dandami Maria Moghya or Mogia or Monghya Dhuru or Dhurwa Mudia (Muria) Dhoba Nagarchi Dhulia Nagwanshi Dorla Ojha Gaiki Raj Gatta or Gatti Sonjhari Jhareka Gaita Thatia or Thotya Gond Gowari Wade Maria or Vade Maria.
" Hill Maria The 30th tribe amongst the tribes included within the broad classification of 'Gond ' tribe is 'Mana ' tribe.
As mentioned earlier, the claim of the appellant that he belonged to the said tribe in the previous case 1140 was negatived.
In August, 1967, a Bill was introduced in the Lok Sabha proposing to amend the Schedule to the Order.
By that Bill, it was proposed to substitute the Schedule to the Order as it stood then by a new Schedule.
Part VIII of the new Schedule related to Maharashtra.
Entry No. 22 in that Part read as follows: ___________________________________________________________ Tribe Synonym Sub tribe __________________________________________________________ 1 2 3 ___________________________________________________________ "22.
Gond Koitur Arakh Kalanga Bada Madia Kandra Bhatola Koya Chhota Madi Khirwar Dandami Mad Kucha Madia Dhulia Kuchaki Madia Dhuru or Dwa Machalir Madia Dhoba Mana Dorla Mannewar Gaiki Mudia Gaita Nagarchi Gatta or Gi Nagwanshi Naikpod Ojha Sonjhari Jharekha Thatia or Thotia." _________________________________ __________________________ In the proposed Entry, 'Mana ' community was shown as a sub tribe of 'Gond ' tribe.
With the concurrence of the Rajya Sabha, the Bill was referred to a Joint Committee of the Parliament presided over by Shri Anil K. Chanda.
The Report of the Joint Committee on the Bill was presented to the Lok Sabha on November 17, 1969.
In so far as the amendments proposed to the Schedule to the Order were concerned, the Joint Committee inter alia observed at Paragraph 20(ii) thus: "20(ii).
The Committee feel that the proposal to specify the tribes, the synonyms and the sub tribes in three separate columns will not be appropriate.
As in the case of Schedule Castes Orders, the Committee are of the view that it would be best to follow the wording of article 342(1) of the Constitution and specify.
"The tribes or tribal communities, or parts of, or groups within, tribes or tribal communities".
Each of the Scheduled Tribes Orders have been modified accordingly, and in the lists of Scheduled Tribes the main tribe name is written first followed by the synonyms and subtribes in alphabetical order." 1141 The Joint Committee also recommended that the Mana sub tribe referred to in the Bill should be excluded from the Schedule to the Order altogether.
Thereafter the matter was again considered by the Parliament.
In the Statement of Objects and Reasons dated May 12, 1976 attached to the Bill, it was stated as follows: "Under the Scheduled Castes and Scheduled Tribes Orders some communities have been specified as Scheduled Castes or as Scheduled Tribes only in certain areas of the State concerned and not in respect of the whole State.
This has been causing difficulties to member of these communities in the areas where they have not been so specified.
The present Bill generally seeks to remove these area restrictions.
However, in cases where continuance of such restrictions were specifically recommended by the Joint Committee on the Scheduled Castes and Scheduled Tribes Orders (Amendment) Bill, 1967, no change is being effected.
The Committee had also recommended exclusion of certain communities from the lists of Scheduled Castes and Scheduled Tribes.
These exclusions are not being made at present and such communities are being retained in the lists with the present area restrictions.
Such of the communities in respect of which the Joint Committee had recommended exclusion on the ground that they were not found in a State are, however, being excluded if there were no returns in respect of these communities in the censuses of 1961 and 1971. . ." Thereafter the (Act No. 108 of 1976) was passed by the Parliament and it had come into force before the election in question was held.
By the above Act, the entire Schedule to the Order as it stood prior to the amendment was substituted by a new Schedule consisting of XVI parts.
Part IX of the new Schedule relates to the State of Maharashtra.
Entry No. 18 of Part IX of the new Schedule corresponds to Entry No. 22 of the Bill referred to above and to Entry No. 12 in Paragraph (5) of Part VII A of the Order as it stood prior to the amendment.
Entry No. 18 of Part IX of the Schedule to the Order after the amendment reads thus: "18.
Gond; Rajgond, Arakh, Arrakh, Agaria, Asur Badi Maria, Bada Maria, Bhatola, Bhimma, Bhuta, Koilabhuta, Koilabhuti, Bhar, Bisonhorn Maria, Chota Maria, Dhandami Maria, Dhuru, Dhurwa, Dhoba, Dhulia, Dorla, Gaiki, Gatta, Gatti, Gaita, Gond Gowari, Hill Maria, Kandra, Kalanga, 1142 Khatola, Koitar, Koya, Khirwar, Khirwara, Kucha Maria, Kuchaki Maria, Madia, Maria, Mana, Mannewar, Moghya, Mogia, Monghnya, Mudia, Muria, Nagarchi, Naikpod, Nagwanshi, Ojha, Raj, Sonjhari Jhareka, Thatia, Thotya, Wade Maria, Vade Maria.
" It is seen from the above Entry that 'Mana ' community is one of the communities included in the group of communities headed by Gond community.
It appears that the recommendation of the Joint Committee to exclude it from the Schedule to the Order was not accepted by the Parliament.
If the Schedule to the Order had not undergone any change, there would not have been any room for argument that the appellant was a person belonging to a Scheduled Tribe eligible to contest as a candidate at an election to fill a seat from the reserved constituency as the question was conducted by the judgment of this Court in Dina 's case (supra).
Mr. M. M. Phadke, learned counsel for the appellant, however, argued that a comparison of Entry No. 12 as it stood prior to the amendment and Entry No. 18 as it stood on the date of the election in question would show that the Parliament while substituting the Schedule by a new Schedule by Act No. 108 of 1976 intended to make a departure from the old law and that every person who belonged to any 'Mana ' community whether it had any affinity with Gond tribe or not would be entitled to the privilege of contesting at the election from the reserved constituency.
The question for consideration before us therefore is whether by reason of the amendment made in the year 1976, persons belonging to the Mana community to which the appellant belonged and which was not a Scheduled Tribe before such amendment can be considered as persons belonging to a Scheduled Tribe after such amendment.
Apart from Article 366(25) of the Constitution, there is no other definition of the expression "Scheduled Tribes".
Scheduled Tribes are, therefore, only those which are deemed under Article 342 of the Constitution to be Scheduled Tribes.
Hence in order to find out whether a community is a Scheduled Tribe or not, we have only to see the order which is made under Article 342 of the Constitution.
Mr. M. N. Phadke, learned counsel for the appellant drew the attention of the Court to the omission of the word 'including ' which according to him, had been used in Entry No. 12 of the Schedule as it stood prior to the amendment to indicate that the communities mentioned after it were those having affinity with the 'Gond ' tribe, from the new Entry No. 18 of Part IX of the Schedule to the Order and 1143 contended that the group of communities mentioned in Entry No. 18 need not necessarily be those having mutual affinity amongst them.
On the above basis, it was urged on behalf of the appellant that a person belonging to any 'Mana ' community should be treated as a person belonging to a Scheduled Tribe even though it had no affinity with the 'Gond ' tribe.
We find it difficult to agree with the submission made by him.
Sometimes, the word 'including ' is used in a definition to give an extended meaning also to the word defined.
In Dilworth vs Commissioner of Stamps(1), Lord Watson observed that when the word 'include ' is used in an interpretation clause to enlarge the meaning of words or phrases in a statute "these words or phrases must be construed as comprehending, not only such things as they signify according to their natural import but also those things which the interpretation clause declares that they shall include".
Sometimes the word 'includes ' is used as a synonym for 'means ' and not as a word of extension, but limitation.
This again is clear from the following observations of Lord Watson in the decision referred to above: "But the word 'include ' is susceptible of another construction, which may become imperative, if the context of the Act is sufficient to show that it was not merely employed for the purpose of adding to the natural significance of the words or expressions defined.
It may be equivalent to 'mean and include ', and in that case it may afford an exhaustive explanation of the meaning which, for the purposes of the Act, must invariably be attached to these words or expressions." In South Gujarat Roofing Tiles Manufacturers Association & Anr.
vs State of Gujarat & Anr.(2) this Court interpreted the expression 'includes ' found in Entry No. 22 which had been included in Part I of the Schedule to the by the Gujarat Government as being equivalent to 'means '.
It is significant that even when it was possible to give an extended meaning to the expression 'Mana ' appearing in Entry No. 12 in the Order before the amendment relying on the presence of the word 'including ' in that Entry, this Court gave a restricted meaning to it and held that only that 'Mana ' community which had affinity with the Gond community could be considered as a Scheduled Tribe and that Kshatriya Bidwaik Mana community to which the appellant belonged could not be treated as a Scheduled Tribe.
Now that the word 'including ' has been omitted from the present Entry No. 18, is it open to construe it as including communities which had no affinity with the principal tribe 'Gond ' mentioned first in that Entry? 1144 We do not think that it is possible to do so.
Even though the proceedings of the Joint Committee cannot be relied upon for the purpose of construing the Order, they may be looked into to ascertain the circumstances in which the several communities were grouped under one Entry or the other.
The extract from the proceedings of the Joint Committee quoted above shows that in order to avoid confusion, the Committee recommended to follow the words in Article 342 of the Constitution and to enlist the "tribes or tribal communities or parts of, or groups within, tribes or tribal communities" under specific Entries.
It also recommended that the main tribe should be mentioned first in any Entry followed by its synonyms and its sub tribes in alphabetical order.
Even without the aid of the proceedings of the Joint Committee, it is possible to arrive at the same conclusion in the context in which the word 'Mana ' is found in Entry No. 18.
Part IX of the Schedule to the Order as it stands today contains 47 Entries.
In certain entries only one community is mentioned and in certain others.
two or more communities are mentioned.
It is obvious that certain communities have been grouped together under a single entry in the light of Article 342 of the Constitution which requires parts of or groups within a tribal community also to be specified in the order issued thereunder.
It is, therefore, reasonable to hold that the communities mentioned against any specific entry are those which have mutual affinity amongst them.
It is also not possible to hold that by replacing the Schedule to the Order by a new Schedule by the , the Parliament intended to treat persons belonging to 'Kshatriya Bidwaik Mana ' community also as Scheduled Tribes.
If really that was the intention, the Parliament would have mentioned 'Mana ' community under an independent entry.
The inclusion of the 'Naikpod ' community amongst the group of communities in Entry No. 18 for the first time also is of no special significance since the appellant has admitted in the course of his evidence that 'Naikpod ' is also a tribe, found alongwith other Scheduled Tribes in that area and it is not stated that the said tribe has no affinity with them.
It may have been omitted from the order earlier due to oversight.
A reading of the Schedule to the Order also shows that where there are two communities with the same name, one having affinity with a tribe and the other not having anything to do with such tribe and both are treated as Scheduled Tribes the community which has affinity with another tribe is shown alongwith it in the same group against a single entry and the other is shown against a different entry.
This is illus 1145 trated by the inclusion of the 'koya ' community having affinity with 'Gonds ' in Entry No. 18 and the 'koya ' community having no such affinity in Entry No. 33 of Part IX of the Schedule to the Order.
If the Parliament intended to treat the appellant 's community also as a Scheduled Tribe, it would have shown 'Mana ' community under a separate entry.
No such entry is found in the Schedule.
Some arguments were addressed at the Bar on the basis of the difference in the punctuation marks used in Entry 12 and in entry 18.
It is well known that punctuation marks by themselves do not control the meaning of a statute when its meaning is otherwise obvious.
Hence we do not feel that we should deal with it in greater detail having regard to the nature of this case.
We are, therefore of the view that the 'Mana ' community included in Entry No. 18 can only be that which has affinity with 'Gonds ' and any other community which also bears the name 'Mana ' but does not have any such affinity cannot be deemed to fall within the scope of 'Mana ' in Entry No. 18.
The appellant has categorically admitted in the course of his evidence that there was no connection between his community and Gonds.
His evidence is, "We have no concern with the Gond community also.
The customs and traditions with regand to marriage of our community are different from those of the Gonds".
He has also stated in his deposition that 'I have no concern whatsoever with Gonds.
There are sub castes amongst Gonds.
Some of them are Arak, Gowari, Raj gond, Bada Magia, Madia, Ojha and Wanjari.
It is not true that Mana is a sub caste of the Gonds.
There is no community known as Gond '.
That the appellant was a member of the 'Mana ' community which has the qualification of 'Kshatriya ' is established by his admission in his deposition that he was a member of the Kshatriya Mana Shikshana Sahayak Mandal, Chandrapur.
Although in another part of his statement of objections, there are some contradictory statements, the following plea in para 9 of the said statement makes it obvious that there is a community called Kshatriya Bidwaik Mana community: "9 As to Para 11 : It is admitted that the respondent No. 1 was the Vice President for some time and also an active worker of the Kshatriya Bidwaik Mana Shikshana Sanastha.
The object of the said institution was not limited to spread education amongst the boys belonging to Kshatriya Bidwaik Mana community, and it is denied that the said 1146 society has been founded in order to give educational facilities to the students belonging to this community only".
In the appeal filed by the appellant where the question was whether he belonged to a Scheduled Tribe or not, this Court observed: "That there are sub tribes amongst the Gonds is not denied.
Names of some of those sub tribes are included in Entry 12 of Item 5 of Part VII A of the Schedule is also a matter which is beyond dispute.
The customs, manners, form of worship, and dress of the members of the Maratha Mana community are all different from the customs manner, form of worship and dress of the Gonds.
No rational explanation has been suggested why the Parliament should have, while including under Entry 12 several sub tribes of Gonds, specified Mana under that entry, if Manas had no affinity at all with Gonds.
The appellant was uncertain about the claim that he was making.
In the nomination paper filed by him he claim to be a Gond (Mana).
His subsequent explanation that he did so because the rules so required cannot be accepted as true.
He relied upon the status of a Mana in the belief that all Manas were intended to be given the benefit of the privileges conferred by the Scheduled Tribes Order.
He described himself as a Gond (Mana).
Realizing thereafter that his community had no affinity with the Gonds he stated that he was not a Gond; that he had nothing to do with the Gonds, and that his community had also nothing to do with the Gonds.
He rested his claim solely upon the description in Entry 12 in item 5 of Part VIIA of the Schedule.
But the form in which the entry is made prima facie indicates that in the view of the Legislature, Mana was a sub tribe of Gonds and a Mana who was a member of the sub tribe of Gonds alone was entitled to the privileges conferred by the Schedule to the Scheduled Tribes Order.
We therefore agree with the High Court that the appellant, merely because he belonged to the Mana community amongst the Marathas, is not eligible to stand as a candidate for election to the Maharashtra Legislative Assembly from the reserved seat of the Armori constituency in Gadchiroli tahsil of Chanda District.
" The position has not since changed even though the Schedule to the Order is substituted by a new Schedule.
There has only been a 1147 re arrangement of the Schedule with slight modification which has no effect on the question at issue in this case.
The High Court was, therefore, right in rejecting the case of the appellant that he belonged to a Scheduled Tribe, and in setting aside his election to the Maharashtra Legislative Assembly.
In the result the appeal fails and is hereby dismissed with costs.
P.B.R. Appeal dismissed.
[/INST]On August 31, 1976, the Food Inspector lifted a sample of 'Postman ' brand refined ground nut oil from M/s. Amar Provision & General Stores, which was sold/supplied to it by M/s. Gainda Mull Hem Raj on August 20, 1976 and the same was found, as per the Public Analyst 's report dated September 9, 1976, to be adulterated due to the presence of Castoroil (not an edible oil).
This adulterated article of food was supplied/sold to Gainda Mull Hemraj by M/s. Ahmad Oomer Bhoy through its sales managers at Delhi, T. K. Nangia and Y. P. Bhasin.
On June 23, 1977, the Delhi Administration filed a complaint under section 7(1) read with Section 16(1)(a) and Section 17 against (i) M/s. Ahmed Oomer Bhoy Ahmed Mills, Bombay manufacturers of well known brand Postman groundnut oil (ii) their distributors M/s. Gainda Mull Hemraj, New Delhi, a partnership firm, and its managing Partner Meher Chand Jain (iii) M/s. Amar Provision and General Stores, Netajinagar Market, New Delhi and its owner Amrik Lal, the retailer (iv) Y. A. Khan, Manager, Quality Control, Ahmed Mills appointed by the manufacturers as the person responsible under section 17(2) of the Act, and (v) The two sales managers, Delhi Branch of M/s. Ahmed Oomer Bhoy, manufacturers, I.K. Nangia and Y. P. Bhasin.
The Metropolitan Magistrate, Delhi by his order dated April 1, 1978 found that there was a prima facie case against all except the two sales managers and issued process accordingly.
He dismissed the complaint against the respondents on the ground "that they were not concerned with the manufacturer of the article in question, but had only effected the sale thereof".
The Delhi Administration moved the High Court in revision against dismissal, but it declined to interfere.
1017 Allowing the appeal by special leave the Court, ^ HELD: 1.
At the initial stage, if there is strong suspicion which leads the Court to think that there is a ground for presuming that the accused had committed an offence, then it is not open to the Court to say that there was no sufficient ground for proceeding against the accused.
[1020 C D] In the instant case, the allegations in the complaint constitute a prima facie, case against the respondents of having committed an offence under section 7(1) read with section 16(1)(a) of the .
The words "were in charge of" and "responsible to it for the conduct of its business" are wide enough to include all the business activities of M/s. Ahmed Oomer Bhoy at Delhi who have their office at Delhi and the two respondents are the sales Managers.
[1020 E, G H, 1021 A] State of Bihar vs Ramesh Singh, ; ; applied.
The person actually effecting the sale of an adulterated article of food is directly liable under section 7(i) of the Act.
The manufacturers M/s. Ahmed Oomer Bhoy, Bombay became liable because they were directly selling the adulterated article through their branch office at Delhi.
The respondents I. K. Nangia and Y. P. Bhasin also became liable because of the words "by any person on his behalf" in Section 7 which includes their agents and servants.
In view of this, the learned Metropolitan Magistrate should not have dismissed the complaint against the respondents.
[1021 C F] 3.
On the plain meaning of the new section 17, introduced by Act 34 of 1976, when an offence has been committed by a company, where there is no nomination under s 17(2), every person who at the time the offence was committed was in charge of and was responsible to the company for the conduct of the business, is deemed to be guilty of the offence and is liable to be proceeded against and punished.
Notwithstanding the nomination of a person under section 17(2), any director, manager, secretary or other officer of the company [not being a person nominated under sub section
(2)] can also be vicariously made liable if it is proved that the offence has been committed "with the consent or connivance of, or is attributable to any neglect on the part of such person".
[1023 B D] 4.
To construe section 17(2) of the Act to mean that the only person liable to be proceeded is the named/nominated person under section 17(2) would render the Explanation to Section 17(2) wholly illusory.
[1023 E F] 5.
Where there is a large business organisation, with a widespread network of sales organisation throughout the country, it ought to nominate different persons for different places or face the consequences set forth in section 17(1)(a)(ii).
The Explanation appended to section 17(2) does, in terms, contemplate that where a company has different establishments or branches or different units in any establishment or branch, it may nominate different persons in relation to different establishments or branches or units and the person so nominated in relation to any establishment or branch or unit shall be deemed to be the person responsible in respect of such establishment or branch or unit.
The language of the Explanation shows a purpose and, therefore, a construction consistent with that purpose must reasonably be placed upon it.
[1024 F H, 1025 A] 1018 The Explanation to section 17(2), although in terms permissive imposes a duty upon such a company to nominate a person in relation to different establishments or branches or units.
There can be no doubt that this implies the performance of a public duty, as otherwise, the scheme underlying the section would be unworkable.
[1024 A D] The Explanation lays down the mode in which the requirements of section 17(2) should be complied with.
Normally, the word 'may implies what is optional, but for the reasons stated, it should in the context in which it appears.
mean 'must '.
There is an element of compulsion.
It is a power coupled with a duty.
Though the company is not a body or authority, there is no reason why the same principle should not apply.
It is thus wrong to suggest that the Explanation is only an enabling provision, when its breach entails in the consequences indicated above.
It is not left to one 's choice, but the law makes it imperative.
Admittedly, M/s. Anand Oomer Bhoy had not at the material time nominated any person, in relation to their Delhi branch.
The matter is, therefore, squarely conversed by section 17(1)(a)(ii).
[1024D E, H, 1025 A] Julias vs Lord Bishop of Oxford, ; quoted with approval.
The individual liability of the sales manager is distinct and separate from the corporate liability of the manufacturer.
In case of a 'company prosecution ', the company alongwith its agent, that is, the person nominated under section 17(2) as well as the sales manager can both be prosecuted under section 7(i) read with section 16(1) (a).
Notwithstanding the nomination of a person responsible under section 17(2), there can also be prosecution of any director, manager, secretary, or other officer of the company under section 17(4).
But in such a case it is necessary for the prosecution to prove that the offence has been committed 'with the consent or connivance of, or is attributable to, any neglect on the part of such person '.
[1025 B D]
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<s>[INST] Summarize the judgementCivil Appeal No. 151 of 1981.
Appeal by Special Leave from the Judgment and Order dated 16.8.1969 of the Addl.
Judge (Revisions) Sales Tax, Saharanpur in Revision Appln.
No. 1688/78.
J. Ramamurthi and Miss R. Vaigai for the Appellant.
section C. Manchanda.
B. P. Maheshwari and Suresh Sethi for the Respondent.
The Judgment of the Court was delivered by TULZAPURKAR, J.
This appeal by special leave raises the question whether hypodermic clinical syringes could be regarded as "glass ware" under Entry No. 39 of the First Schedule to U.P. Sales Tax Act, 1948 ? The facts giving rise to the question lie in a narrow compass.
The appellant firm (hereinafter called the assessee) manufactures and sells hypodermic clinical syringes.
For the assessment year 1973 74 the assessee filed a return disclosing net U.P. sales of such syringes at Rs. 95,065.
The disclosed turnover was accepted by the 296 Sales Tax Officer, Sector III Muzaffarnagar, but as regards the rate of tax the assessee contended that the clinical syringes in respect of their turnover of Rs.91,513 up to November 30, 1973 should be regarded as an unclassified item and taxed at the rate of 3 1/2% or at 4% as "hospital equipment and apparatus" under Entry 44 of the First Schedule to the Act and on the turnover of Rs. 3,552/ for the period from December 1, 1973 to March 31, 1974 at the rate of 7% as an unclassified item.
The Sales Tax Officer, however, treated the syringes as "glass ware" and taxed the entire turnover of Rs.95,065/ at the rate of 10% under Entry No. 39 of the First Schedule.
The said assessment was upheld in appeal by the Assistant Commissioner (Judicial), Sales Tax, Muzaffarnagar and also in revision by the Additional Judge (Revision), Sales Tax, Saharanpur on August 16, 1979.
It is this view taken by the assessing authorities as well as by the Additional Judge in revision that is being challenged by the assessee before us in this appeal.
It may be stated that up to November 30, 1973 there were two competing entries in the First Schedule to the U.P. Sales Tax Act so far as the item in question is concerned, namely, Entry 39 which ran: "Glass wares other than hurricane lantern chimneys, optical lenses and bottles" and Entry 44 which ran: "Hospital equipment and apparatus" and for an item falling under the former the rate of tax was 10% while under the latter the rate of tax was 4% and for an unclassified item the rate was 3 1/2%.
From December 1, 1973 onwards Entry 44 was deleted and, therefore, if the clinical syringes did not fall within Entry 39 it became an unclassified item under section 3A (2A) of the Act and the rate of tax was 7%.
In view of this position that obtained for the relevant periods during the assessment year 1973 74 the assessee had claimed before the assessing authorities that its turnover in respect of syringes for the period up to November 30, 1973 was liable to tax at 3 1/2% as an unclassified item or in the alternative at 4% as "hospital equipment" under Entry 44 and its turnover for the period from December 1, 1973 to March 31, 1974 was liable to be taxed at 7% as an unclassified item.
But, negativing its contentions the entire turnover was held to be taxable at the rate of 10% on the basis that clinical syringes fell within the expression "glass ware" occurring in Entry 39.
Counsel for the assessee contended before us that in the absence of any definition of "glass ware" in the Act that expression must be understood in the ordinary commercial parlance and not in any scientific and technical sense and if such test were applied to the instant case then clinical syringes manufactured and sold by the 297 assessee could never be regarded as "glass ware".
Counsel pointed out that the Revising Authority negatived the contention of the assessee in view of a decision of the Allahabad High Court in the case of Commissioner of Sales Tax vs section section R. Syringes and Thermometers but urged that the contrary view taken by the Orissa High Court in the case of State of Orissa vs Janta Medical Stores that thermometers, lactometers, syringes, eye glasses, etc.
do not come within the meaning of the expression "glass ware" in Entry No. 38 in the Schedule to the relevant Notification issued under the first proviso to section 5(1) of the Orissa Sales Tax Act, 1947 was correct.
In our view counsel 's contention has considerable force and deserves acceptance.
It is well settled that in interpreting items in statutes like the Excise Tax Acts or Sales Tax Acts, whose primary object is to raise revenue and for which purpose they classify diverse products, articles and substances resort should be had not to the scientific and technical meaning of the terms or expressions used but to their popular meaning, that is to say, the meaning attached to them by those dealing in them.
If any term or expression has been defined in the enactment then it must be understood in the sense in which it is defined but in the absence of any definition being given in the enactment the meaning of the term in common parlance or commercial parlance has to be adopted.
In Ramavatar Budhiaprasad, etc.
vs Assistant Sales Tax Officer, Akola the question was whether 'betel leaves ' fell within item 'vegetable ' so as to earn exemption from sales tax and this Court held that word 'vegetable ' had not been defined in the Act, and that the same must be construed not in any technical sense nor from the botanical point of view but as understood in common parlance and so construed it denoted those classes of vegetable matter which are grown in kitchen garden and are used for the table and did not comprise betel leaves within it and, therefore, betel leaves were not exempt from taxation: In Commissioner of Sales Tax, Madhya Pradesh vs Jaswant Singh Charan Singh the question was whether the item 'coal ' under Entry 1 of Part III of Second Schedule to Madhya Pradesh General Sales Tax Act, 1958 included charcoal or not and this Court observed thus: "Now, there can be no dispute that while coal is technically understood as a mineral product, charcoal is manu 298 factured by human agency from products like wood and other things.
But it is now well settled that while interpreting items in statutes like the Sales Tax Acts, resort should be had not to the scientific or the technical meaning of such terms but to their popular meaning or the meaning attached to them by those dealing in them, that is to say, to their commercial sense.
" Viewing the question from the above angle this Court further observed that both a merchant dealing in coal and a consumer wanting to purchase it would regard coal not in its geological sense but in the sense as ordinarily understood and would include 'charcoal ' in the term "coal", and held that 'charcoal ' fell within the concerned Entry No. 1 of Part III of Schedule II of the Act.
Having regard to the aforesaid well settled test the question is whether clinical syringes could be regarded as "glass ware" falling within Entry 39 of the First Schedule to the Act ? It is true that the dictionary meaning of the expression "glass ware" is "articles made of glass" (See: Websters New World Dictionary).
However, in commercial sense glass ware would never comprise articles like clinical syringes, thermometers, lactometers and the like which have specialised significance and utility.
In popular or commercial parlance a general merchant dealing in "glass ware" does not ordinarily deal in articles like clinical syringes, thermometers, lactometers, etc.
which articles though made of glass, are normally available in medical stores or with the manufacturers thereof like the assessee.
It is equally unlikely that consumer would ask for such articles from a glass ware shop.
In popular sense when one talks of glass ware such specialised articles like clinical syringes, thermometers, lactometers and the like do not come up to one 's mind.
Applying the aforesaid test, therefore, we are clearly of the view that the clinical syringes which the assessee manufactures and sells cannot be considered as "glass ware" falling within Entry 39 of the First Schedule of the Act.
In our opinion, the view taken by the Orissa High Court in State of Orissa vs Janta Medical Stores (supra) is correct and the view of the Allahabad High Court in Commissioner of Sales Tax vs M/s S.S.R. Syringes and Thermometers (supra) is unsustainable.
In this view of the matter it is clear that the assessee 's turnover up to November 30, 1973 will fall under Entry 44 dealing with 299 "hospital equipment" and the same would be taxable at the rate of 4% and its turnover from December 1, 1973 to March 31, 1974 will be taxable at the rate 7% as an unclassified item and the assessment will have to be made accordingly.
In the result the appeal is allowed but there will be no order as to costs.
section R. Appeal allowed.
[/INST]Sub section 6 of section 5 of the U.P. Imposition of Ceiling on Land Holdings Act, 1960 as it stood at the relevant time provided that in determining the ceiling area any transfer of land made after January, 24, 1971 should be ignored and not taken into account.
Clause (b) of the proviso to sub section 6 which carves out an exception states that the sub section shall not apply to a transfer proved to the satisfaction of the Prescribed Authority to be in good faith and for adequate consideration under an irrevocable instrument.
Explanation II to this proviso places the burden of proof that a case fell within clause (b) of the proviso is on the party claiming its benefit.
On January 28, 1972 the donor gifted away certain lands in favour of his grand daughter, the appellant, daughter of a pre deceased son.
The gift having been made after the prescribed date, the Prescribed Authority ignored the gift for purposes of section 5 (6) of the Act.
On appeal, the District Judge gave a finding in favour of the appellant holding that the gift was bona fide having regard to the circumstances in which it was made and that it could not be held invalid merely because it was executed after the due date of January 24, 1971.
Purporting to follow one of its earlier decisions, the High Court held that a gift not being a transfer for consideration, had to be ignored under the provisions of the Act and that a gift being a gratuitous transfer made out of love and affection fell outside the purview of clause (b) of the proviso.
On behalf of the appellant it was contended that a gift could not be said to be a transfer without consideration because even love and affection may 240 provide sufficient consideration and hence the condition regarding adequate consideration would not apply to a gift.
Dismissing the appeal ^ HELD: It is a well settled rule of construction of statutes that where the definition of a word has not been given in an enactment it must be construed in its popular sense if it is a word of every day use, that is, the sense in which people conversant with the subject matter with which it deals would attribute to it.
Similarly if the language used is clear and explicit, the provision cannot be reduced to a nullity by reading into it a meaning which it does not carry.
[246B] In the instant case therefore, the word "transfer" being a term of well known legal significance with well ascertained incidents the legislature did not consider it necessary to define it separately.
It is used in the sense in which it is used in the Transfer of Property Act.
[245 G] C.I.T., Andhra Pradesh vs M/s. Taj Mahal Hotel, Secunderabad and Union of India vs Sankal Chand Himatlal Sheth and Anr. ; applied.
Keats vs Lewis referred to.
A conspectus of the meaning of the term "gift" is that it is a transfer which does not contain an element of consideration in any shape or form.
Where in respect of a gift there is a benefit measurable in terms of money the transaction ceases to be a gift and assumes a different colour.
Yet another salient feature of a gift is that love, affection and many other factors may constitute the motive for the gift and may enter into the intention of the donor making a gift, but none of these can be held to be legal consideration, as understood by law.
[251 G H; 252F] "Consideration" means a reasonable equivalent or other valuable benefit passed on by the promisor to the promisee or by the transferor to the transferee.
When the term consideration is qualified by the word "adequate" it makes it sufficient and valuable having regard to the facts, circumstances and necessities of the case.
[251 F] The word "transfer for adequate consideration" used in clause (b) of the proviso excludes a transaction, which is in the nature of a gift and which is without consideration.
[252 E] The argument that if the legislature intended to exclude gifts clause (b) of the proviso would have expressly said so and by not excluding it must be deemed to have included a gift is without force particularly in the face of the clear and unambiguous language of the proviso.
Every legislature has its own technical device to express its intendment.
Express exclusion is not the only method of conveying the legislative intent there may be other methods or devices by which a legislature expresses its intent; namely, by using expressions, which would exclude a particular transaction by necessary intendment.
This is what is done in enacting clause (b) of the proviso.
[252 G H] 241 The legislature has made its intention clear that a gift is excluded by qualifying the word "consideration" with the adjective "adequate".
[252 H] By using the word "adequate" to qualify the word "consideration" the legislature has ruled out gifts from the ambit of clause (b) of the proviso.
[253 C] The words "adequate consideration" clearly postulate that consideration must be capable of being measured in terms of money, having regard to the market price of the property, the value that it may fetch if sold, the value of similar lands situate in the vicinity and so on.
[253 B] The argument that since in the case of a gift there is no question of consideration, the words for "adequate consideration" in the 3rd part of clause (b) of the proviso are inapplicable and should, therefore, be ignored is opposed to the well known rule of interpretation that Courts, while interpreting statutes, must not legislate.
A legislature does not use words without any intention and every word used by the legislature must be given its due import.
The intention of the legislature in using the words "adequate consideration" is to exclude any transaction which is not for adequate consideration.
Even if a sale is bona fide if to but consideration is inadequate, the transaction would fall beyond the protection of clause (b) of the proviso.
[253 E F] Debi Saran Koiri and Anr.
vs Nandlal Chaubey and Ors.
A.I.R. 1929 Patna 591 and Kulasekaraperumal vs Pathakutty Thalevanar and Ors.
A.I.R. 1961 Madras 405 approved, The words "adequate consideration" carry a well known legal significance and, therefore, convey the same meaning and import in whichever statute they are used unless a contrary intention appears from the language employed by the legislature in a particular Act.
[256 E F] Tulsidas Kilachand vs The Commissioner of Income tax Bombay City I, ; , referred to Fateh Mohammed vs District Judge [Civil Writ Petition No. 915 of 1975, decided on 10 7 78] overruled.
An explanation merely widens the scope of the main section and is not meant to carve out a particular exception to the main section.
The words admission, acknowledgment, relinquishment or declaration used in Explanation I, do not absolve the party concerned from proving that the transfer should be executed in good faith and for adequate consideration.
[256 E F] However laudable the object of the donor in gifting the property to his grand daughter (particularly in the circumstances of this case) may be and whatever hardship might ensue to the donee by applying the provision, the gift fails if it does not fulfil the other essential requirements of the section.
The act was enacted to implement one of the Directives contained in Part IV of the Constitution and if in this process a few individuals suffer that cannot be helped, for, individual interests must yield to the larger interests of the community.
[258 D F] 242
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<s>[INST] Summarize the judgement: Criminal Appeal No. 282 of 1971.
(Appeal by Special Leave from the Judgment and Order dated 12 4 1971 of the Allahabad High Court in Criminal Appeal No. 1909/68).
S.K. Mehta, for the appellants.
D.P. Uniyal and O.P. Rana, for the respondent, 233 R.L. Kohli, for the Intervener.
The Judgment of the Court was delivered by FAZAL ALI, J.
It is a peculiar feature of our criminal law that where a trespasser has succeeded in taking recent wrongful possession of the property vested in the public for common enjoyment, the members of the village or the real owner are not entitled in law to throw out the trespasser but have to take recourse to the legal remedies available, and if any member of the public tries to secure public property from the possession of the trespasser he is normal ly visited with the onerous penalty of law.
This is what appears to have happened in this appeal by special leave in which the appellants appear to have got themselves involved in an armed conflict with the prosecution party resulting in the death of the deceased, injuries to some of the prosecu tion witnesses and injuries to three of the accused them selves.
The prosecution case in short is that on July 18, 1966, at about 7 30 to 8 00 in the morning when Ram Khelawan and his companions were removing weeds from the paddy crop sown by them in the field which included a portion of the Chak Road which had recently been encroached by the complainants ' party and amalgamated with their fields, Ram Ratan and Ram Samujh armed with lathis and Din Bandhu and Ram Sajiwan carrying a ballam and Biroo respectively entered the field of Ram Khelawan with their bullocks and insited on passing through the field along with their bullocks, which according to them was a public road.
The complainants protested against the highhanded action of the party of the accused on which Ram Ratan exhorted his companions to assault the deceased Murli as a consequence of which Ram Sajiwan as saulted Murli in the abdomen with his Biroo as a result of which MurIi sustained serious injuries and fell down in the field and ultimately succumbed to the injuries.
The other members of the complainants ' party, namely, Ram Khela wan Manohar Sarabjit, Mewa Lal and Satrohan were also assaulted by Ram Ratan and his party.
Soon after the occurrence Rameshwar Pathak, a police officer, who happened to be present at the spot recorded the statement of P.W. 1 Ram Khelawan which was treated as the F.I.R. and after conducting the usual investigation submitted a chargesheet against all the accused persons who were put on trial before the Sessions Judge, Barabanki.
The Learned Sessions Judge acquitted the accused Din Bandhu and convicted the appellant Ram Sajiwan under section 302 I.P.C. Ram Ratan and Ram Samujh were convicted under sections 326/34 I.P.C. and sentenced to eight years ' rigorous imprisonment.
Three appellants Ram Ratan, Ram Sajiwan and Ram Samujh were further convicted under section 447 I.P.C. to three months ' rigorous imprisonment and under sections 324/34 I.P.C. to two years 'rigorous imprison ment under each of the two counts.
and under sections 323/34 I.P.C. to six months ' rigorous imprisonment and ordered that all the sentences shall run concurrently.
The accused persons filed an appeal before the High Court of Allahabad which was also dismissed and thereafter they obtained spe cial leave of this Court and hence this appeal before us.
234 The defence of the accused was that shortly before the occurrence proceedings for consolidation of holdings had taken place in the village as a result of which the Revenue authorities provided a Chak Road which passed through plot Nos. 853, 854, 864, 823 and 887.
This Chak Road was meant to boa public road to enable the.
residents of the village to pass through this road with their cattle.
This road happened to be adjacent to the field of Ram Khelawan P.W. 1 and he took undue advantage of the proximity of the road and encroached upon the same and amalgamated it with his cultiv able field.
The accused persons wanted t0 assert their lawful right over the Chak Road and it was the prosecution party which was the aggressor and started assaulting the accused as a result of which three persons on the side of the accused received serious injuries.
The accused, there fore, assaulted the deceased in self defence.
Even other wise, the accused pleaded innocence.
Both the courts below have come to a concurrent finding of fact that the occurrence took place as alleged by the prosecution and that the accused persons were the aggressors and had opened the assault on the deceased.
The Trial Court has also the High Court have concurrently found, on a full and complete appreciation of the evidence., that although the place of occurrence was a part of the Chak Road, yet the complainant Ram Khelawan had encroached on the same and some time before the occurrence had brought the land under culti vation over which he had grown paddy crop.
The evidence of the Sub Inspector who visited the spot clearly shows that he found paddy crop grown at the height of 4 or 6 digits.
The learned counsel for the appellants has not been able to show that the concurrent finding of fact arrived at by the Ses sions Judge and the High Court on this point is in any way not borne out by the evidence.
The learned counsel for the appellants submitted two points before us.
In the first place, he submitted that the finding of the High Court impliedly shows that the accused were trying to, assert their lawful right over the Chak Road which was wrongfully occupied by the complainant and was in possession of the villagers.
The accused, therefore, had every right to throw out the complainants ' party who were trespassers by force.
The accused were, therefore, acting in the exercise of their right of private defence of person and property and were.
justified in causing the death of the deceased, particularly in view of the serious injuries received by three of the party of the accused.
Reliance was placed, particularly on the Injury Reports of Ram Samujh, Harnam and Ram Ratan.
It appears that Ram Samujh received two injuries one being a lacerated wound 3 cm X 3/4 cm X 1 cm deep on the posterior part of head and a contusion on the right side of the head, while Harnam had four contusions and Ram Ratan had two.
lacerated wounds in the region of the ear, one punctured wound in the left forearm and one contusion.
It was submitted that in view of the serious injuries, some of which were inflicted by sharp cutting weapons, it would not be said that the appellants had exceeded their right of private defence.
The argument is no doubt attractive, but on closer scrutiny we find that it is not tenable.
In view of the clear finding of the High Court and the Sessions Judge that the land in dispute was in the settled possession of the complainant Ram Khelawan 235 who rightly or wrongly encroached upon the road and convert ed it into his cultivable land the accused had no right to throw the complainant by force.
In fact the Sessions Judge found thus: "There is also no doubt that from the evidence on record adduced by the prosecution and the defence, it appears that the Chak Road, if any was existing, was encroached upon by Ram Khelawan and his family members.
So far as the question whether the Chak Road was encroached upon, there was hardly any discrepancy between the statements of the prosecution witnesses and the defence.
It has been admitted by Ram Khelawan P.W. 1 that before the occurrence Ram Rattan and several other villagers whose Chaks are situated in the east of Ram Khelawan Chak used to say that he had encroached upon the Chak Road, and that in the absence of that Chak Road, from where they should take their bullocks to their Chaks.
. . .From these admissions also it is amply proved that in fact there was a Chak Road but it was later encroached upon by the complainant Ram Khelawan.
" The High Court also found: "It is thus clear that assuming that the consolidation authorities had formed a Chak Road adjoining the Chak of Ram KheIawan, it had been taken possession of by Ram Khelawan included in his Chak ploughed by him and paddy crop had been sown therein.
It is thus obvi ous that Ram Khelawan had established his possession over the land where the incident took place and had been in peaceful possession thereof for 2 to 3 weeks at least before the occurrence took place.
" It is well settled that a true owner has every right to dispossess or throw out a trespasser, while the trespasser is in the act or process of trespassing and has not accom plished his possession, but this right is not available to the true owner if the trespasser has been successful in accomplishing his possession to the knowledge of the true owner.
In such circumstances the law requires that the true owner should dispossess the trespasser by taking recourse to the remedies available under the law.
In view of the clear finding of the High Court that the complainant Ram Khelawan even after encroachment had established his possession over the land in dispute for two to three weeks before the occur rence, for the purpose of criminal law, the complainant must be treated to be in actual physical possession of the land so as to have a right of private defence to defend his possession even against the true owner.
While it may not be possible to lay down a rule of universal application as to when the possession of a trespasser becomes complete and accomplished, yet, as this Court has indicated recently, one of the tests is to find out who had grown the crop on the land in dispute.
In Puran Singh & Others vs State 236 of Punjab(1), this matter was comprehensively considered and on of us (Fazal Ali, J.) who spoke for the Court observed as follows: "We, however, think that this is not what this Court meant in defining the nature of the settled possession.
It is indeed difficult to lay down any hard and fast rule as to.
when the possession of a trespasser can mature into a settled possession.
But what this Court really meant was that the posses sion of a trespasser must be effective, undis turbed and to the knowledge of the owner or without any attempt at concealment.
For instance a stray or a casual act of possession would not amount to settled possession.
There is no special charm or magic in the word 'settled possession ' nor is it a ritualistic formula which can be confined in a strait jacket but it has been used to mean such clear and effective possession of a person, even if he is a trespasser, who gets the right under the criminal law to defend his property against attack even by the true owner . . .
Thus in our opinion the nature of possession in such cases which may entitle a trespasser to exercise the right of private defence of property and person should contain the following attributes: (i) that the trespasser must be in actual physical possession of property over a sufficiently long period; (ii) that the possession must be to the knowledge either express or implied of the owner or without any attempt at concealment and which contains an element of animus pros sendie.
The nature of possession of the tres passer would however be a matter to be decided on facts and circumstances of each case; (iii) the process of dispossession of the true owner by the trespasser must be complete and final and must be acquiesced in by the true owner; and (iv) that one of the usual tests to determine the quality of settled possessions, in the case of culturable land, would be whether or not the trespasser, after having taken possession, had grown any crop.
If the crop had been grown by the trespasser, then even the true Owner has no right to destroy the crop grown by the trespasser and take forcible possession, in which case the tres passer will have a right of private defence and the true owner will have no right of private defence.
" In this case there is a clear finding of the High Court and the Sessions Judge that the complainant Ram Khelawan had encroached upon the land in dispute, had converted it into culturable field and had grown paddy crop which the com plainants ' party was trying to weed out on the day when the occurrence took place.
In these circumstances, therefore, the complainant was undoubtedly in posses (1) [1975] Supp.
S.C.R. 299.
237 sion of the land and the appellants had no right to commit trespass on the land and engage the complainants in a seri ous fight.
As the complainant Ram Khelawan was in peaceful possession of the land to the knowledge of the appellants, he was in law entitled to defend his possession.
The com plainant, therefore, was fully justified in protesting to the accused when they tried to pass through his field and caused damage to the paddy crop by forcibly taking the bullocks through the field.
In these circumstances the appellants who were undoubtedly the aggressors and had opened the.
assault could not claim any right of private defence either of person or property.
For these reasons, therefore, we agree with the finding of the High Court that the accused are not entitled to claim the right of private defence, nor can it be said that in causing the murderous assault on the deceased they had merely exercised their right of private defence of property.
It is true that the appellants were trying to exercise their lawful right over a portion of the land which had been left apart as a public road for the use of villagers by the Revenue authorities, but as a complaint had already been filed before the Pan chayat the appellant should have allowed the law to take its course instead of taking the law in their own hands by making an armed trespass into the property.
However, there can be no doubt that there was no common intention on the part of all the accused to cause the death of the deceased Murli or to cause grievous injuries to him which was an individual act of the appellant Ram Sajiwan.
The other appellants Ram Rattan and Ram Samujh, therefore, cannot be convicted under sections 325/34 I.P.C. Another point canvassed before us by counsel for the appellant was that although three persons on the side of the accused had sustained serious injuries, the prosecution has not given any explanation which shows that the origin of the prosecution is shrouded in mystery.
This contention is also without any substance.
The evidence of the eye witnesses examined by the prosecution clearly shows that some of them were also armed with lathis and sharp cutting weapons, and they have also stated that they wielded their weapons when the accused attached the complainants ' party and that this was done in selfdefence.
In view of the injuries on the person of the deceased and the prosecution witnesses, name ly, Manohar, Sarabjit, Mewa Lal, Satrohan and Ram Khelawan, there can be No. doubt that there was a mutual fight.
Thus in the instant case, the prosecution has given sufficient explanation for the injuries sustained by the accused per sons and the prosecution case cannot be thrown out on this ground.
Lastly it was submitted that so far as Ram Sajiwan was concerned the evidence given by the eye witnesses regarding the manner of the assault is inconsistent with the medical evidence.
In this connection reliance was placed by counsel for the: appellants on the evidence of the Doctor which is to the effect that the injury on the deceased Mufti was undoubtedly caused by a Biroo but it could have been caused only if the Biroo after being struck in the abdomen was rotated.
Much capital has been made out of this admission made by the Doctor,but on a close scrutiny we find that this circumstance is not sufficient 238 to put the prosecution out of court.
There is clear and consistent evidence of the eye witnesses that the deceased had been assaulted in the abdomen and this fact has been accepted by the two courts concurrently that the deceased Murli was assaulted by Ram Sajiwan with a Biroo.
The medi cal evidence clearly shows that the deceased had an injury in the abdomen which could be caused by a Biroo.
The exact manner in which the Biroo was pierced in the abdomen of the deceased could not have been observed by the witnesses, particularly in view of the mutual fight.
Since the injury could be caused if the Biroo was rotated after being pierced, it must be presumed in the circumstances that the assailant must have rotated the Biroo after having pierced it in the abdomen of the deceased, otherwise the injuries could not have been caused to the deceased.
In these cir cumstances, therefore, we are not able to agree with counsel for the appellants that the assault on the deceased by Ram Sajiwan is in any way inconsistent with the medical evi dence.
For these reasons, therefore, we find ourselves in agreement with the High Court that the prosecution has proved its case against this accused beyond reasonable doubt.
The injuries caused by the other appellants on the person of Manohar, Sarabjit, Mewa Lal, Satrohan and Ram Khelawan have been proved by the eye witness whose evidence has been accepted by the High Court as also the Sessions Judge.
We see no reason to interfere with the assessment of the evidence by the two Courts.
The only point that remains for consideration is as to the exact offence committed by the appellants.
In the first place, once it is held that the appellants had no right of private defence of person of property, appellant Ram Sajiwan cannot escape conviction under section 302 I.P.C. simpliciter, because the injury caused by him to the deceased was suffi cient to cause the death of the deceased.
The appellant Ram Sajiwan was rightly convicted under section 302 I.P.C. and as the minimum sentence is life imprisonment we cannot do anything about the sentence either.
We would like to observe, howev er, that the facts, of the case do raise some amount of sympathy for the accused Ram Sajiwan who was really trying to assert his lawful right against the complainant who was a trespasser.
The appellant was fighting for a just and righteous cause though not in a strictly lawful manner.
If the appellant had succeeded he would have been able to secure the right over the Chak Road which was left by the Revenue authorities for the benefit of the villagers.
These considerations, therefore, may weigh with the Government for considering the question of remitting a portion of the sentence imposed on the appellant Ram Sajiwan and the learned counsel appearing for the State has assured us that these considerations would be conveyed to the Government.
So far as the other appellants are concerned, as the object of the appellants was merely to assert a supposed or bona fide claim of right, it cannot be said that they had any common intention to cause grievous hurt.
In these circumstances, therefore, the charge under sections 326/34 I.P.C. must necessarily fall.
The conviction under section 447 I.P.C. as also that under sections 324/34 and 323/34 I.P.C. cannot be interfered with in view of the evidence of assault made by the appellants on the 239 witnesses Ram Khelawan, Manohar, Sarabjit, Mewa Lal, Satro han with their respective weapons.
Having regard to the fact that the appellants made a concerted attack either with a Biroo or lathis respectively on the aforesaid prosecution witnesses they had undoubtedly a common intention to cause simple hurt to these witnesses.
For these reasons, therefore, we would affirm the con victions and sentences passed on the appellant Ram Sajiwan but allow the appeal of the other appellants viz. Ram Rattan and Ram Samujh to this extent that their convictions and sentences under sections 326/34 I.P.C. are set aside, but their convictions and sentences under sections 324/34, 323/34 and 447 I.P.C. will stand.
If the appellants have already served out their sentences they may be released.
M. R. Appeal dismissed.
[/INST]The complainant Ram Khelawan had illegally encroached upon a portion of a public road and grown a paddy crop on it.
A complaint against him was pending before the Panchay at.
He was in peaceful possession of the land to the knowl edge of the appellants who nevertheless went armed and tried to exercise their right over the public road, by passing through the field with their cattle and thereby damaging the crop.
The complainants protested and a fight ensued, as a result of which, one of the complainants ' party died and injuries were received by both sides.
The appellants plead ed the right of private defence of property and person, which they had exceeded, but were concurrently found guilty by both, the Trial Court and the High Court.
Dismissing the appeal the Court, HELD: (1) A true owner has every right to dispossess or throw out a trespasser while he is in the act or process of trespassing but this right is not available to the true owner if the trespasser has been successful in accomplishing his possession to the knowledge of the true owner.
In such circumstances the law requires that the true owner should dispossess the trespasser by taking recourse to the remedies under, the law.
[235 F G, 236 A] Puran Singh & Ors.
vs State of Punjab [1975] Supp.
S.C.R. 299, applied.
The Court further observed: It is a peculiar feature of our criminal law that where a trespasser has succeeded in taking recent wrongful possession of the property vested in the public for common enjoyment, the members of the village or the real owner are not entitled in law to throw out the trespasser but have to take recourse to the legal remedies available, and if any member of the public tries to secure public property from the possession of the trespasser he is normally visited with the onerous penalty of law.
[233 A B] (2) The complainant Ram Khelawan was in peaceful posses sion of the land to the knowledge of the appellants and he was in law entitled to defend his possession.
The appel lants who were the aggressors and had opened the assault, could not claim any right of private defence either of person or property.
[237 A B]
</s>
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<s>[INST] Summarize the judgementiminal Appeal No. 12 of 1957.
Appeal from the judgment and order dated September 5, 1956, of the Calcutta High Court in Government Appeal No. 7 of 1954, arising out of the judgment and order dated April 3, 1954, of the Court of 1st Class Magistrate at Alipore.
Ishwar Lal C. Dalal and 1.
N. Shroff, for the appellant.
H. J. Umrigar, and R. H. Dhebar, for the respondent.
May 7.
This is an appeal on a certificate granted by the Calcutta High Court.
Two points have been urged before the Bench of the High Court which granted the certificate.
The first was that the search conducted by the Customs officials which had resulted in the detection of the currency notes on the person of the appellant had not been a legal search and consequently no proceedings could be based on the purported detection made.
This point was rejected by the Bench.
The second point urged on behalf of the appellant was that on September 16, 1952, when the 95 Magistrate issued the warrant of arrest against the appellant he could not have done so without having previously taken cognizance of the offence.
Since, however, the authorization required under section 23(3) of the Foreign Exchange Regulation Act (VII of 1947) was not obtained till January 27, 1953, the cognizance taken by the Magistrate on September 16, 1952, was without jurisdiction.
If the initiation of the proceedings was without jurisdiction, the conviction could not stand.
The High Court thought that the contention of the appellant raised a question of law and granted the requisite certificate for appeal to this Court.
The prosecution case was that on September 7, 1952, the appellant went to Dum Dum Aerodrome with a view to boarding a plane for Hong Kong.
The plane was due to leave the airport at 8 30 a.m.
The appellant had to go through the customs formalities before he could board the plane.
On an enquiry by the Customs Officers as to whether he had any other articles besides what he had declared in the declara tion form, the appellant answered in the negative.
His baggage was then examined but no objectionable article was detected therein.
The Customs Officers, however, noticed a pouch of somewhat unusual size which aroused their suspicion.
Thereafter, the appellant was subjected to personal search.
When they were about to search his person he let drop his trousers.
The appellant was requested to lift up the trousers and wear them again which he did.
On the search of the trousers a sum of Rs. 25,000 in Indian currency notes was discovered in two secret pockets.
They were concealed from below the surface and opened from the inside.
On September 11, 1952, the Reserve Bank of India authorized Inspector section B. Mitra of the Special Police Establishment, Calcutta, to make a representation to the Additional District Magistrate, 24 Parganas (hereinafter referred to as the Additional District Magistrate) for permission to proceed against the appellant as required under section 19(3) of the Foreign Exchange Regulation Act, 1947.
Mitra thereupon applied to the Additional District, Magistrate on September 16, 1952, for a search warrant 96 to be issued which was allowed.
Mitra on the same date also applied to the same Magistrate that a warrant of arrest might be issued against the appellant.
This was also allowed and a warrant of arrest was issued by the Additional District Magistrate and appellant was thereafter arrested and released on bail with a direction to appear before the Additional District Magistrate on September 19.
On September 19, he was released on bail by the Additional District Magistrate in the sum of Rs. 50,000 with 10 sureties of Rs. 5,000 each.
On November 19, the appellant asked for exemption from attending the court on the succes sive dates fixed for the case but the application was refused.
On January 27, 1953, the Reserve Bank of India authorized Mitra to file a complaint against the appellant.
On February 2,1953, a complaint was filed against the appellant charging him with an offence under section 8(2) of the Foreign Exchange Regulation Act read with section 19 of the Sea Customs Act and notification No. FERA 105/55 RB, dated February 27, 1951.
Thereafter, the appellant was tried by another Magistrate, Mr. Sinha, who acquitted him under section 258 of the Code of Criminal Procedure.
The currency notes which had been seized by the Customs Officials were directed to be relassed.
Against the appellant 's acquittal the State of West Bengal preferred an appeal to the High Court.
The High Court allowed the appeal and convicted the appellant of the offence with which he had been charged.
He was sentenced to pay a fine of Rs. 1,000, in default to suffer rigorous imprisonment for three months.
The order of the Magistrate directing the release of the currency notes was set aside.
The main submission made on behalf of the appellant before us has been that the Additional District Magistrate having taken cognizance of the offence on September 16, 1952, and as the provisions of section 23(3) of the Foreign Exchange Regulation Act had not been complied with, the entire proceedings before him and the Magistrate who tried the case were without jurisdiction.
The subsequent authorization by the Reserve Bank on January 27, 1953, and the filing of 97 the complaint on February 2,1953 could not make legal proceedings which had already commenced without jurisdiction.
It was also urged that the facts found did not attract the provisions of section 19 of the Sea Customs Act (8 of 1878) as it could not be said that at the moment the appellant was searched by the Customs Officials, he was taking out of India across any customs frontier as defined by the Central Government the currency notes in question.
It was also urged that explanation offered by the appellant was accepted by the trying Magistrate and the High Court ought not to have set aside the acquittal of the appellant, there being no good ground why his explanation should not have been accepted.
The version of the appellant as to how the sum of Rs. 25,000 in currency notes was with him was that he was not searched at all at the Customs barrier.
had taken out the currency notes in question from his trouser pocket and handed over the same to the Customs Officers stating the circumstances under which he was carrying the same on his person and asked for a receipt.
The Customs Officers instead of giving him a receipt falsely charged him with smuggling the currency notes out of India without any permit.
According to the appellant, he had applied to the Reserve Bank of India at Calcutta for a permit and had sent an application for that purpose to one Joshi in Calcutta.
He failed to receive the permit upto the last moment.
His intention was to hand over the money to the Customs Officers for safe custody.
In other words, the appellant 's version, in substance, was that as he had failed to get the permit upto the last moment he voluntarily handed over the currency notes in question to the Customs Officers at the customs barrier for safe keeping.
He had at no time any intention to carry out of India the said currency notes without a permit.
This version of the appellant was accepted by the trying Magistrate who acquitted him.
The High Court, however, did not accept his version.
It was urged that the appeal is before us on a certificate and as the High Court had come to a different 13 98 finding on a question of fact to what the trying Magistrate had found, it was open to the appellant to urge that he was entitled to question the findings of the High Court.
It is true that the High Court has taken a different view to that taken by the trying Magistrate and has rejected the appellant 's case that he had voluntarily handed over the currency notes in question to the Customs Officers in the circumstances mentioned by him and that he had no intention to take that money out of India without a permit.
Nonetheless, the finding of the High Court is on a question of fact.
We can see no particular reason in this case to go be.
hind the findings of fact arrived at by the High Court.
The High Court gave very good reasons for accepting the evidence of the prosecution witnesses as to the circumstances in which the currency notes in question were recovered from the appellant when his person was searched.
An important circumstance which might have supported the appellant 's case, namely whether he had applied to the Reserve Bank of India for a permit to take out of India currency notes to the extent of Rs. 25,000 was considered by the High Court.
It found, on the evidence of the Superintendent of the Reserve Bank, that the Reserve Bank received no application from the appellant before September 7, 1952, nor had the Reserve Bank granted the permission to the appellant to take any currency notes out of India.
It was on September 16, that the Reserve Bank had received an application of the appellant forwarded by one G.C. Joshi by his letter dated September 15, 1952.
The application of the appellant bore the date September 2, 1952.
The High Court thought that there were grounds for suspecting that this application was antedated.
The High Court came to the conclusion that there was no evidence to show that any such application was written or submitted on September 2, 1952.
It does seem extraordinary that if the appellant had sent the application to Joshi on September 2, 1952, that Joshi should not have sent on that application to the Reserve Bank till September 15, 1952.
It is to be remembered that the incident had already taken place on September 7, 1952, and in that 99 connection on September 15 and 16, 1952, Inspector Mitra of the Special Police Establishment, Calcutta had applied for a search warrant and a warrant of arrest respectively against the appellant.
On arrest, under the terms of that warrant he was released on bail by the police with a direction to appear before the court on September 19.
The appellant had therefore ample opportunity to concoct an application for a permit after September 7, and to antedate it getting Joshi on September 15, 1952, to forward the same to the Reserve Bank.
It is inconceivable that a person who was leaving for Hong Kong and wished to carry such a large sum of money as Rs. 25,000 in currency notes would have applied on September 2, when he was actually to fly on September 7, 1952.
Further it would not be unreasonable to suppose that the appellant would have so timed his arrival at Calcutta as would have enabled him to make the necessary enquiries from Joshi or the Reserve Bank whether the permit asked for had, been granted.
It is impossible to believe that he had arrived at Calcutta and had gone direct to the Dum Dum Aero drome without making any enquiry from Joshi at least whether the permit asked for had been granted.
Normally one would expect the appellant to reach Calcutta in sufficient time to make the necessary enquiries and in the absence of a permit having been granted to have left the currency notes for safe custody with Joshi or some other trusted person.
It is an entirely unacceptable story which the appellant put forward that he waited upto the last moment at the aerodrome for the necessary permit and not having got it requested the Customs Officers to keep the currency notes for safe custody.
It is significant that the appellant did not examine Joshi as a witness in support of his case.
It is not unlikely that if he had done so some inconvenient results would have followed in consequence of close questioning of Joshi regarding the entire transaction.
We have, therefore, no reason to think that the High Court had erred in suspecting that the application to the Reserve Bank was antedated.
On this finding it is apparent that the very foundation of the defence of the appellant is false.
That the appellant did not hand 100 over the currency notes of Rs. 25,000, at the customs barrier but was searched when the customs formalities were gone through is not only deposed to by a number of 'Witnesses holding responsible positions but is deposed to by P.W. 4, Panna Lal Dey, Money Exchanger of Dum Dum Airport.
Panna Lal Dey 's evidence was accepted by the High Court and after having examined his evidence we are satisfied that there is no reason to distrust his testimony.
Reference has been made to some of the evidence on a question of fact in order to ' satisfy ourselves whether the finding of the High Court was correct.
We are satisfied that the finding of the High Court is the only view which could reasonably be taken in a case like this.
It is true that the appellant had not taken the currency notes in question out of India across any customs frontier as defined by the Central Government.
He had, however, clearly attempted to take the same out of India.
In such a case no question of his crossing the customs frontier arises.
That an attempt to take out the currency notes in question is an offence punishable under the Sea Customs Act is clear from the provisions of section 167, Item 8.
The Foreign Exchange Regulation (Amendment) Act 1952 (VIII of 1952), came into force in February 1952.
By this Act section 23B was introduced into the Foreign Exchange Regulation Act.
Section 23B makes punishable an attempt to contravene the provisions of the Foreign Exchange Regulation Act or any rule, direction or order made thereunder.
Furthermore, this point was not taken before the Bench which granted the certificate of fitness for appeal to this Court.
Be that as it may, the facts found clearly established that the appellant attempted to take out of India the currency notes in question.
He had entered the customs enclosure and had signed the declaration form.
He had been questioned as to whether he had any other article than those mentioned in the declaration form which he wished to declare and he had answered in the negative.
On his personal search he dropped his trousers on the ground.
He was asked to pick up his trousers and wear them again.
On search of the trousers Rs. 25,000, 101 in currency notes were found concealed in the inner pockets.
The appellant had his ticket to proceed to Hong Kong by a plane which was due to leave Dum Dum Airport at 8 30 a.m. and the customs formalities were done in connection with that flight.
If the appellant had successfully cleared himself from the customs formalities all that was left for him to do was to board the plane which would take him out of India.
These circumstances establish beyond all reasonable doubt that the act of the appellant had gone beyond the stage of preparation and was clearly an attempt to carry the sum of Rs. 25,000, in currency notes out of India without a permit from the Reserve Bank.
We cannot accept the argument made on his behalf that the act of the appellant, on the facts found, amounted merely to preparation and not an attempt.
The main submission on behalf of the appellant was directed towards establishing that the entire proceedings before the Additional District Magistrate and the trying Magistrate were without jurisdiction as cognizance of the offence had been taken on September 16, 1952, in contravention of the provisions of section 23(3) of the Foreign Exchange Regulation Act, there being on that date no complaint in writing made by an officer authorised in that behalf by the Central Government or the Reserve Bank of India by a general or a special order.
It is, therefore, necessary to see, in the circumstances of the present case, on what date cognizance of the offence was taken.
In order to ascertain this certain provisions of the Foreign Exchange Regulation Act and the Code of Criminal Procedure will require con sideration.
Under section 19(3) of the Foreign Exchange Regulation Act a District Magistrate or Magistrate of the first class may, on a representation in writing made by a person authorized in this behalf by the Central Government or the Reserve Bank and having reasons to believe that there had been contravention of any of the revisions of that Act, issue a search warrant.
Inspector Mitra was so authorized by the Reserve Bank on September 11, 1952, and in pursuance of that authorization applied to the Additional District Magistrate for the issue of a search warrant.
Under 102 this section the search warrant is issued for the purposes of conducting investigation under that Act.
On September 16, Mitra applied for a warrant of arrest against the appellant.
This application was obviously made under the Criminal Procedure Code, The offence which the appellant is alleged to have committed was a non cognizable offence.
Under section 155(2) of the Code of Criminal Procedure, no police officer shall investigate a non cognizable offence without the order of a Magistrate of the first or second class having power to try such a case or commit the same for trial, or of a Presidency Magistrate.
Inspector Mitra 's application definitely states that he in asking for permission to investigate a non cognizable offence under section 155, Cr.
The order of the Additional District Magistrate directing the issue of a search warrant and the word " permitted " contained therein we consider, in the context of the application, to mean that he granted the sanction for investigation as asked for.
Under section 155(3) of the Code a police officer being permitted to investigate a non cognizable offence may exercise the same powers in respect of the investigation as an officer incharge of a police station may exercise in a cognizable case, except that he has not the power to arrest without a warrant.
It was necessary therefore for Inspector Mitra to obtain from the Additional District Magistrate a warrant of arrest.
It is clear, therefore, that upto September 16, 1952, the Additional District Magistrate had not taken cognizance of any offence.
On September 19, 1952, the appellant appeared before the Additional District Magistrate who recorded the following order: " He is to give bail of Rs. 50,000 with ten sureties of Rs. 5,000 each.
Seen Police report.
Time allowed till 19th November, 1952, for completing investigation.
" On November 19, 1952, on perusal of the police report the Magistrate allowed further time for investigation until January 2, 1953, and on that date time was further extended to February 2, 1953.
in the meantime, on January 27, 1953, Inspector Mitra had been authorized under section 23(3)(b) of the Foreign Exchange Regulation Act to file a complaint.
Accordingly, a 103 complaint was filed on February 2,1953.
The Additional District Magistrate thereon recorded the following order: " Seen the complaint filed to day against the accused Narayandas Bhagwandas Madhavdas under section 8(2) of the Foreign Exchange Regulation Act read with Section 23B thereof read with Section 19 of the Sea Customs Act and Notification No. F.E.R.A. 105/51 dated the 27th February, 1951, as amended, issued by the Reserve Bank of India under Section 8(2) of the Foreign Exchange Regulation Act.
Seen the letter of authority.
To Sri M. N. Sinha, S.D.M. (Sadar), Magistrate 1st class (spl.
empowered) for favour of disposal according to law.
Accused to appear before him.
" Accordingly, on the same date Mr. Sinha then recorded the following order: " Accused present.
Petition filed for reduction of bail.
Considering all facts, bail granted for Rs. 25,000 with 5 sureties.
To 26th March, 1952 and 27th March, 1952 for evidence.
" It is clear from these orders that on September 19, 1952, the Additional District Magistrate had not taken cognizance of the offence because he had allowed the police time till November 19, 1952, for completing the investigation.
By his subsequent orders time for investigation was further extended until February 2, 1953.
On that date the complaint was filed and the order of the Additional District Magistrate clearly indicated that he took cognizance of the offence and sent the case for trial to Mr. Sinha.
It would also appear from the order of Mr. Sinha that if the Ad ditional District Magistrate did not take cognizance, he certainly did because he considered whether the bail should be reduced and fixed the 26th and 27th of March, for evidence.
It was, however, argued that when Mitra applied for a search warrant on September, 16, 1952, the Additional District Magistrate had recorded an order thereon, " Permitted.
Issue search warrant.
" It was on this date that the Additional District Magistrate took cognizance of the offence.
We cannot agree with this submission because the petition of Inspector Mitra clearly states that " As this is non cognizable offence, I pray that you will kindly permit 104 me to investigate the case under section 155 Cr. P. C." That is to say, that the Additional District Magistrate was not being asked to take cognizance of the offence.
He was merely requested to grant permission to the police officer to investigate a non cognizable offence.
The petition requesting the Additional District Magistrate to issue a warrant of arrest and his order directing the issue of such a warrant cannot also be regarded as orders which indicate that the Additional District Magistrate thereby took cognizance of the offence.
It was clearly stated in the petition that for the purposes of investigation his presence was necessary.
The step taken by Inspector Mitra was merely a step in the investigation of the case.
He had not himself the power to make an arrest having regard to the provisions of section 155(3) of the Code of Criminal Procedure.
In order to facilitate his investigation it was necessary for him to arrest the appellant and that he could not do without a warrant of arrest from the Additional District Magistrate.
As already stated, the order of the Additional District Magistrate of September 19, 1952, makes it quite clear that he was still regarding the matter as one under investigation.
It could not be said with any good reason that the Additional District Magistrate had either on September 16, or at any subsequent date upto February 2, 1953, applied his mind to the case with a view to issuing a process against the appellant.
The appellant had appeared before the Magistrate on February 2, 1953, and the, question of issuing summons to him did not arise.
The Additional District Magistrate, however, must be regarded as having taken cognizance on this date because he sent the case to Mr. Sinha for trial.
There was no legal bar to the Additional District Magistrate taking cognizance of the offence on February 2, 1953, as on that date Inspector Mitra 's complaint was one which he was authorized to make by the Reserve Bank under section 23(3)(b) of the Foreign Exchange Regulation Act.
It is thus clear to us, that on a proper reading of the various orders made by the Additional District Magistrate no cognizance of the offence was taken until February 2, 1953.
The argument that he took cogniz ance of the offence on September 16, 1952, is without 105 foundation.
The orders passed by the Additional District Magistrate on September 16, 1952, September 19, 1952, November 19, 1952, and January 2, 1953, were orders passed while the investigation by the police into a non cognizable offence was in progress.
If at the end of the investigation no complaint had been filed against the appellant the police could have under the provisions of section 169 of the Code released him on his executing a bond with or without sureties to appear if and when so required before the Additional District Magistrate empowered to take cognizance of the offence on a police report and to try the accused or commit him for trial.
The Magistrate would not be required to pass any further orders in the matter.
If, on the other hand, after completing the investigation a complaint was filed, as in this case, it would be the duty of the Additional District Magistrate then to enquire whether the complaint had been filed with the requisite authority of the Reserve Bank as required by section 23(3)(b) of the Foreign Exchange Regulation Act.
It is only at this stage that the Additional District Magistrate would be called upon to make up his mind whether he would take cognizance of the offence.
If the complaint Was filed with the authority of the Reserve Bank, as aforesaid, there would be no legal bar to the Magistrate taking cognizance.
On the other hand, if there was no proper authorization to file the complaint as required by section 23 the Magistrate concerned would be prohibited from taking cognizance.
In the present case, as the requisite authority had been granted by the Reserve Bank on January 27, 1953, to file a complaint, the complaint filed on February 2, was one which complied with the provisions of section 23 of the Foreign Exchange Regulation Act and the Additional District Magistrate could take cognizance of the offence which, indeed, he did on that date.
The following observation by Das Gupta, J., in the case of Superintendent and Remembrancer of Legal Affairs, West Bengal vs Abani Kumar Banerji (1) was approved by this Court in the case of R. R. Chari vs The State of Uttar Pradesh (2) : (1) A.I.R. (1950) Cal 437.
14 (2) ; 106 "What is taking cognizance has not been defined in the Criminal Procedure Code and I have no desire to attempt to define it.
It seems to me clear however that before it can be said that any magistrate has taken cognizance of any offence under section 190(1)(a) Criminal Procedure Code, he must not only have applied his mind to the contents of the petition but must have done so for the purpose of proceeding in a particular way as indicated in the subsequent provi sions of this Chapter proceeding under section 200 and thereafter sending it for inquiry and report under section 202.
When the magistrate applies his mind not for the purpose of proceeding under the subsequent sections of this Chapter, but for taking action of some other kind, e.g., ordering investigation under section ' 156(3), or issuing a search warrant for the purpose of the investigation, he cannot be said to have taken cognizance of the offence.
" It is, however, argued that in Chari 's case this Court was dealing with a matter which came under the Prevention of Corruption Act.
It seems to us, however, that makes no difference.
It is the principle which was enunciated by Das Gupta, J., which was approved.
As to when cognizance is taken of an offence will depend upon the facts and circumstances of each case and it is impossible to attempt to define what is meant by taking cognizance.
Issuing of a search warrant for the purpose of an investigation or of a warrant of arrest for that purpose cannot by themselves be regarded as acts by which cognizance was taken of an offence.
Obviously, it is only when a Magistrate applies his mind for the purpose of proceeding under section 200 and subsequent sections of Chapter XVI of the Code of Criminal Procedure or under section 204 of Chapter XVII of the Code that it can be positively stated that he had applied his mind and therefore had taken cognizance.
In our opinion, the proceedings before the Additional District Magistrate and the trying Magistrate were with jurisdiction and the trial of the appellant was legal.
The appeal is accordingly dismissed.
[/INST]On September 7, 1952, the appellant went to Dum Dum Aerodrome to board a plane for Hong Kong.
On his search by the customs authorities a sum of RS.
25,000 was recovered from him which he had not declared in his declaration form and for which he had no permit from the Reserve Bank of India for taking out of India.
On September II, 1952, the Reserve Bank authorised Inspector Mitra to move the Additional District Magistrate, 24 Parganas under section 19(3) Of the Foreign Exchange Regulation Act, for permission to proceed against the appellant.
On September 16, 1952, Mitra applied to the Magistrate for a search warrant and for a warrant of arrest and both warrants were issued.
The appellant was arrested and released on bail with a direction to appear before the Magistrate on September 19 On September 19, the Magistrate granted bail to the appellant but refused him exemption from personal attendance before the Court and granted time till November 19, 1952, for completing the investigation.
This time was extended upto January 2, 1953 and then upto February 2, 1953.
In the meantime on January 27, 1953, Mitra was authorised under section 23(3)(b)) Of the Act to file a complaint against the appellant.
The complaint was filed on February 2, 1953, before the Additional District Magistrate who transferred the case to a Magistrate I Class for trial.
On the same day the Magistrate I Class recorded the presence of the appellant, allowed his application for reduction of security and fixed March 26, and 27, 1953, for evidence.
Upon conclusion of the trial the Magistrate acquitted the appellant but on appeal the Calcutta High Court convicted him.
The appellant contended that the entire trial was without jurisdiction as the Magistrate had taken cognizance of the offence on September 16, 1952, without there being a complaint in writing by a person authorised as required by section 23(3) of the Act.
Held, that cognizance of the offence was taken by the Additional District Magistrate on February 2, 1953, after the complaint had been filed and the trial was valid.
As to when cognizance is taken of an offence will depend upon the facts and circumstances of each case.
Mere issuing of a search warrant or warrant of arrest for the purposes of investigation did not, by 94 themselves, amount to taking of cognizance.
Cognizance was taken when a Magistrate applied his mind for the purpose of proceeding under section 200 and subsequent sections of Ch.
XVI of the Code of Criminal Procedure or under section 204 Of Ch.
XVII of the Code.
In the present case cognizance was taken when on February 2, 1053, the Additional District Magistrate applied his mind to the case with a view to issuing a process and sent the case for trial to another magistrate.
Superintendent and Remembrancer of Legal Affairs, West Bengal vs Abani Kumar Banerji, and R. R. Chari vs The State of Uttar Pradesh, ; , applied.
The facts found clearly established that the appellant attempted to take out of India the currency notes in question, and such attempt was also an offence.
The High Court had rightly rejected his explanation that he had applied to the Reserve Bank for a permit to take the currency notes out of India and that as the permit had not been received he had handed over the notes to the customs authorities for safe custody.
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<s>[INST] Summarize the judgementMINAL APPEAL No. 193 of 1962.
Appeal from the judgment and order dated March 12,1962 of the Allahabad High Court (Lucknow Bench) at Lucknow in Criminal Reference No. 21 of 1961.
O. P. Rana, Atiqur Rehman and C. P. Lal, for the appellant.
The respondent did not appear.
March 24, 1964.
The Judgment of the Court was delivered by HIDAYATULLAH, J.
This is an appeal by certificate granted by the High Court of Allahabad (Lucknow Bench) against its order dated March 12, 1962 quashing the trial of the respondents for an offence under section 15(1) of the Uttar Pradesh Private Forests Act (VI of 1949).
This trial com menced on February 11, 1959 on a complaint by the District Magistrate Bahraich.
The charge against the first respondent was that he sold one tamarind tree to respondent No. 2 for the purpose of felling and removing it without obtaining permission from the competent authority and that against respondent No. 2 was that he felled the tree and removed it.
The complaint was transferred from one Magistrate to another 437 till it came on the file of Mr. T. B. Upadhaya who was a Magistrate of the Second Class.
After Mr. Upadhaya had re corded all the evidence and examined the two respondents the powers of Magistrate, First Class were conferred on him.
Thereafter he pronounced judgment in the case and finding respondents guilty he sentenced them to pay a fine of Rs. 501 each or to, undergo simple imprisonment for one month.
The respondents filed an appeal before the Additional Sessions Judge, Bahraich which was later converted into a revision.
The learned Additional Sessions Judge made a reference to the High Court recommending that the trial before the Magistrate, First Class be quashed as he had no jurisdiction to try the offence.
This reference was heard by Mulla, J. who did not agree with the opinion of Beg, J. In Jaddu and others vs State,(1) on which the Additional Sessions Judge had relied.
Beg, J. had taken the same view in a subsequent case also Harbans Singh and others vs State.(2) Mulla, J. was of the opinion that the trial was proper, but as these rulings stood in his way, he made a reference of the case to a larger Bench.
The case was heard by a Division Bench consisting of B. N. Nigam and section D. Singh, JJ.
The learned Judges differed amongst themselves: Mr. Justice Nigam was of the view that the trial was valid but Mr. Justice Singh did not agree with him.
The case was then placed before Mr. Justice Verma who agreed with Mr. Justice Singh.
As a result, the conviction and sentence passed on the respondents were set aside.
The case was, however, certified by the High Court as fit for appeal and the present appeal has been filed.
Which of the two views is the right one is the short question in this appeal.
Section 15(2) of the Uttar Pradesh Private Forests Act confers jurisdiction to try offences under the first sub section on Magistrates of the Second and the Third Class.
The trial in the present case was by a Magistrate of the First Class, and if there was no jurisdiction in him to try the offence then the proceedings were rightly declared void under section 530(p) of the Code of Criminal Procedure.
According to the opinion of Mr. Justice Nigam which finds support from the order of reference made by Mulla, J., there is nothing to prevent the First Class Magistrate from trying an offence under section 15(1) of the Act, because under Schedule III of the Code of Criminal Procedure the ordinary powers of a Magistrate, First Class include the ordinary powers of a Magistrate of the Second Class.
According to the other view, the Forests Act confers jurisdiction on Magistrates of the Second and the Third Class and this excludes jurisdiction of any superior Magistrate.
(1) A.I.R. 1952 All.873.
(2) A.I.R. 1953 All.179.
438 Section 15 of the Forests Act reads as follows "15, Offences under this Chapter and trial of such offences and penalties thereof: (1) Any person who contravenes any of the provisions of this Chapter or deviates from the prescriptions of a sanctioned working plan without the previous sanction of the Forest Officer shall be punishable with fine not exceeding one hundred rupees for the first offence and with fine not exceeding one thousand rupees or simple imprisonment not exceeding three months or both for the second or any subsequent offence.
(2) Offences under this section shall be triable by a Magistrate of the Second or Third Class, and proceedings under this section may be instituted on a complaint made by the landlord of the notified area or forest in respect of which the offence is alleged to have been committed or by any right holder of such a notified area or forest or by the Forest Officer or by any officer specially empowered by the Provincial Government in this behalf.
(3) (4) The question is one of interpretation of the first part of sub section
(2) which says that offences under section 15 shall be triable by a Magistrate of the Second or Third Class.
It does riot use the phrase "any Magistrate" nor does it specify "a Magistrate of the First Class".
The question is whether the words of the sub section exclude a First Class Magistrate.
The answer to this, in our opinion, is furnished by sections 28 and 29 of the Code of Criminal Procedure.
They provide as follows: "28.
Offences under Penal Code Subject to the other provisions of this Code any offence under the Indian Penal Code may be tried (a) by the High Court, or (b) by the Court of Session, or (c) by any other Court by which such offence is shown in the eighth column of the second schedule to be triable".
Offences under other laws (1) Subject to the other provisions of this Code, any offence under any other law shall, when any Court is mentioned in this behalf in such law, be tried by such court.
439 (2) When no Court is mentioned, it may be tried by the High Court or subject as aforesaid by any Court constituted under this Code by which such offence is shown in the eighth column of Second Schedule to be triable".
The scheme of the Criminal Procedure Code is that it Provides separately for trial of offences under the Penal Code and for offences under any other law.
The court which is to try them is indicated in the Code in the eighth column of the Second Schedule.
The first part deals with offences under the Penal Code and the second part with offences under any other law.
The last entry in the Second Schedule provides for the trial for offences under any other law which are punishable with imprisonment for less than one year or with fine only and they are made triable by "any Magistrate".
If the matter were governed by the Second Schedule, the last entry would undoubtedly have comprehended a Magistrate, First Class.
But section 29 says that offences under any other law shall be tried by that court which that law mentions and it is only when no court is mentioned that the eighth column of the Second Schedule is applicable.
Here sub section
(2) of section 15 mentions the courts by which offences under section 15(1) are triable and section 29(1) excludes the application of the second part of the Second Schedule.
The words of sub section
(1) of section 29 are peremptory.
There is no escape from them.
They say that 'subject to the other provisions of the, Code ' any offence under any other law shall be tried by the court when such court is mentioned in that law.
A case under section 15(1) therefore, is triable only by the two courts named therein, namely, Magistrates of the Second and the Third classes and not by any other Magistrate.
The appellant relies upon the words 'subject to the other provisions of the Code ' and refers to the Third Schedule.
But that Schedule deals with the ordinary powers of the Magistrates under the Criminal Procedure Code.
The words of the second sub section of section 15 are not rendered ineffective by the prescription of the ordinary powers of the Magistrates.
To call in aid Schedule III would render the provisions of section 29 redundant and useless at least in those cases where the second part of the Second Schedule applies.
What section 15(2)) does is to prescribe a particular court and in view of the words of section 29(1) no other court can try offences under section 15(1) even though the powers of those courts may be superior to those of Magistrates of the Second and the Third Class.
If the Second Schedule itself, which prescribes the courts for the trial of offences under laws other than the Penal Code, is excluded, the Third Schedule cannot bring about the same result indirectly.
The provisions of the Third Schedule must 440 therefore be taken to define general powers and not to create jurisdictions to try offences which the Second Schedule does.
It was argued before us that there is no point in prescrib ing that the Magistrates of the Second and the Third Class can try subsequent offences because their powers under section 32 do not extend as far as the punishment prescribed by section 15(1).
This question does not arise directly but it may be said that two views are possible: one is that by implication the powers of these Magistrates are extended beyond what is prescribed under section 32.
The other is that in a case where the Magistrate feels that a heavier punishment should be imposed he can take recourse to the provisions of section 349 of the Code and make a recommendation to a Magistrate who can impose adequate punishment in the case.
The words "subject to the other provisions of the Code" would enable this to be done.
In our opinion, therefore, the scheme of the Code read with the provisions of section 15 of the Forests Act clearly show that offences under section 15 are not triable by any Magistrate as it would be if the Second Schedule were applicable.
They are therefore triable by such Magistrates as have been named in the second sub section.
There is good reason for holding this, because a conviction by a Magistrate of the Second or the Third Class, as the case may be, is open to an appeal whereas a conviction by a Magistrate of the First Class and a sentence of fine of Rs. 501 or under or a fine of Rs. 200/ after a summary trial is not appealable.
It is possible that it was intended that a right of appeal should be conferred and therefore the trial of these offences was restricted to Magistrates of the Second and the Third Class.
This was pointed out by Mr. Justice Beg in Harbans Singh and others vs State(1) and was also referred to by Mr. Justice Verma in the opinion in the present case.
In our opinion, it is a circumstance which may be taken into account.
It is forcefully illustrated in this case.
An appeal would have lain against the same decision if the Magistrate had not been given the powers of a First Class Magistrate during the trial.
The respondents were robbed of a right of appeal.
In any event, in view of the clear words of section 29(1), the trial of these cases ought to have been before a court designated in section 15(2) and as the trial was before a Magistrate who was not empowered to try the offence the proceedings were rightly declared void under section 530(p) of the Code of Criminal Procedure.
We accordingly hold that the decision under appeal was correct.
The appeal fails and is dismissed.
Appeal dismissed.
(1) A.I.R. 1953 All.
[/INST]The respondent was assessed to income tax for the years, 1953 54 and 1954 55 on estimated incomes of Rs. 61,000/ and Rs. 1,21,000/ respectively and notices of demand under section 29 of the Indian Income tax Act, 1922, were served on him by the Income tax Officer for the tax due.
On the respondent failing to comply with the notices of demand within the period specified, the Income tax Officer issued certificates under section 46(2) of the Act and sent them to the Collector for recovery of the tax, treating the respondent as in default.
In appeals filed by the respondent against the orders of assessment, the Appellate Assistant Commissioner reduced the income assessed for the year 1953 54 to Rs. 28,000 and for the year 1954 55 to Rs. 46,000.
The Income tax Officer did not issue fresh notices of demand pursuant to the modification in the orders of assessment made by the Appellate Assistant Commissioner, but by a letter informed the respondent that he had to pay tax as reduced by the appellate order, The respondent did not pay the amount of tax demanded, but applied to the High Court of Mysore under article 226 of the Constitution of India for quashing the certificates issued by the Income tax Officer.
The High Court held that the Income tax Officer could not, without issuing fresh notices of demand, after the Appellate Assistant Commissioner of Income tax reduced the taxable income, treat the respondent as a defaulter and that the proceedings of the Collector based on the certificates issued by the Income tax Officer were illegal.
Held:(per Sarkar and Hidayatullah, JJ.).
The decision of the High Court was right.
Per Sarkar, J. On the Income tax Officer 's order being revised in appeal, the default based on it and all consequential proceedings must be taken to have been superseded and fresh proceedings have to be started to realise the dues as found by the revised order.
Per Hidayatullah, J.
In view of the terms of section 29 of the Act, where an order is passed in appeal and the amount of tax reduced, the Income tax Officer must intimate to the assessee the reduced amount of tax and make a demand and give him an opportunity to pay before treating him as a defaulter.
Per Shah, J. (dissenting) In the absence of any provision imposing an obligation upon the Income tax Officer to issue successive notice , of demand from time to time for recovery of the amount due during the process of assessment, it must be held that the notices of demand issued by the Income tax Officer in exercise of the power under section 29 must be enforced in the manner provided by section 46 and within the period of limitation 149 provide in cl.
(7) of section 46, even after the appeal against the order of assessment by the Income tax Officer is disposed of, subject to adjustment of the amount to be recovered in the light of the order of the Appellate Assistant Commissioner.
</s>
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<s>[INST] Summarize the judgementivil Appeal Nos.
953 954 (NT)/ 1975.
From the Judgment and order dated the 15th February 1974 of the High Court of Allahabad in Civil Misc.
Writ Petitions Nos. 6904 and 6906 of 1973.
S.C. Manchanda and A.K. Srivastava for the Appellants.
Harish N. Salve, Mrs. A.K. Verma, J. Peres and D.N. Mishra for the Respondent.
The Judgment of the Court was delivered by RANGANATHAN, J.
These are two appeals by certificate from the common order.
dated 15.2.74, of the Allahabad High Court in Civil Miscellaneous Petition Nos.
6904 and 6906 of 1973.
They can be disposed of together since the question raised is the same.
This common question arises out of the assessment to central sales tax of the respondent, oriental Coal Corporation of Moradabad (hereinafter referred to as the assessee), for the assessment year 1967 68 and 196869.
The relevant facts bearing on the controversy may be briefly stated.
The assessee is a firm of coal merchants with its place of business in Jharia (Bihar State) and an office at Moradabad (in U.P.).
It is not registered either under the Central or the State Sales Tax Act.
According to the assessee it places orders for coal on the collieries at Jharia on behalf of constituents in Uttar Pradesh, realises the sale proceeds and remits the same to Jharia.
The Sales Tax officer assessed the assessee to sales tax in respect of the turnover of the coal thus 565 supplied by the assessee.
The assessee filed two writ petitions alleging that the assessment orders were without jurisdiction on several grounds.
The High Court allowed the writ petitions on one of these grounds and hence did not go into the other contentions.
It referred to section 9 of the , as it stood at the relevant time, and held that the provision cast a liability to tax only on a registered dealer and not an unregistered dealer like the assessee.
It is the correctness of this decision that is challenged in the present appeals.
Section 9 relied upon by the High Court, reads thus: 3.
"9.(1) The tax payable by any dealer under this Act on sales of goods effected by him in the course of inter state trade or commerce, whether such sales fall within clause (a) or clause (b) of section 3, shall be levied by the Government of India and the tax so levied shall be collected by that Government in accordance with the provisions of subsection (2), in the State from which the movement of the goods commenced.
Provided that, in the case of a sale of goods during their movement from one State to another, being a sale subsequent to the first sale in respect of the same goods, the tax shall, where such sale does not fall within subsection (2) of section 6, be levied and collected in the State from which the registered dealer effecting the subsequent sale obtained or, as the case may be, could have obtained, the form prescribed for the purpose of clause (a) of subsection (4) of section 8 in connection with the purchase of such goods.
(2) Subject to the other provisions of this Act and the rules made thereunder, the authorities for the time being empowered to assess, re assess, collect and enforce payment of any tax under general sales tax law of the appropriate State shall, on behalf of the Government of India, assess, re assess, collect and enforce payment of tax, including any penalty, payable by a dealer under this Act as if the tax or penalty payable by such a dealer under this Act is a tax or penalty payable under the general sales tax law of the State; and for this purpose they may exercise all or any of the powers they have under the general sales tax law of the State; and the Provisions of such law, including provi 566 sions relating to returns, provisional assessment, advance payment of tax, registration of the transferee of any business, imposition of the tax liability of a person carrying on business on the transferee of or successor to such business transfer of liability of any fir n or Hindu undivided family to pay tax in the event of the dissolution of such firm or partition of such family, recovery of tax from third parties, appe als, reviews, revisions, references, 3(refunds, rebates, penal ties) compounding of offences and treatment of documents furnished by a dealer as confidential, shall apply accordingly: Provided that if in any State or part thereof there is no general sales tax law in force, the Central Government may, by rules made in this behalf make necessary provision for all or any of the matters specified in this sub section.
" The High Court pointed out that, under the terms of the section, tax on sales of goods effected by a dealer in the course of inter state trade or commerce shall be levied in the State from which the movement of the goods commenced: in this case, the State of Bihar.
The proviso, however, carves out an exception.
It provides that, if there is a subseq uent sale of the same goods in the course of their movement from one State to another and such sale is effected by a registered dealer, tax can be levied and collected in the State from which such dealer obtained or could have obtained the forms prescribed under section 8(4)(a) (popularly known as 'the Form '): in this case, the State of Uttar Pradesh.
But, the High Court pointed out, the assessee was not a registered dealer and so there was no scope for his being taxed in the State of U.P.
The High Court accordingly quashed the assessments in question and hence these appeals by the State.
We may at once say that the conclusion of the High Court is unassailable in view of the decision of this Court in State vs Kasturi Lal Harlal, 3 S.C. 234 affirming the view taken on this issue by the Allahabad High Court in an earlier case Kasturilal Harlal vs State, [1972] 29 STC 495.
Shri Manchanda, however, submits that this view can no longer hold the field in view of a retrospective amendment of the by the Central Sales Tax (Amendment) Act No. 103 of 1976.
Two provisions of this Amendment Act may be extracted: "6.
Amendment of section 9.
In section 9 of the Principal Act (a) in sub section (1) for proviso, the following pro 567 viso shall be substituted, namely.
A "Provided that, in the case of sale of goods during their movement from one State to another, being a sale subsequent to the first sale in respect of the same goods and being also a sale which does not fall within sub section (2) of section 6, the tax shall be levied and collected (a) where such subsequent sale has been effected by a registered dealer, in the State from which the registered dealer obtained or, as the case may be could have obtained, the form prescribed for the purposes of clause (a) of subsection (4) of section 8 in connection with the purchase of such goods, and (b) where such subsequent sale has been effected by an unregistered dealer in the State from which such subsequent sale has been effected." (b) in sub section (2), before the words "compounding of offences", the words "charging or payment of interest", shall be inserted and shall be deemed always to have been inserted .
(c) after sub section (2), the following sub section shall be inserted, namely: (2A) All the provisions relating to offences and penalties (including provisions relating to penalties in lieu of prosecution for an offence or in addition to the penalties or punishment for an offence but excluding the provisions relating to matters provided for in sections 10 and lOA) of the general sales tax law of each State shall, with necessary modifications, apply in relation to the assessment, reassessment, collection and the enforcement, of payment of any tax required to be collected under this Act in such State or in relation to any process connected with such assessment, re assessment, collection or enforcement of payment as if the tax under this Act were a tax under such sales tax law.
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx 568 9.
Validation ( 1) The provisions of section 9 of the principal Act shall have effect and shall be deemed always to have had effect in relation to the period commencing on the 5th day of January, 1957, and ending with the date immediately preceding the date of commencement of this Act as if that section also provided (a) that all the provisions relating to penalties (including provisions relating to penalties in lieu of prosecution for an offence or in addition to the penalties or punishment on conviction for an offence but excluding the provisions relating to matters provided for in sections 10 and 10A of the principal Act and the provisions relating to offences) of the general sales tax law of each State shall, with necessary modifications, apply in relation to (i) the assessment, re assessment, collection and enforcement or payment of any tax required to be collected under the principal Act in such State; and (ii) any process connected with such assessment, re assessment, collection or enforcement of payment, and (b) that for the purpose of the application of the provisions of such law, the tax under the principal Act shall be deemed to be tax under such law.
(2) Notwithstanding anything contained in any judgment, decree or order of any court or tribunal or other authority, all penalties under the general sales tax law of any State imposed or purporting to have been imposed in pursuance of the provisions of section 9 of the principal Act, and all proceedings, acts or things taken or done for the purpose of, or in relation to, the imposition or collection of such penalties, before the commencement of this Act shall, for all purposes be deemed to be and to have always been imposed, taken or done as validly and effectively as if the provisions of sub section (1) had been in force when such penalties were imposed or proceedings or acts or things were taken or done and accordingly, (a) no suit or other proceedings shall be maintained or continued in or before any court or any tribunal or other 569 authority for the refund of any amount received or realised by way of such penalty; (b) no court, tribunal or other authority shall enforce any decree or order directing the refund of any amount received or realised by way of such penalty; (c) where any amount which had been received or realised by way of such penalty had been refunded before the commencement of this Act and such refund would not have been allowed if the provisions of sub section (1) had been in force or the date on which the order for such refund was passed, the amount so refunded may be recovered as an arrear of tax under the principal Act; (d) any proceeding, act or thing which could have been validly taken, continued or done for the imposition of such penalty at any time before the commencement of this Act if the provisions of sub section (1) had then been in force but which had not been taken continued or done, may after such commencement be taken, continued or done.
(3) Nothing in sub section (2) shall be construed as preventing any Person (a) from questioning the imposition or collection of any penalty or any proceedings, act or thing in connection, therewith or (b) from claiming any refund, in accordance with the provisions of the principal Act read with sub section(1).
" Shri Manchanda contends that, by virtue of section 9 of the Amendment Act, clause (b) of the proviso to section 9 (1) of the is deemed to have been in force since 5.1.1957.
The position according to him, therefore, is as if the Act had always imposed a liability to pay tax even on unregistered dealers just as it had originally done on registered dealers.
We may mention that, while deciding section T. O. vs Coal & Coke Supplies Corporation, JT , we had assumed the correctness of the contention of Sri Manchanda as, in that case, the above argument that the amendment was retrospective was uncontroverted.
570 Sri Harish Salve, appearing for the assessee in this case, however, contests the correctness of Sri Manchanda 's contention.
We have therefore considered this aspect and reached the conclusion that Sri Salve is right and that no retrospective operation to clause (b) of section 9(1) can be spelt out as suggested by counsel for the appellant.
received the assent of the President on 7.9.1976 which is, apparently, what is referred to as the date of its commencement in section 9(1) of the said Act.
The Act amended several sections of the and it did not when its words when it desired to give any degree of retrospective effect to any particular amendment.
The amendments to sections 3 and 4 of the Principal Act thus are clearly retrospective: the provisions added thereto, it is declared, "shall be inserted and shall always be deemed to have been inserted w.e.f. 1.4.1964.
" The amendments to Sections 2, 7, 14 and IS of the Principal Act are obviously intended to be only prospective.
The amendment to section 9 of the Principal Act, with which we are at present concerned, presents an amalgam.
section 6 of the Amending Act makes three amendments in section 9 of the Principal Act by its three clauses (a), (b) and (c).
In clause (a), there is no hint of any retrospectivity whereas the amendment by clause (b) is expressed to be fully retrospective from 1956.
The amendment by clause (b) attracts the penal provisions (including offences) of the relevant State Law and can, in view of Article 20 of the Constitution, only be prospective.
However, it appears that, even under the statute as originally framed, such penal provisions had been enforced in several cases and this action needed retrospective validation (in so far as penalties, other than offences were concerned) in view of the decision of this Court in Khemka vs State, ; This was the raison d 'etre of section 9 of the Amendment Act which has been extracted above: (see Shiv Dutt Rai vs Union, [ ; This is also clear from paragraph 3 of the Statement of objects and Reasons of the Amendment Act, which reads: "Sub section (2) of section 9 of the empowers the State sales tax authorities to assess, re assess collect and enforce payment of Central sales tax.
The sub section also authorises the authorities under the State sales tax laws to exercise all the powers which they have under those laws (including inter alia the power to impose penalties) for the purposes of the also.
In Khemka & Co. (Agencies) Private Ltd. vs State of Maharashtra, 35 S.T.C. 57 1, the Supreme Court, by a ma 571 jority of 3:2, held that the provisions of the State sales tax laws as to penalties do not apply for purposes of the Central Sales Tax.
In view of this judgment, the State Governments are faced with the problem of having to refund the amounts collected in the past by way of penalties.
The judgment has also resulted in a vacuum being created in regard to levy of penalties, it is, therefore, necessary to amend section 9 of the to provide expressly that the provisions relating to offences and penalties under the general sales tax law of each State shall.
with necessary modifications, apply in relation to the assessment, re assessment collection and the enforcement of tax under the .
It is also necessary to validate the penalties which have been levied in the past.
for the purposes of the , on the basis of the provisions of the State sales tax laws.
" Where the statute thus, on its face, clearly indicates retrospective effect where intended, there can be no justification to read retrospectivity into the amendment made by clause (a) of section 6 of the amending Act which does not contain any words to that effect.
Counsel for the appellant, however, relied on two circunstances to say that such retrospective effect must necessarily have been intended.
Firstly, he placed emphasis (a) on the fact that section 9( l) of the Amendment Act refers to section 9 of the principal Act and not merely to section 9(2) and (b) on the use of the words"as if that section also provided." He submitted that this language can only mean that the legislature intended retrospective effect also to the amendment effected in section 9 by section 6 of the Validation Act.
Secondly, he submitted that under section 6 of the Central Sales Act, all dealers registered or unregistered, are liable to pay tax on sales effected by them in the course of inter state trade or commerce.
section 9(1) imposes the liability on the dealer in the State from which the movement of the goods commences but this is without prejudice to the liability of dealers who make subsequent sales during the course of such movement.
Such subsequent sale may be by a registered dealer or an unregistered dealer.
It may be to a registered or an unregistered dealer.
If the sale is to a registered dealer it is exempt under section 6(2), whether it is by a registered dealer or an unregistered dealer.
Under the proviso to section 9(1), as it originally stood, if the sale was by registered dealer to an unregistered dealer, it would be taxed in the State from which the registered dealer obtained or could have obtained the Forms.
When 572 even a sale by a registered dealer is thus made liable, counsel argues, it A could not have been the intention of the State to exempt from liability a sale by an unregistered dealer.
The amendment only clarifies this position.
It imposes no fresh substantive liability.
It is only an amendment of a procedural nature shifting chargeability, in such cases, from the State from which the goods moves, to the State in which the subsequent sale takes place.
In this view of the matter, counsel contends the amendment only affects the venue of taxation and, being procedural in nature, requires to be construed retrospectively.
We are unable to accept these contentions.
So far as the first point is concerned, the language of the validation section clearly concerns only penalties which are dealt with under section 9(2).
The amending Act refers to section 9 in general and not to section 9(2) only perhaps because section 9( l) also contains a reference to sub section (2).
From this circumstance alone, it cannot be inferred that retrospectivity to the amendment of section 9(1) also is intended.
The use of the word 'also ' does not also have the result suggested by counsel.
All that the provision requires is that, for the period 5.1.57 to 7.9.1976, the section is to be read as if it also included the additional substantive provisions referred to therein.
It was earlier not clear whether all these provisions could be read into the section before 7.9.1976, the date when the Amendment Act came into force.
So the validation section declares that the section should be read, even earlier, as if it comprehended also these substantive provisions.
It is in this context that the word "also" is used.
The employment of this word cannot therefore be treated as an indication of intention by the legislature that the amendment ot section 9(1) by section 6 of the amending Act was to be effective from 5.1.1957.
If the Legislature had intended it, the intention could and would have been expressed clearly in clause (a) of section 6 itself as it had been in the other clauses .
and in the other sections.
If section 9(1) of the Amendment Act had been inserted as clause (d) in section 6 thereof, it could not have changed the prospective effect of clause (a).
The position is not different merely because this provision is contained in section 9 and not section 6 of the Amendment Act.
section 9(1) of the Amendment Act talks only of reading these extra words into section 9(1) of the principal Act between 5.1.57 and 7.9.76.
It does not contain any operative words that require section 9(1) of the Principal Act being read in the form in which it has been amended by section 6 during that earlier period.
We, therefore, do not see in section 9 of the Amending Act any support to the contention of the counsel for the appellant.
The contention that the amendment is purely procedural is 573 also misconceived.
Assuming the correctness of the contention that a A purely procedural amendment should ordinarily be construed to be retrospective, we are unable to agree that the present amendment is of such nature.
The decision of this Court in Kasturi Lal 's case, 4JT had held that an unregistered dealer is not taxable under the proviso.
The amendment changes this position and imposes a substantive liability on such a dealer.
It is also one which confers jurisdiction on an officer in a particular State to levy a tax which he otherwise cannot.
It is thus a substantive provision.
That apart, even the question whether a charge to tax can be imposed in one State or another is not a mere question of venue.
It may have an impact on the rate of tax in certain cases and it also regulates the rights inter se of States to levy taxes on such inter state sales.
It is, therefore, difficult to accept the contention that the amendment should be treated as purely procedural and hence necessarily retrospective.
In the result, we are of opinion that clause (b) of section 9(1) of the is operative only from 7.9.1976.
The present case is, therefore, governed by the earlier provision and the decision of this Court in Kasturi Lal 's case, (supra).
The appeals therefore, fail and are dismissed.
We, however, make no order as to costs.
N.P.V. Appeals dismissed.
[/INST]% Rules of Procedure and Conduct of Business in Lok Sabha: Rules 260, 379 and 382 Non publication of resolutions Whether resolutions ineffective Publication in Parliamentary Debates even after delay Adequate publication.
House of the People (Extension of Duration) Act, 1976: Whether ultra vires.
Finance Act, 1976: Validity of.
: section 57 Proceedings of Parliament Court to take judicial notice.
The petitioner, an assessee under the Income Tax Act and Wealth Tax Act during the assessment year 1976 77 and liable to pay income tax and wealth tax in accordance with the rates prescribed by the Finance Act, 1976, which was passed by the Lok Sabha during its extended period under the provisions of the House of the People (Extension of duration) Act, 1976, filed a writ petition before this Court, challenging the vires of the two Proclamations of Emergency issued by the President on 3.12.1971 and 26.6.1975 and also of the House of the People (Extension of Duration) Act, 1976 and the Finance Act, 1976 contending that the duration of the House of People would have been validly extended only when a Proclamation of Emergency was in force under the proviso to cl.
(2) of article 83 of the Constitution and since the two Proclamations of Emergency in question were either ultra vires the Constitution or had ceased to be in operation by the time the House of the People (Extension of Duration) Act, 1976 was passed by Parliament, that Act had no effect and, consequently all Acts passed by the House of the People during the extended period, including the Finance Act, 1976 432 were ultra vires the Constitution, and that even though the said proclamations had been validly issued, the proclamation dated 3rd December, 1971 and 25th June, 1975 had ceased to be in operation on 3rd February, 1972 and 26th August, 1975 respectively because the Resolutions passed by the two Houses of Parliament approving the said Proclamations of Emergency as required by cl.
(2) of article 352 of the Constitutions it stood during the relevant time had not been published in the official Gazette of the Government of India.
The petition was opposed by the respondent Union of India contending that the two Proclamations had been duly issued by the President and approved by the Resolutions of the two Houses of Parliament as required by law and that actually the Proclamations of 3rd December 1971 and June 25, 1975 had been revoked by the Vice President acting as the President by the Proclamations dated 27th March, 1977 and 21st March, 1977 respectively, that in the month of February, 1976 when the House of the People (Extension of Duration) Act, 1976 was passed by Parliament both the Proclamations of emergency were in force and, therefore, Parliament was entitled to extend the period of the House of the People for a period not exceeding one year at a time, that the Finance Act, 1976 passed duly in the period so extended had been, therefore, validly passed and that publication of the Resolutions was not necessary and, in any event, since they had been published in the Lok Sabha and Rajya Sabha Debates which were published under the authority of the Speaker of the House of the People and the Chairman of the Rajya Sabha respectively, the Proclamations of Emergency remained in force until they were duly revoked.
Dismissing the writ petition, ^ HELD: 1.
The two Proclamations of Emergency were kept in force by virtue of the resolutions passed by the Houses of Parliament until they were duly revoked by the two Proclamations which were issued by the Vice President acting as President of India in the year 1977.
Since the two Proclamations of Emergency were in force when the House of the People (Extension of Duration) Act, 1976 was passed, its validity cannot be questioned.
[455D E] The Lok Sabha passed the Finance Act, 1976 during the extended period of its duration and, therefore, the validity of Finance Act, 1976 also cannot be questioned.
[455E] 2.
Article 352 of the Constitution does not prescribe that a 433 Proclamation of Emergency should be published in the official Gazette.
A Wherever the Constitution expressly requires a certain notification to be published in the official Gazette, it has stated that the said notification shall be published in the form of a public notification.
[444H; 445C] A Proclamation of Emergency, being a very important event affecting public life, has also to be published in any manner known to modern world and the publication in the official Gazette is one such mode.
If the Constitution requires that a particular mode of publication is necessary then such mode must be followed, but if there is no mode of publication prescribed by the Constitution, then it must be considered that the Constitution has left the method of publication to the authority issuing the proclamation in order t., make it known to the members of the public.
[445G H; 446A B] 3.1 In the instant case, the Proclamations of Emergency have been published in the official Gazette.[446B] In the Constitution and in the Rules of Procedure of the Houses of Parliament and of the State Legislatures there are several provisions which provide for resolutions being passed by the Houses of Parliament or the Houses of State legislatures.
They are not required to be published in the official Gazette, even though in some cases they are published, say, where a certain law is adopted under article 252 or a member is removed on the ground of privilege etc.
They would not be treated as ineffective merely because they are not published in the official Gazette.
They are all, however, published in the Reports of the Houses of Parliament and of the Houses of the State Legislature within a reasonable time.
[446C; 447B C] 3.2 The Lok Sabha Debates and the Rajya Sabha Debates are the journals or the reports of the two Houses of Parliament which are printed and published by them.
The Court has to take judicial notice of the proceedings of both the Houses of Parliament under section 57 of the Indian evidence Act, 1872 and it is expected to treat the proceedings of the two Houses of Parliament as proved on the production of the copies of the journals or the reports containing the proceedings of the two Houses of Parliament which are published by them.[450E F ] 3.3 What is essential is that the resolutions approving the Proclamation of Emergency should be passed within the period of two months.
A little delay in publishing the proceedings would not affect the validity of there solutions.
[454B C] 434 3.4 The reports of the proceedings of Parliament and the State Legislatures are widely circulated.
The newspapers, radio and the television are also the other modern means which give publicity to all Acts and Resolutions of Parliament and the Legislatures of the States.
The publication in the Parliamentary Debates, though after some short delay is adequate publication of the resolutions of Parliament as there is no rule which requires that the resolutions should be published in the official Gazette.
Hence, mere non publication of the resolutions approving the Proclamations of Emergency in the offlcial Gazette did not make them ineffective.
[454G H; 455A B] In the instant case, the resolutions of the Lok Sabha, and the Rajya Sabha approving the two resolutions have been duly published in the official reports of the two Houses.
[455B C] Waman Rao & Ors.
vs Union of India & Ors.
, ; ; Harla vs The State of Rajasthan, ; ; State of Punjab vs Sat Pal Dang & Ors., ; and Mharendu Dutt Majumdar vs The King Emperor, , referred to.
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<s>[INST] Summarize the judgementAppeal No. 91 of 1957.
Appeal from the judgment and order dated March 29, 1956, of the Saurashtra High Court at Rajkot in Civil Reference No. I of 1955.
Shankarlal G. Bajaj and P. C. Aggarwal, for the appellant.
K. N. Rajagopala Sastri, R. H. Dhebar and D. Gupta, for the respondent.
October 9.
The Judgment of the Court was delivered by GAJENDRAGADKAR, J.
This appeal arises from the assessment proceedings taken against the appellant, Rajputana Agencies Ltd., Lavanpur, for its income for the assessment year 1952 53, the accounting period being the corresponding Marwadi Year ending in October, 1951.
The appellant is a ' private limited company and it was assessed to income tax and super tax by the Income tax Officer, Morvi Circle, Morvi, on a total income of Rs. 26,385.
The appellant had declared dividend of Rs. 30,000.
The Income tax Officer held that out of the said amount of dividend, Rs. 15,159 was excess dividend.
On this basis the Income tax Officer determined the additional income tax payable by the appellant at the rate of forty four pies in a rupee on the said excess dividend.
The additional income tax payable by the appellant in that behalf was computed at Rs. 3,473 15 0.
This order was passed on November 25, 1952.
The appellant filed an appeal against this order before the Appellate Assistant Commissioner of Income tax at Rajkot.
The appellate authority determined the additional income tax payable by the appellant at Rs. 2,084 12 0 on August 29, 1953.
An appeal was preferred by the appellant against the appellate order before the Income tax Appellate Tribunal, Bombay, but the appellate tribunal confirmed the order under appeal on November 27, 1954.
The 144 appellant then moved the appellate tribunal under section 66(1) of the Income tax Act and the appellate tribunal, by its order passed on April 25, 1955, referred two questions to the High Court at Saurashtra for its opinion.
In the present appeal, we are concerned with ,the second of the said two questions.
This question as framed by the tribunal was: Whether the expression " at the rate applicable to the total income of the company " as appearing in sub cl.
(b) of el.
(ii) to the second explanation to proviso to paragraph B of Part I of the First Schedule to the Indian Finance Act, 1952, means the rate at which a company 's total income is actually assessed or the rate prescribed by the respective Finance Act without taking into consideration the rebate allowed in the respective years in accordance with the provisions of the Part ' B ' States (Taxation Concessions) Order, 1950 (hereinafter called the Order).
Section 2 of the Finance Act, 1952, provides that the provisions of section 2 of, and the First Schedule to the Finance Act, 1951, shall apply in relation to income tax and super tax for the financial year 1952 53 as they apply in relation to the income tax and super tax for the financial year 1951 52 with the modification that, in the said provisions for the figures 1950, 1951 and 1952 wherever they occur, the figures 1951, 1952 and 1953 shall be respectively substituted ; and so in the present case we are really concerned with the material provisions of the Finance Act, 1951 (herein.
after called the Act).
By its judgment delivered on March 29, 1956, the High Court answered this question against the appellant and held that the expression " at the rate applicable to the total income of the company " means the rate at which the company 's total income is actually assessed.
The appellant then applied for and obtained a certificate from the High Court under article 133(1)(c) of the Constitution read with section 66A(2) of the Income tax Act that the case is a fit one for appeal to this Court.
It is with this certificate that the present appeal has been brought to this Court; and the only point which it raises for our decision relates to the construction of the expression " at the rate applicable 145 to the total income of the company " appearing in the relevant provision of the Act.
The appellant does not dispute its liability to pay additional income tax under cl.
(ii) of the proviso to paragraph B of Part I of the First Schedule to the Act.
The dispute between the parties is in regard to the rate at which the additional income tax has to be charged.
I The appellant has paid income tax on its total income in the relevant assessment year at the rate of sixteen pies in a rupee in accordance with the computation prescribed by para.
6 of the Order; and it is urged on its behalf, that the rebate to which it is entitled under the provisions of the said Order is irrelevant in determining the rate at which the additional income tax can be computed against it.
On the other hand, the respondent contends that the additional income tax has to be computed at the rate at which the appellant 's income has been actually assessed and so the rebate granted to the appellant under the said Order must be taken into account in determining the said rate of the additional tax.
It would be relevant, at this stage, to refer to the provisions of the Order under which the appellant has admittedly obtained rebate as a company carrying on its business in Saurashtra.
By the Order, the Central Government made exemptions, reductions in the rate of tax and modifications specified in the Order in exercise of the powers conferred by section 60A of the Income tax Act.
This Order applied to Part 'B ' states which included all Part 'B ' States other than the State of Jammu and Kashmir.
Paragraph 5 of the Order deals with income of a previous year chargeable in the Part 'B ' States in 1949 50.
Sub clause (3) of paragraph 5 shows that the State assessment year 1949 50 means the assessment year which commences on any date between April 1, 1949 and December 31, 1949.
We are not concerned with the provisions of this paragraph.
Paragraph 6(iii) applies to the present case.
The effect of para.
6(1), (ii) and (iii) is that in respect of so much of the income, profits and gains included in the total income as accrue or arise in any State other 19 146 than the States of Patiala and East Punjab States Union and Travancore Cochin (i) the tax shall be computed (a) at the Indian rate of tax; and (b) at the State rate of tax in force immediately before the appointed day; (ii) where the amount of tax computed under subclause (a) of clause, (1) is less than or is equal to the amount of tax computed under sub clause (b) of clause (1) the amount of the first mentioned tax shall be the tax payable; (iii) where the amount of tax computed under subclause (a) of clause (1) exceeds the tax computed.
under sub clause (b) of clause (1), the excess shall be allowed as a rebate from the first mentioned tax and the amount of the first mentioned tax as so reduced shall be the tax payable.
Thus under el.
(iii) the amount of income tax levied against the appellant is not the amount computed at the Indian rate; it represents the difference between the amounts calculated at the Indian rate of tax and that calculated at the State rate of tax.
The excess of the first amount over the second is allowed as a rebate.
In other words, the Indian rate of tax prescribed by the relevant provisions of the Act does not by itself determine the amount of tax payable by the appellant for the relevant year.
It is well known that when different Part ' B ' States merged with the adjoining States or Provinces and were made taxable territories under the Income tax Act, the operation of the Indian rate of tax was introduced by phases and rebates on a graduated scale were allowed to the assessees under the provisions of this Order.
As we have already mentioned, it is common ground that the appellant was entitled to and has obtained rebate under sub cl.
(iii) of paragraph 6 of 'the Order, with the result that his total income has been taxed to income tax at the rate of sixteen pies in a rupee.
The point for determination is whether this rebate is relevant in determining the rate at which the additional income tax has to ' be levied against the appellant under the relevant provisions of the Act.
147 Let us now consider the relevant provisions of the Act.
Section 3 of the Income tax Act which is the charging section provides that " where any Central Act enacts that income tax shall be charged for any year at any rate or rates, tax at that rate or those rates shall be charged for that year in accordance with, and subject to the provisions of, this Act in respect of the total income of the previous year of the ' assessee ".
Thus, when levying income tax against the total income of the assessee, the rate at which the tax has to be levied is prescribed by the Act for the relevant year.
Section 2 of the Act provides that, subject to the provisions of sub sections
(3), (4) and (5), income tax shall be charged at the rates specified in Part I of the First Schedule; and sub section
(7) provides that " for the purpose of this section, and of the rates of tax imposed thereby, the expression " total income " means total income as determined for the purposes of income tax or super tax, as the case may be, in accordance with the provisions of the Act ".
So we must turn to the First Schedule to the Act to find the rate at which the appellant can be assessed.
Paragraph B of the said Schedule deals with companies and it provides that, in the case of every company, on the whole of total income the tax is leviable at the rate of four annas in the rupee.
There is a proviso to this paragraph and the clause which calls for our construction in the present appeal occurs in the explanation to el.
(ii) of this proviso.
This proviso deals with the case of a company which in respect of its profits liable to tax under the Act for the relevant year has made the prescribed arrangements for the declaration and payment within the territory of India excluding the State of Jammu and Kashmir of the dividends payable out of such profits and has deducted the super tax from the dividends in accordance with the provisions of sub section
(3D) or (3E) of section 18 of that Act; and in that connection, it provides: (1) where the total income, as reduced by seven annas in the rupee and by the amount, if any, exempt from income tax exceeds the amount of any dividends (including dividends payable at a fixed rate) declared 148 in respect of the whole or, part of the previous year for the assessment for the year ending on the 31st day of March, 1951, and no order has been made under subsection (1) of section 23A of the Income tax Act,, a rebate shall be allowed, at the rate of one anna per rupee on the amount of such excess (ii) where the amount of dividends referred to in clause (1i) above exceeds the total income as reduced by seven annas in the rupee and by the amount, if, any, exempt from income tax, there shall be charged on the total income an additional income tax equal to the sum, if any, by which the aggregate amount of income tax actually borne by such excess (hereinafter referred to as " the excess dividend ") falls short of the amount calculated at the rate of five annas per rupee on the excess dividend.
It would thus be seen that the object of the legislature in enacting this proviso is to encourage companies to plough back some of their profits into the industry not to distribute unduly large portions of their.
profits to their shareholders by declaring unreasonably high or excessive dividends.
In order to give effect to this intention the legislature has offered an inducement to the companies by giving them a certain rebate.
If a company does not distribute as dividends more than roughly nine annas of its profits which is specified as distributable, then the rebate of one anna is given to the company to the extent that the dividend paid by it was less than the distributable dividend.
If the company pays more than the distributable amount of dividend then it was not entitled to claim any rebate; but, on the contrary, it becomes liable to pay an additional income tax as provided in cl.
(ii) of the proviso.
In other words, the intention of the legislature appears to be that companies should no doubt declare reason able dividend and thereby invite the investment of capital in business; but they should not declare an excessive dividend and should plough back part of their profits into the industry.
It is with this object that the provision for rebate has been made.
It would be noticed that,, in addition to the rebate received by the appellant under the relevant provisions of the 149 Order, it would have been entitled to receive the rebate under el.
(1) of the proviso to paragraph B if the dividend declared by it had not exceeded the specified distributable amount.
In fact the dividend declared by the appellant has exceeded the said amount and the appellant has thus become liable to pay additional income tax in respect of the excess dividend under cl, (ii) of the proviso to paragraph B.
Under this clause, " the appellant shall be charged on the total income an additional income tax equal to the sum, if any, by which the aggregate amount of income tax actually borne by such excess (hereinafter referred to as " the excess dividend ") falls short of the amount calculated at the rate of five annas per rupee on the excess dividend ".
This provision raises the problem of determining the aggregate amount of income tax actually borne by the excess dividend; and it is to help the solution of this problem that an explanation has been added which says, inter alia, that " for the purposes of cl.
(ii) of the above proviso the aggre gate amount of income tax actually borne by the excess dividend shall be determined as follows: (i) the excess dividend shall be deemed to be out of the whole or such portion of the undistributed profit,% of one or more years immediately preceding the previous year as would be just sufficient to cover the amount of the excess dividend and as have not likewise been taken into account to cover an excess dividend of a preceding year; (ii) such portion of the excess dividend as is deemed to be out of the undistributed profits of each of the said years shall be deemed to have borne tax(a) if an order has been made under sub section (1) of section 23A of the Income tax Act, in respect of the undistributed profits of that year, at the rate of five annas in the rupee, and (b) in respect of any other year, at the rate applicable to the total income of the company for that year reduced by the rate at which rebate, if any, was allowed on the undistributed profits.
" Clause (1). explains what shall be deemed to be the 150 excess dividend and how it, should be ascertained.
Clause (ii) lays down how the portion of the excess dividend as is deemed to be out of the undistributed profits of each of the years mentioned in cl.
(ii) of the proviso shall be deemed to have borne tax.
clause (a) of cl.
(ii) is concerned with cases where an order has been made under section 23A (1) in respect of the undistributed profits of that year at the rate of five annas in a rupee.
We are not concerned with this clause in the present appeal.
It is sub cl.
(b) of el.
(ii) of the explanation to the proviso to paragraph B that falls for consideration in the present appeal.
The appellant 's case is that the expression " at the rate applicable to the total income " means the rate prescribed by paragraph B of the Act and not the rate at which income tax has actually and in fact been levied.
This contention has been rejected by the High Court and the appellant urges that the High Court was in error in rejecting its case.
The argument is that the words " at the rate applicable to the total income of the company " must be strictly and literally construed and reliance is placed on the principle that fiscal statutes must be strictly construed.
On the other hand, as observed by Maxwell " the tendency of modern decisions upon the whole is to narrow materially the difference between what is called a strict and beneficial construction (1) ".
Now the words " the rate applicable " may mean either the rate prescribed by paragraph B or the rate actually applied in the light of the relevant statutory provisions.
"Applicable", according to its plain grammatical meaning, means capable of being applied or appropriate; and appropriateness of the rate can be determined only after considering all the relevant statutory provisions.
In this sense it would mean the rate actually applied.
In the present case, if sub cl.
(b) is read as a whole, and all the material words used are given their plain grammatical meaning, its construction would present no serious difficulty.
When the clause refers to the rate applicable, it is necessary to remember that it refers to the rate applicable to the total income of the company for (1) Maxwell on " Interpretation of Statutes ", 10th Ed.
p. 284.
151 that year.
In other words, the clause clearly refers to the specific or definite rate which is determined to be applicable to the taxable income of the company for the specific year; and it is not the rate prescribed by the Act for the relevant year generally in reference to incomes of companies.
The result is that, for determining the aggregate amount of income tax actually borne by the excess dividend, the department must take into account the rate at which the income of the company for the specific year has in fact been applied or levied.
Besides, in construing the words "I the rate applicable " we must bear in mind the context in which they are used.
The context shows that the said words are intended to explain what should.
be taken to be " the tax actually borne ".
If the legislation had intended that the tax actually borne should in all, cases be determined merely by the application of the rate prescribed for companies in general, the explanation given by the material clause would really not have been necessary.
That is why in our opinion, the context justifies the construction which we are inclined to place on the words " the rate applicable ".
The same position is made clear by the further provision in sub cl.
(b) itself which requires that the relevant rate has to be reduced by the rate at which the rebate, if any, has been allowed on the undistributed profits; which means that, for determining the rate in sub cl.
(b), it is necessary to take into account the rebate which may have been allowed to the company under el.
(1) of the proviso to paragraph B, so that in such a case the rate applicable cannot be the rate prescribed in paragraph B of the Act; it must be the rate so prescribed reduced by the rate at which the rebate has been granted under cl.
(1) of the proviso to paragraph B.
It is thus clear that the words " rate applicable in such cases mean the rate determined after deducting from the rate prescribed by paragraph B the rate of rebate allowed by el.
(1) of the proviso to the said paragraph.
Therefore, at least in these cases, the material words mean the rate actually applied.
If that be the true position, the rate applicable must in 152 all cases mean the rate actually applied.
The same words cannot have two different meaning,% in the same clause.
Incidentally we may point out that the provision of the Act in regard to the payment of additional income tax appears to be intended to impose a penalty for distributing dividends beyond the distributable.limit mentioned by the statute.
The method prescribed for determining the amount of this additional income tax is this.
Calculate the amount at the rate of five annas per rupee on the excess dividend and deduct from the amount so determined the aggregate amount of income tax actually borne by such excess dividend; the balance is the amount of additional income tax leviable against the company.
In adopting this method, if rebate admissible under cl.
(1) of the proviso to para.
graph B has to be deducted from the rate prescribed, it is difficult to understand why a rebate granted under paragraph 6(iii) of the Order should not likewise be deducted.
We accordingly hold that the rate applicable in sub cl.
(b) of cl.
(ii) of the explanation read with cl.
(ii) of the proviso to paragraph B of Schedule I of the Act means the, rate actually applied in a given case.
On, this construction the rate at which the appellant is liable to pay the additional income tax would be the difference between the rate of five annas and the rate of sixteen pies in a rupee at which the appellant has in fact paid income tax in the relevant year.
That is to say, the additional income tax is leviable at the rate of forty four pies in a rupee.
In its judgment, the High Court of Saurashtra has referred with approval to the decision of the Bombay High Court in Elphinstone Spinning and Weaving Mills Co., Ltd. vs Commissioner of Income tax, Bombay City(1).
In this case, Chagla C. J. and Tendolkar J. have held that if a company has no taxable income at all for the assessment year 1951 52 and in that year it pays dividends out of the profits earned in the preceding year or years, additional income tax cannot be levied on the company by reason of the fact that it has paid an excess dividend within the meaning of that 153 expression in, the proviso to paragraph B of Part I of the Act.
We are not concerned with this aspect of the matter in the present appeal.
However, in dealing with the question raised before them, the learned judges have incidentally construed the relevant words " rate applicable" as meaning the rate actually applied; and their observations do support the view taken by the Saurashtra High Court in the present case.
The result is the appeal fails and is dismissed with costs.
Appeal dismissed.
[/INST]The assessee, a private limited company in Saurashtra, was assessed for the assessment year 1952 53 on a total income of Rs. 26,385.
It was assessable at the rate of four annas per rupee but in view of the provisions of the Part B States (Taxation Concession) Order, 1950, it was actually assessed at the rate of sixteen pies per rupee.
The assessee had declared dividend of Rs. 30,000 out of which Rs. 15,159 was found to be excess dividend.
On this excess dividend the assessee was liable to pay additional income tax and the dispute was regarding the rate at which tax was to be computed.
Clause (ii) of the proviso to para.
B of Part.
I of the First Schedule to the Finance Act, 1951, which applied to the case, provided that the additional income tax was to be equal to the sum by which the aggregate amount of income tax actually borne by the excess amount fell short of the amount Calculated at the rate of five annas per rupee on the excess dividend.
Sub clause (b) of cl.
(ii) to the second explanation to proviso to para.
B provided that the aggregate amount of income tax actually borne by the excess dividend was to be determined at the rate applicable to the total income of the company.
The assessee contended that the words 'at the rate applicable to the total income of the company ' meant the rate prescribed by para.
8 of the Act, i.e. four annas per rupee, and not the rate as reduced by the Order at which the income tax had actually and in fact been levied and that consequently it was liable to pay additional income tax on the excess dividend at the rate of one anna per rupee only.
Held, that the expression 'rate applicable to the total income of the company ' meant the rate actually applied and that the assessee was rightly charged at the rate of forty four pies per rupee being the rate by which the rate at which the assessee was actually assessed fell short of the rate of five annas per rupee.
The clause referred to the specific or definite rate which was determined to be applicable to the taxable income of the company for that specific year and not to the rate prescribed by the Act for the relevant year generally in reference to incomes of companies.
143 Elphinstone Spinning and Weaving Mills Co. Ltd. vs Commis sioner of Income tax, Bombay City, , con sidered.
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<s>[INST] Summarize the judgementCivil Appeal No. 2463 of 1982.
From the Judgment and order dated 31.
1981 of the Orissa High Court in First Appeal No. 184 of 1977.
Veenu Bhagat for the Appellants.
A.P. Mohanty and A.K. Mahapatra for the Respondents.
The Judgment of the Court was delivered by SHARMA, J.
The appellants filed a suit for partition of the properties detailed in the plaint claiming 1/3rd share.
A preliminary decree was passed by the trial court which was challenged by the defendant No. 9 (original respondent No. 1 in the present appeal) before the Orissa High Court in First appeal No. 184 of 1972.
The appeal was disposed of on compromise whereby the plaintiffs ' claim to 1/3rd share was accepted as correct.
The terms of the compromise are set out in paragraph 2 of the order dated 27.3.79.
It was, however, further agreed that half of the share of the plaintiffs, i.e. 1/6th share, would go to the defendant No. 9 provided he paid a sum of Rs.40,000 290 to the plaintiffs by a particular date, failing payment within time, the decree passed by the trial court would stand confirmed as per term of the compromise.
The compromise was recorded on 27.3.1979.
According to the compromise the sum of Rs.40,000 was to be paid in two instalments; the first instalment of Rs.10,000 by 31 7 1979 and the remaining amount of Rs.30,000 by 28.2.1980.
The first instalment was paid within time but the remaining amount was not paid.
In the meantime, the decree by the High Court was formally drawn up on 6.9.1979.
In view of the default in payment of the second instalment the plaintiffs appellants deposited the sum of Rs. 10,000 received by them as the first instalment to the credit of the defendant No. 9 with the permission of the Court.
The defendant No. 9, thereafter, made an application before the High Court on 28.8.1981 for extension of the period for payment of the second instalment of Rs.30,000.
The application was allowed by the order dated 31.8.1981 which is under challenge in the present appeal.
Before proceeding to the points involved in the present appeal it will be useful to briefly state the facts.
The parties are close relations, the defendant No. 9 (original respondent No. 1) being the uncle of the plaintiffs appellants.
He died during the pendency of the appeal here and his heirs and legal representatives have been substituted as respondents.
The father of the plaintiffs Nityagopal, defendant No. 9 (original respondent No. 1) Ghosta Gopal and Brajgopal were brothers.
Nityagopal died in 1953 leaving behind the plaintiffs and their mother who also died in 1962.
According to their case, they thus became entitled to 1/3rd share in the properties belonging to the family.
The appellants were very young girls and lived with Gostha Gopal for some time after the death of their parents.
But, according to their case, they had to leave for their maternal grandmother 's place in 1964 due to the ill treatment by their uncle.
In 1965, a collusive suit for partition was commenced by both the uncles Gostha Gopal and Brajgopal, in which although the plaintiffs were impleaded as parties, their address was wrongly mentioned in the plaint.
Consequently no summons could be served on them nor did they have any information about the suit and the decree passed therein.
No share was allotted to the appellants at all.
After they learnt about the collusive suit and the decree, they filed the present suit being T.S. 32 of 1967, for setting aside the earlier decree and for partition.
The trial court accepted the plaintiffs case that the earlier decree was obtained by fraud.
The plaintiffs were awarded 1/3rd share as claimed by them.
Brajgopal became reconciled to the situation but Gostha Gopal challenged the decision in the aforementioned First Appeal No. 184 of 1972.
291 3.
The parties reached an amicable settlement and the appeal was disposed of on 27.3.1979.
Accordingly the heirs of Brajgopal (who was dead by then) got their 1/3rd share in accordance with the trial court 's decision and the suit so far as the other two branches, that is, the plaintiffs and Gostha Gopal were concerned, was disposed of on the terms as mentioned in paragraph 1 above.
According to the case of the plaintiffs appellants they had no information of the application dated 28.8.1981, filed by the defendant No. 9 for extension of the period for payment of the second instalment of Rs.30,000 and when a copy of the application was offered to their advocate he did not accept the same making an endorsement thereon that notice should be served directly on the plaintiffs as he did not continue to hold any authority on their behalf.
Despite this stand of their learned counsel in the High Court, no notice was sent to the plaintiffs and the case was listed only after two days on 31.8.1981.
The plaintiffs ' advocate although he did not represent them on that date was present in Court when the case was called out, and pointed out that there was no justification for excusing the long delay.
Earlier the court by its order dated 17.8.1981, after taking into consideration the conduct of the defendant No. 9 in not complying with the terms of the compromise, had permitted the plaintiffs to refund the sum of Rs.10,000 paid to them as the first instalment.
The plaintiffs ' counsel pointed out that the aforesaid order had finally closed the matter.
The court, however, allowed the prayer of the defendant and permitted him to pay the remaining money along with an additional sum of Rs.6,000 by way of compliance of the terms of the compromise.
The counsel who was representing the plaintiffs earlier, refused to accept the money when offered, and the court permitted the defendant to deposit the amount with the Registrar of the court observing that the same would be available to be withdrawn by the plaintiffs.
When the petitioners learnt about the order they took a copy of the same and approached this Court under Article 136 of the Constitution.
While hearing the Special Leave Petition this Court directed the Subordinate Judge, Baripada to ascertain the market value of the 1/6th share of the property in question.
The Subordinate Judge in his report to this Court stated that the value of the entire properties would be Rs.13,90,000 and the value of 1/6th share would accordingly be Rs.2,31,716.
After the parties filed a number of affidavits, special leave was granted on 30.7.1982.
Mr. Bhagat, appearing in support of the appeal, contended that an order based on the consent of the parties can be modified only 292 with further consent and it is not open to the court to alter the terms otherwise.
It was further argued that assuming the court to be so empowered, the jurisdiction has to be exercised in exceptional circumstances and only in the ends of justice.
If the High Court had directed notice to be issued to the plaintiffs, they would have placed before the court the circumstances showing that it was against the cause of justice to allow the prayer of defendant No. 9 and specially so after such a long delay.
The plaintiffs were shabbily treated by their uncle after the death of their father when they were very young and had to take refuge at their deceased mother 's parental home.
Out of the two sisters only one could be married, and the younger one could not be married as the sum of Rs.30,000 promised by the respondent No. 1 to be paid by 28.2.1980 was not actually paid.
According to the affidavit filed before this Court by way of rejoinder to the respondents ' supplementary affidavit she was not married till then.
The learned counsel, therefore, argued that there was no justification whatsoever for the High Court to condone the delay and extend the period for deposit of the money by the respondent after more than 1 1/2 years of default.
Mr. Mohanty, the learned counsel representing the contesting respondents, who have been substituted in place of the original respondent No. 1 Gostha Gopal, contended that the 6th term of the compromise dealing with the consequence of default in payment of the instalments is penal in nature and must, therefore, be held illegal.
He urged that the clause being severable from the other terms of the compromise should be ignored and the other terms of the compromise ought to be given effect to.
As a result the clause that on the nonpayment of the agreed sum by the time indicated therein the decree of the trial court would become final, must be rejected as illegal.
Reliance was placed on Section 74 of the Indian Contract Act.
It was further argued that the position with respect to an order of a court of law made on the basis of consent of parties is also the same and it is not correct to suggest that in the circumstances of the present case the court had no power to permit the respondent No. 1 to make the deposit later.
The learned counsel relied on the observations made in Charles Hubert Kinch vs Edward Keith Walcott & Ors., AIR 1929 P.C. 289, Banku Behari Dhur vs J.C. Galstaun & Anr., AIR 1922 P.C. 339 and Jagat Singh & Ors.
vs Sangat Singh & Ors., AIR 1940 P.C. 70 and the decision of this Court in Smt.
Periyakkal & Ors.
vs Smt.
Dakshyani; , It was argued that it is not right to assume that the decree of the trial court was unassailable in appeal.
The respondent No. 1 had a substantial defence which he could have suc 293 cessfully pressed if the dispute had not been amicably settled.
We do not find any merit in the argument that the impugned clause 6 of the agreement is illegal being penal in nature and has, therefore, to be ignored.
It has to be noted that the plaintiffs had in the trial court obtained a decree for partition for 1/3rd share in the suit properties and there was presumption in favour of correctness of the decree.
At the appellate stage one of the three branches represented by the heirs of Brajgopal was satisfied with the share allotted to them and the interest of Gostha Gopal (defendant No. 9) was identical to their interest.
The situation was acceptable to the defendant No. 9 also but he wanted to acquire half the share of the plaintiffs on payment of consideration.
The plaintiffs agreed and the sum of Rs.40,000 was fixed as the price.
In clause 2 of the agreement, as mentioned below, it was expressly stated thus: "The sum of Rs.40,000 agreed to be paid by defendant No. 9 to the plaintiffs as compensation for the 1/6th share shall be paid in two instalments: . " (Emphasis added) The amount was to be paid by way of price was reiterated by the use of the word "consideration" in clause 3.
It is significant to note that the defendant No. 9 in the court below or his heirs (after his death) before us have not suggested that the entire compromise should be ignored on account of the impugned clause 6.
They have been relying upon the compromise except the default clause which alone is sought to be ignored.
They insist that under the compromise the shares allotted to the different branches should be treated as final and further half of the share of the plaintiffs, i.e. 1/6th share in the suit properties should have gone to the defendant No. 9 (and after him, to them, i.e. his heirs) for Rs.40,000.
This part of the compromise is in substance an agreement for transfer by the plaintiffs of half their share for a sum of Rs.40,000 to be paid within the time indicated.
It is true that the market price of the property was higher, and a beneficial right was bestowed on the defendant No. 9 to acquire the same for an amount considerably low.
In this background the defendant was subjected to the condition that if he had to take the advantage of the bargain he was under a duty to pay the stipulated amount by the time mentioned in the agreement.
On failure to do so within time, he was to be deprived of this special benefit.
Such a clause cannot be considered to be a penalty clause.
The expression 'penalty ' is an elastic term with many different shades of meaning but it always involves an idea of 294 punishment.
The impugned clause in the present case does not involve A infliction of any punishment; it merely deprives the defendant No. 9 of a special advantage in case of default.
Coming to the next question as to whether the High Court acted rightly in extending the period for payment of the second instalment, the learned counsel for the parties have placed all the facts and circumstances of the case in detail in support of their respective arguments, and we have considered them closely and do not have any hesitation in holding that the High Court, assuming that it had the power to do so, was not justified in allowing the prayer of the defendant No. 9 permitting him to make a grossly belated payment.
Even where such a power exists it is not to be exercised liberally.
In Smt.
Periyakkal and Ors.
vs Smt.
Dakshyani; , , relied upon by the respondents, this Court thus observed: "Of course, time would not be extended ordinarily, nor for the mere asking.
It would be granted in rare cases to prevent manifest injustice.
True the court would not rewrite a contract between the parties but the court would relieve against a forfeiture clause . " In the present case, justice is manifestly in favour of the plaintiffs and against the contesting respondents and further the clause in question was not a forfeiture clause.
Even the High Court had to observe as follows: "The conduct of the appellant (i.e. the defendant No. 9) is indeed very reprehensible.
Though extensions were obtain ed from us, he did not comply with the directions and suffered order No. 72 dated 17.8.1981 to be passed.
Only when his rights were taken away did he realise the real effect of what he had lost." In view of our conclusion it is not necessary to decide the abstract question of the general power of the court in this regard.
The grievance of the plaintiffs that they were not afforded reasonable opportunity to contest the defendants ' prayer is also well founded.
The appeal in the High Court had been disposed of earlier.
After the default in payment of the second instalment occurred the present appellants placed the circumstances before the court and prayed for permission to refund the first instalment of Rs.10,000, 295 received by them so that they could take full advantage of the compromise decree.
The matter was fully considered and decided by the order dated 17.8.1981 as mentioned by the High Court in the above quoted passage.
In the situation the counsel who represented the plaintiffs in the appeal could not have been held to have continued to represent them specially when they informed the court that he had no further authority and that notice should be directly sent to the plaintiffs.
However, we do not consider it necessary to remand the matter to the High Court for fresh consideration as we have considered all the relevant materials and have come to a final conclusion on merits in favour of the plaintiffs.
For the reasons mentioned above, the order dated 31.8.1981 passed by the Orissa High Court in First Appeal No. 184 of 1972 is set aside and the application filed by Gostha Gopal Dey for extension of time is rejected.
The appeal is accordingly allowed with costs payable to the appellants by the contesting respondents.
S.L. Appeal allowed.
[/INST]% The petitioner in this application under Article 136 of the Constitution entered into a contract with the respondent State for construction work.
The contract could not be completed within the stipulated time because of alleged gross delay on the part of the State in allotment of work and discharge of its obligations under the contract.
The petitioner incurred unforeseen expenditure and approached the Superintending Engineer for payment.
Upon refusal of the Superintending Engineer to pay and also to refer the matter to arbitration, the petitioner moved the District Judge under Section 20 of the Arbitration Act, ( 'the Act ') for the filing of the arbitration agreement and for reference of the dispute to arbitration.
The District Judge directed the respondent State to file the agreement, and made a reference for specific question to the arbitration.
The High Court dismissed the State 's appeal against the order of the District Judge.
Thereafter, an arbitrator was appointed, who made an award partly allowing the petitioner 's claim.
The award was filed in the Court of the District judge, who made the award a rule of the court.
The respondent appealed to the High Court.
The High Court remanded the matter to the District Judge for a fresh decision.
The District Judge accepted the respondent 's objections and set aside the award.
The High Court dismissed the appeal of the petitioner.
The petitioner then moved this Court for relief by this petition for special leave.
Dismissing the petition, the Court, ^ HELD: The District Judge rightly found that the question regarding extra cost was a general question and not a specific legal question and the decision of the arbitrator was not final.
The arbitrator 104 misconducted himself in allowing the claim without deciding the objection of the State.
In view of the specific clauses, the petitioner was not legally entitled to claim for extra cost.
The decision of this Court in Seth Thawardas vs Union of India, was of no avail on this point.
If no specific question of law is referred, the decision of the arbitrator on that question is not final however much it may be within his jurisdiction and indeed essential for him to decide the question incidentally.
The arbitrator is not a conciliator and cannot ignore the law or mis apply it in order to do what he thinks is just and reasonable.
The arbitrator is a Tribunal selected by the parties to decide their disputes according to law and so he is bound to follow and apply the law, and if he does not, he can be set right by the Court provided his error appears on the face of the award.
In this case, the contractor having contracted, could not go back to the agreement simply because it did not suit him to abide by it.
[111C F] The petitioner had argued that since specific issues had been framed and referred by the District Judge to the arbitrator, the same had been answered by a non speaking award and there was no mistake of law apparent on the face of the record, and the District Judge had erred in setting aside the award by looking into the terms of the contract which neither formed part of the award nor were appended to it.
The Court did not agree.
This being a general question, the District Judge rightly examined the question and found that the petitioner was not entitled to claim for extra cost in view of the terms of the contract, and the arbitrator misdirected himself by not considering this objection of the State before giving the award.
[112B C] The limits of the jurisdiction of the Court to challenge the award are well settled.
While considering the objection under section 30 of the Act, the Court does not act as an appellate Court; it can only interfere with the award if the arbitrator misconducts himself or the proceedings or if the award has been made after the issue of an order by the Court superseding the arbitration or if the arbitration proceedings have become invalid under section 35(c) of the Act, or the award has been improperly procured or is otherwise invalid.
If, a specific question is submitted to the arbitrator and he answers it, the fact that the answer involves an erroneous decision in point of law, does not make the award bad on its face so as to permit it being set aside.
[112E F; 1l3A] The High Court was right that the District Judge was entitled to examine the contract in order to find out the legality of the claim of the petitioner regarding extra cost towards rise in prices of material and 105 labour.
Clauses 2.16 and 2.4 stipulated that the contractor had to complete the work inspite of rise in prices of materials and also rise in labour charges at the rates stipulated in the contract.
There was a clear finding of the arbitrator that the contract was not rendered ineffective in terms of section 56 of the Contract Act due to the abnormal rise in prices of materials and labour.
This being so and the contractor having completed the work, it was not open to him to claim extra cost towards rise in prices of material and labour.
The arbitrator misdirected himself in not deciding this specific objection raised by the State regarding the legality of the extra claims of the petitioner.
It has to be born in mind that there were specific clauses which barred consideration of extra claims in the event of price escalation.
[113D F; 114B] The award was properly set aside by the District Judge and the High Court was right in the view it took and there was no ground to interfere.
[113G] Seth Thawardas vs Union of India, ; M/s Alopi Parshad vs Union of India, ; ; Kapoor Nilokheri Co operative Dairy Farm Society Ltd. vs Union of India, ; Champsey Bhara and Co. vs Jivraj Balloo Spinning and Weaving Co. Ltd., A.I.R. 1923 P.C. 66; Re.
King and Duveen, ; Government of Kelantan vs Duff Development Co. Ltd., ; Bungo Steel Furniture vs Union of India, ; ; Saleh Mohd. vs Nathoo Mal, 54 I.A. 427; Abosalom Ltd. vs Great Western, ; Allen Berry & Co. vs Union of India, ; and Tarapare and Company vs Cochin Shipyard Ltd., Cochin and Anr.
,[1984] 2 S.C.C. 680, referred to.
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<s>[INST] Summarize the judgementl Appeals Nos.
2180 to 2182 of 1968.
Appeals by Special Leave from the judgment and order dated October 6, 1967 of the Andhra Pradesh High Court in Writ Petitions Nos.
1456 of 1965, 376 and 2006 of 1966.
M. C. Chagla, P. Ramachandra Rao and B. R. Agarwala, for the appellants (in all the appeals).
P. Ram Reddy and A. V. V. Nair, for the respondents (in all the appeals).
The Judgment of the Court was delivered by Mitter, J.
These appeals are directed against the imposition of taxes under the Andhra Pradesh Motor Vehicles Taxation Act (V of 1963).
The appellant in the first two appeals is the Automotive Manufacturers (P.) Ltd., a dealer, among other automobile equipment, of motor chassis, motor vehicles etc.
received by it from manufacturers outside the State of Andhra Pradesh.
The first appeal arises out of a writ petition against the levy in respect of motor chassis delivered to it by Ashok Leyland Ltd. of Madras.
These chassis are said to be driven by transport contractors of the manufacturers themselves under temporary, certificates of registration under the Motor Vehicles Act and delivered to the appellant at Secunderabad.
The second appeal by the same appellant arises out of a writ petition challenging the levy on jeeps, jeep truck chassis, jeep station wagons of the manufacture of Mahindra & Mahindra Ltd. of Bombay, besides pick up vans, scooters etc.
from Bajaj Auto Ltd. of Poona.
The scooters are carried to Secunderabad in lorries.
The appellants in Civil Appeal No. 2182 of 1968 are Ashok Leyland Ltd. Madras who transport motor chassis by road from their factory at Encore to dealers in various parts of India, State Transport Undertakings etc.
According to their writ petition, these chassis have to traverse long distances in the State of Andhra Pradesh every month destined for delivery not only in the said State but also beyond the same.
These chassis are driven from Ennore to their respective destinations in the several States under temporary certificates of registration obtained from the 595 Madras State on payment of requisite tax in that behalf, such certificates of registration under section 28 of the Motor Vehicles Act being effective throughout India.
The appellants ' case is that the levy is illegal and unconstitutional.
The grounds urged in the writ petitions filed in the High Court inter alia are as follows : 1.
S.3 of the Act only authorises a levy of tax on a motor vehicles "used or kept for use in a public place in the State".
There can be no user or keeping for use: of the chassis of a motor vehicle as a motor vehicle unless a body is attached to it. 'In the, case of vehicles other than chassis such user or keeping for use in 'a public place can only take place when they are put to the required user or kept for use by the customers for whom the vehicles are transported in the manner contemplated by the Motor Vehicles Act.
2. section 9 of the Act exempts from payment of tax chassis of a motor vehicle "driven to another place in order that a body may be attached to it".
As the chassis are invariably driven to their respective destinations in order that bodies may be attached to them, they come directly under the notification of exemption issued by the State Government.
As the chassis or the vehicles are covered by temporary certificates of registration taken out by the manufacturers entitling transportation throughout the territory of India, the impugned levy operates as an impediment to the free trade and commerce of the petitioners in violation of article 301 of the Constitution.
The High Court turned down all the contentions.
Hence the appeals.
Before this Court Mr. Chagla for the appellants limited his first and second contentions to the cases of chassis only.
His first contention was that section 3 of the Act was not applicable to the appellants.
Sub section
(1) of that section, runs as follows : "The Government may, by notification from time to time direct that a tax shall be levied on every motor vehicle used or kept for use, in a public place in the State.
" Under sub section
(2) of section 3 the notification issued under sub section (1) is to specify the class of motor vehicles on which, the rates for the periods at which and the date from which the tax shall be levied.
A motor vehicle has not been defined in this Act but under section 2(j) of the Act it is to have, the same meaning as is assigned to it in the Motor Vehicles Act.
Under section 2(18) of the last mentioned Act, "a motor vehicle means any mechanically propelled vehicle adapt 596 ed for use upon roads whether the power of propulsion is transmitted thereto from an external or internal source and includes a chassis to which a body has not been attached and a trailer; but does not include a vehicle running upon fixed rails or a vehicle of a special type adapted for use only in a factory or in any other enclosed premises.
" The argument of learned counsel was that a chassis as such could neither be used nor kept for use in a public place, before a body was fitted to it and so long as the said step was not taken, the question of levy of tax under the Act would not arise.
We were referred to the different meanings of the word "use" in the Oxford Dictionary some of which are as follows : "To make use of as a means or instrument; To employ for a profitable end;" In our view, it is not necessary for a chassis to have a body attached to it before it can be used within the meaning of the Act inasmuch as it can be used by the man who drives it and such use of it on public roads would be enough to attract the levy.
Ordinary chassis have bodies attached to them for commercially profitable use but even without a body a chassis can be used and is actually used when it is taken over public roads.
The second submission was that the appellants qualified for exemption under the Government notification under section 9 of the Act.
Section 9 inter alia provides : "(1) The Government may, by notification (a) grant an exemption, make a reduction in the rate or order other modification not involving an enhancement in the rate, of tax payable (i) by any person or class of persons; or (ii) in respect of any motor vehicle or class of motor vehicles or motor vehicles running in any particular area; xx xx XX.
" The notification issued ran as follows: " In exercise of the powers conferred by sub section (1) of section 9 of the Andhra Pradesh Motor Vehicles Taxation Act, 1963 (Andhra Pradesh Act 5 of 1963), the Governor of Andhra Pradesh hereby grants exemption of the tax payable in respect of motor vehicles specified in column (1) of the Table below subject to the conditions, if any, specified in column (2) thereof '.
597 Item (4) of the table reads : "Any chassis of a motor vehicle" the condition for exemption being : "When driven to any place in order that a body may be attached to it.
" It was argued that as the use of a chassis would be meaningless unless a body is attached to it and all chassis, as a matter of fact, have to have bodies attached to them, the driving of the chassis on the road without a body ' would qualify for exemption under, the above notification.
We find ourselves unable to accept this view.
Item (4) in the table of the above notification limits the exemption from the tax to the journey of the chassis for the express purpose of a body being attached to it.
The Automotive Manufacturers being dealers can and do probably deal with or dispose of the chassis as such.
There is no allegation in any of the two writ petitions tiled by these appellants that the chassis were coming from Madras or Bombay for the purpose of having bodies attached to them at the workshop of the appellant.
In so far as Ashok Leyland Ltd. is concerned, it is their positive case that the chassis were being driven through the State of Andhra Pradesh either for delivery there or in other States of India.
They were certainly being driven along the roads of Andhra Pradesh for disposal at the joumey 's end and it would be for the purchaser at the destination to have a body fixed to the chassis according to Ms own need and on the specification given by him.
Merely because bodies were going to be attached by the ultimate purchasers, it cannot be said that the running of the chassis on the roads of Andhra Pradesh would attract exemption under item (4) of the notification.
The last point urged by counsel was that inasmuch as registration of a vehicle in any State under section 28 of the Motor Vehicles Act is to be effective throughout India any tax by a State on motor vehicles be they merely chassis or otherwise would run counter to article 301 of the Constitution according to which trade, commerce and intercourse throughout the territory of India is to be free subject to the other provisions of Part XIII.
Under article 304(b) how ever it is open to the Legislative of a State to impose such reasonable restrictions on the freedom of trade, commerce or intercourse with or within that State as may be required in the public interest.
This again is subject to the proviso that no Bill or amendment for the purpose of the said cl.
(b) is to be introduced in the State Legislature without the previous sanction of the President.
Learned counsel wanted to urge that the impost was not saved by article 304(b) inter alia, on the ground that there was no previous sanction of the President in respect of the Bill as envisaged by article 304(b).
We did not allow counsel to press this point inasmuch as it had 598 not been urged in the writ petition and we hereby make it clear that we are not examining the merits of the contention urged by counsel in this regard and it will be open to his clients, if so advised, to urge it in any future proceedings they may choose to take.
These appeals were originally heard by a Bench of five Judges including section C. Roy, J. who expired a few days back.
The above judgment was concurred in by our late colleague.
We however gave a further hearing to the parties at which nothing was addressed to us to make us change our opinion already formed.
In the result, the appeals fail and are dismissed with costs.
One set of costs including hearing fee.
K. B. N. Appeals dismissed.
[/INST]The respondents were committed to trial before the Sessions Court for offences of forgery, cheating, etc.
They challenged the committal order but the High Court held that there was a prima facie case.
Thereafter, the trial judge split up the charges and this was again questioned but the High Court held that there was no illegality.
The Public Prosecutor then applied under section 494, Cr.
P.C., under instructions from the Government, for permission to withdraw from the prosecution, on the grounds, that the transaction relating to the offence arose out of a contract and was of a civil nature, that there had been enormous delay in proceeding with the trial, and that the securing the evidence of witnesses would involve heavy expense for the State as the witnesses were in far off places. 'Material judge gave the permission and the order was confirmed by the High Court.
Allowing the appeal to this Court, HELD : (1) Section 494 of the Code is not in pari materia with section 333 under which the Advocate General may enter a nolle prosequi at any stage of a trial.
It only gives power to the Public Prosecutor to withdraw from the prosecution subject to the consent of the Court.
Though the section is in general terms and does not circumscribe the powers of the Public Prosecutor the essential consideration which is implicit in the grant of the power is that it should be exercised in the interests of justice which may be, either that it may not be possible to produce sufficient evidence to sustain the charge, or that subsequent information before the prosecuting agency falsifies the prosecution evidence, or other similar circumstances depending on the facts and circumstances of each case.
The power is subject to the permission of the Court and it is the duty of the Court to see that the permission is not sought on grounds extraneous to the interests of justice or that offences against the State do not go unpunished merely because the Government as a matter of general policy or expediency unconnected with its duty to prosecute offenders directs a Public Prosecutor to withdraw from the Prosecution and the Public Prosecutor merely does so at its behest.
The court, while considering the request to grant permission, should not do so as a formality for the mere a .king.
it may grant permission only if it is satisfied on the materials placed before it that the grant of it subserves the administration of justice and that the permission was not sought covertly with an ulterior purpose unconnected with the vindication of the law.
[603 E H; 604 A D; 606 E] State of Bihar vs Ram Naresh Pandey, , followed.
Devendra Kumar Roy vs Syed Yar Bakht Chaudhury & Ors.
A.I.R. 1939 Cul. 220, The King vs Parmanand & Ors., A.I.R. 1949 Pat. 222 and Dy.
Accountant General (Admn.) Office of Accountant General, Kerala Trivandrum vs State of Kerala & Ors., , referred to.
(2) In the present case none of the grounds alleged or even their cumulative effect would justify, the withdrawal from the prosecution.
[906 G] 600 (a) It may be that the acts of the respondents may make them both liable under the civil as well as the criminal laws.
But that does not justify either the seeking of the permission to withdraw from the prosecution or the granting of it unless the matter before the criminal court is of a purely civil nature.
The committal order and the judgments of the High Court at the prior two stages show that there was a prima facie case against the accused with respect to the charges framed against them.
[906 G H; 907 G H] (b) Neither the ground of delay nor the question of expenditure involved by themselves, could be a proper ground for granting permission to the Public Prosecutor for withdrawing from the case [608 B C, F G]
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<s>[INST] Summarize the judgementtter of the Contempt of Court proceedings relating to the printing, publishing and circulation of a pamphlet over the name of Hira Lal Dixit (General Secretary, Praja Socialist Party, Mainpur) entitled "HAMARA VAHAN VIBRAG" arising out of (Civil) Petition No. 379 of 1953.
(Hira Lal Dixit vs The State of Uttar Pradesh).
The Attorney General for India (P. A. Mehta, with him) to assist the Court.
S.C. Issacs (R. Patnaik and section section Shukla, with him) for respondent No. I (Hira Lal Dixit).
Mohan Lal Saxena and section section Shukla for respondent No. 2 (Kishore Dutt Paliwal).
S.S. Shukla for respondent No. 3 (Printer, Sainik Press).
679 1954.
October 1.
The Judgment of the Court was delivered by DAS J.
This Rule was issued by this Court on the 16th September, 1954, calling upon the respondents to appear and show cause why they should not be proceeded against for contempt of this Court.
It is desirable to mention at the outset the cir cumstances in which it became necessary for this Court to issue this Rule.
On the 14th September, 1954, there were on that day 's cause list for hearing and final disposal two appeals, being 'Appeal No. 182 of 1954 (Saghir Ahmad vs The State of Uttar Pradesh and Others) and Appeal No. 183 of 1954 (Mirza Hasan Agha vs The State of Uttar Pradesh and Others).
A large number of writ petitions, 224 in number, under article 32 of the Constitution raising the same questions were also on the cause list for that day.
Both the appellants and all the petitioners were engaged in carrying on businesses as carriers of passengers and goods by motor buses or lorries on different routes under licenses issued by the State of Uttar Pradesh and in cases where the route passed into or through the State of Delhi, countersigned by that State.
Some of these persons had originally been granted permanent permits by the Regional Transport Authority.
Pursuant to the policy of nationalisation of road transport business the State of Uttar Pradesh made declarations under section 3 of the Uttar Pradesh State Road Transport Act, 1950, to the effect that road transport services on certain routes should be run and operated by the State Government in the manner mentioned in the relevant declarations and it also published schemes of road transport services under section 4 of that Act.
In furtherance of its object the State Government began to serve notices on the licensees to stop plying buses on specified routes.
The appellant thereupon applied to the Allahabad High Court for a writ of mandamus directing the State Government and its Minister of Transport to withdraw the declaration made under section 3 of the Uttar Pradesh Road Transport Act, 1950, in respect of their respective routes and directing them and their officers to refrain from proceeding further under sections 4 and 680 5 of that Act and not to interfere with the operation of their respective stage carriages and for other ancillary reliefs.
By an order made on the 17th November, 1953, the Allahabad High Court dismissed those, applications.
The two petitioners thereupon filed these two appeals in this Court after having obtained a certificate from the Allahabad High Court under article 132(1) of the Constitution.
The appellants obtained orders for stay of proceedings until the determination of their appeals.
In view of the decision of the Allahabad High Court many other persons holding licenses for plying motor stage carriages or contract carriages came direct to this Court with applications under article 32 for appropriate writs and obtained interim stay.
As already stated, the two appeals and all those numerous applications were posted on the cause list for the 14th September, 1954, for final disposal.
The respondent, Hira Lal Dixit, was the petitioner in one of those writ applications.
The two appeals were called on for hearing on that day and were part heard.
The hearing continued for the whole of the 15th and 16th September, 1954, and was concluded on the 17th September, 1954, when the Court took time for considering its decision.
The Court has not 'yet delivered its judgment.
A large number of persons, presumably the petitioners in the writ petitions or otherwise interested therein, attended the Court on all those dates, for the result of the decision of the appeals would also conclude the writ petitions.
It appears that on the 15th September, 1954, a leaflet printed in the Hindi language and characters, consisting of 18 pages, intituled "Hamara Vahan Vibhag" meaning "Our Transport Department", purporting to be written by the respondent Hira Lal Dixit and containing a foreword purporting to be written by Sri Krishna Dutt Paliwal and a block photograph of the respondent, Hira Lal Dixit, on the front page was distributed in the Court premises.
The leaflet contained a graphic account of the harassment and indignity said to have been meted out to the writer by the State officers and the then State Minister of Transport in connection with the cancellation and eventual restoration of his license 681 in respect of a passenger bus.
The second paragraph on page 15 of that leaflet contained a passage of which the following is an English translation prepared by an advocate of this Court duly authorised in that behalf" The public has full and firm faith in the Supreme Court, but sources that are in the know say that the Government acts with partiality in the matter of appointment of those Hon 'ble Judges as Ambassadors, Governors, High Commissioners, etc., who give judgments against Government but this has so far not made any difference in the firmness and justice of the Hon 'ble Judges.
" The leaflet containing the above offending paragraph having been brought to its notice the Court on the 16th September, 1954, issued the present rule and sent a copy of the rule to the Attorney General for India.
All the respondents have been duly served.
They have filed affidavits and have appeared before us by their respective advocates.
The respondent, Sri Krishna Dutt Paliwal, the writer of the foreword, who was present in Court, made the following statement to the Court through his advocate, Sri Mohan Lal Saksena: " When I wrote the foreword I did not go through the whole manuscript.
I was only told that it dealt with the working of the Transport Control.
Now that my attention has been drawn to the passage objected to I am sorry that I wrote a foreword to the pamphlet and I offer my apology to the Court.
I never knew that the pamphlet was intended for circulation and I was not a party to its circulation.
" One., Devendra Sharma, the General Manager of the Sainik Press, Agra, where the offending leaflet was printed, filed an affidavit on behalf of the respondent Press stating that at the time when the leaflet had been given to the Press for being printed he did not notice the paragraph in question, that his attention was drawn to it only after the service of the present Rule, that he was sorry that it, had been printed in the Press and that he never had the slightest intention of committing any contempt of this Court.
In his affidavit as well as through his advocate, Sri section Sukla, the 682 respondent Press represented by Devendra Sharma who was present in Court tendered an unqualified apology to the Court.
In view of the statements made in Court by the advocates of these two respondents this Court accepts their apology and discharges the rule as against them and nothing further need be said about them.
Learned counsel appearing for the respondent, Hira Lal Dixit, strongly urged that the passage complained of could not possibly be capable of any derogatory meaning or implication and could not be regarded as constituting a contempt of Court.
There are innumerable ways by which attempts can be made to hinder or obstruct the due course of administration of justice in Courts.
One type of such interference is to be found in cases where there is an act or publication which scandalises the Court itself.
A situation of that type was considered by this Court in the case of Brahma Prakash Sharma and Others vs The State of Uttar Pradesh(1), and the principles governing a case of that type were discussed and laid down in the judgment of the Court.
The present case does not fall within that category, for here there has been no scandalising of the Court itself.
The question here is whether the offending passage is of such character and import or made in such circumstances as would tend to hinder or obstruct or interfere with the due course of administration of justice by the Court.
To begin with, the leaflet was written by a person who was himself the petitioner in one of the writ petitions which were on the cause list for hearing.
The actual timing of the publication of the leaflet is significant.
It was circulated at a time when the appeal and the writ petitions including that of the respondent, Hira Lal Dixit, himself were posted on the cause list and the appeals, on the decision of which depended the fate of those numerous petitions, were being actually heard.
The place of publication was also not without significance.
It was distributed in the Court premises where a very large number of licensees had fore gathered.
The fact of distribution of the leaflet in the Court premises was denied in the affidavit of this respondent but when a (1) 683 suggestion was made that evidence be recorded on this point the learned counsel appearing for him did not press for it and accepted the position that the leaflet was in fact distributed in the Court premises.
In the circumstances, the only other question that remains is as to what was the meaning and purpose of the offending passage in the leaflet.
Learned counsel for the respondent, Hira Lal Dixit, maintained that the passage in question was perfectly innocuous and only expressed a laudatory sentiment towards the Court and that such flattery could not possibly have the slightest effect on the minds of the Judges of this august tribunal.
We do not think flattery was the sole or even the main object with which this passage was written or with which it was published at the time when the hearing of the appeals was in progress.
It no doubt begins with a declaration of public faith in this Court but this is immediately followed by other words connected with the earlier words by the significant conjunction "but.
" The words that follow are to the effect that sources that are in the know say that the Government acts with partiality in the matter of appointment of those Judges as Ambassadors, Governors, High Commissioners, etc., who give judgments against the Government.
The plain meaning of these words is that the Judges who decide against the Government do not get these high appointments.
The necessary implication of these words is that the Judges who decide in favour of the Government are rewarded by the Government with these appointments.
The attitude of the Government is thus depicted surely with a purpose and that purpose cannot but be to raise in the minds of the reader a feeling that the Government, by holding out high hopes of future employment, encourages the Judges to give decisions in its favour.
This insinuation is made manifest by the words that follow, namely, "this has so far not made any difference in the firmness and justice of the Hon 'ble Judges.
" The linking up of these words with the preceding words by the conjunction "but" brings into relief the real significance and true meaning of the earlier words.
The passage read as a 684 whole clearly amounts to this: "Government disfavours Judges who give decisions against it but favours those Judges with high appointments who decide in its favour: that although this is calculated to tempt Judges to give judgments in favour of the Government it has so far not made any difference in the firmness and justice of the Judges.
" The words "so far" are significant.
What, we ask, was the purpose of writing this passage and what was the object of the distribution of the leaflet in the Court premises at a time when the Court was in the midst of hearing the appeals ? Surely, there was hidden in the offending passage a warning that although the Judges have "so far" remained firm and resisted the temptation of deciding cases in favour of Government in expectation of getting high appointments, nevertheless, if they decide in favour of the Government on this occasion knowledgeable people will know that they had succumbed to the temptation and had given judgment in favour of the Government in expectation of future reward in the shape of high appointments of the kind mentioned in the passage.
The object of writing this paragraph and particularly of publishing it at the time it was actually done was quite clearly to affect the minds of the Judges and to deflect them from the strict performance of their duties.
The offending passage and the time and place of its publication certainly tended to hinder or obstruct the due administration of justice and is a contempt of Court.
These is another aspect of the matter.
Even if the passage about the Judges were not in the leaflet the rest would still amount to a serious contempt of Court.
There is in ' it a strong denunciation of the State of Uttar Pradesh, a party to the appeal and the petitions ' regarding the very matters then under the consideration of this Court.
It was not fair comment on the proceedings but an attempt to prejudice the Court against the State and to stir up public feeling on the very question then pending for decision.
The manner in which the leaflets were distributed, the language used in them and the timing of their publication could only have had one object, namely, to try and influence 685 the Judges in favour of the petitioner and the others who were in the same position as himself.
This again is a clear contempt of this Court.
It is well established, as was said by this Court in Brahma Prakash Sharma and Others vs The State of Uttar Pradesh (supra), that it is not necessary that there should in fact be an actual interference with the course of administration of justice but that it is enough if the offending publication is likely or if it tends in any way to interfere with the proper administration of law.
Such insinuations as are implicit in the passage in question are derogatory to the dignity of the Court and are calculated to undermine the confidence of the people in the integrity of the Judges.
Whether the passage is read as fulsome flattery of the Judges of this Court or is read as containing the insinuations mentioned above or the rest of the leaflet which contains an attack on a party to the pending proceed ings is taken separately it is equally contemptuous of the Court in that the object of writing it and the time and place of its publication were, or were calculated, to deflect the Court from performing its strict duty, either by flattery or by a veiled threat or warning or by creating prejudice in its mind against the State.
We are, therefore, clearly of opinion and we hold that the respondent, Hira Lal Dixit, by writing the leaflet and in particular the passage in question and by publishing it at the time and place he did has committed a gross contempt of this Court and the qualified apology contained in his affidavit and repeated by him through his counsel cannot be taken as sufficient amends for his misconduct.
It should no doubt be constantly borne in mind that the summary jurisdiction exercised by superior Courts in punishing contempt of their authority exists for the purpose of preventing interference with the course of justice and for maintaining the authority of law as is administered in the Court and thereby affording protection to public, interest in the purity of the administration of justice.
This is certainly an extraordinary power which must be sparingly exercised but where the public interest demands it, the Court will 88 686 not shrink from exercising it and imposing punishment even by way of imprisonment, in cases where a mere fine may not be adequate.
After anxious consideration we have come to the conclusion that in all the circumstances of this case it is a fit case where the power of the Court should be exercised and that it is necessary to impose the punishment of imprisonment.
People must know that they cannot with impunity hinder or obstruct or attempt to hinder or obstruct the due course of administration of justice.
We, therefore, find respondent, Hira Lal Dixit, guilty of contempt of Court, make the Rule absolute as against him and direct that he be arrested and committed to civil prison to undergo simple imprisonment for a fortnight.
He must also pay the costs, if any, incurred by the Union of India.
Order accordingly.
[/INST]The petitioner was an applicant in one of the writ petitions which had been filed in the Supreme Court challenging the validity of U. P. Road Transport Act, 1951.
During the hearing of the writ petitions a leaflet printed in the Hindi language and intituled "Our Transport Department" purporting to be written by the petitioner was distributed in the Court premises.
The leaflet contained a graphic account of the harassment and indignity said to have been meted out to the writer by the State officers and the then State Minister of Transport in connection with the cancellation and eventual restoration of his license in respect of a passenger bus.
87 678 The second paragraph at page 15 of that leaflet contains a passage of which the following is the English translation : " The public has full and firm faith in the Supreme Court, but sources that are in the know say that the Government acts with, partiality in the matter of appointment of those Hon 'ble Judges as Ambassadors, Governors, High Commissioners, etc., who give judgments against Government but this has so far not made any difference in the firmness and justice of the Hon 'ble Judges.
" Held, (1) that the offending passage and the time and place of its distribution tended to hinder or obstruct the due administration of justice and was a contempt of Court.
(2)It was not fair comment on the proceedings but an attempt to prejudice the Court against the State and to stir up public feeling on the very question then pending for decision.
The manner in which the leaflets were distributed, the language used in them and the timing of their publication could only have had one object, namely, to try and influence the Judges in favour of the petitioner and the others who were in the same position as himself.
This again was clear contempt of the Supreme Court.
(3)It is not necessary that there should in fact be an actual interference with the course of administration of justice but it is enough if the offending publication is likely or if it tends in any way to interfere with the proper administration of law.
Such insinuations as were implicit in the passage in question were derogatory to the dignity of the Court and were calculated to undermine the confidence of the people in the integrity of the Judges.
Brahma Prakash Sharma and Others vs The State of Uttar Pradesh ([1953] S.C.R. 1 169) referred to.
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<s>[INST] Summarize the judgementCivil Appeal No 531 of 1986 From the Judgment and order dated 22.5.1984 of the Rajasthan High Court in S.B. Civil Writ Petition No. 114 of 1985.
Sushil Kumar Jain and Sudhanshu Atreya for the Appellant.
B.D.Sharma for the Respondents.
The question is whether the appellant having his date of birth as January 2, 1956 had attained the age of 28 years on January 1, 1984 and was therefore disqualified from being considered for direct recruitment to 668 the Rajasthan Administrative Service under r. l l B of the Rajasthan State & Subordinate Service (Direct Recruitment by Competitive Examination) Rules, 1962 (for short 'the Rules ').
Put very briefly, the essential facts are these.
The Rajasthan Public Service Commission invited applications for direct recruitment to the Rajasthan Administrative Service and allied services of the Government of Rajasthan by a competitive examination to be held in 1983.
Under the directions issued by the Commission, the minimum age prescribed for candidates was 21 years and the maximum 28 years.
It was prescribed that the candidate should have attained the age of 21 years on January 1, 1984 and should not have attained the age of 28 years i.e. On the first day of January next following the last date fixed for receipt of application.
The appellant was allowed to appear in the written examination, but by an order dated June 12, 1984, the Assistant Secretary to the Commission intimated the appellant that his candidature was rejected on the ground that he had attained the age of 28 years on January 1, 1984 and was therefore ineligible for consideration.
Feeling aggrieved, the appellant moved the High Court under article 226 of the Constitution and contended that his date of birth was January 2, 1956 and that he had not attained the age of 28 years on January 1, 1984.
His claim was contested by the respondents who pleaded that the appellant had attained the age of 28 years on January 1, 1984 and therefore his form was properly rejected.
During the pendency of the writ petition, the High Court by an interim order dated September 14, 1984 directed the Commission to interview the appellant if he was otherwise eligible for being considered except on the ground of age.
The appellant was acoordingly interviewed but the result was withheld.
A learned Single Judge by his judgment and order dated January 19, 1985 held that if the date of birth of the appellant was January 2, 1956 he would complete the age of 28 years only at the end of the day of January 1, 1984 and there he could not be said to have attained the age of 28 years on that date.
He accordingly held that the Commission was not justified in rejecting the candidature of the appellant on the ground that he had attained the age of 28 years on January 1, 1984 and therefore was not eligible for consideration.
On appeal, a Division Bench disagreed with the view expressed by the learned Single Judge and reversed his judgment on the ground that the words used in r. 11 B of the Rules are, 'must not have attained the age of 28 years on the first day of January next following the last date fixed for receipt of application ' and not that he should have completed the age of 28 years on that day.
They relied upon the 669 undisputed fact that the first day of January next following the last A date fixed for receipt of application in this case was January l, 1984.
Accordingly, they held that the appellant was born on January 2, 1956 and, as such, he had attained the age of 28 years as soon as the first day of January, 1984 commenced.
They further held that the appellant had not only attained the age of 28 years, but had also completed the same at 12 o 'clock in the midnight of January 1, 1984.
According to the learned Judges, on January 2, 1984, the appellant would be one day more than 28 years and, as such, he was disqualified to appear at the examination under r. 11 B of the Rules.
The conclusion of the learned Judges may best be stated in their own words: "In calculating a person 's age, the day of his birth must be counted as a whole day and he attains the specified age on the day preceding, the anniversary of his birth day." In coming to that conclusion the learned Judges relied upon the language of r. 11 B of the Rules which prescribes the age limit for the said examination and also referred to section 4 of the .
They have relied on certain decisions of different High Courts, particularly to that in G. Vatsala Rani represented by guardian and father, P.M.G. Kini vs Selection Committee for Admission to Medical Colleges, Bangalore Medical College, Bangalore 2 represented by the Secretary, AIR and to some English decisions laying down the principle for determination of age.
It is argued that the learned Judges were in error in introducing the legal concept of the age of majority as laid down in section 4 of the for the purpose of interpreting r. 11 B. It is said that the purpose of r. 11 B framed by the Government was to prescribe the maximum and minimum age limits for entry into the Rajasthan Administrative Service and allied services of the Government of Rajasthan.
It is submitted that as commonly understood, a person attains a particular age after he has completed a given number of years.
It is said that there is no reason why the words of r. 11 B 'must have attained the age of 21 years and must not have attained the age of 28 years ' should not be understood in the ordinary sense.
At first blush, the contention advanced appears to be rather attractive but on deeper consideration it cannot prevail.
Learned counsel for the appellant drew our attention to the fact that the Union Public Service Commission has been interpreting the 670 words 'must have attained the age of 21 years and must not have attained the age of 26 years on the first day of August next following ' in the way the appellant contends for.
These words are taken from r.4 of the Indian Administrative Service (Appointment by Competitive Examination) Regulations, 1955 framed by the Central Government in pursuance of r. 7 of the Indian Administrative Service (Recruitment) Rules, 1954.
Presumably, there would be similar provisions laying down the qualification as to age in other central services as well.
R. 4 insofar as material reads: "4.
Conditions of Eligibility In order to be eligible to compete at the examination, a candidate must satisfy the following conditions, namely: (i) (ii) Age He must have attained the age of 21, and not attained the age of 28 on the first day of August of the year in which the examination is held: Provided that the upper age limit may be relaxed in respect of such categories of persons as may from time to time, be notified in this behalf by the Central Government, to the extent and subject to the conditions, notified in respect of each category. ' Undoubtedly, the Union Public Service Commission has been interpreting the provision as to attainment of age in a like manner.
This would be clear from the advertisement issued by it on December 8, 1984 which is in these terms: "Age limit: (ka) The candidate should have attained the age of 21 years on 1st August.
hut should not have attained the age of 26 years, that is, he should not have born before the 2nd August, 1959 and after the 1st August, 1964," We are afraid, the interpretation of r.
I l B of the Rules cannot proceed upon the basis adopted by the Union Public Service Commission.
Rule 11 B of the Rules provides: "11 B. Age.
Notwithstanding anything contained regarding 671 age limit in any of the service Rules governing through the A agency of the Commission to the posts in the State Service and in the Subordinate Service mentioned in Schedule I and in Schedule II respectively, a candidate for direct recruitment to the posts to be filled in by combined competitive examinations conducted by the Commission under these Rules must have attained the age of 21 years and must not have attained the age of 28 years on the first day of January next following the last date fixed for receipt of application.
" It is plain upon the language of r. l l B that a candidate 'must have attained the age of 21 years and must not have attained the age of 21 years on the first day of January next following the last date fixed for receipt of application '.
Last day fixed for receipt of application in this case, was January 1, 1983.
First day of January next following that day would be January 1, 1984.
The object and intent in making r. 11 B was to prescribe the age limits upon which the eligibility of a candidate for direct recruitment to the Rajasthan Administrative Service and other allied services is governed.
At first impression, it may seem that a person born on January 2, 1956 would attain 28 years of age only on January 2, 1984 and not on January 1, 1984.
But this is not quite accurate.
In calculating a person 's age, the day of his birth must be counted as a whole day and he attains the specified age on the day preceding, the anniversary of his birth day.
We have to apply well accepted rules for computation of time.
One such rule is that fractions of a day will be omitted in computing a period of time in years or months in the sense that a fraction of a day will be treated as a full day.
A legal day commences at 12 o 'clock midnight and continues until the same hour the following night.
There is a popular misconception that a person does attain a particular age unless and until he has completed a given number of years.
In the absence of any express provision, it is well settled that any specified age in law is to be computed as having been attained on the day preceding the anniversary of the birth day.
In Halsbury 's Laws of England.
3rd edn., vol.
37, para 178 at p. 100, the law was stated thus: "In computing a period of time, at any rate, when counted in years or months, no regard is generally paid to fractions of a day, in the sense that the period is regarded as comp 672 lete although it is short to the extent of a fraction of a day Similarly, in calculating a person 's age the day of his birth counts as a whole day; and he attains a specified age R on the day next before the anniversary of his birth day.
" We have come across two English decisions on the point.
In Rex vs Scoffin, LR the question was whether the accused had or had not completed 21 years of age.
section l0(I) of the Criminal Justice Administration Act, 1914 provides that a person might be sent to Borstal if it appears to the court that he is not more than 21 years of age.
The accused was born on February 17, 1909.
Lord Hewart, CJ held that the accused completed 21 years of age on February 16,1930 and that he was one day more than 21 years of age on February 17, 1930 which was the Commission day of Manchester Assizes.
In Re.
Shurey, Savory vs Shurey, LR [1918] I Ch.
263 the question that arose for decision was this: Does a person attain a specified age in law on the aniversary of his or her birthday, or on the day preceding that anniversary? After reviewing the earlier decisions, Sargant, J. said that law does not take cognizance of part of a day and the consequence is that person attains the age of twenty one years or of twenty five years, or any specified age, on the day preceding the anniversary of his twenty first or twenty fifth birthday or other birthday, as the case may be.
From Halsbury 's Laws of England, 4th edn., vol 45, para 1143 at p. 550 it appears that section 9 of the Family Law Reforms Act, 1969 has abrogated the old common law rule stated in Re. Shurey, Savory vs
Shurey (supra).
It is in recognition of the difference between how a person 's age is legally construed how it is understood in common parlance.
The Legislature has expressly provided in section 4 of the that how the age of majority is to be computed.
It reads: "4.
Age of majority how computed In computing the age of any person, the day on which he was born is to be included as a whole day, and he shall be deemed to have attained majority, if he falls within the first paragraph of section 3, at the beginning of the twenty first an 673 niversary of that day, and if he falls within the second A paragraph of section 3, at the beginning of the 18th anniversary of that day." The Section embodies that in computing the age of any person, the day on which he was born is to be included as a whole day and he must be deemed to have attained majority at the beginning of the eighteenth anniversary of that day.
As already stated, a legal day commences at 12 o 'clock midnight and continues untill the same hour the following night.
It would therefore appear that the appellant having been born on January 2, 1956, he had not only attained the age of 28 years but also completed the same at 12 o 'clock on the midnight of January 1, 1984.
On the next day i.e. On January 2, 1984, the appellant would be one day more than 28 years.
The learned Judges were therefore right in holding that the appellant was disqualified for direct recruitment to the Rajasthan Administrative Service and as such was not entitled to appear at the examination held by the Rajasthan Public Service Commission in 1983.
We affirm the view taken by the learned Judges as also the decisions in G. Vatsala Rani 's case, (supra).
It is rather unfortunate that the appellant should upon the construction placed on r. 11 B of the Rajasthan State and Subordinate Services (Direct Recruitment by Competitive Examination) Rules.
1962 fail to secure entry into the Rajasthan Administrative Service and allied services of the Government of Rajasthan merely because he exceeds the upper age limit just by one day.
The Government ought to consider the question of relaxing the upper age limit in the case of the appellant in order to mitigate the hardship, if otherwise permissible.
There is need for a provision like the proviso to r. 4 of the Indian Administrative Service (Appointment by Competitive Examination) Regulations, 1955, conferring the power of relaxation on the State Government under certain conditions without which a deserving candidate would be rendered ineligible for appointment.
The result is that the appeal must fail and is accordingly dismissed.
There shall be no order as to costs.
G A.P.J. Appeal dismissed.
[/INST]For direct recruitment to the Rajasthan Administrative Service and allied services of the Government of Rajasthan by a competitive examination to be held in 1983, the Rajasthan Public Service Commission prescribed that the candidate should have attained the age of 21 years on January 1, 1984 and should not have attained the age of 28 years i.e. On the Ist day of January next following the last date fixed for receipt of application.
F The appellant was allowed to appear in the written examination, but later on he was intimated by the Commission that his candidature was rejected on the ground that he had attained the age of 28 years on January 1, 1984 and was therefore ineligible for consideration.
The writ petition filed by the appellant under article 226 was allowed by a Single Judge holding that if the date of birth of the appellant was January 2, 1956 he would complete the age of 28 years only at the end of the day of January 1, 1984 and therefore he could not be said to have attained the age of 28 years on that date.
666 on appeal by the respondents, a Division Bench reversed the Judgment of the Single Judge.
In appeal to this Court, on behalf of the appellant it was con tended: (i) that the Division Bench erronously introduced the legal concept of the age of majority as laid down in section 4 of the for the purpose of interpreting r. 11 B of the Rajasthan State and Subordinate Services (Direct Recruitment by Competitive Examination) Rules 1962 and (ii) that as commonly understood, a person attains a particular age after he had completed a given number of years and there is no reason why the words of r. 11 B "must have attained the age of 21 years and must not have attained the age of 28 years" should not be understood in the ordinary sense.
Dismissing the appeal, ^ HELD: 1.
In the absence of any express provision, while calculating a person 's age, the day of his birth must be counted as a whole day and he attains the specified age on the day preceding, the anniversary of his birthday.
One of the well accepted rules for computation of time is that fractions of a day will be omitted in computing a period of time in years or months in the sense that a fraction of a day will be treated as a full day.
A legal day commences at 12 O 'clock midnight and continues until the same hour the following night.
This principle is in conformity with section 4 of the Indian Majority Act 1875.[671F G] G. Vatsala Rani, P. M. C. Kini v .
Selection Committee for Admission to Medical Colleges, Bangalore Medical College, Bangalore 2, AIR , Rex
Scoffin, LR [1930] l KB 741 & Shurey, Savory F. vs Shurey, I,R , approved.
Halsbury 's Laws of England, 3rd edn.
37, para 178 at 100, relied upon.
The object and intent in making r. llB of the Rajasthan State & Subordinate Services (Direct Recruitment by Competitive Examination) Rules, 1962 was to prescribe the age limits upon which the eligibility of a candidate for direct recruitment to the Rajasthan Admmistrative Service and other allied services is governed.
The expression "must not have attained the age of 28 years on the first day of January next following the last day fixed for receipt of application" in r. llB has to be interpreted by applying the aforesaid principle and not on the basis 667 adopted by UPSC while interpreting r. 4 of the Indian Administrative A Services (Appointment by Competitive Examination) Regulations, 1955 framed by the Central Government in pursuance or r. 7 of the IAS (Recruitment) Rules 1954.
[670A B] 3.
The last day fixed for receipt of application in this case, was January 1, 1983.
First day of January next following that day would be January 1, 1984.
the appellant having been born on January 2, 1956, he had not attained the age of 28 years but also completed the same at 12 o 'clock on the midnight of January 1, 1984.
On the next day i.e. On January 2, 1984, the appellant would be one day more than 28 years.
The Division Bench of the High Court was, therefore, right in holding that the appellant was disqualified for direct recruitment of the Rajasthan Administrative Service in the examination held by the Rajasthan Public Service Commission in 1983.
[673C D] The Court emphasised the need for a provision like the proviso to r. 4 of the Indian Administrative Service (Appointment by Competitive Examination) Regulations 1955 conferring the power of relaxation on the State Government under certain conditions without which a deserving candidate would be rendered ineligible for appointment and advised the Government to consider the question of relaxing the upper age limit in the case of the appellant in order to mitigate the hardship, if otherwise permissible, because he exceeded the upper age limit just by one day.
[673E F]
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<s>[INST] Summarize the judgementAppeal No. 535 of 1958.
Appeal from the judgment and order dated March 29,1955, of the Assam High Court in I.T.R. No. 1 of 1954.
A.V. Viswanatha Sastri and D. N. Mukherjee, for the appellants.
Hardayal Hardy and D. Gupta for the respondent.
March 13.
The Judgment of the Court was delivered by HIDAYATULLAH, J.
This appeal which has been filed with a certificate under section 66(A)(2) granted by the High Court of Assam against its judgment and order dated March 29, 1955, concerns the assessment of the appellants, a Hindu undivided family, for the assessment years, 1945 1946 and 1946 1947.
The appellants owned a tea garden called the Sewpur Tea Estate in Assam.
They had on the Estate, factories, labour quarters, staff quarters etc.
On February 27, 1942, the Military authorities requisitioned all the factory buildings, etc., under R. 79 of the Defence of India Rules.
Possession was taken sometime between March land March 8, 1942.
The tea garden was, however, left in the possession of the appellants.
The possession of the military continued till the year 1945, and though the appellants looked after their tea garden the manufacture of tea was completely stopped.
Under the Defence of India Rules, the Military authorities paid compensation.
For the year 1944, corresponding to the assessment year, 1945 1946, they paid a total sum of Rs. 2,22,080 as compensation including a sum of Rs. 10,000 for repairs to quarters for labourers and Rs. 144 which represented the assessor 's fee.
For the year 1945, corresponding to the assessment year, 1946 1947, the Military authorities paid a sum of Rs. 2,46,794 which included a sum of Rs. 15,231 for other repairs.
The sums paid for repairs appear to have been admitted as paid on capital account, and rightly so.
The question was whether the two Sums paid in the two 259 years minus these admitted sums, or any portion thereof, were received on revenue or capital account.
The assessments for the two years were made by different Income tax Officers.
For the assessment year, 1945 1946, the Income tax Officer deducted from Rs. 2,22,080, a sum of Rs. 1,05,000 on account of admissible expenses.
He then applied to the balance Rs. 1,17,080, R. 24 of the Indian Income tax Rules, 1922, and brought to tax 40 per cent of that sum amounting to Rs. 46,832.
The assessment was made under section 23(4).
For the assessment year, 1946 1947, the assessment was made under section 23(3) of the Incometax Act.
The Income tax Officer excluded the sum paid on account of repairs and treated the whole of the amount as income taxable under the provisions of the Income tax Act, after deduction of admissible expenditure.
The appeals filed by the appellants to the Appellate Assistant Commissioner against both the assessments were unsuccessful.
On further appeal, the Income tax Appellate Tribunal (Calcutta Bench) was divided in its opinion.
The Judicial Member held that the receipts represented revenue but on account of "use and occupation" of the premises requisitioned.
He, therefore, computed the not compensation attributable to such use and occupation at 20 per cent of the total receipts in both the years.
He however, observed that if the receipts included income from the tea estate he would have been inclined to apply R. 24 in the same way as the first Income tax Officer.
The Accountant Member was of the opinion that the appellants were liable to pay tax on 40 per cent of their receipts in both the years after deduction of the sums paid for repairs of buildings and the admissible expenditure.
He accepted the estimate of expenditure for the account year, 1944,.
at RE;. 1,05,000, and directed that the admissible expenditure for the succeeding year be determined and deducted before the application of R. 24.
It appears that through some inadvertence these two orders which were not unanimous, were sent to the appellants and the Department.
The Commissioner of Income tax filed an application under section 66(1) for a 260 reference, while the appellants filed an application under section 35 for rectification of the orders, since many other matters in appeal were not considered at all.
When these two applications came before the Tribunal, it was realised that the matter had to go to a third Member for settling the difference.
The President then heard the appeal, and agreed with the Accountant Member.
Though he expressed a doubt whether the appellants were entitled to the benefit of rr. 23 and 24, he did not give an opinion, because this point was not referred to him.
The Tribunal then referred the case to the High Court of Assam on the following two questions: "(1).
Whether the sums of Rs. 2,12,080 and RE;. 2 31,563 paid by the Government to the assessee in 1945 and 1946 respectively (exclusive of the sums paid specifically for building repairs) were revenue receipts in the hands of the assessee comprising any element of income? (2).
If so, whether the whole of the said sums less the expenses incurred by the assessee in tending the tea bushes constituted agricultural income in his hands exempt from tax under the Indian Income tax Act, 1922?" The reference was heard by Sarjoo Prasad, C.J., and Ram Labhaya, J., along with two writ petitions, which had also been filed.
They delivered separate judgments, but concurred in their answers.
The High Court answered both the questions against the appellants.
The writ petitions were also dismissed.
Before we deal with this appeal, we consider it necessary to state at this stage the method of calculation of compensation adopted by the Military authorities.
It is not necessary to refer to both the years, because what was done in the first year was also done in the following year except for the change in the amounts.
This method of calculation is taken from the order of the Judicial Member, and is as follows: 261 Rs. A. P. Crop 211120 1bs.
at 17.85d (half) and at 18.35d (half) 2,12,292 14 0 15480 1bs.
at Rs. 0 11 10 11, 449 12 0 52600 1bs.
at Rs. 0 15 6 50,956 4 0 2,74, 698 14 0 Less Saving of plucking and manufacturing: Rs. (a) Expenses at annas 3 per lb.
49,209 (b) Sale of export rights, 1,32,935 1bs.
4,924 (c) Purchase of export rights 78,185 lbs.
at annas 4.
1,629 (d) Food and clothing concessions 7,000 62,762 0 0 2,11,9360 0 Add For fees of assessors, Rs. 144 Coolie lines repairs, Rs. 10,000 10,1440 0 Rs. 2,22,08000 From the admitted facts which have been summarised above, it is clear that the business of the appellants as tea growers and tea manufacturers had come to a stop.
The word "business" is not defined exhaustively in the Income tax Act, but it has been held both by this Court and the Judicial Committee to denote an activity with the object of earning profit.
To say that a business is being carried on, means no more than that profit is to be earned by a process of production.
The business of a tea grower and manu facturer is not merely to grow tea plants but to collect tea leaves and render them fit for sale.
During the years in question, the appellants were tending their tea garden to preserve the plants, but this activity cannot be described as a continuation of the business, 262 which had come to an end for the time being.
It would have hardly made any difference to the carrying on of business, if, instead of the factories and buildings, the tea garden was requisitioned and occupied, because in that event also, the business Would have come to a standstill.
The compensation which was paid in the two years was no doubt paid as an equivalent of the likely profits in those years; but, as pointed out by Lord Buckmaster in The Glenboig Union Fireclay Co. Ltd. vs The Commissioners of Inland Revenue (1) and affirmed by Lord Macmillan in Van Den Berghs Ltd. vs Clark (2), "there is no relation between the measure that is used for the purpose of calculating a particular result and the quality of the figure that is arrived at by means of the application of that test".
This proposition is as sound as it is well expressed, and has been followed in numerous cases under the Indian Income tax Act and also by this Court.
It is the quality of the payment that is decisive 1 of the character of the payment and not the method of the payment or its measure '.
and makes it fall within capital or revenue.
We are thus required to determine what was it that was paid for, or, in other words, what did the two payments replace, if they replaced anything.
The arguments at the Bar followed the pattern which has by now become quite familiar to Courts.
We were taken to the 12th Volume of the Tax Cases series, where are collected case,% dealing with Excess Profits Duty and Corporation Profits Tax in England follow ing the First World War, and to, other English case, , reported since.
These cases have been considered and applied on more than one occasion by this Court, and we were referred to those cases as well.
Now, it is necessary to point out that the English cases were decided under a different system of taxation and must be read with care.
A case can only be decided on its own facts, and the desire to base one 's decision on another case in which the facts appear to be near enough sometimes leads to error.
It is well to (1) (2) ; 263 remember the wholesome advice given by Lord Dunedin in Green vs Gliksten & Son Ltd. (1) that "in these Income Tax Act cases one has to try, as far as possible, to tread a narrow path, because there are quagmires on either side into which one can easily be led. . " The English cases to which we were referred, were used even in England by Lord Macmillan in Van Den Berghs ' case (2) as mere illustrations, and when cited before the Judicial Committee in Income Tax Commissioner vs Shaw Wallace & Co.(3) were put aside by Sir George Lowndes with this observation "their Lordships would discard altogether the case law which has been so painfully evolved in the construction of the English income tax statutes both the cases upon which the High Court relied and the flood of other decisions which has been let loose in this Board".
Most of the cases cited before us deal with Excess Profits Duty and Corporation Profits Tax.
In the former group, pre war profits had to be determined, so that they might be Compared with post war business for the purpose of arriving at the excess profits, if any.
In dealing with the pre war profits, diverse receipts were considered from the angle whether they formed capital or revenue items.
The observations which have been made are sometimes appropriate to the nature of the business to which the case related and the quality of the payment in relation to that business.
Similarly, the Corporation Profits Tax was a tax intended to be imposed upon the profits of British Companies (which included some other corporate bodies ' carrying on trade or business including the ' business of investments.
The profits which were taxed under section 52 of the English, Finance Act were required to be determind according to the principles laid down in that Act.
It is thus obvious that though the English cases may be of some help in an indirect way by focussing one 's attention on what is to be regarded as relevant (1) 384 (2) ; (3) (1932) L.R 59 J.A. 206.
264 and what rejected, they cannot be regarded in any sense as precedents to follow.
Since this Court on other occasions used these cases as an aid, we shall refer to them briefly; but we have found it necessary to sound a warning, because the citation of these authorities has occasionally outrun their immediate utility.
We begin with the oft cited case of The Glenboig Union Fireclay Co. Ltd. (1).
That was a case under the Excess Profits Duty.
The facts are so well known that we need not linger over them.
A seam of fireclay could not be worked, and compensation was paid for it.
That the clay was capital asset was indisputable, and the portion lost was a slice of capital.
The hole made in the capital was filled up by the compensation paid.
It was said that a portion of the capital asset was sterilized and destroyed, and even though the business went on, the payment was treated as on capital account.
The case cannot be used as precedent, because here, no doubt, the factories and buildings were apart of fixed capital, but the payment was not so much to replace them in the hands of the appellants as to compensate them for the stoppage of business.
The Glenboig case (1) does not apply.
The case of Short Bros. Ltd. vs The Commissioners of Inland Revenue (2), another case under the Excess Profits Duty, illustrates a contrary principle.
The Company had agreed to build two ship;, 'but the contracts were cancelled and E. 100,000 were paid for cancellation of the contracts.
This was held to be a receipt in the ordinary course of the Company 's trade.
Rowlatt, J., said that it was "simply a receipt, in the course of a going business, from that going business nothing else".
In the Court of Appeal, Lord Hanworth, M.R., affirmed the decision, observing: "Looked at from this (business) point of view it appears clear that the sum received was received in ordinary course of business, and that there was not in fact any burden cast upon the company not to carry on their trade.
It was not truly compensation (1) (2) 265 for not carrying on their business; it was a sum paid in ordinary course in order to adjust the relation between the shipyard and their customers.
" The payment was by a customer to the shipyard.
Whether the amount was paid for ships built or because the contract was cancelled, it was a business receipt and in the course of the business.
In the present case, the payment is not of this character, and Short Bros. case (1) does not apply.
The next case also of Excess Profits Duty is The Commissioners of Inland Revenue vs Newcastle, Breweries, Ltd. (2).
In that case, the admiralty took over one third stock of rum of the Brewery, and paid to the Company the cost plus 1 section per proof gallon.
Later, the compensation was increased by an amount of E. 5,309 and was brought to tax in the earlier year, when the original compensation was paid.
The observations of Rowlatt, J., though made to distinguish the case from one in which the compensation is paid for destruction of business, are instructive.
We shall refer to them later.
The learned Judge held that this was a case of compulsory sale of rum, and that a compulsory sale was also a sale.
The receipt was held to be a profit.
The decision was affirmed by the Court of Appeal.
This case also, so far as its facts go, was very different, and the actual decision has no relevance.
The Commissioners of Inland Revenue, vs The Northfleet Coal and Ballast Co. Ltd. (3) was a case like Short Bros. case (1).
;E. 3,000 in a lump sum were paid to be relieved from a contract, and as the business was a going business, it was held to be profit.
In fact, Short Bros. case (1) was applied.
Ensign Shipping Co. Ltd. V. The, Commissioners of Inland Revenue 4 a case of Excess Profits Duty, is interesting.
During the Coal Strike of 1920, two ships of the Company were ready to sail with cargoes of coal.
They were detained for 15 and 19 days respectively by orders of Government.
In April 1924,pound 1,078/were paid as compensation, and were held to be (1) (3) 34 (2) (4) 266 trading receipts.
Rowlatt, J., laid down that if there was an operation which produced income, it was none the less taxable, because it was a compulsory operation.
The learned Judge then observed that he could not hold that this was a case of hire, like Sutherland vs The Commissioners of Inland Revenue (1), because the ships lay idle and their use was interrupted.
The learned Judge then concluded: "Now it is quite dear that if a source of income is destroyed by the exercise of the paramount right. and compensation is paid for it, that that is not income, although the amount of the compensation is the same sum as the total of the income that has been lost. but in this case I have got to decide the case of a temporary interference.
Here these ships remained as ships of the concern. they merely could not sail for a certain number of days, and in lieu of the value of the use which they would have been to their owners in their profit earning capacity during those days, in lieu of that receipt, this money was paid to the owners, although they were not requisitioned, as if requisitioned.
I think I ought to regard this sum, as the Commissioners have obviously regarded it, as a sum paid which to the shipowners stands in lieu of the receipts of the ship during the time of the interruption.
" This decision was approved by the Court of Appeal.
Now, the case was one of loss of time during which the ships would have been usefully and profitably employed.
It was argued in the Court of Appeal with the assistance of the Glenboig case (2), and it was suggested that the vessels, were `sterilised ' for the period of detention.
Lord Hanworth said that that was rather a metaphorical word to use, and that the correct way was to look at the matter differently.
The Master of the Rolls observed: "But in the present case it seems to me that, looked at from a business point of view, all that has happened is that the two vessels arrived much later at the ports to which they were consigned than they would have done, with the consequent result (1) (2) 267 that for the certain number of days which they were late they could not possibly make any earnings, and it is in respect of that direct loss by reason of the interference with the rights exercised on behalf of His Majesty that they made a claim and have been paid compensations This ruling was strongly relied upon by the Department as one which laid down a principle applicable here.
We do not agree.
The, payment there was made towards loss of profits of a going business, which business was not destroyed.
As a source of income, the business was intact, and the business instead of being worked for the whole period, was worked for a period less by a few days and the profit of that period was made up.
That may be true if one is going to determine standard profits of a particular period, because what is paid goes to profits in the period but is of no significance in a case like the present, where during the whole of the year no business at all was done nor profits made.
This case also does not help to solve the problem.
Charles Brown & Co. vs The Commissioners of Inland Revenue (1) is yet another case of Excess Profits Duty.
In that case, the business of the taxpayer was carried on under the control of the Food Controller from 1917 to 1921, and he was compelled to bay and sell at prices fixed by the Controller .
By agreement a 'mill standard ' was fixed, and the tax.
payer was allowed to retain profits up to that standard, and if there was a shortfall, it was to be made up by the Controller.
This amount which the taxpayer retained together.
with the amount paid towards shortfall was regarded as profits.
The principle applicable is easily discernible.
There can be little doubt that the trade was being carried on, and what was received was rightly treated as profits.
Howlatt, J., observed that this was a clearer case than the Ensign case (2).
The matter was covered by section 38 of the Finance (No. 2) Act of 1915, Fourth Schedule, Part 1(1), where the words were "The profits shall be taken to be the actual profits arising in the accounting period".
(1) (1) 268 In Barr Crombie & Co. Ltd. vs The Commissioners of Inland Revenue (1), the Company 's business consisted almost entirely of managing shipping for another Company.
When the shipping Company went into liquidation, a sum was paid as compensation to the managing Company.
It was held that this was a capital receipt.
The reason for holding thus was that the structure (if the managing Company 's whole business was affected and destroyed, and this was not profit but compensation for loss 'of capital.
Kelsall Parsons & Co. vs The Commissioners of Inland Revenue (2), to which we shall refer presently, was distinguished on the ground that, though in that case the agency was cancelled, the payment was for one year and that too, the final year.
This case is important in one respect, and it is that if the entire business structure is affected and destroyed, the payment may be regarded as replacing capital, which is lost.
These are cases of Excess Profits Duty where profits for a particular period had to be determined and also the character of the payments in relation to the kind of business, to determine whether to treat them as excess profits or not.
In the Glenboig case (1), the payment was not regarded as profit, because it replaced lost capital and so also, in Barr Crombie case(1).
These form the first group.
Short Bros. case Northfleet case (5) and Ensign Shipping CO 's case were of a going business, and what was paid was towards lost profits in a going concern.
These form the second group.
Newcastle Breweries case (7) and Charles Brown and 60 's case (3) were of business actually done and profits therefrom.
None of these rulings is directly in point.
In the case with which we are concerned, the payment was not towards any capital asset to attract the first group, there was no going business so as to attract the second, and nothing was bought nor any business done with the taxpayer to make the third group applicable.
(1) (2) ; (3) (4) (5) (6) (7) (8) 269 We shall next see some cases which involved Corporation Profits Tax.
In The Gloucester Railway Carriage and Wagon Co. Ltd. vs The Commissioners of Inland Revenue(1), the Company was doing business of selling wagons and of hiring them out.
The Company then sold all the wagons which it was using for purposes of hiring.
The receipt was treated as profit of trade, there being but one business and the wagons being the stock in trade of that business.
In Green vs Gliksten & Son Ltd.(2), stocks of timber were destroyed.
Their written down value was pound 160,824 but the Insurance Company paid :E. 477,838.
The Company credited E. 160,824 in its trading account but not the balance.
The House of Lords held that the timber, though burnt, was realised, and that the excess of the sum over the written down book value must be brought into account.
These two cases throw no light upon the problem with which we are faced, and any observations in them are so removed from the facts of this case as to be of no assistance.
The cases under Sch.
D of the Income tax Act like Burmah Steam Ship Co. Ltd. vs The Commissioners of Inland Revenue(3), a case of late delivery of ships sent for overhaul, Greyhound Racing Association (Liverpool) Ltd. vs Cooper(4), which was a case of surrender of an agreement in which the amounts were treated as trading receipts, are not cases of stoppage of a business and are not relevant.
Kelsall Parsons case(5), where one of the agreements of a commission agency which was to run for 3 years was terminated at the end of the second year and compensation of pound 1500/ was paid for the last and final year, was held on its special facts to involve taxable profits of trading.
Though the business came prematurely to an end, the struc ture of the business was not affected because the payment was in lieu of profits in the final year of the business as if business had been done.
The payment was held to be within the structure of the business in the same way as in Shove vs Dura Manufacturing Co. Ltd. (6).
The converse of these cases is the well known (1) (3) (5) ; 270 Van Den Berghs Ltd. vs Clark (1), where mutual trade agreements were rescinded between two Companies and pound 450,000 were paid to the assessee Company as ",damages".
This was treated as capital receipt and not as income receipt to be included in computing the profits of trade under Sch.
D Case 1 of the Income tax Act of 1918.
Lord Macmillan observed: "On the contrary the cancelled agreements related to the whole structure of the appellants ' profitmaking apparatus.
They regulated the appellant 's activities, defined what they might and what they might not do, and affected the whole conduct of their business.
I have difficulty in seeing how money laid out to secure, or money received for the cancellation of, so fundamental an Organisation of a trader 's activities can be regarded as an income disbursement or an income receipt".
We have referred to these cases to show that none of them quite covers the problem before us.
The facts are very dissimilar, and the observations, though attractive, cannot always be used with profit and often not without some danger of error.
We shall now turn to the cases of this Court, which were referred to at the hearing.
The first case of this Court is The Commissioner Income Tax and Excess Profits Tax, Madras vs The, South India Pidures Ltd., Karaikudi (2).
The South India Pictures, Ltd., held distribution rights for 5 years of three films towards the completion of which they had advanced money to a film producing Company, called the Jupiter Pictures.
When the term had partially run out, the agreement for distribution was cancelled, and the South India Pictures, Ltd., received Rs. 26,000/ as commission.
The question was whether this sum was on capital or revenue account.
Das, C. J., and Venkatarama Aiyar, J., held that it was the latter, while Bhagwati, J., held that it was the former.
The learned Chief Justice came to his conclusion on four grounds: (i) that the payment was towards commission which would have been earned; (ii) that it was not the price of any capital (1) ; (2) ; 271 asset sold, surrendered or destroyed; (iii) that the structure of the business, which was a going business, was not affected; and (iv) that the payment was merely an adjustment of the relation between the South India Pictures, Ltd. and the Jupiter Pictures.
The learned Chief Justice thus rested his decision on, Short Bros '(1) and Kelsall Parsons '(2) cases and not upon Van den Berghs (3) or Barr Crombie 's case (4).
Bhagwati, J., who dissented, judged the matter from the angle of business accountancy.
He observed that money advanced to produce the cinema pictures, if returned, would have been credited on the capital side as a return of capital, just as expenditure for distribution work was revenue expenditure and the commission, a revenue receipt.
On a parity of reasoning, the learned Judge held that money spent in acquiring distribution rights was a capital outlay, and that when distribution rights were surrendered, it was capital which was returned, since the agreement was a composite one, the films were a capital asset and the payment for their release was a return of capital.
With due respect, it is difficult to see how the payment could be regarded as capital in that case.
The fact which seems to have been overlooked in the minority view was that the entire capital outlay had, in fact, been previously recouped and even the security held by the South India Pictures had been extinguished.
It was a portion of the running business which ceased to be productive of commission and by the payment, the commission which would have been earned and would have constituted a revenue receipt when so earned, was put in the pockets of the South India Pictures.
The business of the South India Pictures.
was still & going business, one portion of which instead of being fruitful by stages became fruitful all at once.
What was received was still the fruit of business and thus revenue.
The case, though interesting, is difficult to apply '.
in the present context of facts, where no business at all was done and what was received was not the fruit of any business.
(1) (3) ; (2) ; (4) 272 The next case of this Court, Commissioner of Income Tax vs Jairam Valji (1), may be seen.
The assessee there was a contractor, and received Rs. 2,50,000 as compensation for premature termination of a contract.
This was held to be a revenue receipt.
The assessee had many businesses including many contracts, and the receipt was considered as one in the ordinary course of business.
All the English decisions to which we have referred, were examined in search for principles, but the principle on which the decision 'was rested, was that the payment wag an adjustment of the rights under the contract and must be referred to the profits which could be made if the contract had instead been carried out.
The payment not being on account of capital outlay and the assessee not being prevented from carrying on his business, the receipt was held to be revenue, that is to say, related to income from a contract terminated prematurely.
In a sense, the case is analogous to The South India Pictures, Ltd. case which it follows.
In The Commissioner of Income tax, Hyderabad Deccan vs Messrs. Vazir Sultan & Sons (3), the assessee held the sole selling agency and distribution rights of a particular brand of cigarette, in the Hyderabad State on foot of a 2 per cent discount on all business done.
Subsequently, the area outside Hyderabad State was also included on the same terms.
Later still, the area was again reduced to the Hyderabad State.
Rs. 2,19,343 were paid by way of compensation "for loss of territory outside Hyderabad".
Bhagwati, J., and Sinha, J., (as he then was), held that the compensation was on capital account, while Kapur, J., held otherwise.
The reason given by the majority was that the agency agreement was a capital asset and the payment was in lieu of the loss of a portion of the capital asset.
Kapur, J., on the other Wand, held that the loss which was replaced was the loss of agency commission and bore its character.
The case furnishes a difficult test to apply.
If what was adjusted was the relationship between the parties and if (1) [1959] Supp. 1 S.C.R. 110.
(2) ; (3) [1959] SUPP.
2 S.C.R. 375.
273 there was a going business as, in fact, there was, the case comes within the dicta in The South India Pictures Ltd. case (1) and Jairam Valji 's case (2).
The case can only be a decision on the narrow ground that a portion of the 'fixed capital was lost and paid for.
In Godrej & Co. vs Commissioner of Income tax(3) the assessee firm, which held a managing agency, released the managed Company from an onerous agreement and inconsideration,, was paid Rs. 7,50,000.
It was held that the payment was not made to make up the difference in the remuneration of the managing agency firm bat to compensate it for the deterioration or injury of an enduring kind to the managing agency itself.
The injury being thus to a capital asset, the compensation paid was held to be on capital account.
The last case of this Court to which reference may be made is Commissioner of Income tax vs Shamshere Printing Press (4).
That 'was a very special case.
There, the premises of the Press were requisitioned by Government, but the Press was allowed to set up its business elsewhere, the charges for shifting the machines, etc., being paid by Government.
In addition, Government paid a sum claimed as loss of profits, which was expected to bring up the profits to the level of profits while the business was in its old place.
The ' assessee claimed that this sum was paid as compensation for loss of goodwill arising from its old locality.
There was however, nothing to show that the payment was goodwill and it was held that the compensation paid must be regarded as money arising as profits in the course of business.
It was like putting money in the till to bring the profits actually made by the level of normal profits.
All these cases were decided again on their special facts.
Though they involved examination of other decisions in search for the true principles, it cannot be said that they resulted in the discovery of any principle of universal application.
To summarise them: South India Pictures ' case (1) was so decided because (1) ; (2) [1959] SUPP.
1 S.C.R. 110.
(3) [1960] 1 S.C.R. 527.(4) [1960] 39 I.T.R. go.
35 274 the money received was held to be in lieu of commission which would have been earned by the business which was still going, and the receipt was treated as the fruit of the business.
The same reason was given in Jairam Valji 's case (1) and Shamshere Printing Press case (2).
In Vazir Sultan 's case (3), the compensation was held to replace loss of capital, and in Godrej 's case (4), the compensation was said not to have any relation to the likely income or profits but to loss of capital.
Each case was thus decided on its facts.
We have so far shown the true ratio of each case cited before us, and have tried to demonstrate that these cases do no more than stimulate the mind, but none can serve as a precedent, without advertence to its facts.
The nature of the business, or the nature of the outlay or the nature of the receipt in each case was the decisive factor, or there was a combination of these factors.
Each is thus an authority in the setting of its own facts.
Before we deal with the facts of this case and attempt to answer the question on which there is so much to guide but nothing to bind, we will refer to two cases of the Judicial Committee, one of which is Income Tax Commissioner vs Shaw Wallace & Co. (5), to which we have referred in another connection.
In that case, all the authorities prior to 1935 to which we have referred (and some more) were used in aid of arguments; but the Judicial Committee, for reasons which are now illustrated by this judgment, declined to comment on them.
Shaw Wallace and Co., did many businesses, and included in them was the managing agency of two oil producing Companies.
This agency wag terminated, and compensation was paid for it.
The usual question arose about capital or revenue.
The Full Bench of the Calcutta High Court related the payment to goodwill, but the Judicial Committee rejected that ground because no goodwill seemed to have been transferred.
The Judicial Committee also rejected the contention that it was compensation in lieu of notice under section 206, Indian (1) [1959] SUPP.
1 S.C.R. 110.
(3) [1959] SUPP.
2 S.C.R. 375.
(2) (4) [1960] 1 S.C.R. 527.
(5) (1932) L.R. 59 I.A. 206.
275 Contract Act, as there was no basis for it either.
The Judicial Committee held that income meant a periodical monetary return coming in with some sort of regularity or expected regularity from a definite source and in business was the produce of something "loosely spoken of as capital".
In business, income is profit earned by a process of production, or, in other words, by the continuous exercise of an activity.
In this sense, the sum sought to be charged could not be regarded as income.
It was not the product of business but some kind of solatium for not carrying on business and thus, not revenue.
The case is important, inasmuch as this analysis of 'income ' has been accepted by this Court and has been cited with the further remark made in Gopal Saran Narain Singh vs Income Tax Commissioner (1) that the words "profits and gains" used in the Indian Income tax Act do not restrict the meaning of the word "income" and the whole expression is 'income ', writ 'large.
From this case, it follows that the first consideration before, holding a receipt to be profits or gains of business within section 10 of the Indian Income tax Act is to see if there was a business at all of which it could be said to be income.
We shall now take up for consideration the facts of our case and see how far any principle out of the several which have governed earlier cases can be usefully applied.
The assessee was a tea grower and tea.
manufacturer.
His work consisted in growing tea and in preparing leaves by a manufacturing process into a commercial commodity.
The growing of tea plants only furnished the raw material for the business.
Without the factory and the premises, the tea leaves could not be dried, smoked and cured to become tea, as is known commercially, and it could not be packed or sold.
The direct and immediate result of the requisition of the factories was to stop the business.
That the tea was grown or that the plants were tended did not mean that the business was being continued.
It only meant that the source of the raw material was intact but the business was gone.
(1) (1935) L.R. 62 I.A. 207.
276 Now, when the payment was made to compensate the assessee, no doubt the measure was the out turn of tea which would have been manufactured; but that has little relevance.
The assesee was not compensated for loss or destruction of or injury to a capital asset.
the buildings were taken for the time being, but the injury was not So much to the fixed capital as to the business as a whole.
The entire structure of business was affected to such an extent that no business was left or was done in the two years. ' This was not a case where the interruption was caused by the act of a contracting party so that the payment could be regarded as an adjustment of a contract by payment.
It was a case of compulsory requisition, but the requisition did not involve the buying of tea either as raw material or even as a finished product.
If that had been the case, it might have been possible to say that since business was done, though compulsorily, profits had resulted.
It ' was not even a case in which the business continued, and what was paid was to bring up the profits to normal level.
The observations of Rowlatt, J., in Newcastle Breweries case (1) distinguish a case where business is carried on and one in which business comes to an end.
The learned Judge observes: "Now I have no doubt that a Government re quisition, such as took place during the war, could destroy a trade, and anything which was paid would be compensation for such destruction.
I can understand, for instance, if they had requisitioned in this case the people 's building and stopped them either brewing and selling or doing anything else, and paid a sum, that could not be taken as a profit; they would have destroyed the trade pro tempore and paid compensation for that destruction; and in fact I daresay if they take the whole of the raw materials of a man 's trade and prevent him carrying it on, and pay a sum of money, that is to be taken, not as profit on the sale of raw materials, which he never would have sold,, but as compensation for interfering with the trade altogether." These observations, though made under a different (1) 277 statute, are, in general, true of a business as such, and can be usefully employed under the Indian Income tax Act.
Our Act divides the sources of income, profits and gains under various heads in section 6.
Business is dealt with under section 10, and the primary condition of the application of the section is that tax is payable by an assessee under the head profits and gains of a business ' in respect of a business carried on by him.
Where an assessee does not carry on business at all, the section cannot be made applicable, and the compensation that he receives cannot bear the character of profits of a business.
It is for this reason that the Judicial Committee in Shaw Wallace 's case (1) observed that the compensation paid in that case was not the product of business, or, in other words, profit, but some kind of solatium for not carrying on business and thus, not revenue.
It is to be noted that Das, C.J, in South India Pictures ' case (2), in distinguishing Shaw Wallace 's case (1), made the following observation: "In Shaw Wallace 's case the entire distributing agency work was completely closed, whereas the termination of the agreements in question, did not have that drastic effect on the assessee 's business at all. .
In Shaw Wallace 's case, therefore, it could possibly be said that the amount paid there represented a capital receipt.
" The observation is guarded, but it recognises the difference made in the Privy Council case and others between payment to compensate interference with a going business and compensation paid for stoppage of a business altogether.
This distinction was emphasised in the dissenting opinion in Vazir Sutltan 's case (3).
Though the payment in question was not made to fill a hole in the capital of the assessee, as in the Glenboig case (4), nor was it made to fill a hole in the profits of a going business as in Shamshere Printing Press case (5), it cannot be treated as partaking the character of profits because a business not having (1) (1932) L.R. 59 I. A. 206.
(3) [1959] Supp. 2 S.C.R. 375.
(2) ; (4) (5) 278 been done, no question of profits taxable under section 10 arose.
The Privy Council described such a payment as a solatium.
It is not necessary to give it a name; it is sufficient to say that it was not profit of a business.
Once it is held that this was not profit at all, it is clear that Rules 23 and 24 of the Indian Income tax Rules could not apply, and there was no question of apportioning the amount, as laid down in R. 24.
The whole of the amount received by the assessee was not assessable.
It remains to consider whether the payment could be treated as income from property under section 9 of the Income tax Act.
That this was never the case of the Department is clear from the fact that the income was not processed under that section, and even the Judicial Member of the Tribunal, who entertained this opinion, did not express it as his decision in the case.
This aspect of the matter not having been considered in the case before, we cannot express any opinion upon it.
In our opinion, the answers to the two questions ought to have been: Question (1) no Question (2) does not arise.
In the result, the appeal is allowed with costs here and in the High Court.
Appeal allowed.
[/INST]Lands in four villages forming part of the Cis Sutlej jagir were compulsorily acquired under the East Punjab Acquisition and Requisition of"Immovable Property (Temporary Powers) Act, 1948.
At the time of the acquisition A was the holder of the jagir.
Possession over one of the villages had been given to 677 A 's wife G in lieu of maintenance under a consent decree.
The matter of payment of compensation was referred to an arbitrator.
A claimed that he was entitled to the entire compensation amount as he was the present holder of the jagir.
A 's son S claimed that the lands, acquired were inalienable, that A merely had a life interest therein and that the compensation money should be deposited out of which A should get only the interest for his life.
G claimed that she was entitled to the entire compensation in respect of the lands over which she was in possession.
All the claimants claimed interest on the compensation amount from the date of taking of possession to the date of payment of compensation.
The arbitrator held: (i) the acquired lands were inalienable and A merely had a life interest thereiq, (ii) S was entitled to a share in the compensation awarded, (iii) the amount of compensation for the first three villages should not be deposited but should be divided between A and S in the proportion of 3/4th to 1/4th, (iv) the compensation for the fourth village should be deposited and the interest thereof be paid to G and after the death of G the amount be divided between A and S half and half, and (v) the claimants were not entitled to any interest on the amount of compensation.
On appeal the High Court confirmed the awards in toto.
The claimants appealed to the Supreme Court by special leave.
Held, that the acquired lands formed part of a Cis Sutlej Jagir which was inalienable, that A was merely a limited owner thereof and was not entitled to the entire amount of compensation and that the reversioners were also entitled to a share therein.
The compensation amount could not be permanently deposited leaving the parties the right to enjoy only its income.
Even if the equitable principle of section 32, Land Acquisition Act, 1894, was applied it would not justify the permanent investment of the compensation amount.
Section 32(1)(b) was intended to be applied provisionally for short periods, where other lands had to be purchased out of the compensation money but were not immediately available and the money had to be invested as an interim measure till such lands were available.
It was fair to divide the compensation money in respect of the first three villages half and half between A and section In deciding the question of apportionment on equitable grounds it was relevant and material to take into account the facts that no part of the amount paid to A would reach the reversioners, that S himself had a son and that the reversionary interest had to be safeguarded.
Shri Somashekhar Swami vs Bapusaheb Narayanrao Patil A.I.R. , K. C., Banerjee, Official Receive?, In re: A.I.R. 1928 Cal.
402, Mt. Gangi vs Santu A.I.R. 1929 Lah. 736 and Special Deputy Collector, Ramnad vs Rajah of Ramnad A.I.R. 1935 Mad. 215, referred to.
Held, further, that the claimants were entitled to interest at 4% per annum on the compensation amount from the date when possession was taken by the State to the (late on which it deposited 678 or paid the amount of compensation to the claimants ' The provision in section 5(e) of the 1048 Act which made section 23(1) of the Land Acquisition Act, 1894, applicable did not exclude the application of SS. 28 and 34 of the latter Act which dealt with the payment of interest.
On general principles, the act of taking possession of immovable property generally implied an agreement to pay interest on the value of the property ; the right to receive interest took the place of the right to retain possession.
The application of this rule was not excluded by section 5 of the 1948 Act.
Even under the Interest Act, 1839, the power to award interest on equitable grounds was expressly saved by the proviso to section 1.
Swift & Co. vs Board of Trade , Birch vs joy ; and Inglewood Pulp and Paper Co. Ltd. vs New Brunswick Electric Power Commission , applied.
Surjan Singh vs The East Punjab Government A.I.R. 1957 Punj.
265, approved.
Seth Thawardas Pherumal vs The Union of India and Nachiappa Chettiar vs Subramaniain Chettiar ; , referred to.
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<s>[INST] Summarize the judgementCivil Appeal No. 2047 of 1969.
A Appeal by Special Leave from the Judgment and Order dated 25 6 1969 of the Andhra Pradesh High Court in Civil Revision Petition No. 346/67.
Y. section Chitaley, section K. Mehta, P. N. Puri and E. M. Sarul Anam for the Appellant.
A. T. M. Sampath and P. N. Ramalingam for the Respondent.
The Judgment of the Court was delivered by CHlNNAPPA REDDY, J.
The short question for consideration in this appeal is whether the practice of the legal profession is 'business ' within the meaning of Section 10(3) (a) (iii) of the Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Act, 1960.
The question arises this way.
The respondent, an Advocate filed an application before the Rent Controller seeking eviction of the appellant, his tenant, from the premises in question on the ground that he required the premises for the purpose of carrying on his profession as an Advocate.
The application was contested by the appellant who was carrying on the business of manufacturing art jewellery in the premises.
We are not concerned in this appeal with the several defences which were raised by the appellant.
Nor are we concerned with the vicissitudes which the case underwent.
For the purposes of this appeal it is sufficient to say that the final Court of fact, namely the Chief Judge of the Court of Small causes, Hyderabad, found that the respondent bona fide required the premises for the purpose of carrying on his profession as an Advocate and that the tenancy was not such as could be split up.
The Appellate authorities passed an order of eviction against the appellant.
Before the High Court, in revision, it was contended by the appellant that the practice of the profession of an Advocate was not business within the meaning of Section 10(3) (a) (iii) and, therefore, the respondent could not seek the eviction of the appellant on the ground that he required the premises for the purpose of carrying on his profession as an Advocate.
It was contended that Section 10(3) (a) (iii) used the expression 'business ' only and not the expression 'profession. ' The contention was negatived by a Division Bench of the High Court of Andhra Pradesh consisting of Gopalrao Ekbote and Ramachandra Rao, JJ.
The tenant has appealed by special leave to this Court.
Dr. Chitaley learned counsel for the appellant argued that there was a clear distinction between 'business ' and 'profession ' and that the practice of a liberal profession like that of an Advocate or a Doctor which 14 had nothing commercial about it was not business within the meaning of Section 10 (3) (a) (iii) of the Andhra Pradesh Buildings ( Lease, Rent and Eviction) control Act 1960.
He argued that though the Andhra Pradesh Act broadly classified buildings into residential and non residential buildings, the landlord of a non residential building could not seek to evict his tenant on the ground of his requirement unless it was for the purpose of carrying on a business.
According to the learned Counsel this indicated that the expression business was to be given a narrow meaning and was to be confined to activities of a commercial nature.
The learned Counsel also urged that the Court should favour a construction which would be beneficient to the tenant.
Dr. Chitaley relied on M. P. Sethurama Menon vs Thaiparambath Kunhukutty Amma 's daughter, Meenakshi Amma and Ors.
(1) Bangalore Water Supply & Sewerage Board etc.
vs R. Rajappa & Ors.
(2) and Stuchbery & Ors.
vs General Accident Fire and Life Insurance Corporation Ltd.(3) The expression business has not been defined in the Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Act, 1960.
It is a common expression which is sometimes used by itself and sometimes in a collocation of words as in "business, trade or profession".
It is a word of large and wide import,, capable of a variety of meanings.
It is needless to refer to the meanings given to that term in the various Dictionaries except to say that everyone of them notices a large number of meanings of the word.
In a broad sense it is taken to mean everything that occupies the time attention and labour of men for the purpose of livlihood or profit '.
In a narrow sense it is confined to commercial activity.
It is obvious that the meaning of the word must be gleaned from the context in which it is used.
Reference to the provisions of the Constitution or other statutes where! the expression is used cannot be of any assistance in determining its meaning in Section 10(3) (a) (iii) of the Andhra Pradesh Building (Lease, Rent and Eviction) Control Act, 1960.
It is not a sound principle of construction tn interpret expressions used in one Act with reference to their use in another Act; more so, if the two Acts in which the same word is used are not cognate Acts.
Neither the meaning, nor the definition of the term in one statute affords a guide to the construction of the same term in another statute and the sense in which the term has been understood in the several statutes does not necessarily throw any light on the manner in which the term should be understood generally.
On the other hand it is a (1) A.I.R. 1967 Kerala 88.
(2) ; (3) [1949] 2 K. B. D. 256.
15 sound, and, indeed, a well known principle of construction that meaning of words and expressions used in an Act must take their colour from the content in which they appear.
Dr. Chitaley very frankly and fairly conceded as much.
Now the Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Act, 1960, is an 'Act to consolidate, and amend the law relating to the regulation of leasing of buildings, the control of rent thereof an(l the prevention of unreasonable eviction of tenants therefrom in the State of Andhra Pradesh.
It applies to the cities of Hyderabad and Secunderabad and to all municipalities in the State of Andhra Pradesh.
The provisions of the Act, however, do not apply to buildings owned by the Government and to buildings constructed on or after 26th August, 1957.
Building is broadly defined as meaning any house or hut or a part of a house or hut, let or to be let separately for residential or nonresidential purposes.
Landlord is defined as the owner of a building, including a person who is receiving or is entitled to receive the rent of a building, on his own account or on behalf of another person etc.
Tenant is defined as a person by whom or on whose account rent is payable for a building.
Section 4 provides for the determination of a fair rent of a building on the application of the tenant or landlord.
Section 10(1) provides that a tenant shall not be evicted whether in execution of a decree or otherwise except in accordance with the provisions of Sections 10, 12 and 13.
Section 10(2) mentions several grounds on which a landlord may seek to evict a tenant.
The grounds are default of payment of rent, sub letting of premises, used for a purpose other than that for which it was leased, commission of acts of waste, conduct amounting to nuisance to the occupiers of the other portions in the same building, securing of alternative accommodation by the tenant and denial of the title of the landlord.
The grounds mentioned in Section 10(2) apply both to residential and non residential buildings.
Section 10(3) (a) (i) provides for the eviction of a tenant where the landlord of a residential building requires it for his own occupation.
Section 10(3)(a)(iii) provides for the eviction of a tenant from a non residential building where "the landlord is not occupying a non residential building in a city town or village concerned which is his own or to the possession of which he is entitled whether under the Act or otherwise (a) for the purpose of a business which he is carrying on on the date of the application, or (b) for the purpose of a business which in the opinion of the Controller, the landlord bona fide proposes to commence".
Section 12 and 13 contain special provisions relating to recovery of buildings by landlord for the purpose of effecting repairs, alterations or additions or for reconstruction.
The scheme of the Act is to prevent unreasonable eviction of 16 tenants by landlords and to provide for eviction on specified grounds.
The Act is of general application and its protection not confined to any classes of tenants nor is the right to evict under the Act limited to any class of landlords.
There is no reason why a landlord who is a member of the legal or medical professions and who requires the premises for carrying on the practice of his profession should be wholly debarred from obtaining possession of the premises.
It is impossible to discover any reason for so making a discrimination against the liberal professions.
But, that would be the result if the expression 'business ' is given a narrow meaning which the appellant wants us to give to that expression.
It would indeed be anamolous to hold that all the provisions of the Act including Section 4 which provides for the determination of fair rent and Section 10(1) which bars the eviction of tenants apply to nonresidential buildings owned by an Advocate but not Section 10 (3) (a) (iii) only.
In our view the expression business occurring in Section 10(3)(a)(iii) is used in a wide sense so as to include the practice of the profession of an Advocate.
The Kerala High Court in M.P. Sethurama Menon vs Meenakshi Amma & Ors.
, (supra) construed the expression 'trade or business ' as connoting commercial activity and as not including the practice of the legal profession.
The learned Judges referred to Article 19(1)(g) of the Constitution, Section 49 of the , the Madras Shops and Establishments Act, 1947 and drew a distinction between the words 'business ' and 'profession. ' As mentioned by us earlier, we do not think that it is right to ascribe to the word 'business ' occurring in the Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Act, 1960, the same meaning that the word may have when it occurs in other statutory provisions.
The word must be interpreted in the context of the statute in which it occurs and not in the context of other statutes or in a manner alien to the context of the statute concerned.
In Bangalore Water Supply & Sewerage Board etc.
vs R. Rajappa Ors., (supra) Chandrachud, J. (as he then was) observed ".
I find myself unable to accept the broad formulation that a Solicitor 's establishment cannot be an industry.
A Solicitor, undoubtedly, does not carry on trade or business when he acts for his client or advises him or pleads for him, if and when pleading is permissible to him.
He pursues a profession which is variously and justifiably described as learned, liberal or noble.
" The observations of the Learned Judge were made in the context of the question whether a Solicitor 's establishment would fall within the definition of 'industry ' under the 17 Industrial Disputes Act.
It would be most unwise to apply this A observation to determine whether the practice of the liberal professions is within the meaning of the expression 'business ' in Rent Control legislation.
In Stuchbery & Ors.
vs General Accident Fire and Life Assurance Corporation Ltd., (supra) it was observed that the carrying on of a Solicitor 's business was the carrying on of a profession and was not the carrying on of a trade or business within the meaning of that phrase in the Landlord and Tenant Act, 1927.
The observation was made in the context of that Act which made a distinction between 'trade or business ' and 'profession '.
In fact sub section 3(a) of Section 17 of the Act expressly said: "for the purposes of this Section premises shall not be deemed to be premises used for carrying on there at a trade or business by reason of their being used for the purpose of carrying on there at any profession".
The question in that case was about the right to compensation for the goodwill attached to the premises where the "business" or "profession" was being carried on.
We do not think 1 that the case is of any help to the appellant.
We may refer here to the decision of Danckwerts, J., in Re Williams ' Will Trusts, Chartered Bank of India, Australia and China and Another vs Williams and Others.(1) where the question was whether the bequest to a son for the purpose of starting him in 'business ' was affective to start the son in medical practice.
The learned Judge held that it did, observing that the word 'business ' was capable of including the practice of a profession and that it plainly included the profession of a Doctor.
We may refer to just one more case i.e. Taramal vs Laxman Sewak Surey Ors(2) where this very question whether the practice of law was a 'business ' within the meaning of the Madhya Pradesh Accommodation Control Act came for consideration before A. P. Sen, J.
The learned Judge held that in the context of the Madhya Pradesh Act, the word 'business ' had to be given a wide meaning so as to include any profession.
We, therefore, agree with the High Court that the practice of law is 'business ' within the meaning of that expression in Section 10(3) (a) (iii) of the Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Act, 196().
The appeal is, therefore, dismissed with costs.
M. R. Appeal dismissed.
[/INST]The respondent, an advocate, sought to evict his tenant, the appellant, under section 10(3) (a) (iii) of the Andhra Pradesh Building (Lease, Rent and Eviction) Control Act, 1960, on the ground that he required the disputed premises for carrying on his profession.
The court of small causes, Hyderabad, finding that the requirement was bona fide, passed an eviction order against the appellant.
In revision, the High Court negatived the contention that the expression "business" used in section 10(3)(a)(iii), did not include the 'profession ' of an advocate.
Dismissing the appeal, the Court, ^ HELD: 1.
"Business" is a word of large and wide import, capable of a variety of meanings.
In a broad sense it is taken to mean 'everything that occupies the time, attention and labour of men, for the purpose of livlihood or profit '.
The practice of law is 'business ' within the meaning of that expression in section 10(3)(a)(iii).
The Act is of general application, and its protection is not confined to any classes of tenants, nor is the right to evict under the Act, limited to any class of landlords.
There is no reason why a landlord who is a member of the legal or medical professions and who requires the premises for carrying on the practice of his profession, should be wholly debarred from obtaining possession of the premises.
It would be anamolous to hold that all the provisions of the Act apply to non residential buildings owned by an Advocate, excepting section 10(3)(a)(iii).
[14D, E, 16A B, C D] Williams ' Will Trusts, Chartered Bank of India, Australia and China and Anr.
vs Williams and Ors.
, [1953] 1 All.
ELR 536; Taramal vs Laxman Sewak Surey & Ors. , approved.
M. P. Sethurama Menon vs Thaiparambath Kunhukutty Amma 's daughter, Meenakshi Amma & Ors., AIR 1967 Kerala 88; Bangalore Water Supply Sewerage Board, etc.
vs R. Rajappa & Ors., ; ; Stuchbery & Ors.
vs General Accident Fire and Life Assurance Corp. Ltd., [1949] 2 KBD 256; distinguished.
It is a sound principle of construction that, meaning of words and expressions used in an Act, must take their colour from the context in which they appear.
Neither the meaning, nor the definition of a term in one statute, affords a guide to the construction of the same term in another statute, more so, if the two Acts in which the same word is used, are not cognate Acts and the sense in which a term has been understood in several statutes, does not necessarily throw any light on the manner in which it should be under stood generally.
[14G H & 15A] 13
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<s>[INST] Summarize the judgementivil Appeal No. 2794 of 1986.
From the Judgment and Order dated 18.1.1985 of the Calcutta High Court in E.M.A.T. No. 19 of 1983.
Appellant in person.
G.B. Pai, P.R. Seetharaman and Ms. Deepa Chhabra for the Respondents.
477 The Judgment of the Court was delivered by PATHAK, CJ.
This appeal is directed against the judgment and order of a Division Bench of the Calcutta High Court affirming on appeal the judgment and order of a learned Single Judge of the High Court declaring that the reference made by the Government of West Bengal in the dispute raised by the appellant is incompetent and invalid.
The appellant is a working journalist employed by the respondents, Messrs. Bennett Coleman and Company Limited.
The registered office of the company is at Bombay and its press is located in Calcutta.
The sales office of the compa ny is situated in Calcutta.
On 1 November, 1961 the appel lant was appointed a staff correspondent in the Calcutta office of the company.
The letter of appointment dated 9 November, 1961 was issued by the company from its registered office at Bombay.
Subsequently, the appellant was promoted to the post of Industrial Correspondent, Pune and was trans ferred from Calcutta to Pune from 16 February, 1976.
Upon transfer to Pune the appellant received his remuneration and allowances from the Pune office of the company, and he was under the direct control and supervision of the registered office of the company situated in Bombay.
While the appellant was in Calcutta and before his transfer on promotion to Pune the appellant applied to the Labour Department, Government of West Bengal on 29 April, 1975 under sub section
(1) of section 17 of the Working Journalists and Other Newspaper Employees (Conditions of Service) and Miscellaneous Provisions Act, 1955 (hereinafter referred to as "the Act") for recovery of the unpaid portion of his wages relating to the period April, 1968 to February, 1973 from the employer company.
On 14 May, 1975 the Government of West Bengal initiated conciliation proceedings.
The employer company participated in the conciliation proceedings and a joint conciliation meeting was held before the Conciliation Officer, Calcutta.
The appellant was transferred to Pune while the report of the conciliation proceedings was still awaited.
On 16 November, 1976 the Conciliation Officer reported failure of the conciliation proceedings and recom mended that the dispute be referred to the Labour Court under sub section (2) of section 17 of the Act.
Accordingly, the Government of West Bengal made a reference on 23 August, 1977 to the First Labour Court, West Bengal for the adjudi cation of the dispute between the parties.
An objection was raised by the employer company before the First Labour Court that the reference was incompetent as the Government of West Bengal had 478 no power to make the reference.
On 11 July, 1980 the First Labour Court rejected the objection.
The order was chal lenged by the employer company by a writ petition filed in the High Court.
By his judgment and order dated 5 August, 1982, the learned Single Judge held that the reference was incompetent.
That view was affirmed by a Division Bench of the High Court in appeal.
And now this appeal by special leave.
The question whether the Government of West Bengal was empowered to make a reference of the dispute between the appellant and the employer company must be determined by the provisions of the Act in their application to the facts of this case.
Section 17 of the Act makes provision for the recovery of money due to a newspaper employee from his employer.
Sub section
(1) requires that an application by the newspaper employee complaining that an amount due to him has remained unpaid by the employer should be made to the State Government, and provides that if the State Government is satisfied that any amount is so due it is empowered to issue a certificate for that amount to the Collector, and there upon the Collector must proceed to recover that amount in the same manner as an arrear of land revenue.
Which is the State Government to which such application lies is indicated by Rule 36 of the Rules made under the Act.
Rule 36 provides that an application under section 17 of the Act shall be made to the Government of the State where the Central Office or the Branch Office of the newspaper establishment in which the newspaper employee is employed is situated.
It is the loca tion of the Central Office or the Branch Office in which the newspaper employee is employed which determines which State Government it will be.
The Rule works in favour of the convenience of the newspaper employees.
Sub sections (2) and (3) of section 17 provide: "(2) If any question arises as to the amount due under this Act to a newspaper employee from his employer, the State Government may, on its own motion or upon application made to it, refer the question to any Labour Court constituted by it under the ( 14 of 1947) or under any corresponding law relating to investigation and settlement of industrial disputes in force in the State and the said Act or law shall have effect in relation to the Labour Court as if the question so referred were a matter referred to the Labour Court for adjudication under that Act or law.
479 (3) The decision of the Labour Court shall be forwarded by it to the State Government which made the reference and any amount found due by the Labour Court may be recovered in the manner provided in sub section (1).
" When all the provisions of section 17 are considered together it is apparent that they constitute a single scheme.
In simple terms the scheme is this.
A newspaper employee, who claims that an amount due to him has not been paid by his employer, can apply to the State Government for recovery of the amount.
If no dispute arises as to the amount due the Collector will recover the amount from the employer and pay it over to the newspaper employee.
If a question arises as to the amount due, it is a question which arises on the application made by the newspaper employee, and the applica tion having been made before the appropriate State Govern ment it is that State Government which will call for an adjudication of the dispute by referring the question to a Labour Court.
When the Labour Court has decided the ques tion, it will forward its decision to the State Government which made the reference, and thereafter the State Govern ment will direct that recovery proceedings shall be taken.
In other words the State Government before whom the applica tion for recovery is made is the State Government which will refer the question as to the amount due to a Labour Court, and the Labour Court upon reaching its decision will forward the decision to the State Government, which will then direct recovery of the amount.
Turning to the facts of the present case, it is clear that the application under sub section
(1) of section 17 was made on 29 April, 1975 when the appellant was employed at the Cal cutta Branch of the employer company.
He made the applica tion to the Labour Department of the Government of West Bengal for recovery of the unpaid portion of his wages.
When the question arose as to the amount due to the appellant, the Government of West Bengal made the reference for adjudi cation to the First Labour Court, West Bengal.
Upon the construction of sub section
(2) of section 17 which has found favour with us, it is beyond dispute, we think, that the Government of West Bengal is competent to make the reference.
In our opinion the High Court erred in holding that the reference was without jurisdiction and that it was the State of Maha rashtra which was competent to make the reference.
The application for recovery was rightly made by the appellant before the Government of West Bengal because he was then employed by the Branch Office of the employer company, Calcutta.
Once we hold that the application was rightly made before the Government of West 480 Bengal, the further conclusion must necessarily follow that it was the Government of West Bengal which possessed the power to refer the question for adjudication.
It seems to us that the High Court omitted to appreciate the inter rela tionship between the different provisions of section 17 and the fact that if the proceeding under sub section
(1) of section 17 was commenced rightly before a State Government it was that State Government alone which should make a reference to a Labour Court for adjudication.
A number of cases have been placed before us, but we do not consider it necessary to refer to them having regard to the view taken by us upon a plain analysis o.f the statutory provisions.
We may note that the fundamental question before us is whether the Government of West Bengal was competent to make the reference.
We do not consider it appropriate to decide any other questions arising upon the reference since the reference must, pursuant to this judgment, be considered to be pending still and those questions can be raised there.
Our attention has been drawn by learned counsel for the employer company to an award of the Labour Court of West Bengal where, it is said, the question covered by the im pugned reference has already been concluded on its merits.
That is a submission which is open to the employer company during the proceedings before the Labour Court upon the impugned reference.
We are concerned with a limited point and we need go no further.
In the result the appeal is allowed, the judgment and order dated 18 January, 1985 of the Division Bench of the High Court and the judgment and order dated 5 October, 1982 of the learned Single Judge of the High Court are set aside and the writ petition filed by the employer company is dis missed.
The Labour Court will now proceed to dispose of the reference expeditiously.
The appellant is entitled to his costs of this appeal and of the entire proceedings before the High Court.
P.S.S. Appeal allowed.
[/INST]The appellant, a working journalist who was appointed on November, 1961 as a Staff Correspondent in the Calcutta Office of the respondent company while working as such at Calcutta, applied on 29 April, 1975 to the Government of West Bengal under sub section
(1) of section 17 of the Working Jour nalists and Newspaper Employees (Conditions of Service) and Miscellaneous Provisions Act, 1955 for recovery of the unpaid portion of his wages relating to the period April 1968 to February 1973.
While the conciliation proceedings were on, he was promoted and transferred to Pune on 16 February, 1976.
The Conciliation Officer reported the fail ure of the proceedings before him on 16 November, 1976 and the Government of West Bengal made a reference under sub section
(2) of section 17 of the Act to the First Labour Court, West Bengal on 23 August, 1977 for the adjudication of the dis pute between the parties.
The preliminary objection raised by the respondent company that the Government of West Bengal was not competent to make the reference was rejected by the Labour Court.
The respondent company 's writ petition chal lenging 'the order of the Labour Court was allowed by a Single Judge whose decision was affirmed in appeal by the Division Bench of the High Court.
Allowing the appeal by special leave and dismissing the writ petition of the respondent company, this Court.
HELD: (i) Sub section
(1) ors.
17 of the Act requires that an application by the newspaper employee complaining that an amount due to him has remained unpaid by the employer should be made to the State Government.
Which is the State Govern ment to which such application lies is 476 indicated by r: 36 of the Rules made under the Act and that rule provides that an application under section 17 of the Act shall be made to the Government of the State where the central office or the branch office of the newspaper estab lishment in which the newspaper employee is employed is situated.
It is the location of the central office or the branch office in which the newspaper employee is employed which determines which State Government it will be.
The rule works in favour of the convenience of the newspaper employ ee.
[478C E] (ii) Sub section
(2) of section 17 provides that if any question arises as to the amount due under the Act to a newspaper employee from his employer, the State Government may refer the question to any Labour Court, constituted by it under the or under any corresponding law relating to investigation and settlement of industrial disputes in force in the State.
If a question arises as to the amount due, it is a question which arises on the appli cation made by the newspaper employee, and the application having been made before the appropriate State Government, it is that State Government which will call for an adjudication of the dispute by referring the question to a Labour Court.
The State Government before whom the application for recov ery is made is the.
State Government which will refer the question as to the amount due to a Labour Court.
[478F G; 479C D] In this case, the appellant was employed at the Calcutta branch of the respondent company.
He made the application to the Labour Department of the Government of West Bengal for recovery of the unpaid portion of his wages.
When the ques tion arose as to the amount due to the appellant, the Gov ernment of West Bengal made the reference for adjudication to the First Labour Court, West Bengal.
Upon the construc tion of sub section
(2) of section 17 as indicated at (ii) above, it is beyond dispute that the Government of West Bengal is competent to make the reference.
The High Court erred in holding that the reference was without jurisdiction and that it was the State of Maharashtra which was competent to make the reference.
[479E G]
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<s>[INST] Summarize the judgementAppeal No. 170 of 1956.
Appeal by special leave from the judgment and order dated the 12th January, 1955, of the Calcutta High Court in exercise of its Special Jurisdiction under the , in Matter No. 107 of 1954.
M. C. Setalvad, Attorney General for India, section N. Andley, J. B. Dadachanji and Rameshwar Nath, for the appellants.
Aswini Kumar Ghose, T. section Venkataraman and K. R. Chaudhury, for the respondents.
373 1957.
September 10.
The following Judgment of the Court was delivered by GAJENDRAGADKAR J.
The material facts leading to the present appeal are not in dispute and may be conveniently stated at the outset.
On July 17, 1933, the respondent was enrolled as a registered accountant under the Auditors Certificate Rules, 1932.
When the , came into, operation, the respondent 's name was entered as a Member of the Institute of Chartered Accountants of lndia on July 1, 1949.
On September 13, 1950, the respondent was appointed a Liquidator of three companies.
The respondent obtained refund of the sums and securities deposited on behalf of the three companies with the Reserve Bank of India.
He, however, made no report about the progress of liquidation of the said three companies.
Repeated requests made to him by the Assistant Controller of Insurance found no response.
As Liquidator the respondent gave a cheque to Shri section K. Mandal, Solicitor to the Central Government at Calcutta, towards payment of the taxed costs in the winding up proceedings of one of the companies.
The said cheque was, however, returned dishonoured on the ground that the payment had not been arranged for.
When the Assistant Controller of Insurance found that the conduct of the respondent as Liquidator was wholly unsatisfactory and that he would not even show the ordinary courtesy of replying to the letters addressed to him, he proceeded to cancel the appointment of the respondent as Liquidator by his letter dated October 29, 1952.
The respondent was then called upon to hand over all books of account, records, documents, etc., to Shri N. N. Das, who was appointed a Liquidator in his place.
Shri Das as well as the Assistant Controller of Insurance then made repeated demands on the respondent to deliver to Shri Das the assets and records of the three companies.
It is common ground that the respondent had with him securities of the value of Rs. 11,950 and a cash sum of Rs. 642 on account of the United Common 374 Provident Insurance Co. Ltd. He had also with him securities to the value of Rs. 12,100 on account of the Asiatic Provident Co. Ltd., and securities and cash on account of the Citizens of India Provident Insurance Co. Ltd. Out of these amounts the respondent returned only securities of the face value of Rs. 10,000 and Rs. 350 of Asiatic Provident Co. Ltd., and United Common Provident Insurance Co. Ltd., respectively.
He failed to send any further securities or cash held by him on account of the said three companies.
It was at this stage that a complaint was lodged against the respondent with the Council of the Institute of Chartered Accountants of India in Calcutta.
As required by the provisions of the Act, the disciplinary committee of the Council inquired into the matter.
Notice was served on the respondent but he filed no written statements within the time fixed.
On August 1, 1953, a letter was received from the respondent that he was ill and was unable to attend personally.
The respondent had also requested for the adjournment of the case.
Proceedings were accordingly adjourned to August 29, 1953, on which date the respondent was represented by a counsel who filed the respondent 's affidavit stating that he was prepared to hand over the entire cash, books of account, etc., to the newly appointed Liquidator without rendering the necessary accounts.
It appears that Shri Das, the subsequently appointed Liquidator, gave evidence before the disciplinary committee.
Though several opportunities were given to the respondent to appear before the disciplinary committee he failed to appear or to take part in the proceedings.
Ultimately the committee made its report on September 13, 1953, and found that the respondent was guilty of gross negligence in the conduct of his professional duty in not handing over charge of the assets and the books of account of the said companies to the newly appointed Liquidator.
This report was considered by the Council itself as required by the Act.
Tile Council agreed with the finding recorded by the disciplinary committee in substance, but took the view that the 375 acts and omissions of the respondent were more serious than what can be described as gross negligence.
The finding of the Council was then forwarded to the High Court of Judicature at Calcutta as required by section 21 (1) of the Act and the matter was heard by the learned Chief Justice and Mr. Justice Lahiri.
By their judgment delivered on January 12, 1955, the reference was rejected on the ground that no action could be taken against the respondent under the Act though the facts proved against the respondent showed that " he had been guilty of grossly improper conduct if not dishonesty".
On these facts the main point which arises for our decision is what is the nature, scope and extent of the disciplinary jurisdiction which can be exercised under the provisions of this Act against the respondent.
It would now be necessary to examine the scheme of the material provisions of the Act.
This Act came into force in 1949 and it was passed, because the Legislature thought it expedient to make provision for the regulation of professional accountants and for that purpose it has provided for the establishment of the Institute of Chartered Accountants.
Section 2, sub section
(1) (b) defines a Chartered Accountant as meaning "a person who is a member of the Institute and who is in practice".
Section 2, sub section
(2) provides that a member of the Institute shall be deemed to be in practice when, individually or in partnership with chartered accountants, he, in consideration of the remuneration received or to be received, does any of the acts mentioned in the following 4 sub clauses: . .
Sub clause (iv) is relevant for our purpose: " section 2 (2) (iv): " (Where a member) renders such other services as in the opinion of the Council are or may be rendered by a chartered accountant, (he is deemed to be in practice).
" Section 4 provides for the entry of names in the register of chartered accountants.
Section 5 divides the members of the Institute into two classes designated respectively as Associates and Fellows.
Section 6 lays down that no member of the Institute shall be 376 entitled to practise unless he has obtained from the 'Council a certificate of practice.
Under section 7, every member of the Institute in practice shall be designated as a chartered accountant and no person practising the profession of accountancy in India shall use any other designation whether in addition thereto or in substitution therefor.
Section 8 deals with disabilities.
Any person who incurs any one of the disabilities enumerated in sub cls.
(i) to (vi) of section 8 shall not be entitled to have his name entered in or borne on the Register.
Sub clause (v) deals with the disability arising by reason of conviction by a competent court whether within or without India of an offence involving moral turpitude and punishable with transportation or imprisonment or of an offence not of a technical nature committed by him in his professional capacity unless in respect of the offence committed be has either been granted a pardon or, on an application made by him in this behalf, the Central Government has, by an order in writing, removed the disability.
Sub clause (vi) deals with the disability in cases where the chartered accountant is found on an inquiry to be guilty of conduct which renders him unfit to be a member of the Institute.
Chapter III deals with the constitution of the Council, the committees of the Council and the finances of the Council.
Chapter IV deals with the register of members and the removal from the Register of the name of a chartered accountant, as provided by section 20, sub cls.
(a), (b) and (c).
Under section 20, sub section
(2), it is provided that the Council shall remove from the Register the name of any member who has been found by the High Court to have been guilty of conduct which renders him unfit to be a member of the Institute.
Chapter V deals with the question of misconduct.
It consists of sections 21 and 22.
Chapter VI deals with the constitution and functions of the Regional Councils; chapter VII deals with penalties and chapter VIII deals with miscellaneous matters.
Section 21 deals with the procedure of enquiries relating to misconduct of members of the Institute.
It reads thus: 377 " section 21.
(1) Where on receipt of information or on receipt of a complaint made to it, the Council is of opinion that any member of the Institute has been guilty of conduct which, if proved, will render him unfit to be a member of the Institute, or where a complaint against a member of the Institute has been made by or on behalf of the Central Government, the Council shall cause an inquiry to be held in such manner as may be prescribe and the finding of the Council shall be forwarded to the High Court.
(2). . . . (3). . . . (4). . . .
Sub sections (2), (3) and (4) of section 21 deal with the powers of the High Court in dealing with the reference made to it, under section 21, sub section
Section 22 defines misconduct.
It reads thus: " section 22.
For the purposes of this Act, the expression conduct which, if proved, will render a person unfit to be a member of the Institute " shall be deemed to include any act or omission specified in the Schedule, but nothing in this section shall be construed to limit or abridge in any way the power conferred on the Council under sub section
(1) of section 21 to inquire into the conduct of any member of the Institute under any other circumstances." The learned Judges of the Calcutta High Court have held that the conduct of which the respondent is proved to have been guilty cannot be said to be professional misconduct properly so called and cannot, therefore, attract the provisions of sections 21 and 22 of the Act.
"There, thus, seems to be no room for contending"# observes the learned Chief Justice in his judgment, " that misconduct not connected with the exercise of the profession is also within the ambit of the Act, provided it involves moral turpitude or appears to render a person unworthy to remain a member of a responsible profession".
It has also been found by the learned Judges that even if they were to hold that the misconduct proved against the respondent attracted the provisions of sections 21 and 22 of 378 the Act it would not be open to them to take any action against the respondent on that ground because the Institute cannot expect the Court to take action in the present case on the footing that the respondent had been guilty of misconduct otherwise than in his professional capacity since that is not the finding which the Council arrived at and which is reported to the Court.
It is the correctness of these findings that is challenged before us by the learned Attorney General.
lie contends that the learned Judges of the Calcutta High Court have put an unduly restricted and narrow construction on the provisions of section 21 and section 22 in holding that the respondent 's conduct does not amount to professional misconduct; and he has also urged that the technical reason given by the learned Judges in not taking any action against the respondent even if they had accepted the broader interpretation of the two said sections proceeds on a misconception about the nature and extent of the powers of the High Court while hearing references made to it under the provisions of section 21, sub sections
(2), (3) and (4).
In our opinion, the contentions raised by the learned Attorney General are well founded and must be upheld.
Let us first consider whether the conduct of the respondent amounts to professional misconduct or not.
In dealing with this question it is necessary to bear in mind the provisions of section 2, sub section
(2) (iv) of the Act.
A member of the Institute under this provision shall be deemed to be in practice when he renders such other services as in the opinion of the Council are or may be rendered by a chartered accountant.
In other words, just as a member of the Institute Who engages himself in the practice of accountancy is by such conduct deemed to be in practice as a chartered accountant, so is he deemed to be in practice as a chartered accountant when he renders other services mentioned in section 2, sub s.(2) (iv).
What other services attract the provisions of this sub section has to be determined in the light of the regulations framed under provisions of this Act.
Section 30 of the Act confers power on the Council to make regulations by notification 379 in the Gazette of India for the purpose of carrying out the object of the Act and it provides that a copy of such regulation should be sent to each member of the Institute.
Section 30, sub section 2 sets out the several topics in respect of which regulations can be framed though, as usual, it provides that the enumeration of the different topics is without prejudice to the generality of the powers conferred by section 30, sub s.(1).
Sub section
(4) lays down that, notwithstanding anything contained in sub sections
(1) and (2), the Central Government may frame the first regulations for the purposes mentioned in the section and such regulations shall be deemed to have been made by the Council and shall remain in force from the date of coming into force of this Act until they are amended, altered or revoked by the Council.
Regulation 78 is one of the regulations originally framed by the Central Government under section 30, sub section
It reads thus: " Regulation 78.
Without prejudice to the discretion vested in the Council in this behalf, a Chartered Accountant may act as liquidator, trustee, executor, administrator, arbitrator, receiver, adviser, or as representative for costing financial and taxation matter or may take up an appointment that may be made by Central or State Governments and Courts of law or any Legal Authority, or may act as Secretary in his professional capacity not being an employment on a salary cum full time basis.
" The last clause has been added by the Council by a notification dated August 22, 1953.
Now it is clear that when the respondent accepted his appointment as liquidator of the three companies in question he agreed to work as a liquidator in pursuance of an order passed by the High Court of Judicature at Calcutta and there can be no doubt that in working as such liquidator he was rendering services which in the opinion of the Council may be rendered by a chartered accountant.
The provisions of Regulation 78 must inevitably be considered in the light of section 2, sub s.(2), cl.(iv) and the result of considering the two provisions together obviously is that when the respondent was working as a liquidator in pursuance of an order passed by the Calcutta High Court he 49 380 must be deemed to be in practice within the meaning of section 2, sub s.(2).
We feel no difficulty in holding that chartered accountants who render services falling within section 2, sub section
(2), cl.
(iv) are as much entitled to be deemed to be in practice as those whose duties attract the provisions of cls.
(i), (ii) and (iii) of sub section
If that be the true position it is difficult to accept the view that the conduct of the respondent while he discharged his duties as a liquidator is not the professional conduct of a chartered accountant even within the narrow and restricted sense of the term.
If, while acting as liquidator, the respondent must be deemed to be in practice as a chartered accountant, all acts and omissions proved against him in respect of such conduct as liquidator must be characterised as his professional acts and omissions.
"Practice" according to Webster 's New International Dictionary means Cc exercise of any profession or occupation " and if the performance of the duties as liquidator attracts the provisions of section 2, sub section
(2), whatever the chartered accountant does as a liquidator must be held to be conduct attributable to him in the course of his practice.
The object with which cl.
(iv) in sub section
(2) of section 2 has been deliberately introduced by the Legislature ' in our opinion, appears to be to bring within the disciplinary Jurisdiction of the statutory bodies recognized under the Act, conduct of chartered accountants even while they are rendering services otherwise than as chartered accountants properly so called.
It is because the Legislature wanted to provide for a self contained code of conduct in respect of chartered accountants that the denotation of the expression " to be in practice " has been in a sense deliberately and artificially extended by virtue of section 2, sub section
(2), el.
We must, therefore, hold that, on the facts proved, the respondent is clearly guilty of professional misconduct.
This would really dispose of the appeal before us, because once it is held that the respondent is guilty of professional misconduct it would be obviously necessary to deal with him on that basis and make an appropriate order under section 21, sub section
(3) of the Act.
However, 381 since the learned Attorney General has alternatively urged before us that in confining the exercise of disciplinary jurisdiction only to cases of professional misconduct, technically so called, the learned Judges of the Calcutta High Court have misconstrued the relevant provisions of the Act, we propose to deal very briefly with that question also.
Section 21, sub section
(1), deals with two categories of cases in which the alleged misconduct of members of the Institute can be inquired into.
If information is received or complaint is made to the Institute against the conduct of any chartered accountant the Council is not bound to hold an inquiry straightaway.
The Council is required.
to examine the nature of the information or complaint made and decide whether, if the facts alleged against the member are proved, they would render the member unfit to be a member of the Institute.
In other words, in the case of a private complaint made against members, it is only where the Council is satisfied prima.facie that facts alleged against the member, if proved, would justify the exercise of disciplinary jurisdiction against the member that the Council is required to hold an inquiry.
The conduct alleged must be such as, if proved, would render the member unfit to be a member of the Institute.
The other class of cases has reference to.
the complaint received by the Council from the Central Government.
In regard to this class of cases, the Council is not required, and indeed has no jurisdiction to apply the primarily test before holding an inquiry.
The Council is required to cause an inquiry to be held on such complaint straightaway.
In both the cases when the inquiry is concluded, the findings of the Council are to be forwarded to the High Court.
Section 22 purports to define the expression "conduct which, if proved, will render a person unfit to be a member of the Institute".
It is an inclusive definition ; it includes any act or omission specified in the schedule but the latter portion of section 22 clearly lays down that nothing contained in this section shall be construed to limit or abridge in any way the power conferred on the Council under sub section
(1) of section 21.
The position thus 382 appears to be that though the definition of the Material expression used in section 21, sub section
(1), refers to the acts and omissions specified in the schedule, the list of the said acts and omissions is not exhaustive;and, in any event, the said list does not purport to limit the powers of the Council under section 21, sub section
(1), which may otherwise flow from the words used in the said sub section itself.
The schedule to which section 22 refers has enumerated in cls.
(a) to (v) several acts and omissions and it provides that, if any of these acts or omissions is proved against a chartered accountant, he shall be deemed to be guilty of professional misconduct which renders him unfit to be member of the Institute.
Clause (v) is rather general in terms since it provides for cases where the accountant is guilty of such other act or omission in his professional capacity as may be specified by the Council in this behalf by notification in the Gazette of India.
It must be conceded that the conduct of the respondent in the present case cannot attract any of the provisions in the schedule and may not therefore be regarded as falling within the first part of section 22; but if the definition given by section 22 itself purports to be an inclusive definition and if the section itself in its latter portion specifically preserves the larger powers and jurisdiction conferred upon the Council to hold inquiries by section 21, sub section
(1), it would not be right to hold that such disciplinary jurisdiction can be invoked only in respect of conduct falling specifically and expressly within the inclusive definition given by section 22.
In this connection it would be relevant to mention section 8 which deals with disabilities.
Section 8, sub sections
(v) and (vi), support the argument that disciplinary jurisdiction can be exercised against chartered accountants even in respect of conduct which may not fall expressly within the inclusive definition contained in section 22.
We, therefore, take the view that, if a member of the Institute is found, prima facie, guilty of conduct which, in the opinion of the Council, renders him unfit to be a member of the Institute, even though such conduct may not attract any of the provisions of the schedule, it would still be open to the Council to hold an inquiry against the 383 member in respect of such conduct and a finding against him in such an inquiry would justify appropriate action.
being taken by the High Court under section 21, sub section
It is true that the High Court would take action against the offending member only if the High Court accepts the finding made by the Council and not otherwise.
This conclusion is strengthened if we bear in mind the extended meaning of the expression "to be in practice" given in section 2, sub section
(2), which we have already dealt with.
In this view of the matter we must reverse the conclusion of the learned Judges of the Calcutta High Court that the conduct proved against the respondent does not fall within as.
21 and 22 because it is not conduct connected with the exercise of his profession as a chartered accountant in the narrow sense of that term.
The next question to consider is in regard to the extent of the jurisdiction and powers of the High Court when the High Court deals with references under section 21, sub sections
(2), (3) and (4).
The learned Judges of the Calcutta High Court took the view that even if they had agreed to put a wider construction on the material words used in sections 21 and 22, they would not be justified in passing any orders against the respondent in the present proceedings because the finding which had been referred to the High Court was only one and that was that the respondent was guilty of professional misconduct in the narrow sense of the term.
In other words, the High Court thought that in accepting, and acting or the larger construction of the material words the High Court would be making out a new case on the reference and the High Court would not be justified in adopting such a course.
In our opinion, this view is not well founded.
Section 2 1, sub section
(2), lays down the procedure to be followed by the High Court when a finding made by the Council is referred to it under section 21, sub section
Notice of the day fixed for the hearing of the reference has to be given to the parties specified in section 21, subs.
(1) and an opportunity of being heard has to be given to them.
Section 21, sub section
(3), then lays down that the High Court may either pass such final orders on the case as it thinks fit or refer it back for further 384 inquiry by the Council and, upon receipt of the finding after such inquiry, deal with the case in the manner provided in sub section
(2) and pass final orders thereon.
It is clear that, in hearing references made under section 21, sub section
(1), the High Court can examine the correctness of the findings recorded by the statutory bodies in that behalf.
The High Court can even refer the matter back for further inquiry by the Council and call for a fresh finding.
It is not as if the High Court is bound in every case to deal with the merits of the finding as it has been recorded and either to accept or reject the said finding.
If, in a given case, it appears to the High Court that, on facts alleged and proved, an alternative finding may be recorded, the High Court 'can well send the case back to the Council with appropriate directions in that behalf.
The powers of the High Court under section 21, sub section
(8), are undoubtedly wide enough to enable the High Court to adopt any course which in its opinion will,, enable the High Court to do complete justice between the parties.
Besides, in the present case, no such technical considerations can really come into operation because the material facts have not been in dispute between the parties at any stage of the proceedings.
The only point in dispute between the parties has been whether on the facts proved disciplinary jurisdiction can be invoked against the respondent under the provisions of the Act.
We, therefore, take the view that the learned Judges of the High Court were in error in holding that, even if they had accepted the broader interpretation of section 21 and section 22, they could not make an appropriate order in the present case against the respondent having regard to the specific finding recorded by the Council in the inquiry in question.
It would now be necessary to refer to some judicial decisions to which our attention has been invited.
In G. M. Oka, In re (1), it has been held by a Division Bench of the Bombay High Court that, when a chartered accountant gives evidence before a court of law and he is in the witness box not as a chartered (1) [1952] 22 Comp.
385 accountant but as a witness, the falsity of his ,statement does not give rise to any disciplinary proceedings against him as a chartered accountant.
If he gives false evidence he may be guilty of perjury and if he is convicted the conviction itself may call for disciplinary action.
These observations undoubtedly lend support to the view taken by the Calcutta High Court.
It is of course.
true that the conviction of a chartered accountant would attract the provisions of section 8, sub a.
(vi) and in that sense the conclusion of the Bombay High Court that the conviction itself may be the basis of disciplinary action is, with respect, wholly correct; but the other observations on which reliance is placed by the respondent before us are obiter and it also appears from the judgment that the attention of the learned Judges was not drawn to the provision of section 2 (2) (iv) and other relevant considerations do not appear to have been urged before them in that case.
As the judgment itself points out, apart from the technical points which were urged before the court on behalf of the chartered accountant, there was a large volume of other evidence produced against him which conclusively proved that he was guilty of misconduct.
Mr. Ashwini Kumar Ghosh, for the respondent, has also sought to rely on Haseldine vs Hosken (1).
In this case the solicitor had taken out an indemnity policy which insured him against loss arising by reason of any neglect, omission or error while acting in his.
professional capacity.
During the subsistence of this policy, the solicitor sustained loss through having, without realizing the fact, entered into a champertous agreement.
When the solicitor made a claim to be indemnified, it was held that the loss in respect of which indemnity was claimed did not arise by reason of any neglect, omission or error committed by the solicitor in his professional capacity but arose from his entering into a personal speculation.
We do not see how this case can assist the respondent in any way.
In considering the question as to whether the respondent has been guilty of professional misconduct in the present case, we are concerned with (1) 386 the material provisions of the itself.
Observations made by the learned Judges in Haseldine 's case can afford no assistance to us in interpreting the said provisions.
Similarly the decision in Krishnaswamy vs The Council of the Institute of Chartered Accountants (1) where the court was primarily concerned with the question as to whether orders passed under section 21 (2) of the Act are orders passed in civil proceedings or not is wholly inapplicable and gives us no help in deciding the points before us.
The only question which now remains to be considered is the final order to be passed against the respondent.
The conduct of the respondent is, in our opinion, wholl yunworthy of a chartered accountant in practice.
His refusal to give prompt replies to the letters received from the Assistant Controller of Insurance followed by his failure to return the documents and all securities and cash received by him as liquidator leave no room for doubt that he was unable to return the said amount and the said securities and cash and that he was merely employing delaying tactics with the object of postponing the evil day.
It is not conduct which is only technically improper or unworthy; it is conduct which is grossly improper and unworthy and as such it calls for a deterrent order.
The respondent was appointed a liquidator by the Calcutta High Court presumably because he was a chartered accountant in practice.
He thus received the benefit of this appointment as a result of his status as chartered accountant in practice and in acting as a liquidator he has been guilty of conduct which is absolutely unworthy of his status and it renders him unfit to be a member of the Institute.
We, therefore, think that the ends of justice require that the respondent 's name should be removed from the Register for four years.
In regard to costs we direct that the respondent should pay the costs of the appellants in this Court and that the parties should bear their own costs in the court below.
Appeal allowed.
(1) A.I.R. 1953 Madras 79.
[/INST]Respondent, a chartered accountant and a member of the Institute of Chartered Accountants, was appointed liquidator of three insurance companies in pursuance of the orders of the High 48 372 Court.
He received records, cash and securities on behalf of these companies.
The Assistant Controller of Insurance found that his conduct as liquidator was wholly unsatisfactory and that he would not even reply to the letters addressed to him.
His appointment was cancelled and another person was appointed.
In spite of repeated demands he failed to return all the records, cash and securities.
A complaint was lodged against him with the Council of the Institute of Chartered Accountants.
After inquiry the respondent was found guilty of misconduct, and the report was forwarded by the Council to the High Court for necessary action under section 21 of the .
The High Court rejected the reference on the ground that the conduct of which the respondent was found guilty could not be said to be professional misconduct and did not attract the provisions of sections 21 and 22 of the Act.
Held, that the respondent, when working as a liquidator, must be deemed to have been in practice as a chartered accountant within the meaning Of section 2(2) of the Act.
The definition of misconduct in section 22 is inclusive and the Council may hold an inquiry and find a member guilty of conduct which, in its opinion, renders him unfit to be a member of the Institute, even though such conduct does not attract any of the provisions of the schedule referred to in section 22.
The conduct of the respondent was grossly improper and unworthy and amounted to professional misconduct within the meaning of the Act.
In a reference under section 21 of the Act the High Court has ample powers to adopt any course which would enable it to do complete justice between the parties.
It can examine the correctness of the findings recorded by the Council or refer the matter back for further inquiry and call for a fresh finding.
The High Court is not bound to deal with the merits of the finding as it has been recorded and either to accept or reject it.
</s>
|
<s>[INST] Summarize the judgementCivil Appeal No. 1115 of 1979.
856 From the Judgment and Order dated 26.10.1978 of the Jammu & Kashmir High Court in W.P.No.41 of 1978.
A.K. Sen, Harish Salve, K.J. John and C.S.S. Rao for the Appellants.
Altaf Ahmed, Advocate General and S.K. Bhattacharya for the Respondents.
The Judgment of the Court was delivered by RAY, J.
This is an appeal by special leave against the judgment and order passed in Writ Petition No. 41 of 1978 dismissing the writ petition and upholding the order of the District Judge, Srinagar dated 26th July, 1978 as well as the order of the Estate Officer dated 20th March, 1978.
The petitioners purchased the premises in dispute which were originally leased out to Dewan Bishen Dass, exhibit Prime Minister of the Jammu and Kashmir, from his successor in interest Purnesh Chandra and others by two sale deeds dated 12.7.1967 and 8.12.1967.
Dewan Bishen Dass who took lease of the said property was in possession of the same for more than 75 years.
The suit property consists of residential houses, buildings, shed and open lands.
The appellants purchased the land under Khasra Nos. 885(min) 890 and 891 measuring about 10 Kanals.
In 1957 the respondents State Government tried to resume the lands for setting up a Tonga and Lorry stand; but thereafter no action was taken in this regard.
In 1961 another order was made by which the land in question was sought to be resumed under the previous order and the said land was sought to be transferred to the Roads and Building Department.
Under this order compensation was fixed at Rs.1,39,260 in respect of building and structures standing on the said lands; however no compensation was paid nor any action was taken subsequently in this regard.
In 1963 another Government order was issued under sec.
4(1) of the Jammu and Kashmir (Public Premises Eviction of Unauthorised Occupants) Act, 1959 seeking to resume the land for purpose of the development of the city.
An appeal preferred by the lessee was rejected.
But no further action was taken thereafter.
On 5th of June 1968 an order of eviction under the provisions of Jammu and Kashmir (Public Premises Eviction of Unauthorised Occupants) Act, 1959 was issued seeking to evict the petitioners as being unauthorised occupants.
On January 11, 1978 a large number of police personnel and municipal employees came upon the land and 857 demolished the buildings of the petitioners on the said land.
The Administrator took illegal possession of the suit property whereon the appellants filed a writ petition before the High Court of Jammu and Kashmir praying for a writ or direction prohibiting the Administrator of the Municipality from interfering with the physical possession of the Petitioners and directing him to forbear from taking possession of the property without the authority of law.
The High Court by judgment and order of 19th of July 1979 allowed the writ petition and directed the respondents to restore possession of the premises immediately to the petitioners.
By allowing the writ petition High Court held: (1) Section 6 of the Land Grants Act, shows that the provisions of the Act would apply to the lease created after the passing of the Act.
(2) Possession of the Lessees can be taken only on payment of compensation.
Since no compensation was paid, the lessee is validly in possession and cannot be evicted.
(3) Petitioners not being unauthorised occupants the Act is not applicable and therefore any notice under section 4 or 5.5 of the Act is without jurisdiction.
(4) Section 5 of the Jammu and Kashmir (Public Premises Eviction of Unauthorised Occupants) Act is ultra vires Article 14 of the Constitution since discretion is on State Officer to evict one occupant and refuse to evict another.
Amendment of 1962 does not revive section 5 of the 1959 Act.
(5) Action of the State was held malafide.
Against the said judgment and order the respondents filed appeals before this Court being Civil Appeal Nos.
144 147 of 1979.
On August 8, 1972 this Court dismissed those appeals and confirmed the judgment and order made by the High Court holding that as the Administrator of the Municipality had not complied with the provisions of sections 238 and 239 of the Municipal Act the action taken by the Municipality in the matter of demolition must be held to be entirely illegal and contrary to law.
It was further held "that the conclusions and observations of the High Court on all the points which have not 858 been decided by us become unnecessary in the view we have taken with regard to the illegality and invalidity of the demolition carried out pursuant to the notices issued under section 129 of the Municipal Act .
" This decision was reported in State of Jammu and Kashmir & Ors.
vs Haji Wali Mohammed and Ors.v.
; Thereafter the Estate Officer issued a notice under section 4(1) of the Amended Jammu and Kashmir Public Premises (Unauthorised Occupants) Act intimating the appellants that they were in unauthorised occupation of the public premises mentioned in the schedule below by encroaching upon Government land measuring 10 Kanals 8 Marlas and 208 fts.
comprising Khasra No. 890 situated at Bagh Magermal, Srinagar, and calling upon the appellants to show cause why the order of eviction should not be made.
The appellants filed an objection to the said notice stating inter alia that they are not in unauthorised occupation of the said land nor they have encroached upon the same.
The notice is wholly misconceived and it is illegal.
The land in question in fact was taken lease of by late Dewan Bishen Dass who has been in continuance possession of the same for about 75 years and thereafter the appellants purchased the said land in 1967 from the legal heirs of the lessee Dewan Bishen Dass.
The appellants made various improvements on the land and built houses thereon at a cost of about Rs.50,000.
The appellants are not unauthorised occupiers but are fulfledged owners of the said land.
These facts are wholly confirmed by the judgment of the High Court of Jammu and Kashmir while accepting the Writ Petition of the appellants.
The appellants had stepped into the shoes of the original owner who was lawfully inducted in the lawful possession of the land as lessee.
It has been stated that the Estate Officer cannot declare the person in possession as unauthorised occupants after lapse of more than 80 years.
Their objection however was rejected by the Estate Officer and the appellants were directed to hand over possession of the premises including structures to the Administrator of the Municipality within 14 days.
Against the said order the appellants preferred an appeal before the District Judge, Srinagar.
The appellants also challenged the said order by a writ petition before the High Court of Jammu and Kashmir and this was registered as writ petition No. 49 of 1978.
The appeal was however dismissed and the order of the Estate Officer was confirmed holding inter alia that the appellants purchased the land from the legal heirs of Dewan Bishen Dass who was the lessee of the land, that all the sale deeds were executed without obtaining requisite prior permission from the Government and as such the Sub Registrar was not em 859 powered to accept those documents for registration under proviso to section 4 of the Jammu and Kashmir Lands Grants Act, 1960, that the lease shall be deemed to have been determined because of contravention of the provisions of section 12(A) of the Jammu and Kashmir Lands Grants Act, 1960, that the possession of the appellant was not regular and as such they were in authorised occupation, within the meaning of the said Act, that the Government had a right to re enter on the land and the notice in question was rightly issued against the appellants directing them to vacate the land.
The writ petition was amended and this judgment was also challenged.
The writ petition was, however, dismissed by the High Court by Order dated 26th October, 1978 holding that the land being transferred by the legal heirs of the Dewan Bishen Dass without obtaining previous permission of the Government or by the competent authority in that behalf the lease stood determined and the impugned notice under the Jammu and Kashmir (Public Premises Eviction of Unauthorised Occupants) Act, 1959 was quite in accordance with law.
Against this judgment and order the instant appeal on special leave has been filed by the appellants.
It has been urged on behalf of the appellants that the lands taken lease of by Dewan Bishen Dass who was the exhibit
Prime Minister of the State cannot be deemed to have been taken under the provisions of Ailan No. 10 dated 7 Bhadon 1976 and as such Section 12(A) and Section 6 of the Land Grants Act 1960 are not applicable.
The lease cannot be determined on the ground that the transfer was made in favour of the appellants by the legal heirs of the original lessee without previous permission in writing from the Government or any competent authority.
It has been submitted in this connection that the provisions of the said ailan refers to the lease of land to a "Wasidar", but as the lease was granted free of rent it does not come under the said ailan as the said ailan provides for payment of ground rent for the land used.
Under rule 6 of the said ailan the land belongs to the Government and permission is granted for building purposes only in respect of an area of land not exceeding 3 acres.
In the present case the lease granted in favour of Dewan Bishen Dass is in respect of 20 Kanals of land free of rent whereas under the proviso of the said rule no lease could be granted for a period exceeding 40 years.
It has also been submitted that even if for argument 's sake without admitting it is accepted that the appellant 's predecessor in interest was a Wasidar and lease was granted under the aforesaid Ailan No. 10 yet the lands could not be acquired without providing for adequate compensation to be paid to the Wasidar for the buildings and appurte 860 nances and other improvements effected by him on the land and the amount of compensation shall have to be determined by the State Engineer.
No compensation was either awarded in respect of valuable buildings, structures and other improvements made by the appellant on the land nor any valuation has been made of the buildings and structures existing on the land as well as all the improvements made in respect of such land.
It was, therefore, submitted that the impugned notice under section 4(1) of the said Act was liable to be cancelled and quashed being not in accordance with law.
The learned counsel appearing on behalf of the State has on the other hand submitted that the petitioner 's predecessor, that is, the original lessee was a Wasidar and the lease was granted under Ailan No. 10 dated 7 Bhadon 1976.
It was also contended that section 12(A) of the Jammu and Kashmir Lands Grants Act is applicable to this case.
The transfer of the land by sale in favour of the appellants have been made by the legal heirs of the original lessee Dewan Bishen Dass without the prior permission of the Government or any authority empowered in that behalf.
The lease stood determined from the date of the transfer and the Government has the right of re entry on the land in accordance with the provision 6 of the said Act.
The appellants are unauthorised occupants and as such notice under section 4(1) of the Jammu and Kashmir (Public Premises Eviction of Unauthorised Occupants) Act 1959 is not illegal but is in accordance with the provisions of the said Act.
After considering the submissions advanced by learned counsels for the parties we are constrained to hold that Dewan Bishen Dass predecessor of the appellants was a Wasidar and the lands in question were wasidari land leased out to him for the purpose of constructing buildings.
This lease is governed by Ailan No. 10 as well as by the Lands Grants Act 1960.
We affirm the findings of the High Court which held the land as Wasidari land.
The land was transferred by Purnesh Chandra and others, legal representatives of the original lessee Dewan Bishen Dass, in favour of the appellants in contravention of the provisions of section 12(A) of the Jammu and Kashmir Land Grants Act, 1960.
The impugned notice under section 4(1) of the Jammu and Kashmir (Public Premises Eviction of Unauthorised Occupants) Act is in accordance with law and as such it is valid.
Under the said Act as well as the rule the appellants are entitled to get compensation of the buildings and structures as well as of the improvements made on the land even though they are not entitled to get compensation in respect of value of the land.
The compensation in the 861 instant case has not been determined nor the same has been paid.
We, therefore, allow the appeal and set aside the judgment and order of the High Court and remit the matter to the District Judge, Srinagar who will either himself or by any Additional District Judge allotted by him hear the parties and determine the market value of the buildings, structures and all other improvements effected on the land in question after hearing the parties and also considering the papers that will be filed in Court and to make an award accordingly.
Since the matter is pending for a long time the District Judge or Additional District Judge allotted by him will expedite the determination of the compensation as directed hereinbefore.
The order of Stay granted by this Court will continue till the compensation is determined and paid to the appellants.
In the facts and circumstances of the case there will be no order as to costs.
N.V.K. Appeal allowed.
[/INST]% The facts and issues involved in all these appeals were similar.
Criminal Appeals Nos.
644 45.87 and Criminal Appeals Nos.
642 45 /87 were against the judgment and order of the High Court of Bombay, dismissing the Criminal Appeal filed by masters of two trawlers against their conviction and sentence and allowing the appeal filed by Commander S.D. Baijal against the acquittal of accused Nos. 3 and 4, i.e. the Charterer Company and its Managing Director and also releasing the trawlers.
The High Court convicted the accused Nos. 3 and 4 for contravention of sub section 6 of section 5 of the Maritime Zones of India Act, 1981 (M.Z.I. Act) read with section 7 thereof and rule 16 of the Maritime Zones of India Rules 1981, (M.Z.I. Rules).
The High Court also ordered confiscation of the two trawlers, vesting the same in favour of the Central Government under section 13 of the M.Z.I. Act.
The two trawlers involved foreign vessels were chartered by the respondents Nos. 4 & 5 herein for fishing in Maritime Zone of India after obtaining permit under section 5 of the M.Z.I. Act.
The trawlers along with three other pairs of trawlers were apprehended and seized by the Coast Guard ship commanded by Commander S.D. Baijal for fishing operations in the exclusive economic zone of India, in violation of the terms and conditions of the permit and the letter of intent granted to that company by the Government of India under section 5(4) of the M.Z.I. Act and in violation of the M.Z.I. Rules.
They were prosecuted by the Additional Chief Metropolitan Magistrate on the complaint filed by Commander S.D. Baijal as authorised officer under section 19 of the M.Z.I. Act.
The masters of the trawlers, respondents Nos. 2 and 3, were convicted and sentenced to pay fines and the other accused respondents Nos. 4 and 5 were acquitted and the trawlers and the fishes thereon were ordered to be released on payment of the detention 642 charges.
Of the other three pairs of foreign trawlers chartered by Indian Company for fishing in the Maritime Zone of India under the permit granted under the M.Z.I. Act, which were seized and prosecuted, two pairs of trawlers with fishes thereon were ordered to be confiscated while one pair of these trawlers were directed to be released.
The masters of each pair of trawlers were similarly convicted and sentenced to pay fine for violation of the provisions of the said Act and the Rules thereunder.
The Masters of the pair of trawlers filed a criminal appeal against their conviction and sentence while the complaining Commander S.D. Baijal filed a criminal appeal against the acquittal of respondent Nos. 4 and 5 i.e. the Managing Director of the company and the company and also against the release of the trawlers in spite of conviction of the masters under section 12(b) of the M.Z.I. Act.
The High Court disposed of these appeals by a common judgment, allowing the appeal of the masters in part and modifying their sentence and convicting.
in the appeal filed by S.D. Baijal, the Managing Director and the Company, accused respondents Nos. 3 and 4 and sentencing them to pay fines, and ordering the trawlers to be confiscated with fishes thereon or the proceeds thereof in case of sale of the same.
The High Court also held the masters of the trawlers guilty under Rule 8(1)(g) and convicted them under section 12(a) instead of section 12(b) of the M.Z.I. Act, but maintained the sentence of penalty.
Criminal Appeals Nos.
645 47;87 and Criminal Appeals Nos.
65051 of 1987 arose out of a common judgment of the High Court in two criminal appeals, modifying in part the judgment and order of the Additional Chief Metropolitan Magistrate, whereby the Magistrate had convicted the masters of the trawlers, i.e. accused Nos. 1 and 2 for contravening Rule 8(1)(g) read with Rule 16 and section 20(b) of the M.Z.I. Act and sentenced them to pay fines, in default of payment of fine, to suffer rigorous imprisonment.
The Magistrate also had made an order, confiscating the two trawlers alongwith the fishing gear, equipments, stores, cargo and fish and vesting the same together with the proceeds of the sale of the fish, if any, with the Central Government.
The Magistrate had acquitted the accused Nos. 3 and 4 i.e. the Charterer Company and its Managing Director.
The criminal appeal filed by Cdr.
S.D. Baijal against the order acquitting the accused Nos. 3 and 4 above said was allowed by the High Court and they were convicted and sentenced to pay fines etc.
The order of confiscation of the two trawlers was maintained.
The criminal appeal filed by the masters of the trawlers was dismissed with the modification that the conviction 643 made under section 12(b) was altered to one under section 12(a) of the M.Z.I. Act and the sentence of vigorous imprisonment was modified.
Criminal Appeals Nos.
648 49.87 and Criminal Appeals Nos.
65253187 arose out of a common judgment of the High Court, dismissing the appeals of the masters of the vessels and allowing the appeals filed on behalf of the prosecution.
All these appeals were filed against the judgment and order of the Additional Chief Metropolitan Magistrate in the Criminal case wherein the Magistrate had convicted and sentenced the masters of the trawlers with the imposition of fines on accused Nos. 1 and 2 for contravening Rules 8(1)(g) and 16 of the M.Z.I. Rules and also of the offence under section 5 of the Act and imposing penalty section 12(b) of the M.Z.I. Act.
The Magistrate had acquitted the accused Nos. 3 and 4 i.e. the Charterer Company and its Managing Director and directed the release of the trawlers in favour of the masters of the trawlers.
The criminal appeal filed by the masters of the vessels was dismissed by the High Court and the conviction and sentence u/s 12(b) of the M.Z.I. Act was altered to one under section 12(a) of the Act.
The criminal appeal filed on behalf of the prosecution was allowed and the accused Nos. 3 and 4 i.e. the Charterer Company and its Managing Director, were convicted and sentenced to pay fine.
The vessel and the fishing equipment were confiscated and directed to vest in favour of the Central Government.
Criminal Appeal Nos. 654 55/87 and Criminal Appeal No. 656 of 1987 arose out of a common judgment and order of the High Court in the Criminal Appeals filed by the Charterers and the masters of the trawlers, respectively.
These appeals were filed against the judgment and order of the Additional Chief Metropolitan Magistrate in a criminal case against the masters of vessel.
The Magistrate had convicted and sentenced the accused Nos. 1 and 2, i.e. the masters of the vessel to pay fines; in default to undergo rigorous imprisonment, and had confiscated the trawlers together with fishing gear, equipment, stores, cargo and fish therein.
The criminal appeal of the masters of the trawlers had been dismissed with a modification of the conviction and sentence passed under section 12(c) of the M.Z.I. Act was altered to one u/s 12(a) of the Act and the criminal appeal of the Charterers was dismissed with a modification of the imprisonment awarded in default of payment of fine imposed on the appellant to simple imprisonment instead of rigorous imprisonment.
The order of confiscation of trawlers passed by the Magistrate was confirmed.
Dismissing all the appeals, the Court, 644 ^ HELD: The appellants contended that at the time of the apprehension of the trawlers no fish had been found on board and there was no evidence that fish on board was seized or that what had happened to fish or who had put the fish in the hold of the trawlers, and that, therefore, no presumption under section 22 of the Act could be drawn that the trawlers were engaged in fishing within the exclusive economic zone of India in contravention of the provision of the Act and the Rules framed thereunder.
This contention could not be considered in appeal by special leave as there had been concurrent findings by the Chief Metropolitan Magistrate and the High Court that there was fish on board.
[649F H; 650A] The main argument on behalf of the appellants was focussed on the vital question as to whether the words used in section 13 of the M.Z.I. Act "shall also be liable to confiscation" mandated that the foreign vessel used in the commission of the offence would be con fiscated as soon as the masters were convicted under section 10 or 11 or 12 of the Act, or it was the discretion of the Court to order either release of the vessel or confiscation of the vessel with the fish and the other equipment, cargo and fishing gear, considering the graveness of the offence.
On an examination of the objects and Reasons and the various provisions of the Maritime Zones of India (Regulation of Fishing by Foreign Vessels) Act, 1981, it was crystal clear that the M.Z.I. Act had been enacted with the object of preventing illegal poaching of fishes by foreign vessels, including foreign vessels chartered by Indian citizens in the exclusive economic zone of India at a depth less than 40 fathoms, by providing deterrent punishment for contravention of the provisions of the Act to protect Indian fishermen.
The objects and reasons were to be taken into consideration in interpreting the provisions of the statute.
In interpreting a statute, the Court has to ascertain the will and policy of F. the legislature as discernible from the object and scheme of the enactment and the language used therein.
Viewed in this context, it was apparent that the said Act had been made with the sole purpose of preventing poaching of fishes by foreign vessels chartered by Indian citizens within the exclusive economic zone of India as specified in Rule 8(1)(g) of Maritime Zone of India Rules as amended in 1982 as well as in breach of the provisions of the said Act and the terms and conditions of the permit issued under section 5 of the said Act.
[650E G; 651D; 654F] Section 13 of the Act expressly says that besides the conviction and sentence of the masters of the vessels, and charterers, the vessel is liable to be confiscated with fishes therein.
The appellants ' contention was that the words "shall also be liable to confiscation" used in section 13 of 645 the Act did not mean that it was mandatory to confiscate the vessel as the masters of the vessel had been convicted and sentenced to pay penalty under section 12 of the Act, and as various punishments had been provided for different types of offences, it was left to the discretion of the court to order confiscation of the vessel or to release the vessel.
[655A C] Section 13 in clear and unimbiguous terms says that on the conviction of the master and the charterer of an offence under section 10 or 11 or 12, the vessel used in connection with the offence together with the fish on board such ship or the sale proceeds of such fish, and stores, cargo shall also be liable to confiscation.
Viewed in the context, the words "shall also be liable to be confiscation" do not leave any discretion to the Magistrate or the court to make no order of confiscation of the vessel as soon as the masters of the vessel were convicted u/s 10 or 11 or 12 of the Act.
The Legislative intent in making this provision was to provide deterrent punishment to prohibit fishing in the exclusive economic zone of India by foreign vessels in infringement of the Act and the rules framed thereunder and the conditions of the permit or licence.
Viewed in this context, section 13 mandates that on conviction of the master and the charterer of an offence under section 12, not only penalty of fine would be imposed, the vessel used in or in connection with the commission of such offence has to be confiscated.
It is not open to the court to consider the graveness of the offence and other extenuating circumstances and to make no order for confiscation of the offending vessel concerned.
Confiscation of the vessel is the immediate statutory consequence of the finding that an offence either under section 10 or 11 or 12 has been proved and the master of the vessel has been convicted.
Section 13 is thus mandatory and it is not open to the court to refrain from making an order, confiscating the offending vessel as soon as the masters of the vessel are convicted of an offence under section 12 and awarded penalty.
[660BF] The judgments and orders of the High Court were affirmed.
The vessels had been detained in Bombay Port after apprehending them on July 26, 1984 and a huge amount had to be paid as port charges.
Considering the facts and circumstances of the case, the Port Authorities at Bombay might consider if an application was made by the parties for exemption or partial exemption of the same favourably in view of the order of confiscation of the trawlers.
[660G H] State of Madhya Pradesh vs Asad Bharat Finance Co. Anr., [1966] Supp.
SCR 473; Indo China Steam Navigation Co. Ltd. vs Jasjit Singh, Addl.
Collector of Customs & Ors., ; ; 646 Superintendent and Legal Remembrancer of Legal Affairs to the Govt.
Of West Bengal vs Abani Maity, ; ; K.P. Verghese vs The Income tax officer, Ernakulam and another, [19821 I SCR 629 and F.N. Roy vs Collector of Customs, Calcutta; , , referred to.
</s>
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<s>[INST] Summarize the judgementCivil Appeal No. 3787 of 1983.
Appeal by Special leave from the Judgment and Order dated the 19th March, 1971 of the Madhya Pradesh High Court in Misc.
Petition No. 565 of 1980.
S.Q. Hassan, S.K. Mehta, P.N. Puri and M.K. Dua for the Appellant.
Rameshwar Nath for the Respondent.
The Judgment of the Court was delivered by BHAGWATI, J.
This appeal by special leave raises a short but interesting question of law relating to the interpretation of certain provisions of the (hereinafter referred to as the Act).
The question is whether section 47 sub section (3) of the Act is attracted when an application is made by the holder of a permit for extension of the route for which the permit has been granted to him.
In order to appreciate the question, it is necessary to state a few facts giving rise to the appeal.
The appellants are a partnership firm and at all material times they held a stage carriage permit granted to them by the Regional Transport Authority for the route Dabra Karera via Lodi Mata extended upto Gwalior.
It appears that on 22nd June 1978 this route for which the permit was held by the appellants was modified at the request of the appellants and the portion of the route from Karera to Shivpuri was deleted.
Thereafter by a Notification dated 4th August 1978 certain routes were nationalised under Scheme No. 11 M which came into force with effect from 25th September 1978 and under clause 7 (b) of this Scheme, the portion of the route from Shivpuri to Satanwara was deleted and the permit of the appellants remained operative only for the remaining portion of the route, namely, Satanwara Gwalior via Dabra.
This state of affairs conti 292 nued from 25th September 1978 until 18th December 1978 when the State Government by a Notification issued in exercise of the powers conferred under sub section (2) of section 68 F of the Act made the following modifications in the various schemes approved by it under section 68 D sub section (2), including Scheme No. 11 M: "Notwithstanding anything contained in this Scheme, the private operators may be permitted to ply stage carriages for hire or reward subject to the following conditions, namely: (1) Whereas the notified route connects a district Head quarter, the portion thereof covered by the permit shall not exceed 20 kilometers and in other cases it shall not exceed 10 kilometers.
(2) The private operators shall ply the stage carriage over the distance, other than the distance of the notified route, which shall not be less than twice the distance of the notified route covered by the permit; (3) The private operators shall not pick up or set down passengers on the notified route.
Since this modification permitted plying of stage carriages by private operators even on portion of a nationalised route connecting a district head quarter and not more than 20 kms.
in length, the appellants made an application to the Regional Transport Authority for restoring the portion of the route from Shivpuri to Satanwara on the ground that Shivpuri was a district head quarter and the portion of the route between Shivpuri and Satanwara was less than 20 kilometers.
The Regional Transport Authority however took the view and in our opinion rightly, that the modification made by the State Government in Scheme No. 11 M under the Notification dated 18th December 1978 did not have any retrospective effect and the appellants were therefore not entitled to automatic restoration of the portion of the route from Shivpuri to Satanwara and in this view, the Regional Transport Authority rejected the application of the appellants.
The appellants thereupon filed a regular application in the prescribed form for extension of the route specified in their permit 293 from Satanwara to Shivpuri.
The application was published in the Gazette on 11th April 1980 and on coming to know about it, M.P. State Road Transport Corporation which is the 2nd respondent before us filed its objections against the grant of such extension.
The application together with the objections was heard by the Regional Transport Authority and by an order dated 11th September 1980 the Regional Transport Authority rejected the application on two grounds.
The first ground was that "the specific order of the State Government curtailing the Satanwara Shivpuri portion of applicant 's permit while approving Scheme No. 11 M cannot be treated as having been amended by the general amendment made to the scheme" and the other was that no extension of the route could be granted without following the procedure laid down in Section 47 sub section (3) of the Act.
This order made by the Regional Transport Authority was challenged by the appellants in a writ petition filed in the High Court of Madhya Pradesh.
There were two grounds of challenge urged on behalf of the appellants in support of the writ petition but we are concerned in this appeal with only one ground and hence we need not refer to the other ground and burden our judgment with a discussion of that ground.
The ground which was seriously pressed before the High Court and repeated before us was that Section 47 sub section (3) has no application where what is sought by an applicant is not the grant of a new permit on a specified route under section 48 but merely an extension of the route under an existing permit under sub section (8) of section 57 and the order made by the Regional Transport Authority rejecting the application of the appellants on the ground of non compliance with sub Section (3) of section 47 was therefore plainly wrong.
The appellants sought to support this ground by relying on the decision of the Madhya Pradesh High Court in Dewan Chand vs State Transport Authority.
But the learned Judge who heard the writ petition observed that the decision in Dewan Chand 's case (supra) was contrary to the view taken by this Court in R. Obliswamy Naidu vs Regional State Transport Appellate Tribunal and Delhi Transport Undertaking vs Zamindar Motor Transport Company and held that by reason of the express language of sub section (8) of section 57 an application for 294 extension of the route specified in an existing permit was tantamount to an application for grant of a new permit and hence it was subject to the provisions of section 47 sub section (3) and it could not be considered without following the procedure prescribed by sub section (3) of section 47.
The learned Judge on this view rejected the writ petition of the appellants.
The appellants thereupon preferred the present appeal with special leave obtained from this Court.
The only question which arises for consideration in this appeal is as whether section 47 sub section (3) is attracted when an application is made by a holder of a permit for extension of the route specified in the permit.
The determination of this question depends upon a true interpretation of some of the relevant provisions of the Act.
Section 2 is the definition section and clause (28A) of this section defines route to mean "a line of travel which specifies the high way which may be traversed by a motor vehicle between one terminus and another".
Chapter IV is the only material chapter for our purpose and as its heading shows, it deals with control of transport vehicles.
Section 42 provides that no owner of a transport vehicle shall use or permit the use of the vehicle in any public place save in accordance with the conditions of a permit granted or countersigned by a Regional or State Transport Authority or the Commission authorising the use of the vehicle in that place in the manner in which the vehicle is being used.
Section 43 confers certain powers on the State Government to issue directions to the State Transport Authority and section 44 provides for the constitution of State Transport Authority and Regional Transport Authorities for each State.
Section 45 specifies the authority to which an application for a permit must be made and what particulars an application for a permit shall contain is prescribed in section 46.
Section 47 sub section (1) lays down what matters shall be taken into account by the Regional Transport Authority in considering an application for a stage carriage permit and various other provisions regarding reservation of certain percentage of stage carriage permits for Scheduled Castes and Scheduled Tribes and persons belonging to economically weaker sections of the community are made in sub section (1A) to sub section (1H) of section 47.
Then follows sub section (3) of section 47 which is in the following terms: "47 (3).
A Regional Transport Authority may, having regard to the matters mentioned in sub section (1) limit the number of stage carriages generally or of any specified 295 type for which stage carriage permits may be granted in the region or in any specified area or on any specified route within the region.
" Section 48 sub section (1) provides that, subject to the provisions of section 47, a Regional Transport Authority may, on an application made to it under section 46, grant a stage carriage permit in accordance with the application or with such modifications as it deems fit or refuse to grant such a permit, provided that no such permission shall be granted in respect of any route or area not specified in the application.
Sub section (3) of section 48 empowers the Regional Transport Authority while granting a stage carriage permit to attach to the permit any one or more of the conditions set out in that sub section.
One of the conditions which may be attached to the permit is that set out in clause (xxi) and it reads as follows: "48(xxi): that the Regional Transport Authority may, after giving notice of not less than one month (a) vary the conditions of the permit; (b) attach to the permit further conditions; Provided that the conditions specified in pursuance of clause (i) shall not be varied so as to alter the distance covered by the original route by more than 24 kilometres, and any variation within such limits shall be made only after the Regional Transport Authority is satisfied that such variation will serve the public convenience and that it is not expedient to grant a separate permit in respect of the original route as so varied or any part thereof.
" Sections 49 to 51 deal with an application for grant of contract carriage permit while sections 52 and 53 deal with an application for grant of private carrier 's permit.
We are not concerned with these provisions and hence we need not refer to them.
So also we are not concerned with sections 54 to 56 which deal with application for public carrier 's permit.
Section 57 is however an important section and in its various provisions it lays down the procedure in applying for and granting permits.
Sub section (2) of section 57 296 prescribes the time within which an application for a stage carriage permit should be made and sub Sections (3) to (7) lay down the procedure which must be followed by the Regional Transport Authority while dealing with an application for a stage carriage permit made before it.
Sub section (8) of section 57 is the material provision which calls for interpretation and it runs as follows: "57 (8): An application to vary the conditions of any permit, other than a temporary permit, by the inclusion of a new route or routes or a new area or, in, the case of a stage carriage permit, by increasing the (number of trips above the specified maximum or by altering the route covered by it) or in the case of a contract carriage permit or a public carrier 's permit, by increasing the number of vehicles covered by the permit, shall be treated as an application for the grant of a new permit.
" The argument of the respondents on these provisions was, and this argument found favour with the High Court, that an application for extension of the route specified in a permit is nothing but an application to vary the conditions of the permit by altering the route covered by it and it is therefore required by sub section (8) of section 57 to be treated as an application for grant of a new permit and hence, by reason of section 48, the grant of such an application for extension must be held to be subject to the provisions of section 47 sub section (3) and no such extension can be granted without following the procedure prescribed by sub section (3) of section 47.
The validity of this argument was assailed before us on behalf of the appellants and it was contended that the fulfilment of the condition set out in sub section (3) of section 47 was not a part of the procedure for consideration of an application for extension of the route specified in a permit and when sub section (8) of section 57 provided that such an application shall be treated as an application for grant of a new permit, what was sought to be incorporated was merely the procedure set out in sub section (3) to (7) of Section 57 and not pre condition for consideration of such an application set out in sub section (3) of Section (47).
This contention, it was submitted on behalf of the appellants, was supported by Clause (xxi) of sub section (3) of Section 48, because if the condition set out in that clause is attached to a permit, the Regional Transport Authority can suo motu extend the route specified in the permit upto a distance of 297 24 k.ms.
for serving the public convenience, without being subject to the provisions of sub section (3) of Section 47 and if the Regional Transport can do so suo motu without being required to follow the procedure of sub section (3) of Section 47, there is no reason why the Regional Transport Authority should not be entitled to do so on an application for extension made by the holder of the permit.
These were the rival arguments urged on behalf of the parties and we shall now proceed to consider them.
The permit held by the appellants in the present case, after the deletion of the portion of the route from Shivpuri to Satanwara was operative only for the remaining portion of the route namely, Satanwara Gwalior via Dabra and in view of the modification made in Scheme No. 11 M by the notification issued by the State Government under section 68F sub section (2) on 18th December, 1978, the appellants applied for extension of the route from Satanwara to Shivpuri, a distance less than 20 kilometers.
The question it whether this application could be considered by the Regional Transport Authority without first determining under section 47 sub section (3) the number of stage carriages for which permits may be granted for the route Shivpuri Satanwara Gwalior via Dabra, because if the extension applied for were granted, that would be the route for which the permit would be operative.
Now, it is clear that it was a condition of the permit, after the deletion of the portion of the route from Shivpuri to Satanwara, that the appellants shall use their vehicle or vehicles only on the route Satanwara Gwalior via Dabra.
The application of the appellants for extension of this route by including the portion from Shivpuri to Satanwara was, therefore, in effect and substance, an application for varying this condition of the permit by extending the route and it clearly fell within the terms of sub section (8) of section 57.
So far there was no dispute between the parties, but at this point the agreement between the parties ended and a controversy arose as to what was the consequence and effect of the applicability of sub section (8) of section 57 to this application made by the appellants.
There can be little doubt that under terms of sub section (8) of section 57, this application of the appellants was liable to be "treated as an application for the grant of a new permit".
But the question is: for what purpose and which of the provisions of the Act could be said to be attracted to this application by reason of the requirement that it should be treated as an application for the grant a new permit.
The argument of the respondents was that no application for grant of a new permit can be entertained by the Regional Transport Authority under section 48, unless the number of stage carriages 298 for which permits may be granted for the particular route is first determined by the Regional Transport Authority under sub section (3) of section 47, and, therefore, the consequence of treating the application of the appellants for extension of the route as an application for grant of a new permit was that no extension could be granted by the Regional Transport Authority unless the requirement of section 47 sub section (3) was first complied with and the number of stage carriages for which permits may be granted on the extended route was determined under that provision.
But we do not think this argument is well founded.
It is undoubtedly true that having regard to the several decisions of this Court and particularly, the decision in Mohd. Ibrahim vs State Transport Appellate Tribunal, Madras, the law must now be taken to be well settled that an application for grant of a new permit cannot be entertained by the Regional Transport Authority under section 48, unless the limit of the number of stage carriages for which permits may be granted is first determined under section 47 sub section (3).
There are two independent steps required to be taken in connection with the grant of a permit, the first being the determination by the Regional Transport Authority under section 47 sub section (3) of the number of stage carriages for which permits may be granted and the second being that "thereafter applications for stage carriage permits can be entertained" and, therefore, it would mean that before an application for grant of a permit can be entertained by the Regional Transport Authority, there would be a determination under section 47 subsection (3).
Ray, J., as he then was speaking on behalf of the Court observed in Ibrahim 's case (supra): "In our opinion, the provisions of the Act in regard to stage carriage permits have the following consequences.
If the Regional Transport Authority were to appoint a date for the receipt of applications for the grant of stage carriage permits, the Regional Transport Authority should fix the limit of the number of permits which might be granted and then notify the same under section 57 (2) of the Act.
If, on the other hand, applications were sent by persons suo motu for the grant of permit the applications would have to be published and the representations would have to be asked for.
The proviso of 299 section 57 (3) of the Act furnishes the answer that if the grant of any permit in accordance with the application would have the effect of increasing the number of permits beyond the limit fixed under section 47 (3) of the Act, the Regional Transport Authority might summarily refuse the application without following the procedure laid down in section 57 of the Act.
In other cases, the proper stage for fixing the limit under section 47 (3) of the Act would be after applications are received and before the same would be published under section 57 (3) of the Act asking for representations.
If however the Regional Transport Authority would not increase or modify the number of permits which already exist, the grant of an application would mean transgressing the limit fixed, and procedure laid down in section 57 (3) of the Act need not than be followed.
On the other hand, if the Regional Transport Authority on receipt of applications would decide upon the limit of permits and the grant thereof would be with in the limit prescribed then the procedure laid down in section 57 (3) of the Act would be followed.
" There can, therefore, be no doubt that if an application for varying the condition of a permit by extension of the route specified in the permit were equated wholly with an application for grant of a new permit and the permit for the extended route were to be regarded as a new permit, the procedure prescribed in section 47 sub section (3) would have to be followed and the number of stage carriages for which permits may be granted on the extended route would have to be determined before the application could be entertained by the Regional Transport Authority.
But we do not think that the prescription in sub section (8) of section 57 that an application for varying the condition of a permit by extension of the route shall be treated as an application for grant of a new permit has effect of equating such an application with an application for grant of a new permit for all purposes so as to attract the applicability of sub section (3) of section 47.
Section 57 deals with the procedure in applying for and granting permits and sub section (3) to (7) lay down the procedure which must be followed in considering and deciding, inter alia, an application for grant of a stage carriage permit.
Sub section (8) follows upon sub section (3) to (7) and is part of the same section which has a definite object and scheme of providing the procedure for considering and granting an application and therefore, when it 300 provides that an application to vary the conditions of a permit by the inclusion of new route or routes or new area or by increasing the number of trips above the specified maximum or by altering the route covered by it shall be treated as an application for grant of a new stage carriage permit it is obviously intended to incorporate and make applicable the procedure set out in the preceding sub section (3) to (7) to such an application.
The context in which sub section (8) occurs and its juxtaposition with sub section (3) to (7) in section 58 clearly indicate that what is sought to be made applicable to an application referred to in sub section (8) by treating it as an application for grant of a new permit, is the procedure set out in sub section (3) to (7) of section 58 and nothing more.
The requirement spelt out in sub section (3) of section 47 that the number of stage carriages for which permits may be granted on any particular route must be first determined before an application for grant of a stage carriage permit can be entertained by the Regional Transport Authority under section 48, is obviously not a part of the procedure for considering an application for grant of a permit; it is a condition precedent before an application for grant of a permit can be considered and granted.
This condition precedent cannot be said to have been incorporated by reference under sub section (8) of section 57.
An application to vary the conditions of a permit as set out is undoubtedly to be treated as an application for grant of a new permit, but that is only for the purpose of applying the procedure set out in sub section (3) to (7) of that section.
It is not an application for a new permit and if it is granted, the permit for the extended route does not become a new permit in the hands of the applicant.
It is the same permit which now, after the granting of the application, covers the extended route.
It may be possible to say that where a totally new route is sought to be included by an application to vary the conditions of a permit or the alteration of the route sought by such an application is of such a drastic character that it becomes substantially a new route, the application, though in form an application to vary the conditions of the permit, would in effect a and substance, be an application for grant of a new permit and in such a case, a view may conceivably be taken with some degree of plausibility that the number of stage carriages for which permits may be granted on such new route should first be determined under section 47 sub section (3) before the application to vary the conditions of the permit can be entertained.
An applicant for a permit on a route which is not merely technically, but in truth and reality a different route, distinct from the original route, may not be permitted to defeat the provision enacted in section 47 sub section (3) by 301 labelling his application as one for varying the conditions of the permit and in such a case, the procedure set out in section 47 sub section (3) may have to be complied with before the Regional Transport Authority can consider and grant the application.
But where an application merely seeks a short extension of the route specified in the permit as in the present case, it would not be appropriate to say that it is an application for grant of a new permit, though technically the extended route may not be regarded as the same as the original route and where such is the case, it would not be necessary to comply with the procedure set out in sub section (3) of Section 47.
We are, therefore, of the view that the High Court was in error in holding that the application made by the appellants for extension of the route specified in their permit from Satanwara to Shivpuri could not be considered by the Regional Transport Authority with out following the procedure prescribed under sub section (3) of Section 47.
We accordingly allow the appeal, set aside the judgment of the High Court as also the order made by the Regional Transport Authority and remit the case back to the Regional Transport Authority for considering the application of the appellants in accordance with law in the light of the observations contained in this judgment.
There will be no order as to costs of the appeal.
S.R. Appeal allowed.
[/INST]The appellant filed a suit in the District Munsiffs ' Court for demarcating the boundaries of his property from that of the respondents and for a mandatory injunction directing the respondents to remove the eaves protruding on the northern side by reason of which the 'eaves ' water was falling into his property.
The respondents denied that they encroached upon any portion of the appellants property and contended that the appellant had with ulterior motive removed the survey stones in the north eastern and north western side of the respondents ' property and had encroached upon some portion of their land.
It was further contended that the eaves ' water fell only on their own land and that the mandatory injunction claimed was not sustainable in law.
An Advocate Commissioner who was directed to make a local inspection filed his report.
The Trial Court passed a decree for demarcation of the property by putting up of a boundary wall within the appellant 's property and also issued a mandatory injunction directing the removal of portions of the eaves of the respondents ' buildings.
The Trial Court Judgment was confirmed by the Subordinate Judge in appeal.
In the second appeal to the High Court, a Single Judge rejected the contention of the respondents that the measurements in the Commissioner 's report and the markings contained in his plan were not correct, and dismissed the second appeal.
When a review petition was filed by the respondents, the Single Judge noticed that there was an error of measurement in the Government survey plan and the plan filed by the Commissioner and opined that there should be a fresh consideration of the question, set aside his judgment and the concurring judgments of the first two courts, and remanded the matter to the Trial Court.
Allowing the appeal to this court, 498 ^ HELD: 1.
The single Judge was not fully justified in allowing the review petition and setting aside not only his own judgment which had confirmed the concurring judgments of the first two courts, but also erred in setting aside the judgments of the first two courts and remanding the suit to the court of first instance.
He should have adopted the more equitable and just method of framing some additional issues and calling for findings on those issues from the Trial Court with liberty to both the parties for adducing evidence.
[501 H; 502 A B] 2.
The Single Judges ' order in so far as it relates to setting aside his own judgment in the second appeal is set aside.
The judgment and decrees of the first two courts are kept in tact.
The High Court will frame such additional issues as may legally arise on the pleadings of the parties and call for findings thereon from the Trial Court and dispose of the second appeal after taking into consideration the findings and the objections of the parties to the findings.
[502 C D]
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<s>[INST] Summarize the judgementAppeal No. 493 of 1960.
Appeal by special leave from the judgment and order dated April 29,1959, of the Calcutta High Court in Appeal from Original Order No. 177 of 1958.
section T. Desai, D. N. Mukherjee and B. N. Ghosh, for the appellants.
C. K. Daphtary, Solicitor General of India, section K. Kapur and P. C. Chatterjee, for the respondent.
December 12.
The judgment of the Court was delivered by SHAH,J.
The appellants are a firm carrying on business as importers in the name and style of "M. 21 Golodetz & Company" at 120, Wall Street, New York in the United States of America.
The respondents are a firm carrying on business, among others as exporters of manganese ore and their principal office of business is at Bentinck Street in the town of Calcutta.
By a contract in writing dated July 5, 1955 the respondents agreed to sell and the appellants agreed to buy 25,000 tons of manganese ore on the terms and conditions set out therein.
The contract contained the following arbitration clause : "Arbitration : Any dispute arising out of the contract is to be settled by arbitration in New York according to the rules of the American Arbitration Association.
" Between September 1956 and August 1957 the respondents supplied 5478 tons of manganese ore.
Disputes having arisen between the parties about the liability of the respondents to ship the balance of the goods not delivered, the appellants referred them on or about January 15, 1958 to the arbitration of the American Arbitration Association and claimed compensation on the plea that the respondents had unlawfully made default in shipping the balance of the goods agreed to be sold.
On February 2, 1958 the respondents commenced an action on the original side of the High Court of Calcutta claiming a decree that the written contract dated July 5, 1955 be adjudged void and delivered up and cancelled, that a perpetual injunction be issued restraining the appellants, their servants and agents from taking steps in purported enforcement of the said contract and that a declaration (if necessary) be made that the said contract stands discharged and that the parties have no rights and obligations thereunder.
It was the case of the respondents that the appellants had accepted manganese ore shipped till August 1957 in full satisfaction of their liability and that the contract was discharged and the rights and liabilities 22 of the parties thereunder came to an end.
In the alternative the respondents pleaded that the appellants had repudiated the contract or had committed breaches thereof and on that account also the contract stood discharged or had become void or voidable at their option and that they had avoided the same.
In the further alternative they pleaded that the contract had become impossible of further performance and that the same stood frustrated or discharged and they were exempted from further performance thereof.
The appellants thereupon petitioned the High Court of Calcutta for an order that the proceedings in suit No. 194 of 1958 commenced by the respondents be stayed by an order under section 34 of the X of 1940.
and that an injunction be issued restraining the respondents, their agents and servants from proceeding with the hearing of the suit.
Ray, J, who heard the petition held that to the agreement to submit the disputes to arbitration to a foreign arbitral body section 34 of the Indian , applied that the remedy of the party aggrieved by the manner in which the proceedings are conducted, or by the award was to contest the arbitration proceeding and the award in the foreign tribunal, according to the law applicable thereto, and that there was no sufficient reason for not staying the action filed in breach of the agreement to refer the disputes arising under the contract to arbitration.
In appeal under the Letters Patent against the order, the High Court held that the Court of first instance had not exercised its discretion properly for it had failed to take into consideration certain important circumstances emerging from the evidence, viz. that all the evidence regarding the contract and the disputes was in India, that there were on account of the restrictions imposed by the Government of India special difficulties in securing foreign exchange for producing evidence before a foreign arbitration tribunal, that it would be impossible for the respondents to produce their evidence and there 23 fore the foreign arbitration tribunal "would Dot be a safe and convenient forum for a just and proper decision of the disputes between the parties.
" The learned judges also observed that it was conceded by the Advocate General appearing on behalf of the appellants that the entire matter would be governed by the Indian laws, the Indian and the Indian Contract Act and on that account also the discretion of the Court to refuse to stay the suit should be exercised.
The High Court accordingly reversed the judgment of Ray, J., and vacated the order passed by him.
Against that order, with special leave, this appeal is preferred.
We will assume for the purpose of this appeal that section 34 of the invests a Court in India with authority to stay a legal proceeding commenced by a party to an arbitration agreement against any other party thereto in respect of any matter agreed to be referred, even when the agreement is to submit it to a foreign arbitration tribunal.
Where a party to an arbitration agreement commences an action for determination of a matter agreed to be referred under an arbitration agreement the Court normally favours stay of the action leaving the plaintiff to resort to the tribunal chosen by the parties for adjudication.
The Court in such a case is unwilling to countenance, unless there are sufficient reasons, breach of the solemn obligation to seek resort to the tribunal selected by him, if the other party thereto still remains ready and willing to do all things necessary for the proper conduct of the arbitration This rule applies to arbitrations by tribunals, foreign as well as domestic.
The power enunciated by section 34 of the is inherent in the Court : the Court insists, unless sufficient reason to the contrary is made out, upon compelling the parties to abide by the entire bargain, for not to do so would be to allow a party to the contract to approbate and reprobate, and this consideration may 24 be stronger in cases where there is an agreement to submit the dispute arising under the contract to a foreign arbitral tribunal.
A clause in a commercial transaction between merchants residing in different countries to go to arbitration is an integral part of the transaction, on the faith of which the contract is entered into, but that does not preclude the Court having territorial jurisdiction from entertaining a suit at the instance of one of the parties to the contract, even in breach of the covenant for arbitration.
The Court may in such a case refuse its assistance in a proper case, when the party seeking it is without sufficient reason resiling from the bargain.
When the Court refuses to stay the suit it declines to hold a party to his bargain, because of special reasons which make it inequitable to do so.
The Court ordinarily requires the parties to resort for resolving disputes arising under a contract to the tribunal contemplated by them at the time of ' the contract.
That is not because the Court regards itself bound to abdicate its jurisdiction in respect of disputes within its cognizance, it merely seeks to promote the sanctity of contracts, and for that purpose stays the Suit.
The jurisdiction of the Court to try the suit remains undisputed : but the discretion of the Court is on grounds of equity interposed.
The Court is therefore not obliged to grant stay merely because the parties have even under a commercial contract agreed to submit their dispute in a matter to an arbitration tribunal in a foreign country.
It is for the Court, having regard to all the circumstances, to arrive at a conclusion whether sufficient reasons are made out for refusing to grant stay.
Whether the circumstances in a given case make out sufficient reasons for refusing to stay a suit is essentially a question of fact.
In the present case the circumstances, in our judgment, are somewhat peculiar.
The appellants in their petition for stay averred that the petition was bona fide, and was filed at the earliest possible 25 opportunity, that the appellants were ready and willing to do all things necessary for the proper conduct of the arbitration proceeding and there was no sufficient reason why the matters in respect of which the suit had been filed could not be referred to arbitration in accordance with the arbitration agreement.
The respondents by their counter affidavit contended that the entire evidence regarding the subject matter of the suit and all the witnesses in connection therewith were in India and that no part of the evidence regarding any of the aforesaid matters was in New York.
They also submitted that the proper law applicable to the contract dated July 5, 1955 was the Indian law and that the Indian law of Contracts would govern the rights and obligations of the parties.
They also contended that the suit raised difficult questions of law applicable to the contract, and on that account also they should not be required to submit the dispute to adjudication by lay men.
It was also submitted that the arbitration clause even if it was binding on the respondents firm contemplated a foreign arbitration i.e. the arbitration was to be held in New York and any award, that might be made would be a foreign award, the arbitrators not being subject to the control of the Courts in India and therefore the provisions of the including section 34 would not be availed of by the appellants.
By their counter affidavit the appellants did not challenge the assertion made by the respondents that all the evidence in connection with the dispute was in India and that no part of the evidence was in New York.
The constituted attorney of the appellants in paragraph 11 of his counter affidavit merely affirmed that " 'there is no sufficient reason why the matters in respect of which the said suit has been filed should not be referred to arbitration in accordance with the arbitration clause in the said agreement.
I deny that there is any valid and/or sufficient reason why the said disputes which are the subject matter of the said suit should not be so referred 26 to arbitration.
I further say that it would be a cause of injustice to the petitioners to permit the respondents, subsequent to the conclusion of a contract to pick and to choose as whim or prejudice may dictate which clauses are binding and which are "inoperative." He further stated in paragraph 12 I do not admit that evidence with regard to matters mentioned in the said paragraph (10(a) of the res pondent 's affidavit) is necessary or cannot be given before the arbitrators as alleged.
In particular, deny that if arbitration is held in terms of the agreement as deliberately concluded by and between the parties there will be any denial of justice as alleged or at all.
I do not admit that it will be necessary or that it will not be possible for the respondent to send any representative or to take any witness to New York as alleged.
On the other hand, if the suit is not stayed, the petitioners will be greatly prejudiced and will suffer hardship.
" The High Court addressed itself to the question, whether the pleas raised by the respondents constituted sufficient reason within the meaning of the , and pointed out, and in our judgment it was right in so doing, that the statement made in the affidavit of the respondent had remained practically unchallenged, that all the evidence in the case relating to the disputes was in India and that was a strong ground for not exercising the discretion in favour of the appellants.
It must be observed that having regard to the severe restrictions imposed in the matter of providing foreign exchange to individual citizens it would be impossible for the respondents to take their witnesses to New York and to attend before the arbitrators at the arbitration proceeding to defend the case against them and the proceeding before the arbitrators would in effect be ex parte.
That would result in injustice to the respondents.
Undoubtedly the appellants would be put to some inconvenience if they are required to defend 27 the suit filed against them in India, but the High Court has considered the balance of inconvenience and the other circumstances and has come to the conclusion, and in our judgment that conclusion is right, that the facts established make out 'sufficient reason ' for not granting stay.
It was urged by counsel for the appellants that the High Court for reasons which were not adequate interfered with the order which was within the discretion of the trial judge and on that account the order must be set aside.
But the High Court has pointed out that Ray, J., 'did not give full, proper and adequate consideration to all the circumstances and failed to apply his mind to the relevant affidavits ' from which it emerged that all the evidence relating to the dispute was in India and that he did not express his views on the diverse contentions raised and remained content to observe that he was not in a position to decide the questions raised thereby and granted stay because he did not find any compelling reasons for exercising the discretion against the appellants.
This criticism of the High Court appears not to be unjustified.
The High Court was therefore competent on the view expressed in interfering with the discretion.
The two Courts below have differed on the question as to the law applicable to the contract.
Ray, J., held that the contract was governed by the American law.
In appeal Mr. section Choudhry appearing for the appellants propounded that view, but the Advocate General of Bengal who followed him conceded (as observed by the High Court) that the "entire matter would be governed by the Indian law, the matter of arbitration by the Indian , and the other matters under the aforesaid contract by the Indian Contract Act, x x x x x so far as the rights and obligations under the disputed contract are concerned, the parties must now be taken 28 to have accepted the Indian Contract Act as the relevant law for their determination.
" Counsel for the appellants say that no such concession was made before the High Court by the Advocate General, and the observations made in the judgment were the result of some misconception.
Counsel relies in support of this submission upon an affidavit sworn by one Surhid Mohan Sanyal constituted attorney of the appellants filed in this Court on the day on which special leave to appeal was granted.
Apart from the circumstance that the affidavit is couched in terms which are vague, and the denial is not sworn on matters within the personal knowledge of the deponent, it is a somewhat singular circumstance, that Sanyal who swore the affidavit relied upon, did not when he swore an affidavit in support of the petition for certificate under article 133 of the Constitution before the High Court, make any such assertion.
But on the view expressed by us, we deem it advisable not to express any opinion on the question as to the law applicable to the contract.
It will be for the Court trying the suit to deal with that question, and to decide the suit.
The appeal therefore fails and is dismissed with costs.
Appeal dismissed.
[/INST]The appellant was tried by the jury for kidnapping and committing the murder of one Pancham Sukla.
The jury returned a verdict of guilty against him under sections 364 and 302 of the Indian Penal Code.
The Sessions judge accepted the verdict and sentenced him to death under section 302 and to rigorous imprisonment for life under section 364.
The High Court acquitted appellant of the offence of kidnapping under section 364, but while confirming his conviction under section 302, reduced the sentence to imprisonment for life.
The appellant came to this Court on a certificate granted by the High Court.
In this Court, the appellant challenged the identification of the skeleton produced in the case as that of the deceased.
His other contentions were that the super imposed photograph was not admissible under any section of the Evidence Act, there was misdirection to the jury in setting out the statement of the accused to the police which led to the discovery of the skeleton and that he had no intention of killing deceased and killing must have taken place as a result of some quarrel between him and the deceased.
The super imposed photograph was admissible in evidence under section 9 of the Evidence Act.
That photograph was not any trick photograph seeking to make something appear different from what it was in reality.
There was no distortion of truth involved in it or attempted by it.
A superimposed photograph is really two photographs merged into one or rather one photograph seen beneath the other.
Both the photographs are of existing things and they are superimposed or brought into the same plane enlarged to the same size for the purpose of comparison.
Both the photographs would be admissible in evidence and no objection could be taken to their being examined together.
853 There was no misdirection to the jury insetting out the statement of the accused to the police which led to the dis covery of the skeleton.
There was no substance in the contention of the appellant that killing must have taken place as a result of some quarrel.
The jury had held appellant guilty of murder.
This Court is not concerned with the correctness of the acquittal of the appellant by the High Court under section 364 of Indian Penal Code.
No suggestion has been made before this Court that there was misdirection by the Sessions judge in his charge to the jury.
There is no scope for the argument that verdict of the jury should be interfered with or the conviction based on it altered on hypothetical considerations not founded on any facts on record.
Kotayya vs Emperor, A. 1.
R. and State of U.P. vs Deoman Upadhyaya, (19611 1 section C. R. 14, relied on.
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<s>[INST] Summarize the judgementon (c) No. 857/87 etc.
(Under Article 32 of the Constitution of India).
Altaf Ahmed, Addl.
SolicitorGeneral, M.L. Verma, G.L. Sanghi.
K. Labiri, Sarva Miner, Narain, section Bhattacharya, Vivek Gambhir, S.K. Gambhir, Vijay Hansaria, P. Pameswaran, P.K.Jain, Rajiv Dutta, M.N. Shroff, Ms. A.Subhashini, Ms. PratibhaJain, L.K. Gupta, M.A. Firoz, Naresh K. Sharma, A.K. Goel, Ashok K. Mahajan, Ms. 54 Sushma Suri and Kailash Vasdev for the appearing parties.
The judgment of the Court was delivered by B.P. JEEVAN REDDY, J.
The petitioners in this batch of writ petitions question in the validity of the levy and collection of cess under section 3 of the Vegetable Oils Cess Act, 1983 for the period commencing 1st March, 1986 and ending with 31st March, 1987.
Parliament enacted in the year 1983 the National Oilseeds and Vegetable Oils Development Board Act, 1983 (being Act 29 of 1983) hereinafter referred to as the Board Act.
The Act was intended to provide for the development, under the control of the Union, of the oilseeds Industry and the Vegetable Oils Industry and for matters connected therewith.
The Act contemplated establishment and constitution of a board called the National Oilseeds and Vegetable Oils Development Board.
The functions of the Board were specified in section 9.
In short the duty of the Board was to promote the development, by such measures as it thought fit, subject to the control of the Central Government, the Oilseeds Industry and the Vegetable Oils Industry.
Section 12 provided for constitution of Oilseeds and Vegetable Oils Development Fund.
The fund was to be applied for promoting the purposes of the Act.
Simultaneously with the Board Act was enacted the Vegetable Oils Cess Act, 1983 (being Act 30 of 1983), hereinafter referred to as the Cess Act.
The purpose of this Act is stated in sub section (1) of section 3.
It is to levy and collect "by way of cess, for the purposes of the National Oilseeds and Vegetable Oils Development Board Act, 1983, a duty of excise on vegetable Oils produced in any m ill in India at such rate not exceeding Rs.5 per quintal on vegetable oil, as the Central Government may, from time to time, specify by notification in the Official Gazette".
Sub section (2) of Section 3 clarified that the duty of excise levied under sub section (1) section 3 shall be in addition to the duty of excise leviable on vegetable oils under the or any other law for the time being in force.
Sub section (3) stated that the duty of excise levied on section 3 (1) shall be payable by the occupier of the mill in which the vegetable oil is produced.
Sub section (.4) provided that the provisions of the 55 Central Excise Act and the Rules made thereunder including those relating to refunds and exemptions from duty, "shall so far as may be, apply in relation to the levy and collection of the said duty of excise as they apply in relation to the levy and collection of the duty of excise on vegetable oils under that Act".
Section 4 provided that the proceeds ,of the duty of excise levied under section 3 (1) shall first be credited to the Consolidated Fund of India.
Subject to appropriation made by law by the Parliament, the Central Government could pay to the Board from time to time such amounts from out of the said collections as it thought fit for being utilised for the purposes of the Board.
Section 7 amended certain provisions of the .
It is thus clear that the cess, which is called a duty of excise, levied under section 3 of the cess Act was intended to serve the purposes of the Board Act.
The said cess was accordingly levied and collected on and from 1983.
The Cess Act was, however, repealed by section 12 of the Cotton, Copra and Vegetable Oils Cess (Abolition) Act, 1987 (being Act 4 of 1987), hereinafter referred to as the Repeal Act.
Chapter IV of the Repeal Act provides for the repeal inter alia of the Vegetable Oil Cess Act, 1983.
Section 12 is the repealing section.
Chapter V, containing only one section namely section 13, is relevant for purposes.
Chapter V carries the heading "COLLECTION OF ARREARS OF DUTIES OF EXCISE",.
Section 13 reads as follows: "13.
Collection and payment of arrears of duties of excise Notwithstanding anything contained in the amendments made to the (15 of 1966) or the repeal of the Copra Cess Act, 1979 (4 of 1979) or the Vegetable Oils Cess Act, 1983 (30 of 1983) , by this Act, any duty of excise, levied under any of the said Acts immediately before the commencement of this Act, but has not been collected before such commencement, shall be liable to be collected after such commencement in accordance with the provisions of the said Acts for being paid into the Consolidated Fund of India as if this Act had not been enacted," The Statement of Objects and Reasons appended to the Bill,.
56 (which became the Repeal Act) stated inter alia that the abolition of the said cess was with a view to reduce the number of cesses and multiplicity of taxes.
The petitioners do not dispute the validity of the levy of the said cess/duty of excise till the 28th February, 1986.
Their submission is confined, as stated hereinbefore, to the period commencing on.
March 1, 1986 and ending with March 31, 1987.
As noticed here in before, the Cess Act was repealed on and with effect from March 31, 1987 by section 12 of the Repeal Act.
Section 13 of the Repeal Act expressly provides notwithstanding the said repeal, the duty of excise levied under the said Act immediately before the commencement of the Repeal Act, but which has not been collected before such commencement, shall be liable to be collected even after the repeal, in accordance with the Cess Act, as if the said Cess Act has not been repealed.
In the face of this provision, it would appear that the petitioners ' dispute as to their liability to pay the said cess for the period March 1, 1986 to March 31, 1987 is of little avail.
The petitioners, however, rely upon certain circumstances/grounds in support of their contention which we may now deal with.
The petitioners are manufacturers of vegetable oil, which was subject to the cess/duty of excise under section 3 of the Cess Act.
They rely upon the following circumstances and ground in supports of their plea: (1) In his Budget Speech delivered on 28.2.1986, presenting the Budget 1986 87, the Union Minister of Finance stated: "the long term Fiscal Policy recognises that cesses levied as excise duties contribute to the multiplicity of taxes.
As an endeavour to reduce the number of the cesses it has been decided to dispense with the cess on cotton, copra and vegetable oils.
The Ministry of Agriculture will take appropriate action in the matter.
The loss to the exchequer on this account will be Rs.5.90 crores.
" The Budget proposals also specify the loss of revenue on account of the decision to dispense with the cess on vegetable oils among others.
This, Speech made on the floor of the Lok Sabha speaks of a decision already taken by the Government and is enforceable and effective from the said date.
57 (2) In pursuance of the said decision of the Government of India, the Directorate of Vanaspati, Vegetable Oils and Fats addressed the letter dated August 11, 1986 to the Commissioner (Tax Research) Department of Revenue,.
New Delhi asking him to issue instructions to all concerned indicating that the cess on vegetable oils has been dispensed with and as such the cess shall not be collected.
It was further directed that the cess collected, if any, since April 1, 1986 shall be refunded.
A copy of this letter was sent to the President, Central Organisation for Oil Industries and Trade, Bombay.
Counsel for the petitioners Shri M.L. Verma and G.L. Sanghi urged the following contentions: (a) The Budget Speech of the Finance Minister delivered on the floor of the Lok Sabha constitutes a enforceable and effective decision upon which the petitioners were entitled to act.
The said decision was exemplified and implemented by way of a communication from the Directorate of Vanaspati, Vegetable Oils and Fats referred to above.
In view of the said communication, the petitioners did not pass on the burden of the said cess to their purchasers on and from March 1, 1986.
It is not open to the Government to go back upon the said decision and demand cess for the period subsequent to March 1, 1986.
(b) By virtue of sub section (4) of section 3 of the Cess Act, Rule 8 of the Central Excise Rules is attracted among other provisions of the Central Excise Act and Rules.
Rule 8 empowers the Central Government to grant exemption on any excisable goods from the whole or any part of duty leviable on such goods.
Sub rule (1) of Rule 8 empowers the Central Government to grant exemption while Sub rule (2) em powers the Central Board of Excise and Customs to grant exemption.
Inasmuch as section 3 (4) of the Cess Act applies the provisions of the Central Excise Act and the Rules subject to the rider "so far as may be", the provisions in Rule 8 should be read with the necessary modification.
In other words, while sub rule (1) of rule 8 must be read as empowering the Central Government to grant exemption, sub rule (2) must be read as conferring a similar power upon the Central Government and/or the Directorate of Vanaspati, Vegetable Oils and Fats.
Unlike sub rule (1), sub rule (2) does not require the order of exemption to be published in the Official Gazette nor does it require that such 58 exemption should be through a notification.
The budget proposals of the Finance Minister and the letter of the Directorate of the Vanaspati and Vegetable Oils aforesaid are relatable to sub rule (2) or Rule 8 of Central Excise Rule read with sub section (4) of section 3 of the Cess Act.
Reading them together it must be held that the Government and the Directorate have exempted the vegetable oils from the levy under section (1) of section 3.
We find it difficult to agree.
It is not brought to our notice that the budget proposals contained in the Finance Minister 's speech were accepted by the Parliament.
The cess having been imposed by a Parliamentary enactment could be rendered inoperative only by a Parliamentary enactment.
Such repealing enactment came only in the year 1987 with effect from April 1, 1987.
Not only that.
The repealing Act expressly provided in section 13 that the cess due before the date of said repeal.
but not collected, shall be collected according to law as if the Cess Act is not repealed.
This provision amounts to a positive affirmation of the intention of the Parliament to keep the said imposi tion alive and effective till the date of the repeal of the Cess Act.
In the face of the said statutory provisions, no rights can be founded nor can the levy of the cess be said to have been dispensed with by virtue of the alleged decision referred to in the Finance Minister 's speech or on account of the letter dated August 11, 1986.
The Finance Minister 's speech is not law.
The Parliament may or may not accept his proposal.
Indeed, in this case, it did not accept the said proposal immediately but only a year later.
It is only from the date of the repeal that the said levy becomes inoperative.
Now coming to the argument based upon Rule 8 of the Central Excise Rules read with section 3(4) of the Cess Act, we find it totally unacceptable.
No notification has been issued under rule 8 (1) by the Central Government much less was any such notification published in the Gazette.
No special order has also been made by the Central Board of Excise and Customs in this behalf under rule 8 (2).
The cess imposed under section 3 (1) of the Cess Act, it may be remembered, is a duty or Excise as stated in section 3 itself.
Therefore, the Central Board of Excise and Customs was perhaps competent to grant exemption even in the case of said cess though we do not wish to express any definite opinion on this question since it was not debated at the Bar.
Suffice it to say that the Central Government cannot again be brought 59 in under sub rule (2) of rule 8 in the place of Central Board nor can the Directorate of Vanaspati and Vegetable Oils be equated to Central Board of Excise and Customs.
The words "so far as may be" occurring in section 3 (4) of the Cess Act can not be stretched to that extent.
Above all it is extremely doubtful whether the power of exemption conferred by rule 8 can be carried to the extent of nullifying the very Act itself.
It would be difficult to agree that by virtue of the power of exemption, the very levy created by section 3(1) can be dispensed with.
Doing so would amount to nullifying the Cess Act itself.
Nothing remains thereafter to be done under the Cess Act.
Even the language of rule 8 does not warrant such extensive power.
Rule 8 contemplates merely exempting of certain excisable goods from the whole or any part of the duty leviable on such goods.
The principle of the decision of this Court in Kesavananda Bharti Sripadagalvaru and others vs State of Kerala and another A.I.R. 1973 S.C. 1461 applies here perfectly.
It was held therein that the power of amendment conferred by Article 368 cannot extend to scrapping of the Constitution or to altering the basic structure of the constitution.
Applying the principle of the decision, it must he held that the power of exemption cannot be utilised for, nor can it extend to, the scrapping of the very Act itself.
To repeat, the power of exemption cannot be utilised to dispense with the very levy created under section 3 of the Cess Act or for that matter under section 3 of the Central Excise Act.
Mr. Sanghi submitted that the Board contemplated under the Board Act never did actually start functioning and, therefore, the levy of cess is impermissible.
It is difficult to agree with this contention either.
As the Preamble to the Cess Act indicates, the levy of the said cess was not for the purpose of the Board but for the purpose of the development of the Oilseeds Industry and Vegetable Oils Industry.
The Board was merely a medium in that effort.
It must be noticed that the cess was to be credited to the Consolidated Fund of India, out of which requisite sums of money to be utilised for the purpose of the Board Act.
In any event there is nothing to show that the Board did not become operational except the bare assertion to that effect.
A vague allegation cannot merit any credence.
In Writ Petition 963 of 1987 Mr. Sanghi raised an additional contention that the goods concerned therein cannot be called "Veg 60 eatable Oil" within the meaning of section 3 (1) of the Cess Act and, therefore, the levy of the cess thereon is incompetent.
We cannot, however, allow this contention to be raised in a petition under Article 32 of the Constitution.
It is open to the petitioner to raise the said contention before the appropriate authority at the appropriate stage.
For the above reasons the writ petitions fail and are dismissed but in the circumstances without costs.
N. V. K. Petitons dismissed.
[/INST]On 28.5.1984, the High Court intimated the government of ten vacancies in the category of Munsifs and requested it to initiate appropriate steps for selection of candidates.
Written test was held in the year 1985 and viva voce was also held by the Public Service Commission.
On 10.12.1985 the High Court requested the Government to select twenty candidates in the place of ten.
On 27.12.1885 the Government requested the public Service Commission to select twenty candidates.
On 11.3.1986 the public service commission sent three select lists, one containing twenty candidates the other containing three Scheduled castes candidates and a waiting list of ten candidates.
The Government received several complaints against the pro cess of selection.
It was toying with the idea of scrapping the entire list and asking for a fresh selection.
95 On 23.12.1986, as the High Court said that there was urgent need for at least thirteen Munsifs, the government approved the name,,, of thirteen persons out of the list recommended by the Public Service commission and published the same.
They were appointed on 30.12.
Meanwhile a writ petition had been riled in the High Court for a direction to the Government to approve and publish the list recommended by the Public Service Commission.
On 30.12.1986, the State stated before the High court that it has already approved thirteen names and approval of the remaining seven persons was under its active consideration.
The High Court dismissed the writ petition as settled.
The Government did not approve any other names in the list in view of the complaints against the selection process by the Public Service Commission.
The candidates in the select list below serial No. 13 were pressing the Government to approve and publish the list and the High Court was also pressing the Government to approve the list in view of the vacancies.
Another writ petition was riled to direct the Government to approve the remaining seven names from the select list.
The High Court (Single judge) allowed the writ petition and directed the Government to approve and publish the list of the remaining candidates submitted by the Public Service Commission to it for appointment as Munsifs, immediately in accordance with the Jammu and Kashmir Civil Services (judicial) Recruitment Rules, 1967 and to consider the appointment of the candidates (including the writ petitioner .) as Munsifs in the vacancies existing or likely to arise, in accordance with the recommendations to he made by the High Court.
On appeal, the division Bench of the High Court reversed the decision of the Single Judge.
The present appeals by special leave were flied against the 96 decision of the Division Bench,.
contending that once the Public Service Commission prepared and recommended a select list, the Government had no power to sit in judgment over it; that the Government was bound to approve the list as recommended; that the function of the Government under Rule 39 of the 1967 Rules was merely ministerial and formal; that the Government 's action was arbitrary and capricious and vitiated by any admissible and extraneous consideration.
The State Government submitted that the function of the Gov ernment under Rule 39 was not merelY formal or ministerial; that the Government, being the appointing authority, was entitled to scrutinies the list open to the Government either to approve or disapprove the list, either whollY or in part , that a number of complaints were received bY the Government against the selection and many of them were found to he not without substance; that in view of the pressing need expressed by the High Court, the first thirteen candidates in the list were approved in the interest of judicial administration; that refusal to approve the remaining seven names inasmuch as no vacancies were available at that time was a valid and bonafide exercise of power and discretion ton the part of the Government; that the appellants had no legal right to be appointed just because their names were included in the select list prepared by the Public Service Commission.
Dismissing the appeals.
this Court.
HELD: 1.1.
It is true that the Government is the appointing authority for the munsifs but it is misleading to assert that in the matter of selection and appointment the Government has an absolute power.
Such an argument does violence to the constitutional scheme.
(102 F) 1.2.
Rule 39 does not confer an absolute power upon the Government to disapprove or cancel the select list sent by the Public Service Commission Where, however, the Government is satisfied, after due enquiry that the selection has been vitiated either (on account of violation of a fundamental procedural requirement or is vitiated by consideration or corruption.
favourtism or nepotism.
it can refuse to 97 approve the select list.
In such a case, the Government is bound to record the reasons for its action, and produce the same before a Court, if and when summoned to do so, apart from placing the same before the Legislature as required by clause (2) of Article 323.
(103 F H) 1.3.
article 323 (2) is meant as a check upon the power of the Government.
The provision militates against the theory of absolute power in the Government to disapprove or reject the recommendations of the commission.
For the same reason, it must he held that the Government cannot pick and choose candidates out of the list.
It is equally not open to the Government to approve a part of the list and disapprove the balance.
(104 B) 1.4.
Where is respect of any particular candidates an), material is discovered disclosing his involvement in any criminal activity the Government can always refuse to appoint such person but this would not he a case touching the select list prepared and recommended by the commission.
(104 C) 1.5.
In this case the Government itself had asked for a list of twenty and the commission had sent a list of twenty.
It could not have been approved in part and rejected in part.
The number of vacancies available on the date of approval and publication of the list is not material.
By merely approving the list of twenty, there was no obligation upon the Government to appoint them forthwith.
Their appointment depended upon the availability of vacancies.
The list remains valid for one year from the date of its approval and publication, if within such one year, any of the candidates therein is not appointed, the list lapses and a fresh list has to be prepared.
(104 E F) 1.6.
If the Government wanted to disapprove or reject the list, it ought to have done so within a reasonable time of the receipt of the select list and for reasons to be recorded.
Not having done that and having approved the list partly (thirteen out of twenty names), they cannot put forward any ground for not approving the remaining list.
Indeed, when it approved the list to the extent of thirteen, it ought to have approved the entire list of twenty or to have disapproved the 98 entire list of twenty.
The objection, the Government have pertains to the very process of selection i.e., to the entire list and not individually to any of the remaining seven candidates.
(104 G) 1.7.
Mere inclusion in the select list does not confer upon the candidates included therein an indefeasible right to appointment.
(104 H) State of Haryana vs Subhash Chandara Marwaha, ; , M. section Jain vs State of Haryana , A.I.R. 1977 S.C. and State of Kerala vs A. Lakshmikutty: A.I.R. 1987 S.C. 331, referred to.
(111 E) 1.8.
The other aspect is the obligation of the Government to act fairly.
The whole exercise cannot be reduced to a more farce.
Having sent a requisition/request to the commission to select a particular number of candidates for a particular category, in pursuance of which the commission issues a notification, holds a written test, conducts interviews, prepares a select list and then communicates to the Government the Government cannot quietly and without good and valid reasons nullify the whole exercise and tell the candidates when they complain that they have no legal right to appointment.
(105 B C) Shankarsan Dash vs Union of India.
; , referred to.
The Government 's action In not approving the rest of the seven names in the select list is unsustainable but there are certain circumstances which induce the Court not to interfere in this matter.
They are: (1) During the period of one year from the date of approval of thirteen names (23.12.1986/30.121986) no vacancy had arisen, which means that even if the list of twenty had been approved and published on December 23 or December 30, 1986 none of the seven persons would have been appointed.
At the end of one year, the list lapses and becomes inoperative.
(II) When the Government failed to act within a reasonable period from the date of the order (December 30, 1986) of the High Court in writ petition 1316/84 (which was disposed of recording the statement of the Advocate General) the petitioners ought to have moved in the matter.
They did not do so.
They waited for more than twenty months and approached the High Court only on 99 September 14, 1988.
This delay disentitles the petitioners from any relief in the facts and circumstances of the case.
(106 C G)
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<s>[INST] Summarize the judgementew Petition No. 37 of 1959.
Petition for Review of this Court 's judgment and order dated October 29, 1959, in Civil Appeal No. 38 of 1958.
C. K. Daphtary, Solicitor General of India, B. Sen, J. B. Mehta and J. B. Dadachanji, for the petitioner.
N. C. Chatterjee and section section Shukla, for respondents.
J. B. Mehta and J. B. Dadachanji, for interveners Nos. 1 to 13.
J. B. Dadachanji, for interveners Nos.
14 to 19. 1960.
August 3.
The Judgment of the Court was delivered by WANCHOO J.
This is an application for review of the judgment delivered by this Court, to which three of us were party, on October 29, 1959.
The ground on which review is sought is that there are mistakes and/ or errors apparent on the face of the record and therefore the judgment in question should be reviewed.
The petitioner contends further that the judgment under review had dealt with the matter of issue of writs by High Courts under article 226 of the Constitution and this involved a question which could only have been dealt by a bench of not less than five judges and that is why the review application has been placed before a bench of five judges.
Lastly it is contended that this Court should have decided the question of jurisdiction as various.
other parties had agreed to be governed by the decision in this case and that would have saved multiplicity of proceedings.
115 Before we deal with the points urged in support of the petition we should like to state what exactly has been decided by the judgment under review.
The appeal in which the judgment under review was given came up before the Court on special leave granted under article 136 of the Constitution from a decision of the Bombay High Court in a writ petition filed there under article 226 against an order of the Payment of Wages Authority.
The question of jurisdiction of the Payment of Wages Authority was raised before this Court and reliance in that connection was placed on the decision in A. V. D 'Costa vs B. C. Patel and another(1).
It was remarked in the judgment under review that there appeared to be some force in the contention relating to the jurisdiction of the Payment of Wages Authority; but this Court did not go further and decide that question on the view that as there had been no failure of justice this Court would not interfere under its powers under article 136 of the Constitution, particularly as the matter came before it from a decision of the Bombay High Court and not directly from the Authority.
In that connection reference was made to the case of A. M. Allison vs B. L. Sen (2), in which in similar circumstances this Court had refused to decide the question of jurisdiction, because it was satisfied that there had been no failure of justice.
All that therefore the judgment under review decided was that where this Court is of the view that there is no failure of justice it is not bound to interfere under its powers under article 136 of the Constitution.
Reference to Allisons ' Case (2) was made only to show that in almost similar circumstances (except that Allison 's Case came to this Court on a certificate granted under article 133(1) (c) of the Constitution), this Court had refused to decide the question of jurisdiction as there was no failure of justice.
The judgment under review did not deal with the powers of the High Court under article 226 of the Constitution and nowhere laid down anything in conflict with the previous decision of this Court in H. V. Kamath vs Syed Ahmad Ishaque and others(3).
(1) ; (2) ; (3) ; 116 Thus the narrow point decided by the judgment under review was that when dealing with an appeal under article 136 of the Constitution this Court comes to the conclusion %that there is no failure of justice, it is not bound to decide and interfere even when a question of jurisdiction of the original court or tribunal is raised in a case where the matter had been considered by a higher tribunal, which undoubtedly had jurisdiction, and the appeal to this Court is from the decision of the higher tribunal.
This being the decision of this Court in the judgment under review, let us see if there is any reason to review that judgment on the grounds urged in the petition.
Before we consider the main ground in support of the review we should like to observe that the fact that other parties had agreed to be governed by the decision in the judgment under review can be no ground for review.
Are there then such mistakes and/ or errors apparent on the face of record which would justify a review? It is said that in dealing with whether there has been failure of justice in this case, this Court omitted to consider certain provisions of the Bombay Industrial Relations Act, 1946.
Assuming this to be correct, the question still is whether even after a consideration of those provisions the decision of this Court on the question of failure of justice would have been different.
On a further consideration of the reasons given in the judgment under review for holding that there was no failure of justice we feel that the decision on this point would have been still the same even if the provisions referred to had been considered.
In the circumstances we are of opinion that there is no ground for review of the judgment even if it be assumed that certain provisions of the Bombay Industrial Relations Act, 1946, were relevant and had not been considered.
The main plank however of the petitioner is that this Court was bound to consider the question of jurisdiction and the question whether there was failure of justice or not was bound up with the question of jurisdiction and a decision on that question was necessary to arrive at the conclusion that there was no 117 failure of justice.
This contention also must in our opinion be rejected, specially in the context of the narrow point which, as we have already indicated, was decided in the judgment under review.
Besides it is not unknown to law that decisions of original courts and tribunals may be allowed to stand even though there may be some doubt as to the jurisdiction of such courts or tribunals.
There are provisions in the revenue laws where in case of doubt whether the civil court or the revenue court has jurisdiction the decision of the original court is allowed to stand in certain circumstances if there has been no failure of justice : (see, for example, sections 290 and 291 of the U. P. Tenancy Act, 1939).
Therefore when the judgment under review left the question of jurisdiction open on the ground that there was no failure of justice and in consequence this Court refused to exercise its jurisdiction under article 136, it cannot be said that something was done which was unknown to law.
It is necessary to remember that wide as are our powers under article 136, their exercise is discretionary; and if it is conceded, as it was in the course of the arguments, that this Court could have dismissed the appellant 's application for special leave summarily on the ground that the order under appeal had done substantial justice, it is difficult to appreciate the argument that because leave has been granted this Court must always and in every case deal with the merits even though it is satisfied that ends of justice do not justify its interference in a given case.
In the circumstances we are of opinion that this Court was not bound to decide the question of jurisdiction on the facts and circumstances of this case when it had come to the conclusion in dealing with an appeal Under article 136 of the Constitution that there was no failure of justice.
The review application therefore fails and is hereby dismissed with costs.
Review application dismissed.
[/INST]The appellant 's nomination paper for election to the Assam Legislative Assembly was rejected by the Returning Officer on the ground of disqualification under section 7(b) of the Representation of the People Act, 195, in that he had been convicted and sentenced to three years ' rigorous imprisonment under section 4(b) of the Explosive Substances Act (VI of 1908) and five years had not expired after his release.
The appellant had applied to the Election Commission for removing the said disqualification but it had refused to do so.
The appellant 's sentence was, however, remitted by the Government of Assam under s 401 of the Code of Criminal Procedure and the period for which he was actually in jail was less than two years.
The Election Tribunal held that the nomination paper had been improperly rejected and set aside the election but the High Court taking a contrary view, dismissed the election petition.
Held, that the High Court was right in holding that the appellant was disqualified under section 7(b) of the Representation of the People Act and that his nomination paper had been rightly rejected.
That section speaks of a conviction and sentence by a Court and an order of remission of the sentence under section 401 of the Code of Criminal Procedure, unlike the grant of a free pardon, cannot wipe out either the conviction or the sentence.
Such order is an executive order that merely affects the execution of the sentence and does not stand on the same footing as an order of Court, either in appeal or in revision, reducing the sentence passed by the Trial Court.
Venkatesh Yeshwant Deshpande vs Emperor, A.I.R. 1938 Nag.
513, distinguished.
Ganda Singh vs Sampuran Singh, , over ruled.
Held, further, that an inference as to whether a successful candidate was a consenting party to the corrupt ractice under 134 section 100(i)(b) of the Act from facts found on evidence was a question of fact and not a mixed question of fact and law.
Meenakshi Mills, Maduyai vs The Commissioner of Income tax, Madyas, ; , referred to.
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<s>[INST] Summarize the judgementCriminal Appeal No. 12 of 1978 From the Judgment and Order dated 19.4.1976 of the Andhra Pradesh High Court in Referred Trial No. 2 of 1976.
K. Ram Kumar for the Appellant.
G. Narasimhulu and S.K. Mehta for the Respondents.
The Judgment of the Court was delivered by B.C. RAY, J.
This appeal by special leave is against the judgment and order dated 19.4.1976 made by the High Court of Andhra Pradesh in the Referred Trial No. 2 of 1976 and Criminal Appeal Nos. 159, 168 and 169 of 1976 acquitting all the 7 accused who were convicted and sentenced by the Ses sions Court, West Godawari Division at Eluru, Andhra Pradesh in Sessions Case No. 71 of 1975.
The prosecution case in short is that on 23rd July, 1974 at 7.30 a.m. the accused persons forming themselves into an unlawful assembly in the house of the 1st accused and arming themselves with spears, sticks and crow bars attacked the deceased while he was returning from the canal carrying water in what is locally known as "Kavadi".
When the de ceased reached the house of the 1st accused, all the ten accused came from behind and the 2nd accused gave a blow with a stick on the back of the head of the deceased as a consequence of which he fell down on his back.
Then the 1st accused speared the deceased on his face and legs, the 5th accused poked the deceased on his right wrist with a crow bar and the 6th accused speared the deceased on his legs and hands.
The 329 rest of the accused then beated the deceased with sticks indiscriminately.
The deceased cried "Bobu".
This was heard by his wife (P.W.5) from her house which is situated about 150 yards.
She immediately ran to the scene of occurence and saw accused 1 to 8 and two others entering into the house of the 1st accused.
P.W. 5 then sent intimation to her brother P.W. 2 who was working as labourer in a sugar factory through P.W. 8.
P.W. 2 and others took the deceased to Bhimadole Police Station in a cart which is about 4 kms.
away from their house and lodged the F.I.R., exhibit P 1 wherein all the names of accused Nos. A1 to A4 and A6 to A8 as well as the nature of injuries inflicted on the person of the deceased were mentioned.
This FIR was registered at 9.30 a.m. and a case u/s 326 I.P.C. was registered.
Subsequently, the deceased was found dead on examination by the Doctor, P.W. 12 at the Government Hospital, Elurn.
The F.I.R. was then altered to one u/s 302 I.P.C.
The Inspector of Police made inquest of the dead body and the inquest report has been marked as exhibit P5.
All the 10 accused were charged u/s 147 I.P.C. The accused Al, A4, A5 and A6 who were armed with deadly weapons were also charged u/s 148 I.P.C. and accused A1 to A10 were charged u/s 302 read with section 149 I.P.C. They were all committed to the Court of Sessions.
The Sessions Judge after considering the entire evidence and also heating the counsel for the prosecution as well as the defence found that accused A 1 to A3 and A5 to A8 were guilty of the offence u/s 147 I.P.C. and also u/s 302 read with section 149 I.P.C. A1, A5 and A6 were also held guilty u/s 148 I.P.C.
The accused A4, A9 and A10 were however acquitted of the offence u/s 147 I.P.C. Accused A4 was also not found guilty of offence u/s 148 I.P.C. The accused A 1, A5 and A6 who were convicted u/s 302 read with section 149 I.P.C. were sentenced to death and they were directed to he hanged by their necks till their death subject to confirma tion by the High Court.
A3, A7 and A8 were convicted u/s 302 read with section 149 I.P.C. and they were sentenced to undergo imprisonment for life.
A2, was also convicted u/s 302 read with section 149 I.P.C. and he was sentenced to death and directed to be hanged by his neck till death.subject to confirmation by the High Court.
The accused A1 to A3 and A5 to A8 who were convicted u/s 147 I.P.C. were sentenced to undergo rigorous imprisonment for one year.
A1, A5 and A6 were convicted u/s 148 I.P.C. and they were sen tenced to rigorous imprisonment for two years.
All the above sentences were to run concurrently.
Against this judgment and order 3 criminal appeals being Criminal Appeal Nos.
159/1976, 168/1976 and 169/1976 were filed.
These criminal appeals along with R.T. No. 2 of 1976 were heard by the High Court of Andhra Pradesh, Hyderabad and the learned Judge by his order dated 5th May, 1976 acquitted all the accused of both the charges of rioting and murder levelled 330 against them and set aside the convictions and sentences allowing all the appeals and rejecting the reference.
It is against this judgment and order the instant appeal on special leave was filed before this court by the State.
This court granted special leave to appeal by its order dated 11.1.1978 and also ordered issue of bailable warrants against each of the accused persons in the sum of Rs.10,000 with one surety to the satisfaction of Additional Sessions Judge, Eluru.
We have heard the learned counsel for both the parties and we are constrained to hold that the judgment passed by the High Court acquitting all the accused is not a proper judgment in accordance with the provisions of Section 354 of the Code of Criminal Procedure 1973.
The learned Judge has not at all considered and marshalled the evidences examined on behalf of the prosecution particularly the evidences of PWs 1, 3, 4, 6 and 7 who were eye witnesses to the gruesome murder committed in the morning at about 7.30 a.m.
The names of all the 7 accused appeared in the F.I.R. lodged by PW 2 in the Police Station at 9.30 a.m., exhibit PI and exhibit P.23 and P.24 dated 23.7.1974.
The learned Judge did not formulate properly the points for decision and did not marshal the evidences on record and did not come to specific finding on each of the points for determination by recording specific reasons for arriving at the decision.
It is really unfortu nate that the learned Judge approached the case from wrong angle and without properly formulating the points for deci sion and without any proper appraisal of the evidences adduced by the prosecution to prove the guilt of the accused persons and also without adverting to the reasonings of the Sessions Judge, has perfunctorily come to the finding that the prosecution has failed to prove beyond doubt the case against the accused even though there are eye witnesses P.Ws. 1, 3, 4, 6 and 7 to the occurence.
In our considered opinion, this judgment is not in accordance with the mandatory requirements as laid down in Section 354 of the Code of Criminal Procedure.
We therefore, set aside the judgment and order of acquittal passed by the High Court of Andhra Pradesh and remit the ease back to the High Court, Andhra Pradesh for deciding the case in accord ance with law on a proper appraisal and marshalling of the evidences on record as early as possible.
The order of interim stay is vacated and bail bonds are cancelled.
The records be sent to the High Court forthwith.
The High Court will be free to consider whether the accused will be en larged on bail.
[/INST]The ten accused persons forming themselves into an unlawful assembly in the house of A 1 and arming themselves with spears, sticks and crow bars attacked the deceased while he was returning from the canal carrying water in 'Kavadi '.
As a result of the injuries sustained by the deceased he died.
All the ten accused were charged under section 147 I.P.C. accused A 1, A4, A5 and A 6, who were armed with deadly weapons were also charged under section 148 I.P.C. and accused A 1 to A I0 were further charged under section 302 read with section 149 I.P.C.
The trial Court acquitted A 4, A 9 and A I0 of all the charges levelled against them.
Accused A 1 to A 3 and A 5 to A 8 were convicted section 147 I.P.C. and sentenced to undergo rigorous imprisonment for one year.
Accused A I, A 5 and A 6 were convicted section 148 I.P.C. and sentenced to undergo rigorous imprisonment for two years.
Accused A 1, A 2, A 5 and A 6 were convicted u/s 302 read with section 149 I.P.C. and sentenced to death.
Accused A 3, A 7 and A 8 were also convicted section 302 read with section 149 I.P.C. but sentenced to undergo imprisonment for life.
The High Court allowed the appeals flied by the convict ed accused and acquitted all of them of the charges levelled against them and rejected the reference.
Allowing the appeal of the State to this Court, HELD: 1.
The judgment passed by the High Court acquit ting all the accused is not a proper judgment in accordance with the provisions of section 354 of the Code of Criminal Proce dure 1973.
The learned Judge has not at all considered and marshalled the evidence of witnesses examined on behalf of the prosecution particularly the evidence of PWs.
1, 3, 4, 6 and 7 who were eye witnesses to the gruesome murder commit ted in the morning at about 7.30 a.m. 328 The names of all the seven accused appeared in the F.I.R. [330 C] 2.
The learned Judge approached the case from wrong angle and without properly formulating the points for deci sions and without any proper appraisal of the evidences adduced by the prosecution to prove the guilt of the accused persons and also without adverting to the reasoning of the Sessions Judge, has perfunctorily come to the finding that the prosecution has failed to prove beyond doubt the case against the accused even though there are eye witnesses P.Ws. 1, 3, 4, 6 and 7 to the occurrence.
[330 E] 3.
The judgment of the High Court is set aside and the case is remitted back to the High Court for deciding it in accordance with law on a proper appraisal and marshalling of the evidence on record as early as possible.
[330 F G]
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<s>[INST] Summarize the judgementminal Appeal No. 157 of 1965.
Appeal by special leave from the judgment and order dated February 1, 1965 of the Punjab High Court in Criminal Misc.
No. 8 of 1964 in Cr.
Revision No. 1375 of 1963.
Nishat Singh Grewal, Ravindra Bana and O. P. Rana, for the appellants.
R. N. Sachthey, for the respondent No. 2.
The Judgment of the Court was delivered by Sikri, J.
This appeal by special leave is directed against the judgment of the High Court of Punjab dismissing Criminal Miscellaneous Petition No. 8 of 1964.
This petition arose out of the following facts.
Bhagwant Rai and Chhota Ram were tried, under section 325, I.P.C., read with section 34, I.P.C., in the Court of Shri Harish Chander Gaur, Magistrate 1st Class, Patiala.
Ajaib Singh, Sub Inspector, one of the appellants before us, had investigated the case.
The Magistrate, by his order dated April 5. 1957, acquitted both the accused and, inter alia, observed that Bhagwant Rai had been falsely implicated in the case as he was not even present on the, day of the occurrence at Patiala.
On the application of Bhagwant Rai, Shri Joginder Singh 'Karam garhia ', Magistrate 1st Class, Patiala, who succeeded Shri Harish Chander Gaur, filed a complaint under sections 193, 195, 211 and 120B, I.P.C., on October 31, 1958, against six persons including the appellants, Ajaib Singh and Malkiat Singh.
Shri O. P. Gaur.
Magistrate First Class, by his order dated June 1, 1959, discharged the accused, holding that the complaint was not competent as it was barred by sub section
(6) of section 479A, Cr.
P.C., because the, complaint had not been filed by or directed to be filed by Shri Harish Chander Gaur, who had disposed of the case ending in the acquittal of Bhagwant Rai.
In the revision filed against this order the Additional Sessions Judge upheld this view.
The High Court (Capoor, J.), on revision, found it unnecessary to consider the, scope of section 479A, Cr.
P.C., vis a vis section 476, Cr. P.C., because two of the offences mentioned in the complaint, namely.
s.211 and section 120B, I.P.C., did not fall within the purview of s.479A. Capoor, J., further held that section 42 of the Police Act.1861, had no application to a case in which a complaint was made by the Court under section 476, Cr.
P.C. Capoor, J., also held that as the order of Shri Joginder Singh, Magistrate, directing the making of the complaint against the respondents was not appealed from and had become final, the competency of the Court to make the complaint under section 211, I.P.C., against Jaswant Singh, one of the accused, could not be considered at that stage.
The High 147 Court accordingly set aside the order of the learned Additional Sessions Judge and directed that the respondents be proceeded against according to law.
On the case going back fresh objections were filed before the Magistrate trying the case but these were overruled.
Revision was filed before the Additional Sessions Judge who accepted the prayer of Kirpal Singh and recommended to the High Court that the criminal proceedings pending against him in the Court of Magistrate First Class, Patiala. might be quashed.
He, however, declined to interfere with the proceedings pending against the appellants mainly on the ground that the objections now taken by them before the Trial Magistrate had been heard and finally disposed of by Capoor, J., in his order dated April 4, 1961.
In the meantime, the appellants put in Criminal Miscellane ous Petition No. 8 of 1964, in criminal revision, in the High Court, praying that along with the recommendation made by the learned Additional Sessions Judge, Patiala, for quashing the criminal proceedings against Kirpal Singh, the grounds urged by them might also be taken into consideration.
Capoor, J., accepted the recommendation made by the learned Additional Sessions Judge, Patiala, and quashed the criminal proceedings against Kirpal Singh.
He, however, directed that Criminal Miscellaneous Petition No. 8 of 1964 should be placed before another Bench for disposal.
The matter was then placed before Sharma, J., who held that all the points urged in Criminal Miscellaneous Petition had been taken into consideration and repelled by Capoor, J., in his order dated April 4, 1961.
Sharma, J., observed : "The learned counsel, however, omitted to take note of the fact that the revision petition finally was accepted in the terms, 'As the order under revision is not legally sustainable, it must be set aside and the respondents must be proceeded with according to law. ' Therefore, what the order (said) was that the criminal case as a whole was to proceed against all the respondents and so the petitioners could not be heard now to say that the case was remanded to the trial court for trial of the respondents for offences punishable under sections 211 and 120 B of the Indian Penal Code.
In the circumstances, the trial Court cannot be said to have misconstrued the order of Capoor, J., The other grounds urged by them in the Criminal Miscellaneous as already pointed out by me were taken into consideration by Capoor, J., and findings given against the petitioners and that being so, these cannot be agitated again at this stage.
" 148 He accordingly dismissed the Criminal Miscellaneous Petition.
The appellants having obtained special leave, the appeal is now before us.
The learned counsel for the appellants contends that on the facts prosecution for offences under sections 193 and 195, I.P.C., was barred under section 479A(6), Cr.
In our opinion, this contention must be accepted in view of the ruling of this Court in Shabir Hussain Bholu vs State of Maharashtra(1) and Baban Singh vs
Jagdish Singh(2).
The learned counsel next contends that the complaint could only be filed by the Magistrate before whom the original proceedings were taken.
He says that according to section 195 (1) (b), Cr. P.C., a complaint in respect of sections 193, 195 and 211 I.P.C., can only be made by the Court in which the proceedings out of which the offences arose took place.
We see no force in this contention.
Section 559 enables a successor in office of a Magistrate to file a complaint.
The relevant portion of section 559 reads as follows : "559.
(1) Subject to the other provisions of this Code, the powers and duties of a Judge or Magistrate may be exercised or performed by his successor in office.
(2) When there is any doubt as to who is the successor in office of any Magistrate, the Chief Presidency Magistrate in a Presidency town, and the District Magistrate outside such towns, shall determine by order in writing the Magistrate who shall, for the purposes of this Code or of any.
proceedings or order thereunder, be deemed to be the successor in office of such Magistrate." This section was substituted for the original section 559 by the Code of Criminal Procedure (Amendment) Act (XVIII of 1923).
Since the amendment it has been held, and we think rightly, that a successor in office of a Magistrate can file a complaint under section 476, Cr.
P.C., in respect of an offence under section 195, I.P.C., committed before his predecessor.
(See Behram vs Emperor(3) Bara Bapen Manjhi vs Gopi Manjhi(4) and In re: Subramaniam Chettiar(5).
This section applies to all Magistrates and there is no reason why the plain terms of the section should be cut down to limit it, as suggested by the learned counsel for the appellant, to Magistrates whose courts are permanent.
It seems to us further clear that sub s.(2) has not the effect of limiting s.559(1).Section 559(2) applies when there is a doubt as (1) [1963] Supp. 1 S.C.R. 501.
(3) 108.
(2) A.I. R. (4) A. 1.
R. 1927 Pat.
(5) A. 1.
R. 149 to who the successor is, and that doubt can be resolved in the manner laid down in sub section
The sub section does not mean, as contended by the learned counsel, that until a successor is determined under sub section
(2) there is no successor for the purposes of sub section
If there is no doubt about who the successor is, then that person can exercise the powers under sub section
We accordingly hold that the complaint was properly filed by Shri Joginder Singh 'Karamgarhia ', Magistrate.
There is equally no force in the third point raised by ,,he learned counsel that section 42, Police Act, creates a bar and the prosecution is time barred under this section.
This Court held in Mulud Ahmed, vs State of U.P. (1) that section 42, Police Act, does_not apply to prosecutions under the Indian Penal Code or other Acts.
Subba Rao, J., as he then was, observed "The period of three months prescribed for commencing a prosecution under this section is only with respect to prosecution of a person for something done or intended to be done by him under the provisions of the Police Act or under general Police powers given by the Act.
Section 42 does not apply to prosecution against any person for anything done under the provisions of any other Act.
A combined reading of these provisions leads to the conclusion that section 42 only applies to a prosecution against a person for an offence committed under the Police Act. but the prosecution in the present case was for an offence under section 212 of the Indian Penal Code which is an offence under a different act and for which a much higher punishment is pres cribed.
By reason of section 36 of the Police Act, section 42 thereof cannot apply to such a prosecution.
" The fourth point which the learned counsel urges is that the complaint only discloses two offences under section 193 and section 195, I.P.C., and no other, and it was an abuse of the process of the Court.
There is no force in this contention as the complaint on its face mentions sections 193, 195, 211 and 120B.
The learned counsel finally urges that the complaint had been filed because of a private feud and it is not in the interest of justice that the complainant should be allowed to proceed with the complaint.
This point was not taken in the High Court at any stage and we do not allow it to be raised at this stage.
In the result the appeal fails and is dismissed.
Y.P. Appeal dismissed.
(1) [1963] Supp. 2 S.C.R. 38, 44 45.
[/INST]A magistrate acquitted Bhagwant Rai of the charge under sections 325/34 I.P.C. and observed that he had been falsely implicated.
The magistrate 's successor in office the respondent filed a complaint under sections 193, 195, 211 and 120B I.P.C., against the appellants.
The appellants con tended that (i) prosecution for offences under sections 193 and 195 I.P.C., was barred under section 479A(6) Cr.
P.C.; (ii) according to section 195(1)(b) Cr.
P.C., only the Magistrate before whom the original proceedings were taken could file the complaint in respect of sections 193, 195 and 211 IPC;(iii)s.
42 of the Police Act barred the prosecution as it was commenced after the period prescribed; and (iv) the complaint only disclosed two offences under sections 193 and 195 I.P.C. and no other.
HELD:The appeal must be dismissed.
(i) In view of the ruling of this Court in Shabir Husain Bholu vs State of Maharashtra and Baban Singh vs Jagdish Singh, the prosecution for offences under sections 1913 and 195 IPC was barred under section 479A(6) Cr.
P.C. [148 B] (ii) The complaint was properly filed by the successor in office of the Magistrate.
Section 559 Cr.
P.C. enables a successor in office of a Magistrate do file, a complaint.
This section applies to all Magistrates.
and there is no reason to limit it to Magistrates whose courts are perma nent.
Sub section
(2) has not the effect of limiting section 559(1).
Section 559(2) applies when there is a doubt as to who the successor is, and that doubt can be resolved in the manner laid down in sub s.(2).
The subsection does not mean that until a successor is determined under sub s.(2) there is no successor for the purpose of sub section
[148 F H;149 A] Behram vs
Emperor, 108; Bara Bapen Manihi vs Gopi Manjhi, A.I.R. 1927 Pat.
(In re: Subramanian Chettiar, A.I.R. 1957 Mad. 442, followed.
(iii) Section 42 of the police Act does not apply to prosecutions under the Indian Penal Code or other Acts.
[149 C] Mulad Ahmad vs State of U.P., [1963] Supp. 2 S.C.R. 38, 44 45 followed.
(iv) As the complaint on the face of it mentioned sections 193, 195, 211 and 120B, so there was no force.
in the contention that the complaint only disclosed two offences under sections 193 and 195 I.P.C. and no other F149 F] 146
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<s>[INST] Summarize the judgementCivil Appeal No. 44 of 1950.
Appeal from a judgment and decree of the High Court of Bombay (Sen and Dixit JJ.) dated 21st February, 1947, in First Appeal No. 64 of 1943.
C.K. Daphtary, Solicitor General (section B. Jutbar, with him) for the appellant.
N.C. Chatterjee (N. K. Gamadia, with him) for the respondents.
October 5.
The Judgment of Kania CJ.
, Das and Bose JJ. was read by Das J. Patanjali Sastri and Chandrasekhara Aiyar JJ.
delivered separate Judgments.
45 DAS J.
This is an appeal from the judgment of a Bench of the Bombay High Court (Sen and Dixit JJ.) delivered on February 2, 1947, in an appeal filed under section 18 of the Bombay City Land Revenue Act 11 of 1876 against the judgment of the Revenue Judge at Bombay delivered on October 27, 1942, in a suit filed by the respondents, the Municipal Corporation of the City of Bombay, and Madusudan Damodar Bhat, the then Municipal Commissioner for the City of Bom bay, against the Collector of Bombay.
There is no substantial dispute as to the facts leading up to this litigation and they may be shortly stated.
In 1865, the Government of Bombay, having decided to construct an Eastern Boulevard, called upon the Corporation of Jus tices of the Peace for the City of Bombay, the predecessor in title of the respondent Corporation, to remove its then existing fish and vegetable markets from the site required for the construction of the Boulevard.
The then Municipal Commissioner Mr. Arthur Crawford, after whom the present municipal market was named, applied for the site set aside for the exhibition buildings on the Esplanades for the pur pose of constructing new markets as the existing markets could not be removed until new markets had been provided.
On December 5, 1865, the Architectural Improvement Committee informed the Government that it had no objection to the proposed she measuring about 7 acres being "rented to the Municipal Commissioner" and suggested that "the annual charge of one pie per square yard be levied in consideration of the expense of filling in the ground.
" Computed at this rate, the annual rental would have amounted to about Rs. 176.
On December 19, 1865, the Government passed the fol lowing resolution : "(1) Government approve of the site and authorise its grant.
(2) The plans should be submitted for approval; but Government do not consider any rent should be charged to the Municipality as the markets will be, like other public buildings, for the benefit of the whole community.
" 46 Pursuant to the aforesaid Resolution, possession of the site was made over to the then Municipal Commis sioner, but no formal grant was executed as required by Statute 22 & 23 Vic. C. 41.
It has nowhere been contended that even if the statutory formalities had been complied with the grant upon the terms mentioned in the Resolution would nevertheless have been invalid being in excess of the powers of the Government.
The Municipal Com missioner had the site filled up and leveled at the expense of the Corporation.
The plans were approved by the Govern ment and the market buildings were erected by the Corpora tion at considerable expense.
The respondent Corporation was incorporated in 1888 as the successor of the Corporation of the Justices of the Peace for the City of Bombay and it continued in possession of the land and the buildings with out paying any rent to the Government according to the Government Resolution of 1865.
Indeed, it is pleaded in paragraph 7 of the plaint and it is not denied in the writ ten statement that acting upon the said grant contained in the Resolution and the terms contained therein the respond ent Corporation and its predecessor spent considerable sums of money in building and improving the market and have been in possession of the land and the buildings thereon for over 70 years in accordance with the terms of the Resolution and that no land revenue or rent had been paid to the Government ever since the grant was made.
It is in evidence that besides giving up the sites on which the old markets had been situate, a total sum of Rs. 17,65,980 12 1 has been spent by the Corporation up to March 31,1940, in filling up and leveling the site and erecting and maintaining the new market buildings on this site.
In 1911, a portion of the market site was acquired by the Government for the widening of the Palton Road.
Upon the Collector of Bombay being called upon to put in ,his claim, if any, to any part of the compensation money awarded by the Land Acquisition Officer, the Superintendent,, City Survey, on behalf of the Collec tor, replied that Government had no claim in respect of the said land.
The respondent 47 Corporation, therefore, received the whole of the compen sation money and it continued in possession of the rest of the land and the buildings thereon without payment of any rent.
On March 18, 1938, the appellant Collector of Bombay informed the respondent Municipal Commissioner that it was proposed to assess the land occupied by the Crawford Market under section 8 of the Bombay City Land Revenue Act II of 1876 and asked for certain information to enable him to do so.
In his reply, the Municipal Commissioner wrote to say that the site of the market had been given to the Municipal ity as a gift for the construction of the market and that, therefore the question of assessment did not arise.
The appellant Collector of Bombay having insisted that in spite of the Government Resolution of 1865 the Government had the right to assess the site, the Mayor of Bombay on March 23, 1939, wrote a letter to the Government stating, inter alia, as follows : "The Corporation have been advised that there can be no doubt that it was the intention of Government to make a permanent grant of the land to the Municipality, and, fur ther, that it was also the intention that permanent grant should be free from rent and from assessment to land revenue.
I am to point out that the word 'rent ' was used in official documents with the greatest frequency with refer ence to the land revenue leviable by the East India Company and later by Government in the City of Bombay and in the Presidency.
It is, therefore, clear that it was the inten tion of Government in 1865 that this grant should be free from any form of rent or assessment.
The Corporation were put into possession for a period of over 70 years, during which period the land has without interruption been devoted to the purpose for which the grant was made.
Throughout this long period there has been no suggestion from Govern ment that the grant was other than a permanent one, free of revenue, or that the terms of the grant were in any way subject to revision," 48 The above contentions were repudiated by the Govern ment in its letter of January 1, 1940, in the following terms: " As regards the contention that the land has been held by the Municipality uninterruptedly for over 70 years with out any suggestion from Government that it was liable to assessment, I am to state the right to levy the assessment is the prerogative of the Crown and a mere non user of this prerogative cannot destroy it.
Besides, conditions have considerably altered since the land was originally allotted to the Municipality without charging any ground rent or assessment; the Municipality has been recovering substantial rents by letting out stalls in the market and should now be in a position to pay the assessment.
Under the circum stances, the levy of assessment in this case can no longer be foregone or postponed.
" On January 31, 1940, the appellant Collector assessed the land under section 8 of the Bombay Act II of 1876 with a guarantee of 50 years as under : "Assessment Rs. 7,500 per annum for the first 10 years from 1st April, 1940.
Assessment Rs. 15,000 per annum for the next 10 years.
Assessment Rs. 30,000 per annum for the remaining 30 years.
" The assessment was to begin to run from I st April, 1940, and the first payment of the assessment was to become due on 1st April, 1941.
The present suit was thereupon filed in the Court of the Revenue Judge in accordance with the provisions of the Bombay City Land Revenue Act, 1876, for the following reliefs, inter alia : "(a) that it may be declared that there is a right on the part of the plaintiff Corporation in limitation of the right of Government to assess the said land and that the plaintiff Corporation is entitled to hold the said land for ever without payment of any assessment and that the Govern ment has no right to assess the said premises, 49 (b) That the said assessment may be declared ultra vires, invalid and may be ordered to be set aside.
" By his judgment dated October 27, 1942, the learned Revenue Judge dismissed the suit with costs.
The Corporation appealed to the High Court.
Before the High Court, as before us, two of the learned Revenue Judge 's conclusions were not challenged namely, (1) that the Government Resolu tion of 1865 was bad in law either as a grant or even as a contract and could not by itself operate to give any inter est in the land to the respondent Corporation because of the non compliance with the formalities required to be observed by Statute 22 & 23 Vic. C. 41 in the matter of disposition of all real and personal estate vested in the Crown under Statute 21 & 22 Vic. C. 106, and (2) that the Crown 's right to levy assessment on property was a prerogative right to which the ordinary presumption that rights to property which had not been asserted or exercised for a long period of years had been granted away did not apply What was urged before and accepted by the High Court was that the right of the Government to levy any assessment on the land in ques tion had been lost and could not be asserted or exercised by the Government by reason of the equity arising on the facts and circumstances of the case in favour of the respondent Corporation on the principle established by the decision in Ramsden vs Dyson(1) which was adopted by Jenkins C.J. in The Municipal Corporation of the City of Bombay vs The Secretary of State(2) and which equity was, on the authorities, bind ing on the Crown.
After dealing with the cases of Dadoba Janardhan vs The Collector of Bombay(3) and Jethabhoy Rut tonsey vs The Collector of Bombay(4) the High Court observed : "We think, on a reading of the language of the Govern ment Resolution dated the 19th December, 1865, that we should be justified in holding (within the meaning of the rule in Ramsden vs Dyson) that an expectation was created or encouraged by the landlord that the Municipality was to get possession of the land rent free and that the latter took possession of the land with the consent of the landlord, and upon such expectation, with the knowledge of the landlord and without objection by him, laid out money upon the land."
According to the High Court the rule of equity enunciated in Ramsden vs Dyson (supra) was not, as pointed out by Jenkins C.J. in Municipal Corporation of the City of Bombay vs The Secretary of State (supra), dependent on the validity of the disposition and could be asserted even where the statutory formalities relating to the disposition of the property had not been observed and performed, and that this equity constituted a right on the part of the respondent Corporation in limitation of the right of the Government in consequence of a specific limit to assessment having been established and preserved within the meaning of section 8 of the Act II of 1876 so as to disentitle the Government from assessing the land in question.
The High Court relied on the decision in Kamalavahooji Maharaj vs The Collector of Bombay(1) in support of their view that section 8 of the Bombay Act II of 1876 would apply even where the specific limit was nil.
In the result, the High Court reversed the decision of the learned Revenue Judge, allowed the appeal and passed a decree declaring the rights of the respondent Corporation and awarding to it the costs in both Courts.
The Collector of Bombay appealed to the Federal Court and the appeal has now come up for hearing before us.
There has been considerable discussion before us as to the precise scope and effect of the principle of equity enunciated in Ramsden vs Dyson (supra), as to whether such principle should be extended to the facts of the present case, whether the facts 'of this case attract the applica tion of the equity established in Ramsden vs Dyson (supra)or attract the equity established in Maddison vs Alderson (2) and Walsh vs Lonsdale(3) and finally as to whether, in view of the decision (1) (3) (2) 51 of the Privy Council in Ariff vs Jadunath(1), the equity in Ramsden vs Dyson (supra) can prevail against the requirement of formalities laid down in the Victorian Statute referred to above any more than the equity in Maddison vs Alderson (supra)can do against the requirements of the Transfer of Property Act and whether the decision in The Municipal Corporation of the City of Bombay vs The Secretary of State(2) requires reconsideration in the light of the deci sion in Ariff 's case (supra).
In the view we have taken, it is not necessary to go into, and to express any opinion on, any of these questions, for this appeal can, in our opinion, be disposed of on a narrower and shorter ground.
The Government claims to assess the lands in terms of section 8 of the Bombay Act II of 1876 which runs thus : "8.It shall be the duty of the Collector, subject to the orders of the Provincial Government, to fix and to levy the assessment for land revenue.
Where there is no right on the part of the superior holder in limitation of the right of the Provincial Govern ment to assess, the assessment shall be fixed at the discre tion of the Collector subject to the control of the Provin cial Government.
When there is a right on the part of the superior holder in limitation of the right of the Provincial Government, in consequence of a specific limit to assessment having been established and preserved, the assessment shall not exceed such specific limit.
" The sole question for our consideration is whether, on the facts of this case, the respondent Corporation has succeeded in establishing in itself a right in limitation of the right of the Government to assess the land in conse quence of a specific limit to assessment having been estab lished and preserved.
There is no dispute that by reason of the non compliance with the statutory formalities the Gov ernment Resolution of 1865 is not an effectual grant passing title in the land to the respondent Corporation and is not also an enforceable contract.
On the other hand, there is no doubt as to the existence of an intention on the part of the Government to make and on the part of the Corporation to take a grant of the land in terms of the Resolution of 1865 including an undertaking by the Government not to charge any rent.
Both parties acted on the basis of that Resolution and the prede cessor in title of the respondent Corporation went into possession of the land in question pursuant to the Govern ment Resolution of 1865 and, acting upon the said Resolution and the terms contained therein, the respondent Corporation and its predecessor in title spent considerable sums of money in leveling the site and erecting and maintaining the market buildings and have been in possession of the land for over 70 years.
What, in the circumstances was the legal position of the respondent Corporation and its predecessor in title in relation to the land in question?
They were in possession of the land to which they had no legal title at all.
Therefore, the position of the respondent Corporation and its predecessor in title was that of a person having no legal title but nevertheless holding possession of the land under color of an invalid grant of the land in perpetuity and free from rent for the purpose of a market.
Such pos session not being referable to any legal title it was prima facie adverse to the legal title of the Government as owner of the land from the very moment the predecessor in title of the respondent Corporation took possession of the land under the invalid grant.
This possession has continued openly, as of right and uninterruptedly for over 70 years and the respondent Corporation has acquired the limited title it and its predecessor in title had been prescribing for during all this period, that is to say, the right to hold the land in perpetuity free from rent but only for the purposes of a market in terms of the Government Resolution of 1865.
The immunity from the liability to pay rent is just as much an integral part or an inseverable incident of the title so acquired as is the obligation to hold the land for the purposes of a market and for no other purpose.
There is no question 53 of acquisition by adverse possession of the Government 's prerogative right to levy assessment.
What the respondent Corporation has acquired is the legal right to hold the land in perpetuity free of rent for the specific purpose of erecting and maintaining a market upon the terms of the Government Resolution as if a legal grant had been made to it.
The right thus acquired includes, as part of it, an immunity from payment of rent which must necessarily consti tute a right in limitation of the Government 's right to assess in excess of the specific limit established and preserved by the Government Resolution within the meaning of section 8 of the Bombay Act II of 1876.
It is true, as pointed out by the Privy Council in Karnalavahooji Maharaj vs Collector of Bombay (supra) that the words of the section would appear to apply rather to the case of a limitation on the right to assess than to the case of a complete exemption from assessment but such a construction would not protect the cases of total exemption which, as conceded in that very case, did in fact exist and were recognised and protected by virtue of the words of section 8 of the Bombay Act II of 1876.
It has not been suggested before us that there are no cases of total exemption or that those cases are protected by any provision of law other than that of this very section.
There is, therefore, no escape from the conclusion arrived at by the High Court, with which we concur, that the words of section 8 would apply to a case where total exemp tion from assessment was granted.
In other words, specific limit may be nil for the purposes of section 8 of the Act.
It was sought to be argued that even if the Government be precluded from enhancing the "rent" in view of the terms of the Government Resolution, it cannot be held to have disentitled itself from its prerogative right to assess "land revenue".
This contention is sought to be rounded on a distinction between "rent" and" land revenue".
This contention, however, was not raised in the written statement and was not made the subjectmatter of any issue on which the parties went to trial and was never put forward before either of the Courts 54 below.
Indeed, in the letter of the Mayor of Bombay dated March 22, 1939, to which reference has been made, it was clearly alleged that the word "rent" was used in official documents with the greatest frequency with reference to the land revenue leviable by the East India Company and later by the Government in the City of Bombay and in the Presidency.
" In the Government 's reply dated January 24, 1940, also quoted above this assertion was never repudiated or denied.
In the premises, the appellant cannot be permit ted at this stage to raise this contention rounded on the supposed distinction, if any, between "rent" and "land revenue" and for the purpose of this case we must proceed on the basis that the word "rent" in the Government Resolution of 1865 was synonymous with or included" land revenue.
" In our opinion, for reasons stated above, the actual decision of the High Court was correct and this appeal should be dismissed with costs, and we order accordingly.
PATANJALI SASTRI j. I am of opinion that this appeal should be allowed and I will briefly indicate my reasons without recapitulating the facts which have been fully stated in the judgment of my learned brother Das which I have had the advantage of reading.
The appeal concerns a claim by the Provincial Govern ment of Bombay to charge land revenue on a plot of land on which the predecessors of the respondent Municipality erect ed the buildings known as the Crawford Market in the City of Bombay.
It is common ground that the land in question would be assessable to land revenue under section 8 of the Bombay City Land Revenue Act (No. II of 1876) unless the respondent established "a right in limitation of the right of the Provincial Government in consequence of a specific limit to assessment having been established and preserved", in which case, the assessment must not exceed such specific limit.
It has been held, and it is not now disputed, that the words quoted above cover 55 a right of total exemption from assessment, the "specific limit" in such a case being nil (see Goswamini Shri Kamala vahooji vs Collector of Bombay (1).
The only question, therefore, is whether the respondent has established a right to such exemption.
The resolution of the Government dated 19th December, 1865, authorising the grant of the land without "any rent being charged to the Municipality as the market will be like other buildings for the benefit of the whole community" did not by itself purport to pass title to the land in question or to confer on the Municipality a right to exemp tion from land revenue.
Admittedly no formal instrument was executed either granting the land or exempting it from assessment.
Nor could the resolution be regarded as a valid disposition of property or an enforceable contract not to charge revenue on the land, as it did not comply with the requirements of the statute 22& 23 Vic. C. 41 which pre scribed certain formalities to be observed for such transactions.
As pointed out by Jenkins C.J. in Municipal Corpora tion of the City of Bombay vs The Secretary of State (2) all land in British India having been vested in the Crown by 21 & 22 Vic. C. 106, the Governor in Council in Bombay could not dispose of property or enter into a contract on behalf of the Crown except in exercise of the power bestowed on them for the purpose under 22 & 23 Vic. C. 41, and that power could be exercised only by observing the formalities prescribed by that statute.
The learned Judges of the High Court, while recognising this difficulty in the way of the respondent establishing a legal right to exemption from assessment, held that the conduct of the Provincial Govern ment in allowing and, indeed, encouraging the respondent to erect the buildings at great cost on the faith of the prom ise not to charge land revenue contained in the Resolution of 19th December, 1865, precluded the respondent on the equitable principle recognised in Ramsden vs Dyson from assessing the land in question, and that this equity was a "right" in limitation of the right of the Provincial Government to assess.
I am unable to share that view.
There is, in my opin ion, no room here for the application of the principle of Ramsden vs Dyson(1).
That decision has been explained by the Privy Council in Ariff vs Jadunath(2) as based on the equitable doctrine of part performance which, their Lord ships held, could not be applied so as to nullify the ex press provisions of the Transfer of Property Act relating to the creation of leases.
They observed : Whether an English equitable doctrine should, in any case, be applied so as to modify the effect of an Indian statute may well be doubted; but that an English equitable doctrine, affecting the provisions of an English statute relating to the right to sue upon a contract, should be applied, by analogy, to such a statute as the Transfer of Property Act and with such a result as to create without any writing an interest which the statute says can only be created by means of a registered instrument, appears to their Lordships, in the absence of some binding authority to that effect, to be impossible."
After quoting the well known passage in the judgment of Lord Kingsdown, their Lordships commented thus : "It will be noticed that Lord Kingsdown is dealing with the case of express verbal contract or something 'which amounts to the same thing. '
He nowhere puts the case of estoppel; the word is not mentioned.
He would appear to be dealing simply with the equitable doctrine of part performance.
His reference to Gregory vs Mighall [(1811) 18 Ves.3281 confirms this view, for that case was simply an earlier instance of the application of the doctrine.
Even if Lord Kingsdown 's language was intended to cover something beyond the equitable doctrine of part performance in relation to the Statute of Frauds, and was intended to refer to circum stances in which a court of equity will enforce a title to land against the person who at law is the owner thereof, the title must, nevertheless, in their Lordships ' view, be based either upon contract express or implied, or upon some statement of fact grounding an estoppel.
In the later decision in Mian Pir Bux vs Sardar Ma horned(1) their Lordships reiterated the same view and held that English equitable doctrines did not afford in India a valid defence to an action in ejectment based on title.
After these decisions of the Privy Council elucidating the principles underlying Ramsden vs Dyson(2) and Maddison vs Alderson(3), it seems to me clear that they have no application to the facts of the present case.
They can no more prevail against the statutory provisions regarding the disposition of property or the making of contracts by Gov ernment than against the provisions of the Transfer of Property Act requiring registered instruments for effecting certain classes of transactions.
No question of estoppel by representation arises, for the Government made no represen tation of fact which it now seeks to deny.
Nor can any case of estoppel by acquiescence be rounded on the facts of the case.
Both parties knew the facts and neither was misled.
There was no lying by and letting another run into a trap [per Cotton L.J. in Russell vs Watts(4)].
The conduct of the parties was referable to the express agreement evidenced by the Government Resolution of 19th December, 1865, to make a grant of the land free of rent (which, in such context, means and includes revenue).
No question, therefore, of any implied contract could arise.
Unfortunately for the respond ent, the express agreement was unenforceable owing to non observance of the prescribed statutory formalities, though it was acted upon by both sides.
No question arises here as to the respondent 's title to the land which apparently has been perfected by lapse of time.
But it is clear that no right of exemption has been established either on the basis of express or implied contract or on the basis of the equitable principles of part performance or estoppel by acquiescence.
It was next contended that, on the analogy of the line of cases holding that a limited interest in land could be acquired by adverse possession for over the statutory peri od, the respondent 's possession of the land in dispute without payment of any quit rent or revenue for over 70 years to the knowledge of the Government perfected its title to hold the land free from liability to pay land revenue.
It is difficult to appreciate the argument so far as the claim to exemption is concerned.
There is no question here of acquisition of a limited interest in land by adverse possession.
The respondent was asserting full ownership and a right of exemption from assessment and the Government agreed with that view as shown by their letter dated 26th June, 1921, to the Land Acquisition Officer for the City of Bombay wherein they stated that "no Government claim in respect of the land under acquisition (a portion of the land here in question) in the above mentioned case is made as the land vests in the Municipality.
" Be it noted that the Government made no claim even to a portion of the compensa tion on the basis of any right of resumption reserved to them, the Resolution of 1865 having made no such reserva tion.
The position then was that throughout the period of adverse possession, the respondent Municipality regarded itself and was regarded by the Government as absolute owner of the land with the additional right of exemption from assessment to land revenue with the result that the Govern ment 's "right to such property" (the subject of adverse possession) was "extinguished" under section 28 of the Limitation Act.
But the right to levy land revenue was no part of the Government 's right to the property.
It is a prerogative right of the Crown which was placed ' on a statu tory basis under the Bombay City Land Revenue Act of 1876, and could be exercised in respect of a land only on the footing that it belonged to another, the "superior holder", for, the claim to levy assessment itself implies a recogni tion of ownership in 59 another.
It is, therefore, difficult to see how adverse possession of the land could entitle the respondent to exemption from assessment of land revenue.
It was said that the Government having intended to grant the land on the terms that it was to be held free of quit rent or revenue and the respondent having held the land on such terms claiming it to be exempt from assessment, a title to hold it on those terms was perfected by the adverse possession, the covenant for exemption from assessment forming part and parcel of the title.
In other words, the respondent should be placed in the same position as if the Government had made a valid revenue free grant.
The argument is, to my mind, fallacious.
If the Government had given effect to their expressed intention by executing an instru ment in writing observing the due formalities, the respond ent would, no doubt, have secured a valid title to the property with a contract binding the Government not to charge revenue, supported as it was by consideration.
But, as already stated, the Government 's promise not to charge land revenue was unenforceable from the inception, and the respondent 's adverse possession of the land, though accompa nied by a claim to exemption from revenue, could not destroy the Crown 's prerogative right to impose assessment on the land.
A somewhat analogous question arose in Goswamini Shri Kamala Vahooji vs Collector of Bombay(1).
The Government admitted that no land revenue had ever been charged in respect of the land which was enjoyed by the holders for more than a century without payment of revenue and it was urged that in virtue of such a long enjoyment a lost grant of the land on the terms that it should be held free from liability to pay revenue must be presumed.
Rejecting that contention, their Lordships observed : "The appellant submits that in the circumstances a lost grant should be presumed, and that this lost grant should be presumed to have contained an exemption from land revenue or a 'right in limitation of the right of Government to assess the property.
The law may presume the existence of a grant which has been lost where it is sought to disturb a person in the enjoyment of right which he and his predecessors have immemorially enjoyed, but it is a different thing to seek to presume that the Crown has by some lost grant deprived 'itself of the prerogative power to tax the property of its subjects, and their Lordships are of opinion that this plea is untenable." (italics mine).
The decision shows that exemption from land revenue does not form part and parcel of the title to land but is collateral to it.
If a presumed lost grant could not cover it neither could title by adverse possession.
I would allow the appeal but make no order as to costs.
I had the advantage of reading the judgment prepared by my learned brother; Mr. Justice Das, and 1 agree in the conclusion he has reached; but i wish to add a few words of my own on some of the points that have been discussed during the course of the hearing.
In the first place, there can be little doubt that the word "rent" in paragraph 2 of the Government Resolution of the 19th December 1865, means "assessment ".
It is true that this word is used generally in cases of landlord and tenant, but when it is remembered that here the Govern ment was parting with the land vested in the Crown in favour of the Municipal Corporation of Bombay, it can safely be assumed or presumed that they were thinking not merely of their rights as landlord but also of their prerogative right as well.
That the land was going to be used for the build ing of markets for the benefit of the whole community and, therefore, should not be charged with rent is a considera tion more relevant and appropriate to the prerogative right to assess than to a right to collect rent in respect of a transaction of lease.
Moreover, it is well known that when ever we speak of 61 a rent free grant of an inam by the Government, what is meant is land revenue or assessment.
The Resolution in question authorized the grant of the site.
There is apparently no grant in writing, conforming to the formalities prescribed by the law then in force.
Part of the site was wanted for the erection of stables and the question of title to that portion was considered and decided in The Municipal Corporation of the City of Bombay vs The Secretary of State for India in Council (1), where the Government gave the Municipality notice to quit and brought a suit for rent on the alleged determination of the tenancy.
It is part of the same transaction with which we are concerned now, and it seems to me that there was no valid grant.
The grant having been authorized, the Corpora tion went into possession and it is not denied that they have built the Crawford Market at enormous cost.
Though the grant was invalid, the Corporation has now acquired a title by adverse possession to the site; this, however, is not the case with reference to the stable site covered by the afore said Bombay decision.
There the question was brought before the Court, well within the 60 years ' period.
The Crawford Market site has been in the possession of the Municipal Corporation for over 60 years under an invalid grant, a term of which was that no rent should be charged.
We are not concerned now with any question of ejectment or determination of tenancy.
Could it be said that the right to levy assessment on the land, enjoyed without any payment of any kind so far, was lost by adverse possession ?
I find it difficult to give an affirmative answer.
Before a right could be said to be acquired or lost by adverse possession, it must have been the subject of possession by a man without title as against the person with the rightful title.
Right to levy assessment is a prerogative right of the Government and it is hard to conceive of a case where it could be said to be lost by adverse possession.
True, there can be adverse possession of a limited right like that of a mortgagee or a lessee or even a perma nent tenant, but still a right must have been enjoyed by the possessor adversely to the claim of the true owner.
It is unnecessary to go into the wider question whether the denial of the right to levy assessment and possession of property coupled with this denial for over a period of 60 years will negative that right; it is sufficient to say that no right to levy assessment was exercised in the case before us before March, 1938, and the denial was only afterwards.
This, however, does not determine the case in favour of the appellant, as there is a question of equity to con sider and on which the appellant failed in the court below.
In fact, it is the crucial point for determination.
When the Architectural Improvement Committee proposed to levy a nominal rent, the Government stated that no rent need be charged, as the markets to be built were for the benefit of the whole community.
This was a representation made by the Government when the site was given and possession was taken.
How far this representation was taken into consideration when the Corporation of Bombay took possession of the site under the grant is not necessary to be considered at any great length.
It is just possible that they would have taken the site even with the nominal rent, but it is equally possible that had they known that the rent was in the nature of assessment and liable to enhancement from time to time or periodically, they would have insisted on getting a site free from assessment in consideration of the sites they gave up for forming the eastern Boulevard.
The allegation in.paragraph 7 of the plaint that the Corporation acted on the faith of the terms contained in the grant has not been denied by the Government.
The accident that the grant was invalid does not wipe out the existence of the representation of the fact that it was acted upon by the Corporation.
Even if the suit had been brought within 60 years for ejectment and the Corporation had no answer to such a claim, the right to levy assessment might have conceivably stood on a different footing.
In any event, 63 there can be no doubt that it would have been competent for a Court of equity to give compensation for the expenditure and protect the possession in the meantime.
Lord Kingsdown refers to this aspect of the matter in Ramsden vs Dyson (1).
In the present case, the Corporation stands on much firmer ground.
They have acquired a title to the land which the Government cannot upset or challenge.
This acquisition of title is as a result of the law of limitation.
It has nothing to do with any conduct on the part of the Corpora tion which can be said to have rendered the representation about non liability to assessment of no legal effect or consequence.
The invalidity of the grant does not lead to the obliteration of the representation.
Can the Government be now allowed to go back on the representation, and ,if we do so, would it not amount to our countenancing the perpetration of what can be compendiously described as legal fraud which a court of equity must pre vent being committed?
If the resolution can be read as meaning that the grant was of rent free land, the case would come strictly within the doctrine of estoppel enunciated in section 115 of the Indian Evidence Act.
But even otherwise, that is, if there was merely the holding out of a promise that no rent will be charged in the future, the Government must be deemed in the circumstances of this case to have bound themselves to fulfil it.
Whether it is the equity recognised in Ramsden 's case(1), or it is some other form of equity, is not of much importance.
Courts must do justice by the promotion of honesty and good faith, as far as it lies in their power.
As pointed out by Jenkins C.J. in Dadoba Janardhan 's case (2), a different conclusion would be "opposed to what is reasonable, to what is probable, and to what is fair.
" I am of the opinion that the decision of the Privy Council in Ariff vs Jadunath (3) is not applicable to the facts before us, as the doctrine of part performance (1) (2) Dadoba Janardan vs The Collector of Bombay (1901) I.L.R,.25 Born.(3) (1931) 58 I.A. 91.64 is not being invoked here as in that case, to clothe a person with title which he cannot acquire except by the pursuit of or in conformity with certain legal forms.
Here, as pointed out already, the Corporation became the full and absolute owner of the site on the lapse of SO years from the date of the grant.
Appeal dismissed.
[/INST]In assessment proceedings under the Wealth Tax Act for four assessment years the assessee claimed a deduction in the computation of his net wealth on account of income tax, wealth tax and gift tax liabilities.
The Wealth Tax Officer allowed only part of the deductions claimed The appeal of the assessee was dismissed by the Appellate Assistant Commissioner of Wealth Tax.
In the second appeal before the Appellate Tribunal, the assessee filed statements showing particulars of the income tax, wealth tax and gift tax liabilities in respect of the different assessment years.
The Revenue contended that the income tax liability and the gift tax liability for one of the assessment years [1965 66] had been cancelled by the Appellate Assistant Commissioner in appeals against the assessment orders and those appellate orders of the Appellate Assistant Commissioner having become final in view of the dismissal of the Revenue 's appeals by the Appellate Tribunal, there was no outstanding demand on account of income tax and gift tax for that year and that therefore these two items do not constitute 'debts owed ' by the assessee and so would not qualify for deduction under section 2(m) of the Wealth Tax Act.
The Appellate Tribunal following two judgments of this Court [Commissioner of Income Tax vs Keshoram Industries Pvt.
Ltd. (1966) 59 I.T.R. 767 and H.H. Setu Parvati Bayi vs Commissioner of Wealth Tax Kerala , held that so long as the liability to pay the tax had arisen before the relevant valuation dates it was immaterial that the assessments were quantified after the valuation of dates, that the question whether a debt was owed by the assessee must be examined with reference to the position obtaining on the valuation date and that nothing happening subsequently could be considered in computing the net wealth.
491 The High Court having refused te call for a reference from the Appellate Tribunal under section 27(3) of the Act the Revenue appealed to this Court.
Allowing the appeals in part.
^ HELD: 1.
Whether a debt was owed by the assessee on the valuation date would depend on the fact that a liability had already crystallised under the relevant taxing statute on the valuation date.
[494 D] 2.
An income tax liability crystallises on the last day of the previous year relevant to the assessment year under the Income Tax Act, a wealth tax liability crystallises on the valuation date for the relevant assessment year under the Wealth Tax Act and a gift tax liability crystallises on the last day of the previous year for the relevant assessment year under the Gift Tax Act.
[494 E] 3.
The quantification of the income tax, wealth tax or gift tax liability is determined by a corresponding assessment order, and even if the assessment order is made after the valuation date relevant to the wealth tax assessment in which the claim to deduction is made, there is a debt owed by the assessee on the valuation date.
It is the quantification of the tax liability by the ultimate judicial authority which will determine the amount of the debt owed by the assessee on the valuation date.
So long as such ultimate determination indicates the existence of a positive tax liability, it must be held that there is a debt owed by the assessee on the valuation date even though such determination may be subsequent in point of time to the valuation date.
If, however, it is found on such ultimate determination that there is no tax liability it cannot be said that merely because originally a tax liability could be envisaged there was a debt owed by the assessee.
[495 B E] 4.
Section 2(m) (iii) (a) denies deduction of an amount of tax which is outstanding on the valuation date if the assessee contends in appeal, revision or other proceeding that he is not liable to pay the tax.
It presupposes that there is a subsisting tax demand and the assessee has challenged its validity.
It refers to the initial stage only where an appeal, revision or other proceeding is pending merely.
It does not proceed beyond that stage to the point where, in consequence of such appeal, revision or other proceeding, the tax liability has been found to be nil.
Once it is determined that the tax liability is nil, it cannot be said that any amount of tax is outstanding.
Such a situation does not bring section 2(m) (iii) (a) into operation at all.
If upon the ultimate determination it is found that the amount of tax is nil, the assessee is denied the deduction claimed by him not on the ground of section 2(m) (iii) (a) but because the superior authority has found that there is no tax liability whatever.
[496 A D] In the instant case, the income tax and the gift tax liabilities for the assessment year 1965 66 subsequently set aside on appeal after the valuation dates, cannot be regarded as debts owed by the assessee on the relevant valuation dates.
[495 G] 492 Commissioner of Income Tax vs Keshoram Industries Pvt Ltd. ; ; H.H. Setu Parvati Bayi vs Commissioner of Wealth Tax, Kerala referred to.
Late P. Appavoo Pillai vs Commissioner of Wealth Tax Madras reversed.
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<s>[INST] Summarize the judgementAppeal No. 1924 of 1970.
Appeal by special leave from the judgment and order dated April 28, 1970 of the Allahabad High Court in Special Appeal 'No. 368 of 1970.
section V. Gupte and Sobhagmal Jain, for the appellant. 0.
P. Rana and R. Bana, for the respondents.
591 The Judgment of the Court was delivered by Hegde J.
In this appeal by special leave the true ambit of item 1 in the Schedule to the (to be hereinafter referred to as the Act) read with section 3(1) of that Act comes up for consideration.
The appellant is a manufacturer of certain medicines with the aid of substances like tincture, spirit etc.
The tincture and spirit in their turn contain alcohol.
The Superintendent of Excise called upon the appellant to pay duty under the Act on the medicinal preparation on the ground that they contain alcohol.
The appellant resisted the demand on the ground that the medicines in question were not prepared by adding pure alcohol; the fact that the tincture which is a component of that preparation contains alcohol does not make it a preparation containing alcohol.
That contention was rejected by the Superintendent of Excise as well as by the High Court in the Writ petition brought by the appellant.
It is admitted that alcohol though it was not directly added is a component of the medicinal preparations in question.
The alcohol has not undergone any chemical change into some other substance.
It is present in a liquid form in those preparations.
The question for decision is whether the preparation in question do not attract duty because alcohol was not directly added to the solution.
The contention of the appellant is that unless alcohol is added into the preparation in its free condition, a medicinal preparation does not become dutiable.
For deciding this question we may now read the relevant provisions of the Act.
Section 3(1) of the Act says "There shall be levied duties of excise, at the rates specified in the Schedule, on all dutiable goods manufactured in India." "Dutiable goods" is defined in section 2(c) as meaning the medicinal and toilet preparations specified in the Schedule as being subject to the duties of excise levied under this Act: "Medicinal Preparation" is defined in section 2(g) in these words : " "medicinal preparation" includes all drugs which are a remedy or prescription prepared for internal or external use of human beings, or animals and all substances intended to be used for or in the treatment, mitigation or prevention of disease in human beings or animals.
" 5 9 2 Item 1 of the Schedule, the only item with which we are concerned in this case reads as follows : Item No. Description of Dutiable goods Rate of Duty Medicinal preparation.
Medicinal preparations, being patent or Ten proprietary medicines, containing alcohol Percent and which are not capable of being ab valouem consumed as ordinary alcoholic beverages.
The only other provision which we need consider is section 4 of the Act.
That section reads thus : Where alcohol, opium, Indian hemp or other narcotic drug or narcotic had been supplied to a manufacturer of any suitable goods for use as an ingredient of such goods by, or under the authority of, the collecting Government and a duty of excise on the goods so supplied had already been recovered by such Government under any law for the time being in force, the collecting Government shall, on an application being made to it in this behalf, grant in respect of the duty 'of excise leviable under this Act, a rebate to such manufacturer of the excess, if any, of the duty so recovered over the duty leviable under this Act.
" It was conceded that the preparations with which we are con cerned in this case are medicinal preparations.
They are proprietary medicines and that they are not capable of being consumed as ordinary alcohol beverages.
The only question that has to be decided is whether those preparations contain alcohol.
It is admitted that tincture is a component of that preparation and alcohol is a component of tincture.
Therefore we fail to see how it can be urged that those preparations do not contain alcohol.
In order to attract duty all that is required is that a medicinal preparation should contain alcohol.
Alcohol may be a part of the preparation either because it is directly added to the solution or it came to be included in that medicinal preparation because of one of the components of that preparation contained alcohol.
According to the plain language of the provision all that is required is that the preparation should contain alcohol.
In interpreting a tax ing provision, the courts should not ordinarily concern themselves with the policy behind the provision or even with its impact.
As observed by Rowlatt J. in Cape Brandy Syndicate vs Commissioners of Inland Revenue(1) in a taxing Act one has to look at (1) 593 what is clearly said.
There is no room for any intendment.
There is no equity about a tax.
There is no presumption as to a tax.
Nothing is to be read in, nothing is to be implied.
One can only look fairly at the language used.
It was urged on behalf of the appellant that if we hold that even indirect introduction of alcohol into a medicinal preparation brings that preparation within the scope of section 3(1) of the Act, it would mean multipoint taxation.
Coming to the medicinal preparations with which we are concerned in this case, it was urged that if the view taken by the High Court is correct then, first the tincture used became dutiable and thereafter the medicinal preparations in which tincture was used became dutiable.
It was said that that could not be the intention of the parliament.
We are unable to appreciate this contention.
Multipoint taxation is not unknown to us.
Our attention was invited to section 4 of the Act in support of the Contention that the legislature did not intend to levy multi point tax.
Section 4 provides for rebate of duty on alcohol supplied to the manufacturer of dutiable goods for use as an ingredient of such goods by or under the authority of the collecting government and a duty of excise on goods so supplied bad already been recovered by such Government under any law for the time being in force.
In our opinion this provision instead of supporting the appellant goes to show that multi point tax on medicinal preparations containing alcohol was within the contemplation of the leigslature; otherwise there was no purpose in incorporating section 4 into the Act.
if section 3 did not impose any levy on medicinal preparations of which pure alcohol is not a component, there was no need for section I.
There can be no question of any rebate if there was no levy at all.
Every rebate presupposes an imposition of tax or duty.
But the rebate under section 4 is confined only to those goods which directly come within the scope of section 4 and not to others.
That was the will of Parliament.
If Parliament desired to give rebate only in certain cases and not to others, it cannot be said that as regards the other medicinal preparations there can be no levy.
In our judgment the language of the provision imposing the levy is plain and unambiguous.
It imposes duty on all medicinal preparations containing alcohol.
At the hearing our attention was invited to the decision of the Madras High Court in M/s. Pharm Products Ltd. Thanjavur & ors.
vs Dist.
Rev. Officer(1).
The conclusion reached by that High Court accords with our conclusion.
In the result this appeal fails and the same is dismissed with costs.
V.P.S. Appeal dismissed.
[/INST]The appellant is a manufacturer of certain medicines with the aid of substances like tincture, spirit, etc., which contain alcohol.
On the question whether he was liable to pay duty under the Medicinal and Toilet Preparation (Excise Duties) Act, 1955, HELD : (1) The preparations are proprietary medicinal preparations and are not capable of being consumed as ordinary alcohol beverages, According to Item 1 of the Schedule to the Act, in order to attract duty, all that is required is that the medicinal preparation should contain alcohol.
Alcohol may be a part of the preparation either because it is directly added to the solution or it came to be included in the medicinal preparation because one of its components contains alcohol.
[592 E G] (2)It may be that a tincture is dutiable under the item, and, when the medicinal preparation in which it was used is also made dutiable it will involve multi point taxation.
But section 4 of the Act shows that the multi point tax on medicinal preparations containing alcohol was within the contemplation of the Legislature.
That section provides for rebate of duty on alcohol supplied to the manufacturer of dutiable goods, and, every rebate pressupposes imposition of tax or duty.
[593 B F] (3) The rebate under section 4 is confined only to those goods which directly come within the scope of section 4 and not to others.
From such a provision it cannot be said that as regard the other medicinal preparations, there can be no levy when the language of the provision imposing the levy is plain and unambiguous.
[593 F G] M/,s .
Pharm Products Ltd. Thanjavur vs District Revenue Officer , approved.
Cape Brandy Syndicate vs Commissioners of Inland Revenue. , referred to.
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<s>[INST] Summarize the judgementivil Appeal No. 2071 of 1968.
(From the Judgment and Order dated 20 4 1967 of the Madhya Pradesh High Court in Misc.
First Appeal No. 104/66).
Rameshwar Nath, for the appellants U.R. Lalit and A.G. Ratnaparkhi, for respondent No. 1.
Naunit Lal and Miss Lalita Kohli, for respondent No. 2.
The Judgment of the Court was delivered by KAILASAM, J.
This is an appeal by certificate under Article 133 (1)(a) of the Constitution granted by the High Court of Madhya Pradesh.
The appellants filed a claim for compensation of a sum of rupees one lakh under section 110 of the before the Claims Tribunal, Jabalpur.
The first claimant is the wife and the claimants 2 to 8 are the children of one Purshottam Tulsidas Udeshi who met with his death in a motor car accident on 18th December, 1960 when he was travelling in the car which was driven by Madhavjibhai Mathuradas Ved, the Manager of the first opponent company, M/s. Ranjit Ginning and Pressing Co. Private Ltd., in a rash and negligent manner near a village called Chincholivad which was 16 miles from Saoner.
The car which was .a
Hindustan Ambassador Saloon was insured with second opponent, Union 375 Fire Accident and General Insurance Co. Ltd. The deceased was aged 58 years at the time of ' his death and according to the petitioners was earning annually about Rs. 9,000.
They claimed a compensation of rupees one lakh.
The opposite parties, the owner and the insurance company, opposed.
the claim.
While admitting that the vehicle was proceeding from Nagpur on its way to Pandhurna for the purpose men tioned by the applicants they denied that the vehicle was driven in a rash and negligent manner and pleaded that the vehicle was at the time of accident in perfectly sound condition.
It Was submitted that the husband of the appli cant No. 1 was travelling in the said vehicle on his own responsibility and for his own purpose and absolutely gratis and not on behalf of or at the instance of the opposite party No. 1, or the driver of the vehicle and therefore the claimants are not entitled to any compensa tion.
The opposite parties pleaded that the incident was as a result of inevitable accident and not due to any act of rashness or negligence on the part Of the driver.
They opposed the claim of the compensation as highly exaggerated.
The Motor Accidents Claims Tribunal, Jabalpur, found that the accident of the motor vehicle was as a result of negligent driving of the vehicle by the Manager, Madhavjib hai Mathuradas Ved, the driver of the vehicle.
It also found that the first respondent, the owner of the company, is liable to pay compensation to the claimants on account of the negligence of their employee Madhavjibhai which caused the death of Purshottam Tulsidas Udeshi.
Regarding the compensation payable the Tribunal fixed Rs. 31,209.15 as general damages in addition to Rs. 2,000 as special damages for funeral and post funeral expenses.
The owner, first opponent, preferred an appeal to the High Court impleading the claimants and the insurance company as respondents against the award passed by the.
Claims Tribunal.
The High Court did not decide the question as to whether the accident was due to the rash and negligent driving or the quantum of compensation to which the claimants were entitled to as it allowed the appeal by the owner on the ground that the owner cannot be held vicariously liable for the act of Madhavjib hai in taking Purshottam as a passenger as the said act was neither in the course of his employment nor under any au thority whatsoever and that there was no evidence that the owners of the vehicle were aware that Purshottam was being taken in the car as a passenger by their Manager, Madhavjib hai.
Holding that so far as the owners are concerned Pur shottam was no better than a trespasser the High Court held that the owners were not vicariously liable.
On an applica tion by the claimants the High Court granted a certificate and thus this appeal has come before this Court.
The questions that arise for consideration are whether on the facts of the case the claimants have established (1) that the accident was due to the rash and negligent driving of Madhaviibhai Mathuradas Ved, the Manager of the company, and (2) whether the incident took place during the course of the employment of the driver.
In the event the claimants succeed on these two points the amount of compensation to which they are entitled would have to be determined.
376 The High Court relying on three decisions in Sitgram Motilal Kalal vs Santanuprasad Jaishankar Bhatt(1), Canadian Pacific Railway Company vs Leonard Lockhall(2), and Conway vs George Wimpey & Co. Ltd.(3), came to the conclusion that the rash and negligent driving by the Manager was not in the course of his employment.
The learned counsel for the respondent relied on some other decisions which will be referred to in due course.
The High Court has not gone into the question as to whether the car was.
being driven rashly and negligently by the owner 's employee as it held that the act was not in the course of his employment.
We feel that the question as to whether the car was being driven rashly and negligently would have to be decided on the facts of the case first for, if the claimants fail to establish rash ' and negligent act no other question would arise.
We would therefore proceed to deal with this question first.
The claimants did not lead any direct evidence as to how the accident occurred.
No eye witness was examined.
But P.W. 1, the younger brother of the deceased Purshottam Udeshi, who went to the spot soon after the accident was examined.
He stated that he went with one of his relatives and an employee of his brother 's employer and saw that the car had dashed against a tree while proceeding from Nagpur to Pandurna.
The tree was on the right hand side of the road, four feet away from the right hand side of the main metalled road.
The vehicle will have to proceed on the left hand side of the road.
The road was 15 feet wide and was a straight metalled road.
On either side of the road there were fields.
The fields were of lower level.
The tree against which the car dashed was uprooted about 9 to 10 inches from the ground.
The car dashed so heavily that it was broken in the front side.
A photograph taken at that time was also filed.
According to the witness the vehicle struck so heavily that the machine of the car from its original posi tion went back about a foot.
The steering wheel and the engine of the car receded back on driver 's side and by the said impact the occupants died and front seat also moved back.
The witness was not cross examined on what he saw about the state of the car and the tree.
It was not sug gested to him that the car was not driven in a rash and negligent manner.
In fact there is no cross examination on the aspect of rash and negligent driving.
The Claims Tribu nal on this evidence found that "it was admittedly a mishap on the right side of the road wherein the vehicle had dashed against a tree beyond the pavement so violently as not only to damage the vehicle badly but also entailing death of its three occupants, maxim 'res ipsa loquitur ' applies (See Ellor vs Selfridge The Tribunal proceeded to discuss the evidence of P.W. 1 and found on the evidence that it cannot.help concluding that the dashing of the car against the tree was most violent and that it was for the respondents to establish that it was a case of inevitable accident.
They have led no evidence.
It may at once be stated that though the opposite parties had pleaded that this is a case of inevitable accident they have (1) (2) A.I.R. 1943 P.C. 63.
(3) 377 not led any evidence to establish their plea.
The burden rests on the opposite party to prove the inevitable acci dent.
To succeed in such a defence the opposite party will have to establish that the cause of the accident could not have been avoided by exercise of ordinary care and caution.
"To establish a defence of inevitable accident the defendant must either show what caused the accident and that the result was inevitable, or he must show all possible causes, one or more of which produced the effect, and with regard to each of such possible causes he must show that the result could not have been avoided." (Halsbury 's Laws of England, Third Ed., Vol.
28, p. 81).
No such attempt was made and before us the plea of inevitable accident was not raised.
We have therefore to consider whether the claimants have made out a case of rash and negligent driving.
As found by the Tribunal there is no eye witness and therefore the question is whether from the facts established the case of rash and negligent act could be inferred.
The Tribunal has applied the doctrine of "resipsa loquitur".
It has to be considered whether under the circumstances the Tribunal was justified in applying the doctrine.
The normal rule is that it is for the plaintiff to prove negligence but as in some cases considerable hardship is caused to the plaintiff as the true cause of the accident is not known to him but is solely within the knowledge of the defendant who.
caused it, the plaintiff can prove the acci dent but cannot prove how it happened to establish negli gence on the part of the defendant, This hardship is sought to be avoided by applying the principle of res ipsa loqui tur.
The general purport of the words res ipsa loquitur is that the accident "speaks for itself" or tell 's its own story.
There are cases in which the accident speaks for itself so that it is sufficient for the plaintiff to prove the accident and nothing more.
It will then be for the defendant to establish that the accident happened due to some other cause that his own negligence.
Salmond on the Law of Torts (15th Ed.) at p. 306 states: "The maxim res ipsa loquitur applies whenever it is so improbable that such an accident would have happened without the negligence of the defendant that a reasonable jury could find without further evidence that it was so caused.
" In Halsbury 's Laws of England, 3rd Ed., Vol.
28, at p. 77, the position is stated thus: "An exception to the general rule that the burden of proof of the alleged negligence is in the first instance on the plaintiff occurs wherever the facts already established are such that .the proper and natural inference arising from them is ,that the injury complained of was caused by the defendant 's negligence, or where the event charged as negligence "tells its own story ' of negligence on the part of the defendant, the story so told being clear and unambiguous.
" Where the maxim is applied the burden is on the defendant to show either that in fact he was not negligent or that the accident might more probably have happened in a manner which did not connote negligence on his part.
For the application of the principle it must be shown that the car was under the management of the defendant and that the accident is such as in ordinary course of things does not happen if those who had the management used proper care.
Applying the principles stated above we have to see whether the requirements of the principle 378 have been satisfied.
There can be no dispute that the car was under the management of the company 's manager and that from the facts disclosed by P.W. 1 if the driver had used proper care in the ordinary course of things the car could not have gone to the right extreme of the road, dashed against a tree and moved it a few inches away.
The learned counsel for the respondents submitted that the road is a very narrow road of the width of about 15 feet on either side of which were fields and that it is quite probable that cattle might have strayed.
into the road suddenly causing the accident.
We are unable to accept the plea for in a country road with a width of about 15 feet with fields on either side ordinary care requires that the car should be driven at a speed in which it could be controlled 'if some stray cattle happened to come into the road.
From the description of the accident given by P.W. 1 which stands unchallenged the car had proceeded to the right extremity of the road which is the wrong side and dashed against a tree uprooting it about 9 inches from the ground.
The car was broken on the front side and the vehicle struck the tree so heavily that the engine of the car was displaced from its original position one foot on the back and the steering wheel and the engine of the car had receded back on the driver 's side.
The car could not have gone to the right extremity and dashed with such violence on the tree if the driver had exercised reasonable care and caution.
On the facts made out the doctrine is applicable and it is for the opponents to prove that the incident did not take ' place due to their negligence.
This they have not even attempted to do.
In the circumstances we find that the Tribunal was justified in applying the doctrine.
It was submitted by the Learned counsel for the respondents that as the High Court did not consider the question this point may be remitted to the High Court.
We do not think it necessary to do so for the evidence on record is convicing to prove the case of rash and negligent driving set up by the claimants.
The second contention that was raised by the counsel for the appellants is that the High Court was in error in hold ing that the incident did not take place in the course of the employment or under the authority of the company.
The High Court found that there is no evidence that the owner of the vehicle was aware that Purshottam was being taken in the car as a passenger by Madhavjibhai and in the circumstances the owner cannot be held liable for the tortious act of the servant.
The High Court found that the car was going from Nagpur to Pandhurna on the business of the company and it may also be that Madhavjibhai, the Manager of the owner 's car, was also going on the business of the owner and it may also be that he had implied authority to drive the vehicle.
Having agreed with the contentions of the claim ants so far the High Court came to the conclusion that there were no pleadings or material on record to establish that Purshottam was travelling in the vehicle either on some business of the owner of the vehicle or under any ostensible authority from them to their manager Madhavjibhai to take Purshottam as a passenger in the vehicle.
Before dealing with the right of Purshottam as a passenger, we will consid er the question whether the 379 accident took place during the course of the employment of Madhavjibhai by the company.
It is admitted in the written statement by the owner, that Madhavjibhai was the Manager of opposite party No. 1 and that the vehicle was proceeding from Nagpur on its way to Pandhurna for purpose of deliver ing an amount of Rs. 20,000 to the Ginning.
and Pressing factory at Pandhurna.
The Tribunal found on the plead ings that Madhavjibhai was the employee of the company and during the course of employment by driving the motor car he negligently caused the death of Purshottam.
The High Court also confirmed the findings and found that Madhavjibhai, the Manager .of the owner of the car, was going on the business Of the said owner and that it may be that the Manager had the implied authority to drive the vehicle.
On such a finding which is not disputed before us, it is difficult to resist the conclusion that the accident was due to the negligence of the servant in the course of his employment and that the master is liable.
On the facts found the law is very clear but as the question of the company 's liability was argued at some length we will proceed to refer to the law on the subject.
It is now firmly established that the master 's liability is based on the ground that the act is done in the scope or course of his employment or authority.
The position was stated by Lord Justice Denning in Young vs Edward Box and Co. Ltd.(1).
The plaintiff and fellow workmen were given a lift on one of the defendants ' lorries with the consent of his foreman and of the driver of the lorry.
On a Sunday evening the plaintiff, in the course of that journey, was injured by the negligence of the driver of the lorry and the plaintiff brought an action against the defendants claiming damages for his injuries.
The defence was that the plain tiff, when on the lorry, was a trespasser.
The traffic manager of the defendants pleaded that he had never given instructions to the foreman that he should arrange for lifts being given to the plaintiff and his fellow workmen on Sundays and that the foreman had no authority to consent to the plaintiff 's riding on the lorry.
While two learned Judges held that the right to give the plaintiff leave to ride on the lorry was within the ostensible authority of the foreman, and that the plaintiff was entitled to rely on that authority and in that respect was a licensee, Lord Denning held that although the plaintiff, when on the lorry, was a trespasser, so far as the defendants were concerned, the driver was acting in the course of his employment in giving the plaintiff a lift and that was sufficient to make the defendants liable and that he did not base his judgment on the consent of 'the foreman.
Lord Justice Denning stated the position thus: " . the first question is to see whether ' the servant was liable.
If the answer is Yes, the second question is to see whether the employer must shoulder the serv ant 's liability.
So far as the driver is concerned, his liability depends on whether the plaintiff was on the lorry with his con sent or not.
X X X X X. (1) at 793.
380 The next question is how far the employers are liable for their servant 's conduct.
In order to make the employers liable to the passenger it is not sufficient that they should be liable for theft servant 's negli gence in driving.
They must also be responsi ble for his conduct in giving the man a lift.
If the servant has been forbidden, or is unau thorised, to give anyone a lift, then No. doubt the passenger is a trespasser on ' the lorry so far as the owners are concerned; but that is not of itself an answer to the claim.
X X X X X In my opinion, when the owner of a lorry sends his servant on a journey with it, thereby putting the servant in a position, not only to drive it, but also be give people a lift in it, then he is answerable/or the manner in which the servant conducts himself on the journey, not only in the driving of it, but also in giving lifts in it, provided, of course, that in so doing the servant is acting in the course of his employment." Lord Justice Denning concluded by observing that the passen ger was therefore a trespasser, so far as the employers were concerned; but nevertheless the driver was acting in the course of his employment, and that is sufficient to make the employers liable.
It will thus be seen that while two of the learned Judges held that the right to give the plaintiff leave to ride on the lorry was within the ostensible author ity of the foreman and the plaintiff was entitled to rely on that authority as a licensee, Lord Denning based it on the ground that even though the plaintiff was a trespasser so far as the defendants were concerned, as the driver was acting in the course of his employment in giving the plain tiff a lift, it was sufficient to make the defendants li able.
Applying the test laid down there can be no difficul ty in concluding that the right to give leave to Purshottam to ride in the car was within the ostensible authority of the Manager of the company who was driving the car and that the Manager was acting in the course of his employment in giving lift to Purshottam.
Under both the tests the respond ents would be liable.
We will now refer to the three cases relied on by the High Court for coming to the conclusion that the accident did not take place during the course of employment.
The first case referred to is Sitaram Motilal Kalal vs Santanu prasad Jaishankar Bhatt(1).
The owner of a vehicle entrust ed it to A for plying it as a taxi.
B who used to clean the taxi was either employed by the owner or on his behalf by A. A trained B to assist him in driving the taxi and took B for obtaining a licence for driving.
While taking the test B caused bodily injury to the respondent.
A was not present in the vehicle at the time of the accident.
On the question whether the owner was liable the majority held the view that the owner was not liable.
On the facts the court found that the person who had borrowed the taxi for taking out a licence and the driver who lent the same was not acting in the course of his business.
The court on an application of the test laid down in various decisions held that there is no proof that the second defendant, the driver, was author ized to coach the cleaner so that the cleaner ' (1) [19661 3 S.C.R. 527.] 381 might become a driver and drive the taxi and that it ap peared more probable that the second defendant wanted some one to assist him in driving the taxi for part of the time and was training the third defendant to share the task of driving.
The owner 's plea that it had not given any such authority was accepted by the court.
Holding that it had not been proved that the act was impliedly authorized by the owner or to come within any of the extensions of the doc trine of scope of employment the court held that the owner is not liable.
This Court has held that the test is whether the act was done on the owner 's business or that it was proved to have been impliedly authorized by the owner.
At page 537 it is stated that the law is settled that master is vicariously liable for the acts of his servants acting in the course of his employment.
Unless the act is done in the course of employment, the servant 's act does not make the employer liable.
In other words, for the master 's liability to arise, the act must be a wrongful act authorised by the master or a wrongful and unauthorized mode of doing some act authorised by the master.
The extension of the doctrine of the scope of employment noticed in the judgment refers to the decision of Ormrod and Another vs Crosville Motor Serv ices Ltd., and Another (1), where Lord Denning stated: "It has often been supposed that the owner of a vehicle is only liable for the negligence of the driver if that driver is his servant acting in the course of his employment.
This is not correct.
The owner is also liable if the driver is, with the owner 's consent, driving the car on the owner 's business or for the owner 's purposes." The Supreme Court accepted the test and to that extent this may be taken as an extension of the doctrine of scope of employment.
Thus, on the facts as we have found that the accident took place during the course of employment the decision in Sitaram Motilal Kalal is of no help to the respondents.
The next ease which is referred to by the High Court is Canadian Pacific Railway Company vs Lockhart(2).
In that case one S was employed as a carpenter by the railway compa ny.
In the course of his employment he was required to make repairs of various kinds to employer 's property.
He made a key for use in a lock in the station at N far away from his headquarters at W. He was paid per hour and the railway company kept vehicles to be used by S available for him.
S, however, had a car of his own and without communicating his intention to anyone he used it on his way to N.
An accident happened on the way owing to S 's negligence.
It was also in evidence that the railway company had issued notice to its servants particularly to S warning him against using their private cars unless they had got their cars insured against third party risk.
On the facts, the Privy Council held that the means of transport used by the carpenter was clearly incidental to ' execution of that for which he was employed.
As what was prohibited was not acting as a driver but using a non insured car, the prohibition merely limited the way in which the servant was to execute the work which he was employed to do and that breach of the prohibition did not exclude the liability of the master to third party.
We do not see how this case would help the respondents.
On (1) (2) 382 the other hand it supports the contention of the counsel for the appellants that when the Manager was driving the car for the purposes of the company it was in the course of his employment.
The third case that is referred to by the High Court is Conway vs George Wimpey & Co. Ltd. (1).
The defendants, a firm of contractors, were engaged in building work at an aerodrome, and they provided lorries to convey their employ ees to the various places of their work on the site.
In the cab of each lorry was a notice indicating that the driver was under strict orders not to carry passengers other than the employees of the defendants during the course of, and in connection with, their employment, and that any other person travelling on the vehicle did so at his own risk.
Further the driver of the lorry had received clear oral instructions prohibiting him fro.m taking other persons.
The plaintiff who was employed as a labourer by another firm Of contrac tors at the aerodrome, while on his way to work, was permit ted by the driver to ride on one of the defendants ' lorries for some distance across the aerodrome and while dismounting the plaintiff was injured owing to driver 's negligence.
The court held that on the facts of the case the taking of the defendants ' employees on the vehicle was not merely a wrong ful, mode of performing an act of the class which the driver in the present case was employed to perform but was the performance of an act of a class which he was not employed to perform at all.
The facts stated above are entirely different from those which arise in the present case before us as in the case before the Court of Appeal(2) there was a notice indicating that the driver was under strict orders not to carry passengers and the driver was instructed not to carry others while in the present case a responsible officer of the company, the Manager, had permitted Purshottam to have a ride in the car.
Taking into account the high posi tion of the driver who was the Manager of the company, it is reasonable to presume, in the absence of any evidence to the contrary, that the Manager had authority to carry Purshottam and was acting in the course of his employment.
We do not see any support for the conclusion arrived at by the High Court that the driver was not acting in the course of his employment.
We will now proceed to refer to some cases which were cited by the learned counsel for the respondents.
The learned counsel placed reliance on the decision in Houghton vs Pilkington.(1) In that case the plaintiff at the request of a servant of the defendant got into the defendant 's cart which was then in the chrage of the servant, in order to render assistance to another servant of the defendant who had been rendered unconscious by an accident.
The plaintiff fell out of the cart and was injured through the negligence of the servant in charge of the cart in causing the horse to start.
In an action against the defendent for damages for the injuries sustained by the plaintiff it was held that the existence of an emergency gave no implied authority to the servant to invite the plaintiff into.
the cart and that the defendant was not liable (1) (2) (3) 383 to the plaintiff.
Justice Bankes while agreeing with Justice Bray who delivered the leading judgment expressed his view that the lower court had taken the view that an emergency had arisen which gave the defendant 's servant implied au thority to invite the plaintiff into the cart for the pur pose of rendering assistance to.
the injured boy.
The learned Judge was first inclined to agree with that view but because of the case being governed by Cox vs Midland Coun ties Ry.
Co. ; he felt he could not consistent ly with that decision hold that in the circumstances the driver of the cart had any implied authority to invite the plaintiff to get into the car.
The facts in Houghton vs Pilkington are entirely different and the decision was based on the ground that existence of the emergency did not confer on the driver of the cart authority to invite the plain tiff into the cart.
The next case that was cited by the learned counsel for the respondents was Twine vs Bean 's Express, Limited(1).
The defendants provided for the use of a bank a commercial van and a driver on the terms that the driver remained the servant of the defendants and that the defendants accepted no responsibility for injury suffered by persons riding in the van who were not employed by them.
There were two notices on the van, one stating that no unauthorized person was allowed on the vehicle, and the other that driver had instructions not to allow unauthorized travellers in the van, and that in no event would the defendants be responsi ble for damage happening to them.
One T who was not author ized to ride in the van got a rift in the van with the consent of the driver.
Owing to the negligence of the driver the accident occurred and T was killed.
The conten tion that the accident arose while the driver was engaged on a duly authorized journey was negatived and it was held that defendants owed no duty to T to take care.
This case was taken up on appeal which confirmed the view of the trial court holding that the driver in giving the lift to T was clearly not acting within the Scope of his employment and his employers were consequently not liable.
The facts are totally different.
The learned counsel for the respondents was not able to produce any authority which would support his contention that on the facts of the case found, the company should not be held liable.
Before we conclude, we would like to point out that the recent trend in law is to make the master liable for acts which do not strictly fall within the term "in the course of the employment" as ordinarily understood.
We have referred to Sitaram Motilal Kalal vs Santanuprasad Jaishankar Bhat (supra) where this Court accepted the law laid down by Lord Denning in Ormrod and Another rs.
Crosville Motor Services Ltd. and Another (supra) that the owner is not only liable for the negligence of the driver if that driver is his servant acting in the course of his employment but also when the driver is, with the owner 's consent, driving the car on the owner 's business or for the owner 's purposes.
This extension has been accepted by this Court.
The law as laid down by Lord Denning in Young vs Edward Box and Co. Ltd. already referred to i.e. the first question is to see wheth er the servant is liable (1) 155, year 1945 56.
10 36SCI/77 384 and if the answer is yes, the second question is to see whether the em1oyer must shoulder the servant 's liability, has been uniformally accepted as stated in Salmond Law of Torts, 15th Ed., p. 60 '6, in Crown Proceedings Act, 1947 and approved by the House of Lords in Staveley Iron & Chemical Co. Ltd. vs Jones(1) and I.C.I. Ltd. vs Shatwell(2).
The scope of the course of employment has been extended in Navarro vs Moregrand Ltd. & Anr(3) where the plaintiff who wanted to acquire the tenancy of a certain flat, applied to the second defendant, a person with ostensible authority to conduct the business of letting the particular fiat for the first defendant, the landlord.
The second defendant demand ed from the plaintiff a payment of Pound 225 if he wanted the flat and 'the plaintiff paid the amount.
The plaintiff sought to recover the sum from the landlord under the Land lord and Tenant (Rent Control) Act, 1949.
The Court of Appeal held that the mere fact that the second defendent was making an illegal request did not constitute notice to the plaintiff that he was exceeding his authority and that, though the second defendant was not acting within his actual or ostensible authority in asking for the premium, a.s the landlord had entrusted him with the letting of the flat, and as it was in the very course of conducting that business that he committed the wrong complained of he was acting in the course of his employment.
Lord Denning took the view that though the second defendant was acting illegally in asking for and receiving a premium and had no actual or ostensible authority to do an illegal act, nevertheless, he was plainly acting in the course of his employment, because his employers, the landlords, had entrusted him with the full business of letting the property, and it was in the very course of conducting that business 'that he did the wrong of which complaint is made.
This decision has extended the scope of acting in the course of employment to include an illegal act of asking for and receiving a premium though the receiving of the premium was not authorized.
We do.
not feel called upon to consider whether this extended meaning should be accepted by this Court.
It appears Lord Goddard, Chief Justice, had gone further in Barker vs Levinson(4) and stated that "the master is responsible for a criminal act of the servant if the act is done within the general scope of the servant 's employment." Lord Justice Denning would not go to this extent and felt relieved to find that in the authorized Law Reports , the passage quoted above was struck out.
We respectfully agree with the view of Lord Denning that the passage attributed to Lord Chief Justice Goddard went a bit too far.
On a consideration of the cases, we confirm the law as laid down by this Court in Sitararn Motilal Kalal vs Santa nuprasad Jaishankar Bhatt (suvra) and find that in this case the driver was acting in the course of his employment.
and as such the owner is liable.
We therefore set aside the finding of the High Court that the act was not committed in the course of employment or under the authority of the master, and allow the appeal.
2) (1965) A.C. 656.
(3) (4) 66 The Times L.R. (Pt. 2) 717.
385 The only point that remains is the determination of the quantum of compensation to which the appellants are entitled to.
The High Court did not go into this question but the Tribunal after taking into consideration the various facts fixed the compensation at Rs. 33,209.15 with costs and directed that the insurance company shall indemnify the owner to the extent of Rs. 15,000.
The Tribunal fixed special damages for funeral and post funeral expenses in cluding transport charges at Rs. 2,000.
This item is not disputed.
The second item is a sum of Rs. 31,209.15 which according to the Tribunal would have been the amount which the deceased would have earned by continuing to work for a period of 5 years.
The Tribunal accepted the documents produced by the claimants regarding the income of the de ceased and fixed it at Rs. 9,316.83 per annum.
Out of this amount the Tribunal rightly excluded a sum of Rs. 1,875 which is the bonus the deceased would have got as it cannot be taken into account and fixed the net amount of earning at Rs. 7,441.83 per year and Rs. 37,209.15 for 5 years.
After deducting Rs. 6,000 which the deceased might have spent on himself the Tribunal arrived at a figure of Rs. 31,209.15 under this head.
The learned counsel for the respondents referring to item No. 27 pointed out that the pay of the deceased was only Rs. 425 per month and that the Tribunal was in error in including the dearness allowance, conveyance allowance and other expenses and that the income of the deceased should have been taken as only Rs. 425 per month.
The learned counsel for the appellants accepts this figure.
Taking Rs. 425/ being the monthly income the annual income totals up to Rs. 5,100/ and for 5 years to Rs. 25,500/ .
Adding to this Rs. 2,000/ which was given as special dam ages the total amount will come to Rs. 27,500/ .
We accept ' this calculation as correct and restore the award passed by the Claims Tribunal but restrict it to an amount of Rs. 27,500/ .
As the Union Fire Accident & General Insurance Co. Ltd., Paris, carrying on business at Nagpur has been nationalised, though the second respondent before the Tribunal was repre sented by a counsel, we directed notice to the nationalised insurance company so.
that they would also be heard.
The nationalised insurance company has taken notice and appeared through Mr. Naunit Lal, advocate.
The insurance company had nothing further to add except as to the quantum of liability of the insurance company so far as injuries to the passengers are concerned.
Mr. Naunit Lal submitted that the scope of the statutory insurance does not cover the injury suffered by the passengers and as the owner has specifically insured under the insurance policy the risk to passengers to the extent of Rs. 15,000 only the liability of the insurance company should be limited to Rs. 15,000.
On behalf of the owner it was submitted that the insurance cover under the Act extended to the injury to the passengers also and sought to support his contention by referring to section 95(1)(b)(i) which provides against any liability to the owner which may be incurred by him in respect of death of or bodily injury to any person or damage to any property of a third party caused by or arising out of the use of the vehicle in a public place.
386 As section 95 of the Motor Vehicles Act, 1935 as amended by Act 56 of 1969 is based on the English Act it is useful to refer to that.
Neither the Road Traffic Act, 1960, or the earlier 1930 Act required users of.
motor vehicles to be insured in respect of liability for death or bodily injury to passengers in the vehicle being .used except a vehicle in which passengers were carried for hire or reward or by reason of or in pursuance of a contract of employment.
In fact, sub section 203(4) of the 1960 Act provided that the policy shall not be required to cover liability in respect of death of or bodily injury to persons being carried in or upon, or entering or getting on to or alighting from, the vehicle at the time of the occurrence of the event out of which the claims arise.
The provisions of the English Act being explicit the risk to passengers is not covered by the insurance policy.
The provisions under the English Road Traffic Act, 1960, were introduced by the amendment of section 95 of the Indian Motor Vehicles Act.
The law as regards general exclusion of passengers is stated in Hals bury 's Laws of England, Third Edition, Vol. 22, at p. 368, para 755 as follows : "Subject to certain exceptions a policy is not required to cover liability in respect of the death of, or bodily injury to, a person being carried in or upon, or entering or getting into or alighting from, the vehicle at the time of the occurrence of the event out of which the claim arises," It is unnecessary to refer to the subsequent development of the English law and as the subsequent changes have not been adopted in the Indian statute.
Suffice it to say that the Motor Vehicle (Passenger Insurance) Act, 1971, made insur ance cover for passenger liability compulsory by repealing paragraph (a) and the proviso of sub section 203(4).
But this Act was repealed by Road Traffic Act, 1972 though under section 145 of 1972.
Act the coming into force of the provi sions of Act 1971 covering passenger liability was delayed under December 1, 1972.
(vide Bingham 's Motor Claims Cases, 7th Ed., p. 704).
Section 95(a) and 95(b)(i) of the Motor Vehicles Act adopted the provisions of the English Road Traffic Act, 1960, and excluded the liability of the insurance company regarding the risk to the passengers.
Section 95 provides that a policy of insurance must be a policy which insures the persons against any liability which may be incurred by him in respect of death or bodily injury to any person or damage to any property of a third party caused by or arising out of the use of the vehicle in a public place.
The plea that the words "third party" are wide enough to cover all persons except the person and the insurer is negatived as the insurance cover is not available to the passengers made clear by the proviso to sub section which provides that a policy shall not be required "(ii) except where the vehicle is a vehi cle in which passengers are carried for hire or reward or by reason of or in pursuance of a contract of employment, to cover liability in respect of the death of or bodily injury to persons being 387 carried in or upon or entering or mounting or alighting from the vehicle at the time of the occurrence of the event out of which a claim arises.
" Therefore it is not required that a policy of ' insurance should cover risk to the passengers who are not carried for hire or reward.
As under section 95 the risk to a passenger in a vehicle who is not carried for hire or reward is not required to be insured the plea of the counsel for the insurance company will have to be accepted and the insurance company held not liable under the requirements of the Motor Vehicles Act.
The insurer can always take policies covering risks which are not covered by the requirements of section 95.
In this case the insurer had insured with the insurance company the risk to.
the passengers.
By an endorsement to.
the policy the insurance company had insured the liability regarding the accidents to passengers in the following terms: "In consideration of the payment of an additional premium it is hereby understood and agreed that the Company undertakes to pay compensation on the scale provided below for bodily injury as hereinafter defined sustained by any passenger . . ." The scale of compensation is fixed at Rs. 15,000.
The insurance company is ready and willing to pay compensation to the extent of Rs. 15,000 according to this endorsement but the learned counsel for the insured submitted that the liability of the insurance ' company is unlimited with regard to risk to the passengers.
The counsel relied on Section II of the Policy which relates to liability to third parties.
The clause relied on is extracted in full: "Section II Liability to Third Parties.
The Company will indemnify the in sured in the event of accident caused by or arising out of the use of the Motor Car against all sums including claimant 's costs and expenses which the insured shall become ' legally liable to pay in respect of (a) death of or bodily injury to any person but except so far as is necessary to meet the requirements of Section 95 of the Motor Vehi cles Act, 1939, the Company shall not be liable where such death or injury arises out of and in the course of the employment of such person by the insured.
" It was submitted that the wording of clause 1 is wide enough to cover all risks including injuries to passengers.
The clause provides that the Company will indemnify the insured against all sums including claimant 's costs and expenses which the insured shall become legally liable.
This accord ing to the learned counsel would 'include legal liability to pay for risk to passengers.
The legal liability is re stricted to 388 clause 1 (a) which states that the indemnity is in relation to the legal liability to pay in respect of death of or bodily injury to any person bur except so far as is neces sary to meet the requirements of section 95 of the Motor Vehicles Act.
The Company shall not be liable where such death or injury arises out of and in the course of the employment of such person by the insured.
Clause 1 and 1 (a) is not very clearly worded but the words "except so far as is necessary to meet the requirements of Section 95 of the ," would indicate that the liability is restricted to the liability arising out of the statutory requirements under section 95.
The second part of clause 1(a) refers to the non liability for injuries arising in the course of employment of such person.
The meaning of this sub clause becomes clear when we look to the other clauses of the insurance policy.
The policy also provides for insurance of risks which are not covered under section 95 of the Act by stipulating payment of extra premium.
These clauses would themselves indicate that what was in tended to be covered under clause 1 and 1 (a) is the risk required to be covered under section 95 of the Motor Vehi cles Act.
On a construction of the insurance policy we accept the plea of the insurance company that the policy had insured the owner only to the extent of Rs. 15,000 regarding the injury to the passenger.
In the result we hold that the liability of the insurance company is restricted to Rs. 15,000.
There shah be a decree in favour of the claimants appellants to the extent of Rs. 27,500 against ' the respond ents out of which the liability of the insurance company will be restricted to Rs. 15,000.
The appeal is allowed with the costs of the appellant which will be paid by the respondents in equal share.
P.H.P. Appeal allowed.
[/INST]Purshottam Udeshi was travelling in a car which was driven by Manager of the first respondent company.
The car was insured with the second respondent.
The car dashed against a tree while proceeding from Nagpur to Pandurna.
Purshottam, who was aged 58 years at that time, died in the. accident.
His annual income was about Rs. 9000/ .
The widow and children of Purshottam filed a claim for compensation for a sum of Rs. 1 lac under section 110 of the , before the Claims Tribunal.
The respondents denied that the vehicle was driven in a rash or negligent manner and contended tbat the vehicle at the time of accident was perfectly in sound condition.
It was also contended that Purshottam was travelling in the said vehicle on his own responsibility and for his own purpose absolutely gratis and not on behalf of or at the instance of respondent No. 1 or the driver of the vehicle and, therefore, the claimants were not entitled to any compensation.
The respondent pleaded inevitable accident.
The Tribunal found that the accident was as a result of negligent driving of the vehicle by the Manager.
It also found that the first respondent the owner of the company was liable, to pay compensation to the claimants on account of negligence of their employee.
Tribunal awarded Rs. 31,209/ as general damages on the basis of 5 years ' earning less the, amount which the deceased might have spent on himself and Rs. 2,000/. as special damages for funeral and post funeral expenses.
The Tribunal took into account the pay, D.A., conveyance allowance etc.
for the purpose of determining income of the deceased.
Both the respond ents.
filed appeals in the.
High Court.
The High Court did not decide the question as to whether the accident was due to rash and negligent driving or the quantum of compensation allowed by the Tribunal was proper or not on the ground that the respondent No. 1 cannot be held vicariously liable for the act of their Manager in taking Purshottam as a passen ger as the said act was neither in the course of his employ ment nor under any authority whatsoever; that no evidence was led to show that the respondent No. 1 was aware that Purshottam was being taken in the car as a passenger by their Manager.
The High Court held that Purshottam was no better than a trespasser as far as respondent No. 1 is concerned and that, therefore., respondent No. 1 cannot be made vicariously liable.
In an appeal by certificate, the appellants claimants con tended: (1) That the accident was due to the, rash and negligent driving of the Manager of re spondent No. 1.
(2) The accident took place during the course of the employment of the driver.
Allowing the appeal, HELD: (1) The car was being driven rashly and negligent ly.
Although no eye witness was examined P.W.I. the brother of the deceased who went to the spot soon after the accident was examined.
He deposed that the car dashed 373 against a tree.
The tree was on the right hand side of the road, 4 ft.
away from the right hand side of the main met alled road.
The road was 15 ft. wide and was a metalled road.
On other side of the road there were fields at lower level.
The tree against which the car dashed was uprooted about 9 to 10" from the ground.
The car dashed so vio lently that it was broken in the front side.
The vehicle struck so violently that the machine of the car went back about a foot from its original position.
The steering wheel of the engine of the car receded back on the driver 's side and the said impact on the driver 's side and by the said impact the occupants died and front seat also moved back.
The witness was not cross examined on these facts.
The maxim of "Res ipsa 1oquitur" clearly applies in the present case.
In view of the proved facts the burden was on the respondents to prove the inevitable accident.
[376 B H] Eller vs Selfridge , referred to.
The normal rule is that it is for the plaintiff to prove negligence but in some cases considerable hardship is caused to ' the plaintiff as the true, cause! of the accident is not known to him but is solely within the knowledge of the, defendant who caused it.
The plaintiff can prove the acci dent but cannot prove how it happened to establish negli gence on the part of the defendant.
This hardship is sought to be avoided by applying the principle of res ipsa 1oqui tur.
It means the accident "speaks for itself" or "tells its own story".
The car could not have gone to the right extremity and dashed with such violence with the tree if the driver had exercised reasonable care and caution.
The Court did not think it necessary to remand the matter to the High Court to consider the question of rash and negligent driving since the evidence was convincing.
[377 D E, 378, A. E] (2) It is an admitted fact that the driver of the car, the Manager of respondent No. 1, was proceeding from Nagpur to Pandhurna for purpose of delivering an amount of Rs. 20,000/ .
He was driving the car in the course of the employment of respondent No. 1.
It is now firmly estab lished that the master 's liability is based on the ground that the.
act is done in the scope or sourse of his employ ment or authority.
[379 A G] Young vs Edward Box and Co. Ltd. at 793, approved.
Sitaram Motilal Kalal vs Santanuprasad Jaishankar Bhatt (1966)3 SCR 527; Conway vs George Wimpey & Co. Ltd. and , distinguished.
Ormrod and Another vs Crosville Motor Services Ltd. (1953)2 All E.R. 753 and Canadian Pacific Railway Co. vs Lockhart , referred to.
(3) The Manager permitted Purshottam to have a ride in the car.
Taking into account the high position of the driver who was the Manager of the company it is reasonable, to presume in the absence of any evidence to the contrary the Manager had authority to carry Purshottam or acting in the course of his employment.
There is nothing to support the conclusion of the High Court that the driver was not acting in the course of his employment.
[382 D F] Cox vs Midland Counties Ry.
Co. ; and Honghton vs Pilkington, distinguished.
Twine vs Bean 's Express, Ltd. 62 T.L.R.p.
155, year 1945 46 distinguished.
Recent trend in law is to make the master liable for acts which do not strictly fall within the term "in the course of employment" as ordinarily understood.
[383 F] 5.
The High Court did not go into the question of quantum of compensation.
The Tribunal, however, ought not to have taken D.A., Conveyance Allowance etc.
, into account for the purposes of determining the income of the deceased.
Thus, the income of 5 years would stand reduced from Rs. 31,000/to Rs. 25,500/ over and above special damage of Rs. 2,000/ [385 A, C D] 374 6.
As far as respondent No. 2 Insurance Co. is con cerned it contended that since the Company had specifically limited its liability in respect of injury to passengers to Rs. 15,000/ it cannot be made liable for anything in excess of Rs. 15,000/ .
The respondent No. 1 contended that the insurance cover under the Act extended to the injury to the passengers also and relied on Section 95(1) (b)(i) which provides against any libility to the owner which may be incurred by him in respect of death or bodily injury to any person or damage to any person of a third party caused by or arising out of the use of the vehicle in a public place.
Section 95 of the as amended by Act 56 of 1969, is based on the Road Traffic Act of 1960 or the earlier Act of 1930 in England.
Section 95(a) and 95(b)(i) of the Act adopts the provisions of the English Road Traffic Act, 1960, and excludes the liability of the Insurance Co. regarding the.
risk to the passengers.
Section 95 provides that a policy of insurance must be a policy which insures the persons against any liability which may be incurred by him in respect of death or bodily injury to any person or damage.
to any property of a third party caused by or arising out of use of the vehicle in a public place.
Proviso 2 to Section 95(b) makes it clear that it is not required that a policy of insurance should cover risk of the passengers who are not carried for hire or reward.
Under section 95, the risk to a passenger in a vehicle who is not carried for hire or reward is not required to be insured.
The Insurer can however always take policies for a risk which is not covered by section 95.
In the present case, the insurer had insured with the Insurance Co. the risk to the passenger to the extent of Rs. 15,000/ .
Clause 1 of the section 2 to the Insurance Policy which requires the Insurance Co. to indemnify the insured in respect of claimants ' claim which becomes legally payable: in respect of death of or bodily injury to any person is not happily worded.
However, since the said clause .talks of "except so far as necessary to meet the requirements of section 95 of the " would indicate that the liability is restricted ,to the liability aris ing out of the statutory requirements under section 95.
The policy read with the other clauses makes it clear that the respondent No. 2 would be liable to the extent of Rs. 15,000/ .
[385 G H, 386 A, F, A D]
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<s>[INST] Summarize the judgementN: Criminal Appeal Nos.
126 127 of 1972.
(From the Judgment and Order dt.
21 4 72 of the Gujarat Court in Criminal Revision Appln.
490 491 of 1971).
section K. Dholakia and R. Ramachandran for the appellants.
section P. Nayar and M. N. Shroff for the respondents.
The Judgment of the Court was delivered by KOSHAL, J.
By this judgment we shall dispose of Criminal Appeals Nos. 126 and 127 of 1972 both of which have been instituted on certificates granted under Article 134(1) (c) of the Constitution of India by the High Court of Gujarat against the judgment dated April 21, 1972 of a Division Bench of that Court upholding the conviction of each of the appellants under section 4 or section 5 of the Bombay Prevention of Gambling Act 1887 (hereinafter referred to as the Bombay Acc) and a sentence of imprisonment coupled with fine.
Appeal No. 126 of 1972 has been filed by eight persons.
Appellant No. 1 has been convicted of an offence under section 4 of the Bombay Act for keeping a common gaming house, while his seven co appellants were found guilty of an offence under section 5 of that Act.
In Criminal Appeal No. 127 of 1972, appellant No. 1 is the same person who figures as appellant No. 1 in the former appeal and the conviction recorded against him is one for an offence under section or, in the alternative, under section 5 of the Bombay Act.
His two co appellants have earned a conviction under the section last mentioned.
The two appeals have arisen from Criminal Revisions Nos.
490 A and 491 of 1971 both of which were dismissed by the High Court through the impugned judgment.
In Appeal No. 126 of 1972, appellant No. 1 was said to be keeping or using house No. 1408 situate in Ward No. 1 of Himatnagar town as a common gaming house and appellants Nos. 2 and 3 were said to have been employed by him for carrying on in that house the business of betting on Worli Matka figures.
On a search by the police, appellants Nos. 2 to 8 were found present in the house from which numerous betting slips and boards indicating the opening and closing figures of Worli Matka betting were recovered.
A personal search of appellants Nos. 2 and 3 yielded counterfoils of the said slips.
The allegations against the three appellants in criminal appeal No. 127 of 1972 were that all of them were found present for the purpose of gaming in the said house which was, as already stated, being rum by appellant No. 1 as a common gaming house.
The only contention raised on behalf of the appellants before the High Court was that the said house had not been proved to be a "common gaming house" within the meaning of the definition of that expression occurring in section 3 of the Bombay Act.
That definition runs thus In this Act, "common gaming house" means (i) in the case of gaming (a) on the market price of cotton, opium or other commodity or on the digits of the number used is stating such price, or (b) on the amount of variation in the market price of any such commodity or on the digits of the number used in stating the amount of such variation, or (c) on the market price of any stock or share or on the digits of the number used in stating such price, or G (d) on the occurrence or non occurrence of rain or other natural event, or (e) on the quantity of rainfall or on the digits of the number used in stating such quantity, or (f) on the pictures, digits or figures of one or more playing cards or other documents or objects bearing numbers, or on the total of such digits 36 or figures, or on the basis of the occurrence or non occurrence of any uncertain future event, or on the result of any draw, or on the basis of the sequence or any permutation or combination of such pictures, digits, figures, numbers, events or draws any house, room or place whatsoever in which such gaming takes place or in which instruments of gaming are kept or used for such gaming: (ii) in the case of any other form of gaming, any house, room or place whatsoever in which any instruments of gaming are kept or used for the profit or gain of the person owning, occupying, using or keeping such house, room or place by way of charge for the use of such house, room or place or instrument or other wise howsoever.
" Clause (i) of the definition is obviously inapplicable to the cases in hand and the plea of the prosecution has throughout been that the house in question squarely falls within clause (ii) thereof.
This plea was challenged before the High Court on behalf of the appellants with the contention that the house abovementioned had not been shown to be kept for use "for the profit or gain of the person owning, occupying . . " because, according to their learned counsel, the profit or gain mentioned in the definition must have a direct relation with the use of the premises or with the instruments of gaming and a mere expectation or probability of profit arising from gaming itself would not be sufficient to bring the place within the definition of a common gaming house.
The High Court noted that there was a clear distinction between the language employed in the two clauses of the definition so that while the element of profit or gain of the person owning or occupying the premises in question was immaterial under clause (i), it was an essential requirement of clause (ii) which deals with forms of gaming not covered by sub clauses (a) to (f) of clause (i).
The High Court therefore analyses the provisions of clause (ii) and formed the opinion that the expression "or otherwise howsoever" occurring therein had the widest amplitude and did not take its colour from the immediately preceding portion of the clause which employs the words "by way, of charge for the use of such house, room or place or instrument".
Discussing the matter further the High Court was of the opinion that the requirement of the expression "for the profit and gain of the person owning, occupying. " was that the purpose of occupying or using the premises must be such profit or gain as meant a probability 37 Or expectation of profit or gain and not necessarily a certainty of it A and that the expression would embrace even a case where the keeper of the premises expected to gain by the process of gaming itself.
In coming to this conclusion, the High Court relied upon two Division Bench judgments of the Bombay High Court reported in Emperor vs Dattatraya Shankar Paranjpe and another(1) and Emperor vs Chimanlal Sankalchand(Z) and rejected as untenable an opinion to the contrary expressed in some Allahabad cases and a single Bench decision of the Bombay High Court in State vs Vardilal Natuchand, (Criminal Appeal No. 551 of 1964 decided on the 14th of January 1965).
The argument raised before the High Court on behalf of the appellants has been reiterated before us by their learned counsel, Shri section K. Dholakia, but on a consideration of the definition extracted above, we cannot agree with him.
It is common ground between the parties that the present case is not covered by clause (i) of the definition so that what has to be considered is the language of clause (ii) thereof.
For the applicability of the clause last mentioned, the following conditions have to be fulfilled: D (1) Instruments of gaming must be kept or used in the premises in question.
(2) The keeping or using of the instruments aforesaid must be for the profit or gain of the person owning, occupying, using or keeping such premises.
(3) Such profit or gain may be by way of charge for the use of the premises or of the instruments or in any other manner whatsoever.
We fully agree with the High Court that the expression "or otherwise howsoever" is of the widest amplitude and cannot be restricted F. in its scope by the words immediately preceding it which lay down that the profit or gain may be by way of charge for the use of the premises.
In this connection we may usefully quote from the judgment of Shah, Acting C.J., who delivered the judgment of the Division Bench in Emperor vs Dattatraya Shankar Paranjpe, (Supra).
"It is essential for the prosecution under this definition to establish that instruments of gaming were kept or used in he house, room or place for profit or gain of the person owning, occupying, using or keeping the house, room or place.
It may be done by establishing that the person did so either by a charge for use of the instruments of gaming or of the house, room or place, or otherwise howsoever.
The (1) 25 Bombay Law Reporter 1089 = A.I.R. 1924 Bombay 184.
(2) 47 Bombay Law Reporter 75 = A.I.R. 1945 Bombay 305.
38 expression "otherwise howsoever" appears to be very com prehensive, and does not suggest any limitation, such as is contended on behalf of the accused." . . . . . . . . . . . . . . . "We have heard an interesting argument on the question as to how far the words justify the somewhat restricted meaning which has been put upon the definition by the learned Judge of the Allahabad High Court; and after a careful consideration of the arguments urged on either side, and with great respect to the learned Judges, I have come to the conclusion that the words of the definition which we have to construe here would not have their full meaning if we were to accept the narrow construction.
I do not think that on a proper construction of the definition the prosecution can be restricted for the purpose of proving that a particular house, room or place is a common gaming house, to the two alternatives mentioned in the case of Lachchi Ram vs Emperor( ').
It is sufficient if the house is one in which instruments of gaming are kept or used for the profit or gain of the person keeping or using such place, i.e., where the person keeping or using the house knows that profit or gain 4 15 Will in all probability result from the use of the instruments of gaming.
The profit or gain may not actually result from such use.
But if profit or gain is the probable and expected result of the game itself and if that is the purpose of keeping or using the instruments, it would be sufficient, in my opinion, to bring the case within the scope of the definition.
At the same time it is clear that the prosecution must establish that the purpose is profit or gain.
This may be done either by showing that the owner was charging for use of the instruments of gaming or for the use of the house, room or place, or in any other manner that may be possible under the circumstances of the case, having regard to the nature of the game carried on in that house.
" The opinion of Shah, Acting C.J., was noted with approval in Emperor vs Chimanlal Sankalchand (supra), the reasoning adopted in which may be reproduced with advantage: "Lachchi Ram 's case was considered by a Division Bench of this Court in Emperor vs Dattatraya (1923) 25 Bombay (1) A.l.
R. 1922 All.
61. 39 Law Reporter (1089) and was dissented from.
It was held that to constitute a common gaming house it was sufficient if it was one in which instruments of gaming were kept or used for the profit or gain of the person keeping or using such place, i.e., where the person keeping or using the house knew that profit or gain would in all probability result from the use of the instruments of gaming.
The profit or gain may not actually result from such use.
But if profit or gain is the probable and expected result of the game itself and if that is the purpose of keeping or using the instruments, it would be sufficient to bring the case within the scope of the definition.
C "It is argued by Mr. Pochaji on behalf of the accused that even in that case it was observed that 'the prosecution must establish that the purpose was profit or gain and that that might be done either by showing that the owner was charging for the use of the instruments of gaming or for the use of the room or place or in any other manner. ' The words 'or in any other manner, ' (which were used there instead of the words appearing at the end of the definition ' 'or otherwise howsoever ') cannot be regarded as restricting the profit or gain of the owner or occupier of the house to profit or gain in a manner ejusdem generis with what pre cedes those words, and hence even the hope of making a profit out of the gambling itself is sufficient to satisfy the requirement of the definition of common gaming house.
It may happen that the occupier of a house may allow it to be used by the public for gambling and he himself may take part in it in the hope of making a profit, although he may not necessarily make it every time.
Such a hope is sufficient to make the house a common gaming house and the occupier liable for keeping such a house.
" We fully agree with the interpretation of the definition of the term "common gaming house" occurring in section 3 of the Bombay Act as propounded in, the two Bombay authorities cited above, as also in the impugned judgment, that interpretation being in conformity with the unambiguous language employed by the legislature.
The opinion to the contrary expressed in Lachchi Ram 's case (supra) and in other decisions is found to be incorrect.
The learned counsel for the appellants concedes that if the interpretation placed on clause (ii) of the definition by the impugned judgment be upheld, the conviction of the appellants in the two appeals 40 is well founded.
However, we may state that there is another good reason for up holding the conviction and that flows from the presumption which has to be raised under section 7 of the Bombay Act which states: "When any instrument of gaming has been seized in any house, room of place entered under section 6 or about the person of any one found therein, and in the case of any other thing so seized if the court is satisfied that the Police Officer who entered such house, room or place had reason able grounds for suspecting that the thing so seized was an instrument of gaming, the seizure of such instrument or thing shall be evidence, until the contrary is proved, that such house, room or place is used as a common gaming house and the persons found therein were then present for the purpose of gaming, although no ' gaming was actually seen by the Magistrate or the Police Officer or by any person acting under the authority of either of them: Provided that the aforesaid presumption shall be made, notwithstanding any defect in the warrant or order in pursuance of which the house, room or place was entered under section 6.
if the Court considers the defect not: to be a material one.
" It is not disputed that instruments of gaming were seized from the premises in question in both the appeals.
That circumstances, according to the section, "shall be evidence, until the contrary is proved, that such house, room or place is used as a comon gaming house and the persons found therein were present for the purpose of gaming, although no gaming was actually seen . " .
The profit or gain mentioned in clause (ii) of the definition and also the other requirements of that clause are a matter of peremptory presumption which has to be raised by the court as soon as the seizure of instruments of gaming from the place in question is proved, as is the case here.
Admittedly, there is no evidence in rebuttal of the presumption which must therefore be raised and which furnishes a good basis for the conviction of the appellants.
In the result both the appeals fail and are dismissed.
P.B.R. Appeals dismissed.
[/INST]The term "common gaming house" has been defined in section 3 of the Bombay `Prevention of Gambling Act, 1887.
Under cl.
(i) of the section a house or place in which any of six different types of gaming enumerated therein takes place or in which instruments of gaming are kept or used for such gaming would fall within the definition.
Clause (ii) of that section states that in the case of any other form of gaming (a) any house, room or place whatsoever in which any instruments of gaming are kept or used (b) for the profit or gain of the person owning, occupying, using or keeping such house, etc., (c) by way of charge for the use of such house, room or instrument or otherwise howsover, would be a common gaming house.
Certain instruments of gaming were seized by the police from the premises of appellant No. 1 in both the appeals.
He was convicted for keeping a common gaming house while the other appellants were convicted of an offence under section 5 of the Act.
On appeal, rejecting the appellants ' contention that a mere expectation or probability of profit arising from gaming, without establishing a direct relation with the use of the premises or with instruments of gaming, would not be sufficient to bring the place within the scope of the definition, the High Court held that the purpose of occupying or using the premises must be such profit or gain as meant a probability or expectation of profit or gain and not necessarily a certainty of it.
F The argument urged before the High Court was reiterated in appeal before this Court.
Dismissing the appeals, ^ HELD: 1.
The expression "or otherwise howsoever" is of the widest amplitude and cannot be restricted to the words immediately preceding it, namely, "for profit or gain. by way of charge for the use of the premises." [37F] 2.
For proving that a particular house, room or place was a common gaming house, it would be sufficient if it was shown that the house was one in which instruments of gaming were kept or were used for the profit or gain of the person keeping or using such place, that is, where the person keeping or using the house knew that profit or gain would in all probability la result from the use of the instruments of gaming.
Profit or gain may not actually result from such use.
Even the hope of making a profit out of the 34 gambling would be sufficient to satisfy the definition.
In given case the occupier of a house may allow it to be used by the public for gambling and he himself may take part in it in the hope of making profit although he may not necessarily make it every time.
Such a hope would be sufficient to make the house a common gaming house and the occupier liable for keeping such a house.
At the same time the prosecution must establish that the purpose of keeping or using the instruments was profit or gain, which may be done either by showing that the owner was charging for use of the instruments of gaming or for the use of the house, room or place or in any other manner that may be possible having regard to the nature of the game carried [38E, 39E F] 3.
The profit or gain and the other requirements mentioned in cl.
(ii) of the definition are a matter of peremptory presumption which has to be raised by the court as soon as seizure of instruments of gaming from the place is proved.
Section 7 which allows a presumption to be raised against the accused, provides that seizure of instruments of gaming from the premises shall be evidence, until the contrary was proved, that they were used as a common gaming house and the persons found therein were present for the purpose of gaming, although no gaming was actually seen.
In the instant case there is no evidence in rebuttal of the presumption.
[40F Gl
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<s>[INST] Summarize the judgementCivil Appeal Nos.
2072 and 4091 92 of 1985.
From the Judgment and order dated 9.4.1985 of the Allahabad High Court in C.M.W.P Nos 10301 and 2263 of 1983.
with Civil Appeal Nos. 2628, 2696 of 1985 and Special Leave Petition No. 9542 of 1985 From the Judgment and order dated 30.4.1985 of the Allahabad High Court in C.M.W.P Nos 17669, 11027 and 10675 of 1983 S.N. Kacker, R.B Mehrotra, Rajesh, A D. Sanger, Pramod Dayal, Mrs. section Dixit and U.S. Prasad for the Appellants 6 G.L. Sanghi, Shanti Bhushan, Madan Lokur, Prasant Bhushan and A.K. Srivastava for the Respondents.
The Judgment of the Court was delivered by PATHAEK, J.
The principal question in these appeals is whether, in view of the enactment of the U.P. Secondary Education Services Commission and Selection Boards Act, 1982 and the Rules framed thereunder, the provisions contained in section 16 G(2)(c) of the U.P. Intermediate Education Act, 1921 and Regulations 55 to 62 in Chapter III of the Regulations framed under that Act in respect of the transfer of a Principal from one Intermediate College to another continue to be operative and effective.
The Intermediate Education Act, 1921 (shortly referred to as 'the Education Act ') and the Regulations framed thereunder provide inter alia for the conditions of service of Heads and of the teachers of such educational institutions.
The appointment of the Heads and of teachers of educational institutions in the State continued to be governed by the Education Act for several years, but with the passage of time it came to be felt that the selections of teachers under the provisions of that Act and the Regulations were not always free and fair and moreover the field of selection was greatly restricted.
As this adversely affected the availability of suitable teachers and the standards of education the Government of Uttar Pradesh promulgated the U.P. Secondary Education Services Commission and Selection Boards ordinance 1981 on July 10, 1981 with a view to establishing a Secondary Education Services Commission and six or more Secondary Education Selection Boards for the selection of teachers in institutions recognised under the Education Act.
The ordinance was replaced subsequently by the enactment of the U.P. Secondary Education Services Commission and Selection Boards Act, 1982 (conveniently referred to as 'the Services Commission Act ').
Thereafter the State Government framed Rules for carrying out the purposes of the Act.
It was some time before the Services Commission and the Selection Boards could be constituted and therefore a number of Removal of Difficulties orders were made by the State Government pursuant to power conferred under the aforesaid ordinance and thereafter under the Commission Act.
We propose to take the appeal filed by Om Prakash Rana against Swarup Singh Tomar (Civil Appeal No. 2072 of 1985) as representative of the factual context in which the appeals arise.
The Veer Smarak 7 Intermediate College is an educational institution in Baraut in the A district of Meerut.
It is an institution recognised under the provisions of the Intermediate Education Act, 1921.
On June 30, 1982 the post of Principal of the College fell vacant on the retirement of the outgoing Principal, Jai Singh.
The Committee of Management resolved that Bhopal Singh, the then Principal of the Adarsh Vedic Intermediate College, situated in the same district, should be invited to join the post of Principal in the College.
It was intended that the vacancy should be filled in accordance with the provisions of the Education Act and the Regulations made thereunder which permitted the transfer of a Principal from one institution to another.
As the transfer could be affected only with the approval of the District Inspector of Schools, an application was made to the District Inspector of Schools.
He refused to grant approval.
On July 13, 1982 the District Inspector of Schools directed the Committee of Management to give charge of the post of Principal to the respondent Swarup Singh Tomar as officiating Principal.
Three days later, the District Inspector of Schools superseded that order and directed that the respondent Swarup Singh Tomar should be appointed as ad hoc Principal under the Removal of Difficulties order issued under the Services Commission Act.
The Committee of Management of the College filed a writ petition in the Allahabad High Court against the order of the District Inspector of Schools, and during its pendency the High Court made an interim order in which it was recognised that Swarup Singh Tomar was functioning already as ad hoc Principal of the institution.
About this time, the appellant Om Prakash Rana, who was Principal of the B.P. Intermediate College at Bijwara in the district of Meerut, requested the Committee of Management of his College to relieve him in order to enable his transfer as Principal to the Veer Smarak Intermediate College.
On November 22, 1982 the Committee of Management passed a resolution accordingly.
On December 3, 1982 the Committee of Management of the Veer Smarak Intermediate College resolved on accepting the appellant as Principal of the College on transfer from the other institution.
On February 19, 1983, the District Inspector of Schools accorded his approval to the transfer.
Tomar now filed a writ petition in the Allahabad High Court.
He obtained an interim order restraining the Committee of Management from permitting Rana to fill the post of Principal of the College, but the interim order was vacated on March 9, 1983 and Rana has been working as Principal of the College ever since.
On April 9, 1985 the High Court allowed the writ petition and quashed the order dated February 19, 1983 under which the District Inspector of Schools had 8 accorded his approval to the transfer of Rana.
In allowing the writ petition the High Court followed the judgment of a Full Bench of the Court pronounced in Raghunandan Prasad Bhatnagar vs Administrator, Gandhi Vidyalaya Intermediate College, Khekra, (Civil Misc Writ Petition No. 10301 of 1983).
That was a case where the High Court re examined the correctness of the views expressed by two Division Benches of the High Court in Ratan Pal Singh vs Deputy Director of Education, (1983 U.P. Local Bodies and Educational Cases 34) and the Committee of Management, National Intermediate College, Adali Indara District Azamgarh vs The District Inspector of Schools Azamgarh, (1983 U.P. Local Bodies and Educational Cases 198).
The three learned Judges who heard the case were unable to come to a unanimous opinion, and by majority the Full Bench held that it was not permissible for the Committee of Management of an Intermediate College to fill the post of Principal of the College by the transfer of a Principal from one Intermediate College to another after the commencement of the Services Commission Act.
To appreciate the scope and range of the contentions raised before us by the parties it is appropriate to set forth at the outset the relevant provisions of the two statutes and the pertinent Regulations.
Section 16 G of the Education Act provides: "16 G Conditions of service of Head of Institutions, teachers and other employees (1) Every person employed in a recognised institution shall be governed by such conditions of service as may be prescribed by Regulations and any agreement between the management and such employee in so far as it is inconsistent with the provisions of this Act or with the Regulations shall be void.
(2) Without prejudice to the generality of the powers conferred by sub section (1), the Regulations may provide for (a) the period of probation, the conditions of confirmation and the procedure and conditions for promotion and punishment, including suspension pending or in contemplation of inquiry or during the pendency of investigation, inquiry or trial in any criminal case for an offence involving moral turpitude and the emoluments 9 for the period of suspension and termination of service with notice.
(b) the scales of pay and payment of salaries, (c) transfer of service from one recognised institution to another, (d) grant of leave and Provident Fund and other benefits, and (e)maintenance of record of work and service" The Regulations SS to 62 detail the procedure to be followed when a permanent employee of an institution desires his transfer to another institution.
An application for transfer is made to the Inspector of Schools.
All applications for transfer are entered in a register As soon as a substantive vacancy or a temporary vacancy likely to be made permanent and which is to be filled by direct recruitment is advertised, the Manager of the institution has to send a copy of the advertisement to the Inspector.
The Inspector will arrange with the Management to see whether the vacancy can be filled suitably by one of the applicants for transfer.
When the vacancy is not filled by transfer, the Management may proceed to fill it by direct recruitment.
To enable the transfer to take place it is necessary that the Management of the institution where the application is serving should be willing to release him and that the Management of the institution to which the applicant seeks transfer is willing to accept him.
Apparently the appellant Rana relied on these provisions of the Education Act and the Regulations to obtain a transfer as Principal from the B.P. Intermediate College, Bijwara to the Veer Smarak Intermediate College, Baraut.
In anticipation of the promulgation of the Services Commission ordinance the U.P Government issued a radiogram to all District Inspectors in the State directing them to stop all fresh selections and appointments of Principals, Head Masters and teachers including recruitment by promotion in all non Government aided Secondary Schools, except minority institutions, pending further orders .
This was followed on July 19, 1981 by the Services Commission ordinance.
Clause 16 of the ordinance provided that the appointment of a teacher (the expression 'teacher ' being defined to include a Principal) could be made by the Management only on the recommendation of the Commission and any appointment made in contravention of the clause would be void.
Thereafter, the Services Commission Act was enacted 10 Section 3 provides for establishing a Commission to be called the "Uttar Pradesh Secondary Education Services Commission".
It is to be a body corporate and entitled to exercise power throughout the State.
Section 10 provides: "10(1) For the purposes of making appointment of a teacher specified in the Schedule, the management shall notify the vancancy to the Commission in such manner and through such officer or authority as may be prescribed.
(2) The procedure of selection of candidates for appointment to the posts of such teachers shall be such as may be Prescribed; Provided that the Commission shall, with a view to inviting talented persons, give wide publicity in the State to the vacancies notified under sub section (1).
" Section 11 details the procedure to be followed by the Commission after the notification of a vacancy under section 10 for the purpose of holding interviews of the candidates and preparing a panel of those found most suitable for appointment.
The names on the panel are to be forwarded to the Management of the institutions in accordance with the prescribed procedure and the Management is to appoint a candidate accordingly.
Section 16 declares: "16(1) Notwithstanding anything to the contrary contained in the Intermediate Education Act, 1921 or the Regulations made thereunder but subject to the provisions of sections 18 and 33 (a) every appointment of a teacher specified in the Schedule shall, on or after July 10, 1981, be made by the management only on the recommendation of the Commission (b) every appointment of a teacher (other than a teacher specified in the Schedule) shall, on or after July 10, 1981 be made by the management only on the recommendation of the Board: Provided that in respect of retrenched employees, the provisions of section 16 EE of the Intermediate Education Act, 1921 shall apply with the modification that in sub section(2) of the afore 11 said section, for the words 'six months ' the words 'two years ' shall be deemed to have been substituted.
(2) Every appointment of a teacher, in contravention of the provisions of sub section (1), shall be void.
" Where a person is entitled to appointment as a teacher in any institution but is not so appointed by the Management, he is given the right to apply to the Director of Education, Uttar Pradesh for a direction to the Management to appoint him forthwith and to pay him salary from the date specified in the order.
Section 22 provides for the imposition of a penalty on any person appointing a teacher in contravention of the provisions of the Act.
Such contravention constitutes an offence punishable with imprisonment which may extend to three years or with fine up to Rs. 5,000 or with both.
Section 32, of which much will be said hereafter, provides: "32.
The provisions of the Intermediate Education Act, 1921 and the Regulations made thereunder in so far as they are not inconsistent with the provisions of this Act or the rules or regulations made hereunder shall continue to be in force for the purposes of selection, appointment, promotion, dismissal, removal, termination or reduction in rank of a teacher.
" Section 33 enables the State Government to pass orders for a period of two years from the date of commencement of the Act for the purpose of removing difficulties.
The central question is whether the enactment of the Services Commission Act results in the repeal of the provisions of section 16 G(2)(c) of the Education Act and the Regulations made thereunder.
If that is so, no transfer to the office of Principal in Intermediate Colleges can be made except if at all, in accordance with the provisions of the Services Commission Act.
In this connection, one point which arises is whether the transfer of a Principal from one College to another constitutes an appointment to the latter.
It is the case of the appellants that the power relating to appointments conferred on the Commission under the Services Commission Act does not in any way curtail the provisions regarding transfer set forth in the Education Act and its Regulations.
It is urged that the right to apply for transfer is a condition of service of an employee, and neither expressly nor by necessary implication can it 12 be said that the Services Commission Act has abrogated that right.
It is a facility provided to every employee and, it is said, there must be clear language before that right can be taken away.
It is contended that it is perfectly possible to read the Education Act and its Regulations side by side with the Services Commission Act and infer therefrom that the power of transfer continues to co exist under the former with the power relating to appointments conferred on the Commission under the latter.
There is no inconsistency between the two powers, it is submitted, and that is apparent when section 32 of the Services Commission Act deals with the effect of the inconsistency between the provisions of the Education Act, and the Regulations made thereunder, and the provisions of the Services Commission Act, and its rules and Regulations, in regard to the "selection, appointment, promotion, dismissal, removal, termination or reduction in rank of a teacher".
This submission is based on the premises that the power of transfer is not encompassed within the power of appointment.
So it is said that section 16 of the Services Commission Act which provides that the appointment of a Principal can be made by the Management only on the recommendation of the Commission does not bar the transfer of a Principal from one College to another.
As is clear by now the fundamental basis of the contention that the power of transfer under the Education Act and its Regulations continues in force even after the enactment of the Services Commission Act rests on the assumption that the power of appointment does not include the power of transfer.
In our opinion, the assumption is unsustainable.
The scheme under the Education Act envisages the appointment of a Principal in relation to a specific College.
The appointment is in relation to that College and to no other.
Moreover, different Colleges may be owned by different bodies or organisations, so that each Principal serves a different employer.
Therefore, on filling the office of a Principal to a College, a new contract of employment with a particular employer comes into existence.
There is no State level service to which Principals are appointed.
Had that been so, it would have been possible to say that when a Principal is transferred from one College to another no fresh appointment is involved.
But when a Principal is appointed in respect of a particular College and is thereafter transferred as a Principal of another College it can hardly be doubted that a new appointment comes into existence.
Although the process of transfer may be governed by considerations and move through a machinery, different from the considerations governing the appointment of a person ab initio as Principal, the nature of the trans 13 action is the same, namely, that of appointment, and that is so whether the appointment be through direct recruitment, through promotion from the teaching staff of the same institution or by transfer from another institution.
It is pointed out that when section 10 of the Services Commission Act requires that for the purposes of the making of an appointment of a teacher the Management must notify the vacancy to the Commission, it does not speak of "every vacancy", and designedly leaves the possibility open of some vacancies being filled by transfer.
This submission is also without substance.
A survey of the provisions of the Services Commission Act makes it abundantly clear that the entire matter of selecting teachers for recognised institutions is intended to be governed by the Services Commission Act.
As the Preamble of the Act itself suggests, that is the whole purpose of establishing the Services Commission.
Section 3 envisages the Commission as a body corporate, an entity of continuing existence, manned by persons of eminence and distinction from the judicial services and the educational services and selected academicians with a superior level of teaching experience, and armed with a carefully delineated power to select teachers, through a detailed procedure intended to select the best.
No wonder than that section 16(1) mandates that "every appointment" of a Principal can be made by the Management "only on the recommendation of the Commission".
Section 16(2) goes further.
It declares that every appointment made in contravention of section 16(1) shall be void.
It is only in exceptional cases, where the Commission has failed to recommend the name of a suitable candidate for appointment within one year from the date of notification of the vacancy, or the post has actually remained vacant for more than two months then, under section 18(1), the Management may appoint, by direct recruitment or promotion, a teacher on a purely ad hoc basis from amongst the persons possessing qualifications prescribed under the Education Act or the Regulations made thereunder.
Section 22 demonstrates how absolute is the ban on appointing a teacher through a procedure outside the provisions of the Services Commission Act, for the section provides that any person who appoints a teacher in contravention of the provisions of that Act shall, on conviction, be punished with imprisonment for a term which may extend to three years or with fine which may extend to Rs 5000 or with both.
Any doubt remaining is removed completely by section 32 of the Services Commission Act which permits the provisions of the Education Act and its Regulations to continue in force in so far only as they are not inconsistent with the provisions of the Services Commission 14 Act, its Rules and its Regulations in the matter of the selection and appointment, among other things, of a teacher.
We are firmly of opinion that no duality in the source of power is contemplated in the matter of filling the office of Principal of a College.
It is not possible to contemplate that transfers can be affected with the approval of the District Inspectors of Schools under the Education Act and its Regulations, while appointments (other than by transfer) can be made upon the recommendation of the Commission.
The control over all appointments is exercised by a single source of power, namely, the Commission under the Services Commission Act.
It is no longer possible to invoke section 16 G(2)(c) of the Education Act and its Regulations and transfer a Principal from one institution to another.
The context in which those provisions operate, the authority conferred for that purpose and the conditions subject to which it can be exercised stand completely superseded by the corresponding provisions of the Services Commission Act, its Rules and Regulations.
That is amply demonstrated by the declaration in section 16 of the Services Commission Act which mandates that the appointment of a Principal shall be made only on the recommendation of the Commission "notwithstand ing anything to the contrary contained in the Intermediate Education Act, 1921 or the Regulations made thereunder.
" The scheme set forth in the Services Commission Act enacts a complete code in the matter of selection of teachers, and resort is no longer permissible to the provisions of the Education Act and its Regulations for that purpose.
Where the Services Commission Act intended that any provision of the Education Act pertaining to the appointment of a teacher should continue in force, it expressly provided for such saving.
For example, the proviso to section 16(1) of the Services Commission Act enacts that the provisions of section 16 EE of the Education Act which provide for the absorption of retrenched employees against permanent vacancies shall apply with certain modifications.
A submission on behalf of the appellant is that the power to transfer the service of a teacher from one institution to another under section 16 G(2)(c) of the Education Act is a condition of service and should not be identified with the power of appointment.
We have already explained that in its essential nature the transfer of a teacher from one institution to another implies the cessation of his appointment in the former institution and his appointment to the latter.
It will also be noticed that the selection of teachers of the categories mentioned in the Schedule to the Services Commission Act has been considered by 15 the State Legislature of such manifest importance that a high powered A Commission has been envisaged for discharging that function.
It is a Commission consisting of persons holding positions of eminence in the Judicial Services or in the State Education Services or with teaching experience as University Professors and College Principals.
It is intended that whenever a vacancy arises in the post of a teacher the Commission must be notified of it.
In the selection of a teacher the Commission has been charged with the responsibility of inviting talented persons and selecting the best from among them.
The selection has to be made in the context of the particular needs and requirements of the College.
It is a responsibility of grave magnitude, the appointment of the head of an educational institution, and therefore most appropriately entrusted to the vision, wisdom and experience of a high powered body, the Commission.
To contemplate that a vacancy can be filled by transfer, even subject to the approval of the District Inspector of Schools, is to admit the possibility of an appointment which does not measure up to the high standards and norms which the Commission can, having regard to its composition and statutes, be expected to apply.
The Commission, as we have mentioned earlier, is envisaged as a corporate body constituted for the entire State, and in the selection of teachers as Principals and Lecturers of Intermediate Colleges and as Headmasters of High Schools and Trained Graduate Grade teachers of Higher Secondary Schools (the categories of teachers detailed in the Schedule), it can also be expected to bear in mind the needs and standards of education designed for the entire State.
The object of the Services Commission Act would be defeated if vacancies to posts of such responsibility and obvious importance in the field of education can be filled by bypassing the Commission and making appointments by transfer under section 16 G(2)(c) of the Education Act.
As the Services Commission Act stands today, no appointment by such transfer can be envisaged to those vacancies which fall within the responsibilities of the Commission.
Our attention has been invited to the circumstance that even after the coming into force of the Services Commission Act the State Government has made amendments to the Regulations under the Education Act relating to the transfer of service under section 16 G(2)(c) of the Education Act.
It is urged that the making of such amendments indicates the belief in the State Government that section 16 G(2)(c) of the Education Act continues to be operative.
It is permissible to say, we think, that the making of those amendments cannot alter the true construction of the scope of the enactments under consideration.
It 16 may have been another thing altogether if an amendment had been made to section 16 G(2)(c) of the Education Act itself, from which an inference may have been possible that the State Legistlature, when amending that provision on the basis that it continues in operation, has given clear indication thereby that it was never intended that the provisions of the Services Commission Act should supersede section 16 G(2)(c) of the Education Act.
In view of the aforesaid considerations, we hold that upon the constitution of a Commission under the Services Commission Act it is no longer possible for a vacancy in the post of Principal, Headmaster or teacher of the categories mentioned in the Schedule to the Services Commission Act to be filled by the process of transfer under section 16G(2)(c) of the Education Act and its Regulations.
On this point we find ourselves in agreement with the majority opinion of the Full Bench of the High Court in Raghunandan Prasad Bhatnagar (supra) and are unable to agree with what has been said by the Division Benches of that Court in Ratan Pal Singh (supra) and The Committee of Management, National Intermediate College, Adali Indara District Azamgarh (supra).
As the mandate imposed by section 16(1)(a) of the Services Commission Act that the appointment of a Principal of an Intermediate College shall, on or after July 10, 1981 be made only on the recommendation of the Commission, and inasmuch as the appointment by transfer of the appellant as Principal of the Veer Smarak Intermediate College took place after that date, the appointment of the appellant must be regarded as void.
The majority in Raghunandan Prasad Bhatnagar (supra) has ob served that section 16 G(2)(c) of the Education Act should be limited to cases of mutal transfer of services between teachers serving in different institutions.
We find it difficult to accept the accuracy of that observation, having regard to the view taken by us that section 16 G(2)(c) of the Education Act cannot be pressed into service at all now in regard to vacancies intended to be filled on the recommendation of the Commission under the Services Commission Act An attempt was made by the appellant to show that the respondent Tomar is not entitled to continue as Principal of the Veer Smarak Intermediate College and our attention was invited to the provisions of successive U.P. Secondary Education Services Commission (Removal 17 of Difficulties) orders.
Having regard to the finding that the appellant A can have no claim to the office of Principal of that College on the basis of the transfer affected in his favour, we do not think it is open to him to challenge the continuation of the respondent Tomar in that office.
Civil Appeal No. 2072 of 1985 fails and is liable to be dismissed.
Civil Appeal Nos. 4091 4092 of 1985 have been filed by the District Inspector of Schools, Meerut in support of the claim of Om Prakash Rana and as they raise the same questions as Civil Appeal No. 2072 of 1985 filed by Om Prakash Rana, learned counsel for the District Inspector of Schools adopts the submissions made by learned counsel for Om Prakash Rana.
Civil Appeal Nos.
2628 and 2696 of 1985 arise out of substantially similar facts, and those appeals will also be governed by the view taken in the appeal preferred by Om Prakash Rana.
A Special Leave Petition (S.L.P.(C) No. 9542 of 1985) has been filed by Shashi Pal Singh praying for special leave to appeal against the judgment and order of the Allahabad High Court in which the High Court, following its view in Raghunandan Prasad Bhatnagar (supra) has quashed the appointment of the transferee Principal Upon the considerations which have found favour with us, the aforementioned appeals and the special leave petition must fail.
In the result, all these appeals and the special leave petition are dismissed.
There is no order as to costs.
P.S.S. Appeals and Petition dismissed.
[/INST]The appellant is carrying on the business of bulk supply of milk and milk products for the last twenty years.
He has a plant for pasteurization at Pune.
On July 16, 1985 the officer in charge of the Military Farms respondent No. 2, issued tender notice for the supply of pure fresh buffalo and cow milk.
The appellant being eligible and already on the approved list of the respondent authority, submitted a tender offering fresh buffalo milk of the specified fat content and gravity giving a rate of R.S. 421 per 100 litres.
The General Manager, Government Milk Scheme, Pune respondent No. 4, also submitted a tender for the supply of pasteurized milk, an item not contemplated by the tender notice, at Rs.400 per 100 litres.
Tenders were opened on August 23, 1985 and the appellant was found the lowest bidder.
The Military officer concerned submitted a report to the higher authority stating that the appellant was not only the lowest 'bidder but also that the purchase of milk from him would be profitable, while the purchase of milk from respondent No. 4 would result in serious loss to the extent of rupees ten lakhs or so.
But all the same, the respondent authority accepted the higher bid of respondent No. 4, in preference to the lower bid of the appellant contrary to the terms of the notice inviting tender.
Feeling aggrieved by the rejection of his tender, the appellant challenged the order by filing a writ petition in the High Court which was dismissed in limine.
In this appeal by special leave on behalf of the appellant it was 64 contended that even in the matter of contracts, the Government has to act fairly and justly and the failure of the Government to do so gives a right to the citizen to approach the court for justice, that the authority concerned in rejecting his tender had acted contrary to the principles of law, unfairly, arbitrarily and discriminately, that the tender submitted by respondent No. 4 was not in consonance with the tender notice and it should have been ignored, and that if the authority wished to alter the conditions of the tender notice it was obligatory and mandatory for it to call him for negotiation.
It was further contended that the 10 per cent price preference given to respondent No. 4 contrary to the terms of the tender notice was illegal and discriminatory.
On behalf of the respondents it was contended that respondent No. 4 being the Government agency was rightly awarded the contract as per the policy of the Government of India laid down in notification dated August 13, 1385.
Allowing the appeal, the Court, ^ HELD: 1.
The Government may enter into a contract with any person but in so doing the State or its instrumentalities cannot act arbitrarily.
It is open to the State to adopt a policy different from the one in question, but once the authority or the State Government chooses to invite tenders then it must abide by the result of the tender.
[75 C D; 77 D E] 2.
The High Court was not justified in dismissing the writ petition in limine by saying that the question relates to the contractual obligation and the policy decision cannot be termed as unfair or arbitrary.
[77 E] There was no question of any policy decision in the instant case.
The notification dated August 13, 1985 laying down the policy came in after July 16, 1985 when respondent No. 2 issued tender notice.
The instrumentalities of the State having invited tenders for the supply of fresh buffalo and cow milk, these were to be adjudged on their intrinsic merits in accordance with the terms and conditions of the tender notice.
The contract for the supply of milk was to be given to the lowest bidder under the terms of the tender notice and the appellant being the lowest bidder, it should have been granted to him.
The authority acted capriciously in accepting a bid which was much higher and to the detriment of the State.
[75 B D; 77 D F] 3.
Where the tender form submitted by any party is not in con 65 formity with the conditions of the tender notice the same should not be A accepted.
So also, where the original terms of the tender notice are changed the parties should be given an opportunity to submit their tenders in conformity with the changed terms.
[72 C E] 4.
The authority acted arbitrarily in allowing 10 per cent price preference to respondent No. 4.
The terms and conditions of the tender had been incorporated in the tender notice itself and that did not indicate any such price preference to government undertakings.
The only concession available to Central/State Government or to the purely government concerns was under para 13 of the notice, that is, that they need not pay tender form fee and earnest money.
No other concession or benefit was contemplated under the terms of the tender notice.
[73 A C ] Ramana Dayaram Shetty vs The International Airport Authority of India & Ors., ; ; V. Punnan Thomas vs State of Kerala, AIR 1969 Kerala 81; C.K. Achuthan vs State of Kerala [1359] Suppl.
1 SCR 787; Viklad Coal Merchants, Patiala etc.
vs Union of India & Ors.
AIR 1984 SC 95; and Madhya Pradesh Ration Vikreta Sangh Society SCR 750, referred to.
</s>
|
<s>[INST] Summarize the judgementN: Criminal Appeal No. 144 of 1992.
From the Judgement and Order dated 27.9.1991 of the Karnataka High Court in W.P. No. 113 of 1991.
WITH Writ Petition (Crl.) No. 1394 of 1991.
C.S. Vaidyanathan and P.K. Manohar for the Appellant.
K.T.S. Tulsi, Addl.
Solicitor General, P. Parmeswaran, A.K. Srivastava, M. Veerappa and Kh.
Nobin Singh (For the State of Karnataka) for the Respondents.
The Judgment of the Court was delivered by section RATANAVEL PANDIAN, J.
Leave granted.
The appellant/petitioner K.P.M. Basheer by the above appeal is challenging the correctness and legality of the order dated 27th September 1991 made by the High Court of Karnataka dismissing the Writ Petition filed by the appellant challenging the legality and validity of the order of detention dated 7.1.1991 passed by the State of Karnataka.
The first respondent in the appeal, namely, the State of Karnataka in exercise of the powers conferred by the Section 3(1) of the (hereinafter 1077 referred to as `the Act ') passed the impugned detention order on 7th January 1991 with a view to preventing him from engaging in keeping and transporting smuggled goods falling within the mischief of Section 3(1)(iii) of the Act.
The appellant was directed to be detained and kept in the custody of the central prison, Banglore.
The brief facts of the case which led to the passing of the impugned order can be summarised as follows: On 12.11.1990 the Superintendent of Central Excise on information interrogated the appellant at the Balgaum bus stand on his arrival from Bombay in the presence of some panchas and recorved two gold pellets with foreign markings each weighing ten tolas, wrapped in a paper packet from his front side right watch pocket of his pant.
The appellant was not having any valid permit and also was not able to give any satisfactory explanation for possessing the gold pellets.
Therefore, the Superintendent entertaining a reasonable belief that they were smuggled gold pellets recorded the statement of the appellant.
The State Government on the information passed on by the sponsoring authority passed the impugned order on 7.1.1991 on being subjectively satisfied of the necessity of passing the impugned order on the materials placed before it.
The detention order was served on the detenu only on 28.6.1991 from which date onwards he has been detained.
Challenging the detention order, the petitioner filed a Writ Petition No. 113/91 before the High Court of Karnataka and raised several contentions; those being (1) the order of detention is based on a solitary incident; (2) there has been an undue and prolonged delay in serving the order on the detenu; and (3) the materials placed before the detaining authority were not sufficient for drawing the requisite satisfaction for passing the impugned order.
The High Court rejected all those contentions and dismissed the Writ Petition.
Hence this appeal.
Before this Court the petitioner has filed a separate Writ Petition under Article 32 of the Constitution of India raising certain additional grounds.
Those grounds are: (1) The detenu made a request to the detaining authority to forward a copy of his representation to the Central Government and that the detaining authority has not forwarded the same to the Central Government as requested by him.
Even assuming that it has been forwarded, his represe tation has not been disposed of in time and as such there is violation of Article 22(5) of the Constitution of India.
1078 (2) The normal criminal process which would be adequate to take care of the possession of the gold has not been followed; and (3) The first respondent in the Writ Petition (Union of India) has failed in its duty to inform the petitioner regarding the Government instruction issued to the sponsoring agencies not to make an order of detention in cases where the value of the smuggled goods is less than Rs.1 lakh.
In the Writ Petition both the State Government as well as the Central Government have filed their counter affidavits refuting all the additional grounds.
Before scrutinising the additional grounds raised in the Writ Petition, we shall now examine the contentions raised in the appeal and find out whether the order of the High Court warrants interference.
Mr. C.S. Vaidyanathan, the learned counsel appearing on behalf of the appellant contends that the delay of more than five months in executing the order of detention is not only an inordinate and unreasonable one but also stands un explained and on that ground the High Court ought to have set aside the order of detention.
According to him, the High Court has not gone deep into that question but summarily disposed of the same holding "The explanation offered by the 1st respondent, in para 9 of the statement of objection is quite acceptable.
" Of course, this contention has not been specifically taken in the Memorandum of Appeal, but there can be no bar to advance a legal argument in a case of this nature and especially when such a contention has been raised before the High Court.
We want through the explanation given in para 9 of the counter affidavit filed on behalf of the first respondent by the then commissioner and Secretary to Government, Home Department.
It is not denied that the detention order was executed after a period of 5 months and 11 days.
What the first respondent states is that various efforts were taken to trace the detenu at Tellicherry at the address given in the grounds of detention as well as in the Bombay address, but he could not be secured.
Further it has been stated that though the arresting officers attempted to secure him at the Court of Chief Judicial Magistrate at Belgaum on 6.3.91, 28.3.91 and 14.5.91 on which dates the criminal case aS against him stood posted before that court, the officers could not do so as the appellant did not appear before the court for hearing.
Further it is mentioned that though COFEPOSA Section in the office of the Collec 1079 torate of Customs requested the State Government on 19.4.91 to initiate action under Section 7(1)(b) of the Act it was not done so because the seizing unit was asked to make one more attempt to trace out and detain the appellant.
This explanation is not a satisfactory and reasonable one for the following reasons : (1) No sufficient cause is shown for not taking any action under Section 7 of the Act.
(2) It appears from the paragraph 9 of the counter that the officers came to know of the correct address of the appellant at Bombay, but they could not trace him.
It may be pointed out that the Bombay address at which place the appellant detenu was attempted to be secured is not given in the counter.
Had it been given, the Court would have been in a position to verify the averments made in the grounds of detention stating that the address at Bombay given by the appellant was a fictitious one.
In paragraph 17 of the Writ Petition filed before the High Court, the appellant has asserted that he appeared before the Asstt.
Collector of Customs, Marine Lines, Bombay on 6.2.91 and 20.2.91 but no attempt was made to arrest and detain him.
This specific averment is not all denied in the counter.
This indicates that the arresting officers did not take any real and genuine effort to secure and detain the appellant.
The explanation now offered stating that the appellant was fugitive, eluding the dragnet of the detention order cannot be accepted, because during the alleged period of search he has appeared before the Assistant Collector of Customs, Bombay on two occasions during Feb. 1991, that is after passing of the detention order.
All the above points show that no serious and sincere effort appears to have been taken by the arresting officers and that there was only exchange of correspondence between the Department and the arresting officers.
It is incomprehensible as to why no effort has been made to secure the appellant/detenu during the two days, namely, on 6th and 20th February when he appeared before the Assistant Collector of Customs.
No supporting affidavits or documents are filed to substantiate the averments made in the counter.
Incidentally, it may be mentioned that though the two gold pellets (the contrabans) were seized from the appellant on 1080 12.11.90 the authorities concerned passed these orders only on 7.1.1991, i.e. nearly after two months.
Under these circumstances, we are of the view that the order of detention cannot be sustained since the `live and proximate link ' between the grounds of detention and the purpose of detention is snapped on account of the undue and unreasonable delay in securing the appellant/detenu and detaining him.
As we have now come to the conclusion that the order of detention is liable to be set aside on this ground alone we are not dealing with other contentions raised in the Memorandum of Appeal as well as in the Writ Petition.
Hence for the reasons stated above we allow the appeal, set aside the order of the High Court and quash the impugned detention order and direct the detenu to be set at liberty forthwith.
In view of the order in this present appeal, no order is necessary in the Writ Petition.
R.P. Appeal allowed.
[/INST]In exercise of its power under section 68 D of the the Government of Andhra Pradesh approved a draft scheme framed under section 68 C relating to the route Anantapur to Dharamavaram via Mamillapalli.
However, exemption was granted to persons holding permit for the routes namely (a) Kodikonda to Anantapur via Dharmavaram; (b) Bukkapatnam to Anantapur via Dharmavaram; (c) Interstate route Virechal to Dharmavaram via Anantapur; (d) Anantapur to Puttaparti via Dharmavaram and the partial exemption of these routes from the scheme was upheld by the Andhra Pradesh High Court.
Thereafter, the respondents filed a writ petition in High Court for a direction for exemption from the operation of the scheme, and the High Court held that exclusion of the respondents was discriminatory, Accordingly it directed the State Govt.
to consider the respondent 's case and pass appropriate orders to accord exemption from the operation of the scheme.
Against the decision of the High Court the Andhra Pradesh State Road Transport Corporation filed an appeal in this Court.
It was contended on behalf of the respondents that since the State Government exempted four routes from the operation of the scheme they are entitled to parity and denial offends their right to equality under Article 14 of the Constitution.
831 Allowing the appeal and setting aside the order of the High Court, this Court.
HELD: 1.
Section 68 C of the , whose constitutional validity can no longer be questioned, gives power to the State Transport Undertaking to exclude the private operators completely or partially from an area or route or part thereof in the draft scheme.
It gives exclusive power to offer transport service in that area or route or part thereof.
[833H, 834A] 2.
The statute itself gives power to the State to exercise discretion for formulating a scheme for an area or route or part thereof and necessarily has the effect of excluding the existing or potential private operators from the fields to render transport service in that partially prohibited area etc.
while retaining similar private operators in other area, route or part thereof.
The exclusion completely or partially is allowable under the statute itself and is writ large.
The discretion need not necessarily be discriminatory.
Section 68 C left the choice to the State Transport Undertaking and so discrimination in that sense is discernible from the section which itself authorises the State Transport Undertaking, based on factual matrix, eliminate in its choice of a partial exclusion of private operators in an area or route or part thereof.
Opportunity has been given to an affected party to file his or their objections and of a right of hearing before the State Govt.
approved of the draft scheme and publication thereof in the gazette.
The exercise of discretion by the State Transport Undertaking in its selective application of partial prohibition is controlled and regulated by the statute in Ss.
68 D and 68 E of the Act.
[834B D] Ram Nath Verma vs State of Rajasthan, [1963] 2 S.C.R. 152.
referred to.
Giving primacy to the contention of violation of Article 14 would be fraught with insidious effect of upsetting the very scheme itself since anyone of the existing or potential operators would always contend that he too is similarly situated with that of the exempted operators of other area, route or part thereof and unequal treatment has been meted out in the grant of permit to offer transport service offending his right under Article 14.
[834H, 835A] 4.
It is now settled law that even on a partial overlapping approved 832 scheme private operators have been totally prohibited to have corridor shelters and could no longer enter into the frozen area, route or part thereof and obtain permit to render transport service to the travelling public.
When that be so, the partial exclusion does not offend Article 14 of the Constitution.
[835 E]
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<s>[INST] Summarize the judgementAppeal No. 2111 of 1966.
Appeal by special leave from the judgment and decree dated July 9, 1965 of the Madhya Pradesh High Court, Indore Bench in Second Appeal No. 254 of 1962.
Rameshwar Nath and Mahinder Narain, for the appellant.
M. C. Bhandare, K. Rajendra Chaudhuri and K. R. Chaudhuri, for the respondents.
The Judgment of the Court was delivered by Shah., J.
Of Khasra Nos. 33 & 34 of Maheshwar, District Khargone, Madhya Pradesh, Nathu Prasad hereinafter called the plaintiff is the recorded pattedar tenant.
On May 20, 644 1955 he granted a sub lease of the land, for a period of five years, to Ranchhod Prasad and Onkar Prasad hereinafter collectively called 'the defendants '.
On June 30, 1960 the plaintiff commenced an action in the Court of the Civil Judge, Maheshwar against the defendants claiming that the sub lease being in contravention of section 73 of the Madhya Bharat Land Revenue and Tenancy Act 77 of 1950 the 'defendants were trespassers in the land.
The defendants contended that the lease was valid, and since the plaintiff had received consideration, he was estopped from setting up the plea of invalidity of the lease.
The Trial Court decreed the action, holding that the defendants were tres passers and could not acquire Bhumiswami rights claimed by them.
The District Court agreed with the Trial Court.
In second appeal the High Court of Madhya Pradesh allowed the appeal and dismissed the plaintiff 's action.
In the view of the High Court the defendants had acquired rights as occupancy ,tenants under section 185(1)(ii)(b) of the Madhya Pradesh Land Revenue Code.
In so holding the High Court relied upon the judgment of the Madhya Pradesh High Court Rao Nihalkaran vs Ramchandra(1).
With special leave, the plaintiff has appealed to this Court.
Section 73 of the Revenue Administration and Ryotwari Land Revenue and Tenancy Act, Samvat 2007 (Act No. 66 of 1950) provides : "No Pakka tenant shall sub let for any period whatsoever any land comprised in his holdings except in the cases provided for in section 74.
Explanation Section 74 deals with sub letting by disabled persons.
Since the plaintiff is not a disabled person, the section need not be read.
Section 75 provides : "A sub lease of the whole or any part of the holding of a Pakka tenant effected properly and legally prior to the commencement of this Act shall terminate after the expiry of the period of sub lease or 4 years after the commencement of this Act, whichever period is less." Section 76 provides. "(1) If the sub lessee does not hand over possession of the land sub let to him after the sub lease ceases to be in force under sections 74 and 75 to the lessor or (1) 645 his legal heir " he shall be deemed to be a trespasser and shall be liable to ejectment in accordance with the provisions of this Act.
(2) . .
" Section 78 provides "(1) Any possession who in contravention of the provisions of this Act, obtains possession of any land by virtue of a bequest, gift, sale, mortgage or sub lease, or of any agreement purporting to be a bequest, gift, sale, mortgage or sub lease shall be deemed to be a trespasser and shall be liable to ejectment in accordance with the provisions of section 58. .
" The Madhya Bharat Legislature enacted the Madhya Bharat Ryotwari Sub lessee Protection Act, 1955 (Act 29 of 1955).
The Act came into force on October 19, 1955.
The Act was en acted to provide for stay of proceedings under section 76(1) for the ejectment of sub leases of ryotwari land after the termination of sub leases according to section 75 of the Madhya Bharat Land Revenue and Tenancy Act Samvat 2007.
"Ryotwari sub lessee" was defined in cl.
(b) of section 2 as meaning "a person to whom a pakka tenant of any Ryotwari land has sub let on sub lease any part of his Ryotwari land".
Section 3 of Act 29 of 1955 provides: "Nothwithstanding anything contained in section 76 of the Madhya Bharat Land Revenue and Tenancy Act, Samvat 2007, during the continuance of this Act but subject to the provisions contained in section 4 below, no Ryotwari sub lessee other than a sub lessee under section 74 of the Madhya Bharat Land Revenue and Tenancy Act, Samvat 2007, and a sub lessee deemed to be a trespasser under section 78 of the said Land Revenue and Tenancy Act, shall be ejected from his land.
" Section 3 clearly grants protection during the continuance of the Act to sub lessees.
But sub lessees under section 74 of the Madhya Bharat Land Revenue and Tenancy Act and a sub lessee deemed to be a trespasser under section 78 of that Act are outside that protection.
The Madhya Pradesh Land Revenue Code (Act 20 of 1959) was enacted by the State Legislature and was brought into force in the whole of the State of Madhya Pradesh.
By that Code.
Act 29 of 1955 was repealed.
The expression "tenant" was defined in section 2 (y) as meaning "a person holding land from a Bhumiswami as an occupancy tenant under Chapter XIV.
" Section 185, insofar as it is relevant, provides; 646 " (i) Every person who at the coming into force of this Code holds (ii) In the Madhya Bharat region (a) any Inam land as a tenant, or as a sub tenant or as an ordinary tenant ; or Explanation (b) any land as ryotwari sub lessee as defined in the Madhya Bharat Ryotwari Sub lessee Protection Act, 1955 (29 of 1955); or shall be called an occupancy tenant and shall have all the rights and be subject to all the liabilities conferred or imposed upon an occupancy tenant by or under this Code.
" By section 185 of the Madhya Pradesh Land Revenue Code a person who is holding land ,is a ryotwari sub lessee under Act 29 of 1955 is deemed to be an occupancy tenant and is entitled to all the rights and is subject to all the liabilities conferred or imposed upon an occupancy tenant by or under the Madhya Pradesh Land Revenue Code.
A person inducted as a sub lessee, but who by express pro vision contained in section 73 read with section 78 of Act 66 of 1950 is declared a trespasser, does not acquire the status of an occupancy tenant under section 185 (1) (ii) (b) of the Madhya Pradesh Land Revenue Code.
Act 29 of 1955 conferred protection only upon a ryotwari sub lessee, and a ryotwari sub lessee was defined in that Act as meaning a person in whose favour the land was settled.
A person, the lease, in whose favour was declared void by virtue of Act 66 of 1950, could not claim the status of a sub lessee.
That is so enacted in section 3 which excludes from the protection granted by Act 29 of 1955, amongst others, a sub lessee deemed to be a trespasser under section 78 of Act 66 of 1950.
A person inducted as a sub lessee contrary to the provisions of section 73 of Act 66 of 1950 did not therefore acquire any right under a contract of sub letting and his possession was not protected under Act 29 of 1955.
Such a person is not a ryotwari sub lessee as defined in the Madhya Pradesh Ryotwari Sub lessee Protection Act 29 of 1955, and it is only on "Ryotwari sub lessee" as defined in that Act that the right of occupancy tenant is conferred by section 185 (1) (ii) (b) of the Madhya Pradesh Land Revenue Code.
Krishnan, J., regarded himself bound by the following observation made by a Division Bench of the Madhya Pradesh High Court in Rao Nihalkaran 's case(1) (1) 647 "By section 3 of this Act (Act 29 of 1955) a bar was created to the ejectment of these sub lessees whose continuance had become precarious under the existing law.
The bar was to operate during the continuance of that Act which was for a definite duration notwithstanding anything contained in section 76 and 78 of the Madhya Bharat Land Revenue and Tenancy Act barring exceptions contained in section 74 of that Act.
" The observation that protection was given to sub lessees, notwithstanding anything contained in section 78 was apparently made through oversight; it is contrary to the express provisions of the Act.
The High Court was, in our judgment, in error in holding that the defendants had acquired the status of occupancy tenants by virtue of section 185(1)(ii)(b) of the Madhya Pradesh Land Revenue Code (Act 20 of 1959).
The appeal is allowed.
The order passed by the High Court is set aside and the decree passed by the District Court is restored.
There will be no order as to costs in this Court and in the High Court.
R.K.P.S. Appeal allowed.
[/INST]The respondents were inducted as sub lessees in contravention of 'section 73 of the Revenue Administration and Ryotwari Land Revenue and Tenancy Act, 1950.
On the question whether they acquired rights as occupancy tenants under section 185 (1) (ii) (b) of the Madhya Pradesh Land Revenue Code.
HELD : A person inducted as a sub lessee, but who by express provision contained in section 73 read with section 78 of Act 66 of 1950 is declared a trespasser, does not acquire the States of an occupancy tenant under section 185(1)(ii)(b) of the Madhya Pradesh Land Revenue Code.
Act 29 of 1955 conferred protection only upon a ryatwari sub lessee, and a ryotwari sub lessee was defined in that Act as meaning a person in whose favour the land was settled.
A Person, the lease in whose favour was declared void by virtue of Act 66 of 1950, could not claim the status of a. sub lessee.
That is so enacted in section 3 which excludes from the protection granted by Act 29 of 1955, amongst others, a sub lessee deemed to be a trespasser under section 78 of Act 66 of 1950.
A person inducted as a sub lessee contrary to the provisions of section 73 of Act 66 of 1950 did not, therefore, acquire any right under a contract of sub letting, and his possession was not protected under Act 29 of 1955.
Such a person is not a ryotwari sub lessee defined in the Madhya Bharat Ryotwari Sub lesse protection Act 29 of 1955, and it is only on 'Ryotwari sub lessee ' as defined in that Act that the right of occupancy tenants conferred by section 185(1)(ii)(b) of the Madhya Pradesh Land Revenue Code.
[646 E] The observation contra in Rao Nihalkaran vs Ramchandra , disapproved.
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<s>[INST] Summarize the judgementAppeal No. 443 of 1957.
Appeal by special leave from the judgment and order dated April 25, 1955, of the Allahabad High Court in Civil Misc.
Case No. 26/1951.
C. B. Aggarwala, C. P. Lal for G. Ar.
Dikshit, for the appellant.
section K. Kapur and Mohan Behari Lal, for the respondent.
October 31.
The Judgment of Hidayatullah, Das Gupta and Shah, JJ., was delivered by Shah, J., and the judgment of Das and Ayyangar, JJ., was delivered by Ayyangar, J. SHAH J. Judge (Revisions) exercising authority under section 11 of the United Provinces Sales Tax Act XV of 1948 drew up a statement of case and referred to 191 the High Court of Judicature at Allahabad the follow question : " Whether the assessee, who is a manufacturer and a dealer of non edible oils and who elected the previous year as the basis of his assessment in the assessment year 1948 49, is liable to be assessed at the flat rate of 3 pies per rupee on the whole of the turnover of the previous year, or whether he is liable to be assessed at the rates of 3 pies per rupee and 6 pies per rupee on the turnover of the previous year in proportion to the two periods from 1st April to 8th June, 1948, and from 9th June, 1948 to the 31st March, 1949 ?" The High Court answered the question as follows: " The applicant company is liable to pay tax for the assessment year 1948 49 on the turnover of the previous year in respect of sales of non edible oils at the flat rate of 3 pies per rupee.
" Against the order of the High Court recording its answer, this appeal with special leave is preferred.
The facts which give rise to the appeal are briefly these : The Modi Food Products Co., Ltd. hereinafter referred to as " the assessee ", manufactures oils edible and non edible in its factory at Modinagar, District Meerut, State of Uttar Pradesh.
The assessee is registered as a "dealer" under the United Provinces Sales Tax Act XV of 1948.
The assessee 's year of account commences on June 1, and ends on May 31, next year.
For the year of account 1946 47, the assessee 's sales of edible and non edible oils amounted to Rs. 63,02,849 7 7.
The U. P. Legislature enacted with effect from April 1, 1948, the United Provinces Sales Tax Act XV of 1948 providing for the levy of a tax on sales of certain commodities.
This act was amended by Act XXV of 1948 with retrospective operation from April 1, 1948.
By the Act, " assessment year " was defined as meaning the twelve months ending on March 31 and " previous year " was defined as meaning the twelve months ending on the 31st March next preceding the assessment year, or, if the accounts of the dealer had been 192 made up to a date within the said twelve months in respect of a year ending on any date other than the said 31st March then, at the option of the dealer, the year ending on the day to which his accounts had so been made up.
,Turnover " was defined as meaning the aggregate of the proceeds of sale by a dealer.
By section 3, a tax at the rate of 3 pies per rupee of turnover was, subject to certain exceptions, made payable by every dealer in each assessment year whose turn.
over in the previous year exceeded Rs. 12,000 or such larger amount as may be prescribed; the Provincial Government was however authorised to reduce the rate of tax on any dealer or class of dealers on the turnover in respect of any goods or class of goods.
By section 3 A, the Government of U. P. was authorised to introduce instead of the multiple point scheme of taxation provided by section 3 a single point system of taxation and by notification to declare that the proceeds of sale of any goods or class of goods shall not be included in the turnover of any dealer except to such single point in the series of sales by successive dealers as may be prescribed; and if the Government made such a declaration, the turnover of the dealer in whose turnover the sale of such goods was included was in respect of such sale to be taxed at such rate as may be specified not exceeding one anna per rupee.
By section 7, every dealer whose turnover in the previous year was Rs. 12,000 or more was directed to submit such return or returns of his turnover of the previous year within sixty days of the commencement of the assessment year in such form and verified in such manner as may be prescribed.
By the proviso, the Government was authorised to prescribe that any dealer or class of dealers may submit in lieu of the return or returns specified in that section, a return or returns of his turnover of the assessment year at such intervals as may be prescribed.
Provision was made by the Act for appeals against the order of assessment and revision against the order of the appellate authority.
By section 11, the High Court of Judicature at Allahabad was authorised to decide questions of law raised in any case in the course of assessment and 193 referred to it on a statement of the case drawn up by the Revising Authority.
By section 24.
the Provincial, Government was invested with power to make rules to carry out the purposes of the Act and in particular in respect of certain specified matters.
In exercise of the powers conferred by section 24 of the Act, the Government of U. P. framed rules.
Rule 39 of the U. P. Sales Tax Rules gave to every dealer an option to submit his return of the turnover of the assessment year in lieu of the return of the turnover of the previous year.
A dealer who did not carry on business during the whole of the previous year had no option, but was bound to submit his return of the turnover of the assessment year.
By r. 40, it was provided that every dealer who elected to submit a return of the turnover of his previous year shall within sixty days of the commencement of the assessment year, submit to the Sales Tax Officer a return showing his turnover of the previous year.
By r. 41, it was provided that every dealer whose estimated turnover during the assessment year was not less than Rs. 15,000 and who elected to submit his return of such year shall before the last day of July, October, January and April submit to the Sales Tax Officer, a return of his gross turnover for the quarters ending June 30, September 30, December 31 and March 31.
In exercise of the authority conferred by section 3 A which was incorporated in the Act by Act XXV of 1948, the Government of U. P. issed the following notification : " In exercise of the powers conferred by section 3 A of the United Provinces Sales Tax Act, 1941, as amended by the United Provinces Sales Tax (Amendment) Act, 1948, the Governor is hereby pleased to declare that with effect from June 9, 1948, the proceeds of sale of goods entered in column 2 of the schedule hereto shall not be included in the turnover of any dealer except at the point in the series of sales by successive dealers mentioned in column 4 thereof under the circumstances shown in column 3 thereof.
(2) The Governor is further pleased to order that 25 194 as from June 9, 1948, the rate of tax in respect of the column 5 of the schedule hereto.
(3) Every dealer by or on whose behalf goods mentioned in the schedule aforesaid are held at the close of the 8th day of June, 1948, shall submit a statement showing the quantity and price of such stock and of the stock of such goods held on the 24th day of May, 1948, to the appropriate assessing authority by the 30th day of June, 1948.
" To this notification was appended a schedule which set out the descriptions of diverse commodities, the "circumstances under Which the turnover was to be calculated " the point of tax and the rate of tax.
Item 14 of the schedule was " oils of all kinds excluding edible oils but including Vanaspati " and sales thereof by manufacturers in the U. P. were liable to tax at the rate of 6 pies per rupee.
By virtue of this notification, non edible oils became liable to a single point tax as from June 9, 1948, at the time of sale by an importer or manufacturer in the United Provinces.
The assessee submitted its return for the assessment year 1948 49 on its taxable turnover of the previous year ending on May 31, 1947, to the Sales Tax Officer, Meerut Range.
On the assessee 's return, the Sales Tax Officer assessed the tax at Rs. 1,16,238 12 0, holding that sales of non edible oils for the first 69 days out of the year of the turnover were to be taxed at the rate of 3 pies, and sales for the remaining 296 days were to be taxed at the rate of 6 pies per rupee.
Against the order passed by the Sales Tax Officer, Meerut Range, an appeal was preferred to the Judge (Appeals), Sales Tax, under section 9 of the Act.
The appellate authority modified the order and directed the assessee to pay tax on non edible oils on the turnover of the previous year at the flat rate of 3 pies per rupee and reduced the tax liability to Rs. 1,08,477 0 3.
This order of the Judge (Appeals) was set aside by the revising authority and the order of the Sales Tax Officer was restored.
On, a direction made by the High Court, the revising authority drew up a statement of the case and submitted for opinion a question 195 which in his opinion arose out of the assessment.
The High Court re framed the question as set out hereinbefore, and answered it in favour of the assessee.
By section 3 and section 3 A, which are the charging sections, the liability to pay sales tax in each assessment year is charged on the total turnover of a dealer.
By section 7, read with r. 39, the assessee has the option to adopt the turnover of the previous year as the taxable turnover for the year of assessment: and if he does so, he has to submit within sixty days of the commencement of the assessment year returns showing his turnover for that previous year.
If, however, the assessee adopts the turnover in the year of assessment as his taxable turnover, he has to submit returns before the last day of July, October, January and April his gross turnover for each of the four quarters ending 30th June, 30th September, 31st December and 31st March.
The tax is evidently levied in respect of the year of assessment : it is not levied in respect of the business carried on in the previous year.
Again, the rate applicable in assessing the tax is the rate in force in the year of assessment.
That is clear from the terms of sections 3 and 3 A. But the taxable turnover for the year of assessment may, except in certain cases not material for the purpose of this appeal, at the option of the tax payer be either the turnover of the previous year or of the year of assessment.
If the assessee adopts the turnover of the previous year, by the provisions contained in section 3 and section 7 and rr.
39 and 40, the liability to pay tax arises on the 1st of April and the rate applicable is the rate in force on that date.
The liability of the assessee adopting the turnover of the year of assessment arises by virtue of sections 3 and 7 and r. 41 at the end of each quarter.
When the taxable turnover is based on the turnover of the previous year, the tax is assessed on an artificial turnover not related to the actual sales of the year of assessment: whereas the levy of tax on a return made on the turnover of the year of assessment is made on actual sales of that year.
The tax paid on the turnover of the previous year is not related to the actual sales 196 provision for making adjustments in the liability to tax on ascertainment of the actual turnover at the end of the year of assessment.
The Government of the United Provinces had by notification dated June 8,1948, altered the rate of tax in the matter of various commodities including nonedible oils with effect from June 9, 1948.
The Sales Tax Officer was right in his view that the levy of tax at the altered rate was not to operate on sales effected before June 9, 1948.
Initially, when the liability of the assessee to pay tax on edible oils for the assessment year arose, the rate was undoubtedly 3 pies per rupee on the turnover, and the question which falls to be determined is whether by reason of the alteration of the rate and its incidence in the course of the year, the assessee became liable to pay tax at the higher rate on a part of the turnover of the previous year and if so, on what basis.
A tax payer who adopted the previous year 's turnover bad under section 7 and r. 40 to submit his return within sixty days of the commencement of the assessment year, and no provision for submission of any supplementary returns in the case of alteration of rates in the course of the year was made in the Act or the Rules: nor was any method provided for retrospective modification of an assessment once made.
There were under the Act and the Rules two distinct and clear cut schemes to assess sales tax, (1) where the tax payer elected to submit his return based on the turnover of the previous year and (2) where he elected to or was bound by law to submit his return on the turnover of the year of assessment.
Under these two schemes the points of time at which liability arose and the turnover on which liability was to be assessed were in their nature not identical.
The tax payers paying tax under the first scheme paid it on the turnover of the previous year and at the rate in force after the end of the period and applicable to it.
The tax payer paying tax under the second scheme paid tax in quarterly installments based on the previous quarter 's actual turnover and at the rate or rates prevalent in the quarter or applicable to it.
Was it intended, when alteration was made in the rate of tax 197 or its incidence during the course of the year, to assimilate these two schemes of taxation so as to, permit of a departure from the one to the other ? There is no express provision in the Act or in the Rules in that behalf.
Nor does the notification suggest that it was so intended.
In the case of a dealer who adopts the turnover of the year of assessment for purposes of taxation, the application of the notification altering the rate of tax and the incidence of tax does not present any difficulty.
The notification enjoins levy of the tax at the altered rate only in respect of sales taking place after the fixed date, and all sales which preceded that date are to be taxed at the original rate.
In the face of the language employed sales anterior to the date specified could not be affected.
The question next arises: Is any machinery provided in the Act or the Rules for projecting this division of the year of assessment, into the previous year, and for apportioning the turnover of that year ? Express provision in that behalf there is none : and it is difficult to imply such a provision in the Act.
The dates of commencement and closure of the previous year of a tax payer may vary according to the system of accounting adopted by the assessee.
The year may commence from any day of any recognised calendar year, and the year may not consist of 365 days.
The method of antedating by one year the date on which the alteration is made in the rate or incidence will be manifestly inappropriate.
The method of division of the turnover proportionate to the period of the assessment year before the alteration of the rate and after such alteration though prospective, must be deemed to have been made retrospectively in the previous year, and on a day which is removed from the commencement of the year of account by the number of days by which the date of alteration of rate is removed from the commencement of the year of assessment.
But the adoption of the turnover of the previous year as the taxable turnover for the year of assessment is itself based on a fiction and, in the absence of any express provision either in the Act or the Rules or even in the notification setting out machinery for such 198 a division of the year, we are unable to hold that this scheme of a fictional division may be projected into the previous year to make an artificial division of the turnover for imprinting thereon the altered rate of assessment as from the date of the division.
Counsel for the State of Uttar Pradesh submitted several hypothetical cases suggesting that by refusing to adopt this method of division of the previous year of assessment for the application of the altered rate, several anomalies may arise in working out the liability to tax.
He submitted that a person who was not a manufacturer or an importer of goods included in the schedule to the notification under section 3 A may, if he has adopted the turnover of the previous year as his taxable turnover be liable even though it was the intention of the Government to absolve him from liability to pay tax.
But a tax payer adopting the turnover of the previous year for payment of tax makes his choice 'voluntarily and subject to the advantages and disadvantages which that step involves.
The fact that he may have to pay tax from which persons choosing the alternative method of submitting of return may partially be exempted, because of an exemption granted in the course of the year, may not, in our judgment, be a ground for not giving full effect to the provisions of the Act as they stand.
In interpreting a taxing statute, equitable considerations are entirely out of place.
Nor can taxing statutes be interpreted on any presumptions or assumptions '.
The court must look squarely at the words of the statute and interpret them.
It must interpret a taxing statute in the light of what is clearly expressed it Cannot imply anything which is not expressed it cannot import provisions in the statutes so as to supply any assumed deficiency.
Section 18 el.
(c) of the Act which provides for proportionate reduction of tax when in the case of a change or discontinuance taking place in the course of the assessment year of a firm which has been assessed for such year on the turnover of the previous year does not support the contention that an artificial divisions of the turnover of the previous year is intended 199 in cases of alteration of circumstances during the course of the assessment year.
It may be noticed that, the provision is limited to changes in or discontinuance of the business of a firm, in terms it does not apply to individuals.
It is not for us to consider why the Legislature has not chosen to make a similar provision in respect of individuals.
But the fact that the Legislature has made an express provision dealing with changes or discontinuance of business of firms in the course of the assessment year enabling a reduction proportionately to the tax already paid would be a ground indicating that in cases not governed by that provision, no alteration in the liability was permissible when the taxable turnover was based on the previous year 's turnover.
It is not provided that in giving effect to the alteration of the rate during the course of the year of assessment an artificial division of the turnover of the previous year should, in applying the altered rate be made.
The Legislature having failed to provide machinery for working out the liability, the attempted projection becomes unworkable.
A legal fiction must be limited to the purposes for which it has been created and cannot be extended beyond its legitimate field.
The turnover of the previous year is fictionally made the turnover of the year of assessment: it is not the actual or the real turnover of the year of assessment.
By the imposition of a different tariff in the course of the year, the incidence of tax liability may competently be altered by the Legislature, but for effectuating that alteration, the Legislature must devise machinery for enforcing it against the tax payer and if the Legislature has failed to do so, the court cannot resort to a fiction which is not prescribed by the Legislature and seek to effectuate that alteration by devising machinery not found in the statute.
We are therefore of the view that the conclusion of the High Court is correct.
The appeal therefore fails and is dismissed with costs.
AYYANGAR J. We regret we are unable to agree with the judgment just now pronounced.
The facts giving rise to this appeal are briefly 200 these:A company called The Modi Food Products Ltd. ' (amalgamated with the respondent) which will be referred to hereinafter as the assessee, was during the years 1946 & 1947 a manufacturer of and dealer in vegetable oils both edible and non edible.
During that year there was no legislation imposing any tax on sales.
The U. P. legislature enacted the U. P. Sales Tax Act in 1948 and the statute received the assent of the Governor and was published in the official Gazette on June 5, 1948.
Section 1 (2) of the Act enacted that it shall be deemed to have come into force on April 1, 1948.
The appeal is concerned with the liability to sales tax under the Act of the assessee company in respect of the sale of oil effected by the assessee during the period June 1, 1946 to May 31, 1947, which was the account year of the assessee previous to the first assessment year under the Act1948 49.
Section 3 of the Act, to quote only the relevant words, as it stood at the material time, enacted : " Section 3.
Liability to tax under the Act.
Subject to the provisions of this Act, every dealer shall pay on turnover in each assessment year a tax at the rate of 3 pies a rupee Provided that (i) the Provincial Government may, by notification in the official Gazette, reduce the rate of tax on the turnover of any dealer or class of dealers or on the turnover in respect of any goods or class of goods; (ii) a dealer whose turnover in the previous year is less than Rs. 12,000 or such larger amount as may be prescribed shall not be liable to pay the tax under this Act for the assessment year.
" By the U. P. Sales Tax Amendment Act, 1948 (Act XXV of 1948) this proviso was slightly modified and section 3(A) was inserted in the Act reading as follows: " Section 3 A. Single point taxation.
(1) Notwithstanding anything contained in Section 3, the Provincial Government may, by notification in the official Gazette, declare that the proceeds of sale of any goods or class of goods shall not be included in the turnover of any dealer except at such single point 201 in the series of sales by successive dealers as may be prescribed.
(2)If the Provincial Government makes a declaration under sub section (1) of this Section, it may further declare that the turnover of the dealer, in whose turnover the sale of such goods is included, shall, in respect of such sale, be taxed at such rate as ' may be specified not exceeding one anna per rupee if the sale relates to goods specified below.
(A list of goods was then set out) and nine pies per rupee if it relates to any other goods.
" Non edible oil which is the commodity with the sale of which the assessment in the present appeal is concerned is not in the list of goods set out in section 3(A) and would therefore be covered by the residuary clause of the section.
The U. P. Government issued the following notification dated June 8, 1948, under section 3(A) of the Act: " In exercise of the powers conferred by Section 3 A of the United Provinces Sales Tax Act, 1948, as amended by the United Provinces Sales Tax (Amendment) Act, 1948, the Governor is hereby pleased to declare that with effect from June 9, 1948, the proceeds of sale of goods entered in column 2 of the Schedule hereto shall not be included in the turnover of any dealer except at the point in the series of sales by successive dealers mentioned in column 4 thereof under the circumstances shown in column 3 thereof. 2.
The Governor is further pleased to order that as from June 9, 1948, the rate of tax in respect of the turnover of the aforesaid goods shall be as entered in column 3 of the Schedule hereto.
Every dealer, by or on whose behalf goods mentioned in the schedule aforesaid are held at the close of the 8th day of June, 1948, shall submit a statement showing the quantity and price of such stock and of the stock of such goods held on the 24th day of May, 1948, to the appropriate assessing authority by the 30th day of June, 1948 ".
In the Schedule annexed to this notification, nonedible oil of the type dealt with by the assessee was 202 subject to a tax @ 6 pies per rupee if the same was manufactured in U. P. Section 7 of the Act, as it stood at the date relevant to this appeal, enacted : " Section 7.
Determination of turnover and assessment of tax. (1) Subject to the provisions of Section 18, every dealer whose turnover in the previous year is Rs. 12,000 or more in a year shall submit such return or returns of his turnover of the previous year within sixty days of the commencement of the assessment year in such form and verified in such manner as may be prescribed: Provided that the Provincial Government may prescribe that any dealer or class of dealers may submit, in lieu of the return or returns specified in this section, a return or returns of his turnover of the assessment year at such intervals, in such form and verified in such manner as may be prescribed, and thereupon all the provisions of this Act shall apply as if such return or returns had been duly submitted under this section.
Provided further that the assessing authority may in his discretion extend the date for the submission of the return by any person or class of persons ".
Rules were framed by Government inter alia under the power conferred by the 1st proviso just now set out and by rule 39 of the said rules an option was given to dealers to submit returns of their turnover of the assessment year in lieu of the turnover of the previous year.
The assessee exercised the option of being assessed on the basis of the turnover of the previous year under section 7(1) of the Act and in respect of first assessment year after the Act came to force assessment year 1948 49, it filed a return in respect of the turnover of its previous year June 1, 1946 to May 31, 1947.
The total turnover of the assessee during this period was Rs. 63,02,849 7 7.
The Sales Tax Officer by his order dated March 12, 1949, assessed the turnover in respect of edible oil at 3 pies per rupee.
As regards the sale of non edible oil, the sales tax officer hold that since the notification set out above under 203 section 3(A) had come into force as and from June 9 of the assessment year, the assessee was liable to be assessed @ 3 pies per rupee on the turnover during the first 69 days of the year and @ 6 pies per rupee in respect of the remaining days of the year and he computed the ' tax accordingly.
The assessee preferred an appeal to the Judge (Appeals), Meerut Range, Meerut, against the order of the Sales Tax Officer.
This officer allowed the appeal of the assessee and held that the entire turnover was liable to be taxed only at a flat rate of 3 pies per rupee under section 3(1) of the Act on all oil sold by the assessee edible or non edible.
The reason assigned for the order was that on the terms of the notification the new rate of tax could not be applied to sales effected in the previous year which had been opted for the purposes of assessment by the assessee and that so to apply it would be tantamount to giving retrospective effect to the notification which was contraindicated by the terms of the notification itself.
The department thereupon moved the Judge (Revision) who accepted its contention and restored the order of the Sales tax Officer applying the provisions of the notification to the turnover of the assessee.
There.
after the assessee made an application to the Judge (Revision) to state a case for the opinion of the High Court under section 11 of the Act as to whether the rate of tax fixed by the notification could be applied to the sales of the commodity which factually took place on or before June 8, 1948.
This petition having been dismissed, an application was filed before the High Court for directing the reference and on this being ordered the following question (as reframed by the High Court) was referred to it for determination : " Whether the assessee who is a manufacturer and a dealer of non edible oils and who elected the previous year as the basis of his assessment in the assessment year 1948 49 is liable to be assessed at the flat rate of 3 pies per rupee on the whole of the turnover of the previous year or whether he is liable to be assessed at the rates of 3 pies per rupee and 6 pies per rupee on the turnover of the previous year in proportion to the two periods from April 1 to June 8, 1948 and from to March 31 1949.
" 204 The learned Judges answered the question in favour of the assessee and held that the notification under section 3(A) could not apply to determine the rate of tax payable by the assessee on his turnover of the previous year.
The present appeal is against this answer by the High Court.
As the arguments before us proceeded on practically the same lines as before the High Court, it will be convenient if we set out the reasoning by which the learned Judges upheld the asssessee 's contention that the notification under section 3(A) was inapplicable to determine the rate of tax payable by it.
The grounds were mainly five: (1) The assessee could not be charged at the rates prescribed by the notification unless the new rates operated retrospectively; (2) that section 3(A) which was introduced into the parent Act (Act XV of 1948) by the Amending Act XXV of 1948 was not enacted with retrospective effect.
Though the charge imposed by section 3(1) of the Act read with section 7(1) imposed tax retrospectively as and from April 1, 1948, section 3(A) did not on its terms so operate as and from that date.
Hence the liability of the assessee which had become fixed under Act XV of 1948, as it originally stood, could not be and 'Was not varied by section 3(A) and would not therefore be affected by any notification issued under the last mentioned provision ; (3) that a notification under section 3(A) could not have retrospective effect since section 3(A) itself did not operate of its own force and merely empowered the Government, 'by a notification, to effect changes in the law and hence such changes when notified could not operate as from any date prior to the date of the notification ; (4) Section 3(A) which used the words " in respect of such sales " contemplated particular sales taking place after the notification issued under it and hence the notification issued under that section could not alter the rate of levy in respect of sales anterior to the date of the notification ; (5) that the terms of the notification carried out the general scheme of the Act and negatived retrospective operation and that as on its langu age it applied only to sales which took place on or 205 admittedly effected long prior thereto in the previous year the same could not be affected by the enhanced rate of duty.
Before proceeding further it must be pointed out that the learned Judges of the High Court were not right in thinking that section 3(A) was not enacted to operate retrospectively from the commencement of the ' parent Act.
Section 1(2) of the Sales tax Amending Act XXV of 1948 which introduced section 3(A) enacted: " It (this Act) shall be deemed to have come into force on the 1st April, 1948." and as section 3(A) was one of the sections of this enactment, it would have effect from the earlier date.
This inadvertent error, however, would not affect the central point of the reasoning of the learned Judges.
Besides elaborating the other points in the judgment of the High Court, learned Counsel for the respondent further pressed upon us that there was no specific provision in the Act for refund or reassessment which would have been present if the levy of a rate with retrospective effect were contemplated by the Act as applicable to the assessees who bad opted for the " previous year turnover " basis of assessment.
He pointed out that in the case of those assessees who opted for their being assessed in respect of their turn.
over during the assessment year, quarterly returns were submitted along with the payment provisionally of the tax due on the basis of that return, the final assessment being completed only after the close of the year when the amount due for the year was ascertained and a demand made for the balance due after adjustment of the amounts already paid during the course of the year (Rule 41).
Obviously in their case no difficulty could arise by reason of any change in the law either in the rate or basis of taxation effected during the year, as these would automatically be given effect to in the final assessment.
If, however, changes made in the rate of tax payable during the year were held applicable to those assessees who had opted for the previous year turnover basis, necessary adjustments could not be made in their assessment for lack of specific machinery to achieve the same.
From this 206 he argued that the scheme of the Act was that in the case of the previous year turnover assessees, to use a convenient phrase, the tax liability had to be determined on the state of the law as it prevailed on the 1st day of the assessment year and that it got fixed and crystallised on that date and remained unaffected by any changes in the law effected during the course of the assessment year.
In view of these additional submissions, we consider that it would be convenient to examine the entire argument of learned Counsel for the respondent under three heads into which they naturally fall: (1) Does the Act, read in conjunction with the Rules framed to give effect to its provisions, contemplate any difference being drawn between the basis of the tax liability (as distinct from the quantum of the turnover) of those assessees who have opted for the previous year turnover and " the assessment year turnover " assessees.
(2) Is there any sound basis for the contention that the tax liability of the "previous year turnover" assessees gets crystallised on the 1st of April of the assessment year, with the result that such assessees are unaffected by any changes of the law which operate from beyond that date.
(3) If the above two questions are answered in the affirmative the construction of the notification dated June 8, 1948, would not fall for consideration, for even if on its language it can apply to the turnover of a period anterior to its issue, the notification cannot be given such effect since the same would be against the basic scheme of the Act.
If, however, the answer to the above two questions were in the negative, a further point would arise as to whether on the terms of the notification now under consideration the same could on its language apply so as to affect the tax liability of the " previous year turnover assessees.
We shall now proceed to examine these submissions.
On the scheme of U. P. Sales tax Act, as of every other sales tax legislation in the other Indian States, the total tax liability of an assessee is the resultant 207 product of two factors: (1) the total of the proceeds of sales effected during a given period, universally a year, from which are deducted the turnover of the sales of commodities which are exempt from tax; for instance under section 4 of the Act whose provisions will be referred to later; (2) multiplied by the rate of tax applicable either to the entire turnover or where ' different rates are prescribed on sales of different articles, such rates in respect of such turnover.
The best way to appreciate the scheme underlying the Act would be to ascertain the position at the time the Act was enacted.
It received the assent of the Governor and was published in the Gazette on June 5, 1948.
Section 1(2) of the Act further enacted that " It shall be deemed to have come into force on April 1, 1948 ".
Except to that limited extent, the Act is prospective.
The tax is on the " turnover ", i.e., on the total of the sales proceeds of taxable sales and therefore unless there were a taxable sale, its proceeds would not enter the pool which goes by the name of " turnover ".
As the Act is not retrospective, the taxable turnover would normally be the total of the sales effected after the enactment became operative, i. e., from and after April 1, 1948, but for the sake of convenience of assessment, it enacts by section 7(1), we have extracted earlier, a provision providing an option to dealers who have been in business in the year previous to the taxing enactment, to be assessed either on the turnover of the previous year, when owing to the absence of the Act their sales were not subject to tax or on the turnover of the current year.
But whichever be the turnover adopted, the rate of tax or the determination of the particular sale proceeds whose total constitutes the taxable turnover, i.e., after the exclusion of the sale proceeds of the commodities listed in section 4, does not vary.
In other words, though the figure of turnover might vary between those who have opted for the one or the other mode of assessment due to the volume of the sales, no difference is maintained in the Act as regards the incidence of the tax, i.e., either in the principle underlying the computation of the total turnover or in 208 the rate or rates applicable to the sales of particular goods or on the total turnover.
This can only be on the premise or implicit assumption that the sales of the previous year are treated by the Act for the purpose of computing tax liability as the sales of the current year a projection forward in point of time.
In other words, the entire basis underlying the charging provision section 3(1) read with the option provided by section 7(1) is that the sales of the previous year are fictionally treated as the sales of the current year for the purpose of the computation of the tax liability.
It has to be remembered that in cases like the present, during the time when the sales were effected, the Act was not in operation and hence the sales were not taxable.
But for the purpose of the imposition of the tax liability, it is assumed that the sales are taxable and the goods whose sales become taxable are determined on the basis of the provisions of the Act.
Thus, if in the current year commodities A, B and C are exempt from tax, they are not to be included in the turnover of the dealer in respect of the previous year in the case of those who have opted for the " previous year turnover " under section 7(1), and the turnover thus computed is charged at the same rate of tax applicable to transactions of the current year.
So far, therefore, as the express provisions of the Act go, no difference is made between the basis of the tax liability of the " previous year turnover " and the " assessment year turnover " assessees; and though by reason of the terms of section 7(1) the quantum of the turnover varies no other variation in the law applicable to the two types of assessees is contemplated.
We must therefore start from the premise that the Act does not contemplate any difference in the incidence of the tax and the quantum of tax liability flowing from the choice of either the " previous year " or the " assessment year " as the basis of the determination of the turnover.
We should add that learned Counsel for the respondent has not been able to point out any provision in the Act or in the Rules pointing to any such differentiation.
It was, however, submitted that though the statute 209 might not say so in express terms, still by reason of the provisions of the Act and the Rules under, which the " previous year turnover " assessee had to ' or could submit his return within sixty days from the commencement of the assessment year and have his assessment completed immediately thereafter as compared to the " assessment year assessee " whose assessment was completed after the end of the year, coupled with the absence of any machinery for re assessment or refunds in the event of any change in the law effected after the commencement of the financial year, it had necessarily to be held that the liability of the " previous year turnover " assessee got crystallised as on the 1st of April of the assessment year and that the Act did not contemplate this being disturbed by any subsequent changes in the substantive law relating to assessment during the assessment year.
It was said that the tax liability of the dealer who had opted for the " previous year " basis had to be determined on foot of two factors and only two: (1) the turnover of the sales of the previous year which is a definite and known figure by the 31st of March of the previous year and (2) the rate of tax on the turnover as it prevailed on the 1st of April of the assessment year when it was said that there was a "crystallisation" of the liability to tax.
It was pointed out that it was possible for an assessee to submit his return on the basis of the " previous year turnover " even on the 1st of April of the assessment year and there being no legal impediment in the way of the figures returned by the dealer being accepted the assessment might conceivably be completed and the tax due demanded and even paid on the 1st of April, it sell If this were done, it was urged, there being no machinery for reassessment or refunds such completed assessment would become final for the year and could not be disturbed thereafter.
If this were possible or were actually done in the case of one dealer who had so opted, it was urged that it would obviously be anomalous if another dealer who happened to submit his return later and whose assessment was in 27 210 consequence delayed, should be subjected to a different law or a different rate of levy.
In our opinion, this argument breaks on critical examination.
Learned Counsel for the respondent, to start with, asserted that the crystallisation of the tax liability as on the 1st of April of the assessment year was with reference to the law as it factually was on that date and that changes made subsequently even if with retrospective effect to date from the commencement of the year, would not affect that liability.
This was obviously an untenable contention because if the later enactment or rule was retrospective it must be deemed in the eye of the law to have been in existence and in operation on the earlier date.
Though learned Counsel withdrew this extreme argument, still the concession that changes effected with retrospective effect to date from the commencement of the assessment year would apply to determine the tax liability even of the " previous year turnover " assessee serves to emphasize that little importance could be attached to the two bases on which " the crystallisation " argument was rested, viz. : (1) the obligation or freedom of the previous year turnover assessee to submit his return and have his assessment completed within sixty days of the commencement of the assessment year and (2) the absence of a specific provision for reassessment and refund.
Under the proviso (1) to section 3 which reads: " the Provincial Government may, by notification in the official Gazette, reduce the rate of tax on the turnover of any dealer or class of dealers or on the turnover in respect of any goods or class of goods." the State Government could reduce the rate of tax on the turnover of dealers from the standard rate of 3 pies in the rupee under the main part of section 3.
It is also not denied that there is nothing in the terms of the proviso to confine the power to effect reductions only prospectively as distinguished from reductions having retrospective effect.
If a reduction were effected say in January or February of the year, having effect as and from the 1st April preceding, on the very argument advanced, Counsel for the respondent would 211 have to concede, that the reduced rate would govern the liability of even those dealers who were assessed on the basis of their turnover of the previous year.
Let us first take a case where such a reduction in the rate is notified to be effective before an assessee submits his return.
In such a case, the benefit in the reduction of the rate could not be withheld from the previous year turnover dealers even on the theory of " crystallisation " just now referred to.
Let us next take the case of a dealer who has submitted his return of the turnover of the previous year on a date anterior to the notification regarding the alteration of the rate.
It might be mentioned that in the return submitted by dealers which has to be in Form IV of Appendix F to the rules, only the total of the sale proceeds of the sales of the classified items of goods have to beset out, but the return does not concern itself with the rate of the tax levied.
This latter is a matter with which the assessing authority is concerned when determining the amount of tax payable.
If the rates are altered subsequent to the submission of the return but before the assessment is completed, on the terms of the charging section which draws no distinction in the incidence of the tax as between the " previous year turnover " group and the " assessment year turnover " dealers, the Sales Tax Officer would have to afford every assessee, whatever be the basis of this turnover the benefit of the tax reduction.
The position reached therefore is that if the change in the rate (we have assumed it to be by way of reduction, but the argument would equally apply to variation in any kind), were effected before the actual assessment, it should be given effect to in the case of every assessee for not merely is there no procedural complication in the shape of a need for refund but it would be in accordance with the, law and in fact one might go further and say that any other mode of proceeding would not be countenanced by the Act, because the statute homologises the basis of the tax whether the turnover is computed on the previous year 's or the current year 's sales.
Next in regard to cases where the change in the law 212 is effected after the completion of the assessment we consider that the submission regarding the absence of machinery for reassessment and refund is not well founded.
It is true that there are no provisions specially so designated to meet this contingency here referred to, but that is not the same thing as saying that there is a complete absence of machinery.
In the first place, section 22 of the Act empowers authorities including the assessing officer to rectify any mistake apparent on the face of the record and by such rectification even to enhance the tax liability.
If on the premises assumed, the variation in the rate of tax would on a proper construction of the Act be applicable to the turnover of the dealer who has opted for the " previous year rule " but the assessment order does not give effect to it, it would certainly be a case of an error apparent on the face of the record, which would bring the case within the power of rectification.
On the analogy of the cases under section 35 of the Income Tax Act, 1922, the assessment officer could order rectification in such cases.
Even apart from this, under a. 10(2) of the Act the dealer or the department as the case may be may apply to the Revising authority for revision of the assessment on the ground that the same is not legal, proper or regular.
This section enacts: " The Revising Authority may in its discretion at any time suo motu or on being moved by the Commissioner of Sales Tax or on the application of any person aggrieved, call for and examine the record of any order or proceedings recorded by any appellate or assessing authority under this Act for the purpose of satisfying itself as to the legality or propriety, of such order or as to the regularity of such proceedings and may pass such order as he thinks fit." The orders which the Revising Authority could pass might either be by way of enhancement or reduction, and the subsequent sub sections provide: . "10 (4).
The Revising Authority shall not pass any order under sub section (3) adversely affecting any person unless an opportunity has been given to such person to be heard.
213 (5) If the amount of assessment is reduced by the Revising Authority under sub section (3) it shall order the excess amount of tax if already realised to be refunded.
" It is, therefore, not correct to say that there is no machinery for rectifying errors and for making consequential orders for payment of further tax, or for directing refunds, and this argument cannot therefore justify the construction contended for by the respondent.
In the entire discussion up to now we have proceeded on the assumption that the turnover of " the previous year " of the dealer was a fixed quantity which was finally determined once and for ever on the 31st March of that year and that the problem was merely to find the rate of tax to be applied to this predetermined factor.
It will be seen from an examination of the Act that even the factor of the turnover is subject to variation.
For instance, the first part of section 4 enacts: " The provisions of section 3 of this Act shall not apply to (1) the sale of water, salt, foodgrains, milk, gur, electrical energy for industrial purposes, books, magazines, newspapers and motor spirit as defined in the United Provinces Sales of Motor Spirit Act, 1939, and any other goods which the Provincial Government may, by a notification in the official Gazette exempt from time to time.
" Under this power besides the specified goods, the State Government might from time to time exempt other goods from among those whose sale proceeds have to be included in the turnover.
If an exemption of that type were granted say in 1948 49, it cannot be contended that the turnover of the dealer who had opted for the " previous year " has to include these sales in the return which he submits in Form IV, If by the date of the submission of the return, the exemption has been notified, and has effect for the entire year of course he need not include these sale proceeds in his return.
The computation, therefore, of the quantum of turnover of the previous year on which tax has to be levied is one which is subject to the law 214 in relation to it in the assessment year, and any change in that law presents the same problems, as the variation in the rate of tax.
Up to now the discussion has proceeded on the basis that a change in the law made in the assessment year whether as regards the computation of the turnover or as to the rate of levy, is effective throughout that year, i.e., from the 1st April to the 31st March, and it is found that the fact that the returns of the previous year turnover dealers are required to or are submitted within the early part of the year, or the contention based on the absence of specific machinery for reassessment or refund are an insufficient basis for holding that a change in the law affecting the basis of tax liability would not affect the previous year turnover assessees and that the machinery provided by sections 10 and 22 are adequate to meet the contingencies arising out of the changes being retrospectively effected after the assessments were completed.
We shall next proceed to consider whether the change in the law either as regards the computation of the taxable turnover or as regards the rate of tax becoming operative sometime after the year has commenced makes any difference.
In the case of the "assessment year turnover " dealers, there is no problem because the sales effected during the course of the year would be governed by the law applicable from time to time.
The entire basis or theory of the tax being levied on foot of the previous year 's turnover is that notwithstanding that factually the sales took place in the previous year they are to be deemed by fiction to have taken place in the year of assessment.
If that theory be discarded there could be no legal foundation for the tax being levied by the Act even as originally enacted on a sale which factually took place before it was operative.
The only question therefore is the precise scope of that fiction and its logical implication.
If the sale in the previous year is treated by the Act as a sale in the present year, then no principle is contravened, if it were held that sales during a portion of the previous year are held to be sales during a corresponding portion of the current 215 year.
If we reject the argument that it is only the law as prevailed on the 1st April of a year that forms,, the basis for the computation of the turnover and for the ascertainment of the tax liability as not flowing from the provisions of the Act, and indeed as contrary to the very scheme underlying the enactment, the changes in the law effected during the course of the assessment year must operate even in respect of the turnover of the previous year, which are deemed to be the turnover of the assessment year.
It now remains to deal with the question as to whether the language employed in the notification by which only sales effected after a date specified in the assessment year are to be governed by the new levy, precludes the application of the notified change to those dealers whose sales were actually effected in the previous year, but who had opted for the " previous year turnover " basis of assessment.
The argument of learned Counsel, which found favour with the learned Judges of the High Court was briefly this.
The notification expressly states that only sales effected from and after June 9, 1948, were to be charged with the new rates.
In terms therefore, the change in the law is wholly prospective.
If so, one cannot by any line of reasoning reach the conclusion that the new rates of levy applied to sales, as by the present respondent, more than a year earlier.
So stated the reasoning appears impressive and it is true that a taxing enactment cannot be construed as levying a charge unless the words clearly do so.
But the words have always to be understood and more than that applied with reference to the underlying basis of the scheme of taxation.
So applied, it does not appear to us to support the contention of the respondent.
The change in the rate of tax, was no doubt prospective.
The phraseology employed merely means that in the case of the " assessment year turnover " dealers only the sale proceeds of sales effected after the specified date would be governed by the new rates.
In the case of the " previous year turnover " dealers, the change operates to determine the amount of tax during their assessment year just in the same manner as 216 the original charge under the Act, of a flat rate of three pies determined the tax payable notwithstanding that none of the sales whose proceeds were included in their turnover were effected during the assessment year.
We have already pointed out that the basic idea underlying the provision contained in section 7(1) of the Act 'is that it projects the turnover of the previous year into the assessment year.
Admittedly the Act itself is not retrospective, or designed to levy the charge under section 3(1), on sales effected before April 1, 1948.
If sales of the previous year are brought within the taxing provision, it is not because the sales when they took place were subject to tax, but because either (a) the previous year 's sales are deemed in law when the assessee so opts as the sales of the current year or (b) the previous year 's turnover being opted, the provisions of the charging sections operate on that turnover.
Whichever of these be the more accurate method of expressing the result, the fact is that there is no element of retrospectivity at all involved in the application of the tax law which prevails in the year of assessment to the turnover of the previous year when due to the choice of the assessee of being assessed under section 7(1), the previous years ' turnover basis is rendered applicable.
Possibly the matter may be tested in this manner.
Section 3(1) of the Act the charging section imposes in effect a tax of three pies per rupee on all sales effected after the commencement of the Act, i.e., after April 1, 1948.
pose that section itself, had by a proviso imposed a tax @ six pies per rupee on all sales of edible oil effected on and after June 9, 1948.
Could it then be open to argument, that in respect of the previous year 's sales, only a three pies tax was payable and that the result of the charging provision could be ignored.
If, therefore, we are right so far, the respondent derives no advantage from the notification specifying the dates of sales effected from and after which they would be subject to the varied rate.
The notification had necessarily to be worded as it was, in order to fulfil its primary purpose of effecting a change in the rate during the assessment year.
The date 217 mentioned in the notification as the date from and after which sales would be charged at the new rates would therefore not militate against the new rates being applied to the turnover of the previous year, since the turnover of the previous year has to be assessed on the rates prevailing in the assessment year.
The next question is how on the terms of the notification which came into operation after the commencement of the assessment year and during the course of it, the proportion of the turnover on the basis of which the tax liability of a previous year 's turnover dealer could be computed.
Learned Counsel for the respondent urged that no intelligible basis could be suggested for distinguishing the two periods in the previous year when the original rates and the altered notified rates would operate.
Learned Counsel urged that it would be impossible to distinguish these two periods either on any theory of retrospectivity of the notification or on any theory regarding the sales of the previous year being attributed to the corresponding dates of the current year.
There is no doubt that this mode of computing the proportion, viz., to treat the sales which were effected on various dates of the previous year, as if they were sales on the corresponding dates of the current year and thus to compute the two totals of turnover which would be subject to different rates of duty would not be proper.
The impropriety would arise from the fact that the fiction enacted by section 7(1) is not that each day 's sale in the previous year is deemed to be a sale on the corresponding date in the current year, but only that the total taxable turnover of the previous year is deemed to be that of the current year.
The method to which objection is taken is however not the manner in which the Sales tax Officer computed the proportion which was affirmed by the Judge (Revision).
If the total of the sale proceeds of the previous year is deemed to be the total of the current year, there is no illogicality or impropriety in dividing that total in accordance with the number of days in the year in which the different rates prevailed and that is precisely what the Sales tax Officer did.
28 218 If as we hold both the computation of the turnover of the previous year, as well as the incidence of the tax leviable on it, are to be determined not merely by the law as it stood on the first day of the assessment year, but by the law applicable to assessments during the entire assessment year, the method by which the tax liability of the respondent was computed by the Sales tax Officer is not open to any objection.
In connection with the interpretation of the notification a minor point was suggested to which brief reference might be made.
It was submitted that as the notification in effect levied a tax, if it was ambiguous, it should be resolved in favour of the subject the tax payer.
We see no ambiguity in the notification to justify an appeal to this rule.
Besides the notification in effect frees dealers other than importers and manufacturers of all tax liability in respect of the sale turnover of oil, though in the case of two specified classes of dealers.
a single point tax at an enhanced rate is levied.
In such a situation, the rule of construction invoked could hardly be applied, even if the condition as to ambiguity were present.
We, therefore, hold that the assessment to sales tax of the respondent company by applying to its turnover of the year 1947 48, the rate of tax specified in the notification of June 8, 1948, as determined by the Sales tax Officer was in accordance with the law.
We would accordingly allow the appeal, set aside the decree of the High Court and restore the assessment order of the Sales tax Officer with costs here and in the High Court.
BY COURT.
In accordance with the opinion of the majority, the appeal is dismissed with costs.
[/INST]In respect of a decree passed against T, who was the owner of certain watan properties, a building standing on watan land comprised in the said properties, was sought to be attached and sold in execution of the decree.
The appellant, who was the legal representative of T, claimed that the building:was not liable for attachment and sale because (1) the building, being part of watan property within the meaning of section 4 of the Bombay Hereditary Offices Act, 1874, was not saleable property under sub section
(1) of section 60 of the Code of Civil Procedure, 1908, and (2) in any case, he was an agriculturist and the building belonging to and occupied by him was protected from attachment and sale by cl.
(c) of the proviso to sub section
(i) of section 60 of the Code.
The facts showed that the building was not in existence when the watan was first created but had been built subsequently by one of the watandars and there was no indication on the record that the building was constructed for the purpose of providing remuneration for the performance of the duty appertaining to a hereditary office.
The evidence also showed that the appellant was not entirely dependent for his livelihood upon the income from the home farm, that he had substantial income from other lands and that there was nothing to show that this income derived from his other lands was the result of cultivation by him.
Held, that the building in question was not an accession to the land so as to partake of the character of the land on which it was constructed and did not come within the definition of watan property in section 4 of ' the Bombay Hereditary Offices Act, 1874.
Held, further (per jafer Imam and Raghubar Dayal, jj.
Sarkar, J., dissenting), that the word " agriculturist " in cl.
(c) of the proviso to sub section
(1) of section 60 of the Code of Civil Procedure, 1908, must carry the same meaning as the word in cl.
(b) and that in order that a person might come within the meaning of the word in those clauses it must be shown that, he was really dependent for his living on tilling the soil and was unable to 164 maintain himself otherwise, though it was not necessary that he must till the land with his own hands.
That on the facts the appellant was not an agriculturist within the meaning of the word in section 60 of the Code.
Case law reviewed.
Per Sarkar, J. (1) On the plain meaning of the word agriculturist " in cls.
(b) and (c) of the proviso to sub section
(1) of section 60 of the Code an agriculturist is any person who occupies himself with agriculture.
There is nothing in cl.
(c) to indicate that the agriculturist there mentioned must be one who depends for his living on agriculture.
A person occupying himself with agriculture would be an agriculturist though he did not cultivate with his own hands and carried on, agriculture in a very large scale.
He would still be an agriculturist even if he had other means of livelihood besides agriculture.
(2) Under cl.
(c) in order that houses and buildings belonging to an agriculturist might be protected from attachment and sale they must be occupied by him for the purpose of agriculture.
</s>
|
<s>[INST] Summarize the judgementivil Appeal No. 2010 of 1986.
From the Judgment and Order dated 15.4.
1986 of the Andhra Pradesh High Court in A.A.O. Nos.
737 of 1981 275 of 1982 and 69 of 1984.
Shanker Ghosh, A.V. Rangam and T.V. Ratnam for the Appellant.
Ashok Sen. A. Subba Rao, Qamaruddin, Mrs, Qamaruddin, C.S.S. Rao and S.V. Deshpande for the Respondents.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J.
This appeal by special leave is from the judgment and order of the High Court of Andhra Pradesh dated 15th April, 1986.
On or about th of April.
1948 Sail Nawaz Jung, the then ruler of Mukkalla State, South Yeman in Arabia settled some of the properties with which the appeal is concerned by a Registered Tamleeknama in favour of his son Sultan Awaz and his grand son Galib Bin Awaz.
In 1954, there was Wakfnama by the said Sail Nawaz Jung.
On or about 23rd of August, 1963 the Military Estate Officer, Secunderabad of.
Andhra Pradesh requested for the requisition of the property named as "Sail Gulshan" with a vast extent of land and palaces with roads and surrounded by a compound wail measuring 19 acres and 10 guntas situated in the heart of Hyderabad city near Sarojini Devi Hospital.
The property in question was taken possession of on or about 12th of September, 1963.
In this appeal we are concerned with the claim for compensation for the said acquisition by one Abdul Khader who was a flower picker.
He had claimed rights as a tenant during the requisition.
His claim for compensation for requisition was settled by sharing the rent in or about 1969.
The appellant is one of the owners of the property in question deriving their title 1233 and right from the said Sail Nawaz Jung.
On or about 3rd February, 1970 the Collector issued notice for acquisition of the property under section 7(1) of the being Act 30 of 1952 (hereinafter called the Central Act).
The Gazette Notification for the acquisition was issued on 12th March, 1970.
The controversy in this case relates to the question whether Abdul Khader was 'a protected tenant ' under the Andhra Pradesh (Telangana Area) Tenancy and Agricultural Lands Act, 1950 being Act No. XXI of 1950 (hereinafter called the Andhra Pradesh Act).
The purpose of the said Act as the Preamble states was, inter alia, to enable the land holders to prevent the excessive sub division of agricultur al holdings and empower government to assume in certain circumstances the management of agricultural lands, to provide for the registration of Co operative Farms and to make further provision for matters incidental thereto.
Section 2(r) states that the expression 'protected ' means a person who is deemed to be a protected tenant under the provisions of the said Act.
Chapter IV of the Andhra Pradesh Act deals with protected tenants and section 34 of the said Act provides who is to be considered as a protected tenant and uses the expression that a person shall, subject to the provisions of sub sections (2) and (3), be deemed to be a protected tenant in respect of the land if he has fulfilled the conditions mentioned in clauses (a) and (b) of sub section (1) of Section 34 of the said Act.
Sub section (2) of Section 34 of the said Act also deals with "to be deemed to be a protected tenant in respect of any land", for cer tain purposes.
Section 35 of the said Act deals with deci sion on claims and stipulates by sub section (1) of Section 35 of the said Act that if any question arises whether any person, and if so what person, is deemed under Section 34 to be a protected tenant in respect of any land, the landhold er, or any person claiming to be so deemed, may, within one year from the commencement of the Act apply in the pre scribed form to the Tahsildar for the decision of the ques tion and the Tahsildar shall after enquiring into the claim or claims in the manner prescribed, declare what person is entitled to be deemed to be protected tenant or as the case may be, that no person is so entitled.
Sub section (2) of Section 35 stipulates that a declaration by the Tahsildar that the person is deemed to be a protected tenant or, in the event of an appeal from the Tahsildar 's decision such declaration by the Collector on first appeal or by the Board of Revenue on second appeal, shall be conclusive that such person is a protected tenant and his rights as such shall be recorded in the Record of Right of where there is no Record of Rights in such village record as may be prescribed.
Section 36 of the said Act deals with the recovery of pos session by protected tenant.
Section 37 deals with persons not entitled 1234 under section 34 to be deemed in certain circumstances as protected tenants.
Section 38 of the said Act deals with right of protected tenant to purchase land.
Section 39 deals with right of protected tenants to exchange lands.
Section 40 of the said Act makes rights of protected tenant herita ble.
Sub section (2) of section 40 of the said Act indicates who are the heirs who would be entitled to hold the tenancy on the death of the protected tenant and on what terms.
Sub section (3) of section 40 of the said Act provides that if a protected tenant dies without leaving any heirs all his rights shall be so extinguished.
The explanation to sub section (3) of section 40 of the said Act provides who should be 'deemed to be the heirs ' of a protected tenant.
Subsection (4) of section 40 stipulates that the interest of a protected tenant in the land held by him as a protected tenant shall form sixty per cent.
It is necessary also to note the provisions of section 99 of the Act.
It is as follows: "99.
Bar of Jurisdiction: (1) Save as provid ed in this Act no Civil Court shall have jurisdiction to settle, decide or deal with any question which is by or under this Act re quired to be settled, decided or dealt with by the Tahsildar, Tribunal or Collector or by the Board of Revenue or Government.
(2) No order of the Tahsildar, Tribunal or Collector or of the Board of Revenue or Government made under this Act, shall be questioned in any Civil or Criminal Court. ' Section 102 of the said Act stipulates that the Act shall not apply to certain lands and areas and provides inter alia as follows: "102.
Nothing in this Act shall apply (a) to lands leased, granted, alien ated or acquired in favour of or by the Cen tral Government or the State Government, a local authority or a Cooperative Society.
" It is relevant at this stage to refer to certain provi sions of the Central Act to consider the controversy in volved in this appeal.
The Central Act was enacted giving power for requisitioning and acquisi 1235 tion of immovable property for Union purposes.
Section 3 of the said Act gave power to requisition immovable property.
Section 4 of the said Act empowers taking possession of requisitioned property.
Section 5 deals with rights over requisitioned property.
Section 6 deals with the power of release from the requisitioning.
Section 7 authorises the Central Government where it is of the opinion that it is necessary to do so to acquire requisitioned property.
Sec tion 8 deals with 'principles and method of determining compensation either for requisitioning or acquisition of the property and, inter alia, provides for appointment of an arbitrator in certain contingencies in case there was no agreement for determining compensation.
Section 9 deals with the payment of compensation and provides that the amount of compensation payable under an award shall, subject to any rules made under that Act, be paid by a competent authority to the person or persons entitled thereto in such manner and within such time as may be specified in the award.
Suspect ing that the entry in the Protected Tenancy Register might not be genuine, on or about 24th of October, 1970 the Tah sildar passed an order cancelling that entry.
The main question centres around the right of Abdul Khader, respond ent No. 1 herein to the compensation awarded by the arbitra tor, it is therefore, necessary to refer to the relevant portion of the said order which inter alia, stated as fol lows: "By perusal of the Tenancy Register of 1958 it is evident that Sri Mohd. Abdul Khader is not a genuine protected tenant.
The entries of this particular so called tenant is doubtful.
I suspect that somebody has tampered the register and entered the name of Sri Mohd. Abdul Khader.
Separate enquiry in this connec tion is going on in this office to know under what circumstances such entry has been made and copy also issued without knowledge of the Tahsildar.
Hence I suspect the entry and order to cancel the copy of the tenancy issued in favour of Sri Modh.
Abdul Khader.
Sd Tahsildar.
Hyderabad West Taluk.
" This order of cancellation was challenged by Abdul Khadar by filing a writ petition in the High Court of Andhra Pradesh being W .P.
No. 1786 of 197 1 and by judgment and order passed on 27th August, 197 1, the learned single Judge, Vaidya, J. held, inter alia, as follows: 1236 "Whether the petitioner (Abdul Khader) is a protected tenant or whether he has any prima facie interest in the suit property are mat ters entirely within the sole jurisdiction of the arbitrator who has to be appointed under Section 8 of the 'Central Act '.
" In the appeal of Abdul Khader the proceedings of Revenue Divisional Officer while questioning entry of the name of Abdul Khader in the Register is a genuine one or net and while it is stated that it was entered in the Register in such suspicious way by giving Serial No. 1/A between Serial Nos. 1 and 2 of Register being Exhibit A. 106 and Exhibit A. 107, it ultimately held that Abdul Khader was a protected tenant under section 37A of the Andhra Pradesh Act.
On or about 19th of April, 1972 the order was passed by the Dis trict Revenue Officer who held that Abdul Khader was not a protected tenant.
He held further that Khasra Pahani which is the basic record of occupancy period after spot inspec tions does not find the name of Abdul Khader and further held that all entries except this entry in the Protected Tenancy Register prepared under section 37A of the Andhra Pradesh Act was supported by an enquiry.
It was in those circumstances held by him that the entry was a spurious one.
In Civil Revision Petition No. 1006 of 1972 which was filed by Abdul Khader as against others, Justice R. Ramachandra Raju of the Andhra Pradesh High Court on or about 19th August, 1974 held that Abdul Khader was not a protected tenant and directed deletion of entry made in the Final Record of tenancies as a spurious one.
The learned Judge observed, inter alia, as follows: "I am told by the counsel for both the parties that the lands in question were already ac quired for military purpose under the Requisi tion and Acquisition of Immovable property Act, 1952 and that Sri M.S. Sharma, the Addi tional Chief Judge, City Civil Court, Hydera bad has already been appointed as Arbitrator under the Act for determining the compensation and the persons entitled to it.
Not only that, in the writ petition filed by the present petitioner in this Court, it was held that it is not necessary to go into the question whether the petitioner is a protected tenant or whether he has any prima facie interest in the property because they are the matters entirely within the sole jurisdiction of the arbitrator who has to be appointed under Section 8 of the Act.
Now, as the arbitrator has already been appointed, he will go into the matter as to whether the 1237 petitioner was a protected tenant of the lands or not and if he was the protected tenant to what share in the compensation amount he would be entitled to.
Under these circumstances, the C.R.P. is dismissed with a direction that the entry made in the Final Record of Tenancies that the petitioner was the protect ed tenant, for the lands in question which is spurious as found by both the Revenue Divi sional Officer and the District Revenue Offi cer should be deleted.
" The matter was brought to this Court by a special leave application and this Court in Special Leave Petition (Civil) No. 10 of 1975 on or about 30th January.
1975 held that since the question whether the petitioner in that case namely, Abdul Khader was a protected tenant had been left open by the High Court to be decided by the Arbitrator under section 8 of the Central Act, special leave petition was rejected with those observations.
Thereafter there was an order appointing arbitrator on 29th of March, 1975 under section 8(1)(b) of the Central Act.
Claim petition was filed by the appellant before the arbitrator ' Claim petition was also filed by Abdul Khader claiming 60 '% of compensation as a 'protected tenant '.
There was an award by the arbitrator holding that as this Court had left it open to decide whether Abdul Khader was a protected tenant.
Despite the objection exercising the jurisdiction of the Arbitrator to go into the question of protected tenant, the arbitrator held that Abdul Khader was a protected tenant.
Aggrieved by the aforesaid award, the appellant claiming as one of the owners of the property filed a statutory appeal to the High Court.
In the meantime Abdul Khader filed an application on or about 21st of Octo ber, 1984 for adducing additional evidence to mark Kaulnama dated 2nd of December, 1950 for the first time and Oubu liatnama dated 2nd December, 1950 as exhibits in deciding the protected tenancy rights.
The appellant objected to that application but the High Court on 1st April, 1985 appointed Advocate Commissioner to record additional evidence.
On or about 22nd of April, 1985 the appellant filed the objection reserving the right of raising the jurisdiction of the Arbitrator to go into the question whether Abdul Khader was a protected tenant in the light of the Act 21 of 1950.
Three civil appeals were filed before this Court against the order of the High Court on 15th May, 1985.
This Court passed the order, on 19th August, 1985.
The said order is important and reads as follows: 1238 "Special leave are granted.
The appeal is heard.
Dr. Chitale learned counsel for the appellants submitted that the High Court should be directed to consider the issues relating to the jurisdic tion of the arbitrator appointed and function ing under the , 195 i to decide whether a person is protected tenant of an agricultural land or not in the light of Sections 99 and 102 of the Andhra Pradesh (Telangana Area) Tenancy and Agricultural Land Act, 1950.
We have heard the learned counsel for the respondents on the above question.
After giving our due consideration to the question we are of the view that the High Court should determine this question.
The High Court shall decide the question of juris diction referred to above in light of the submissions to be made by both the parties.
Shri Subba Rao, learned counsel for the respondents submits that the appellants should not be permitted to withdraw from the authorities concerned more than 40 per cent of the total compensation awarded in respect of the lands in question pending disposal of the appeal before the High Court.
We agree with his submission.
We direct that the appellants shall withdraw not more than 40 per cent of the compensation pending disposal of the appeal before the High Court.
The remaining 60 per cent shall be disbursed in accordance with the directions to be given by the High Court after hearing all the parties concerned.
" The appeals were disposed of accordingly.
Other C.M.Ps. were filed for clarification of the second part of the order dated 19th August, 1985 and this Court on 29th November, 1985 in CMPs.
Nos. 4692 to 4694 of 1985 clarified and ob served that there was no need for further clarification.
It was observed that the High Court was at liberty to consider the claims to be made by both the parties and pass any fresh order with regard to the disbursement of the remaining 60% of the compensation.
The judgment under appeal was passed on 15th of April, 1986.
This appeal arises out of the said judgment.
In the judgment under appeal which is directed against the award made by the arbitrator formulated the following four issues (1) what is the value of the land; (2) who are entitled to the compensation amount; (3) whether Abdul Khader is a protected tenant of Sail Gulshan of the area 19 02 guntas excluding the 1239 land of buildings, wells, etc.
and (4) what share is to be apportioned to successors of Sail Nawaz Jung.
It has to be borne in mind that in the award, the arbitrator after ex haustively discussing the evidence on record held that Abdul Khader was a protected tenant and as such further held that he was entitled to 60% of the compensation money payable for the acquisition of the land excluding the land of buildings, wells etc.
In this appeal we are concerned with the question wheth er the High Court was right in upholding the award of the arbitrator so far as it has held in favour of Abdul Khader and his rights to get 60% of the compensation.
The High Court dealt with the value of the land.
We are not concerned with the challenge to this aspect in this appeal.
The High Court further modified a portion of the order in view of the decision of this Court in Bhag Singh vs Union Territory of Chandigarh, ; on the question of solati um and interest on the amount awarded.
The judgment also dealt with the question as to who were the successors of Nawaz Jung.
We are also not concerned with this aspect of the matter inasmuch as the same is the subject matter of another appeal being Civil Appeal No. 4406 of 1986.
We are concerned in this appeal with the right of Abdul Khader.
The High Court discussed 18 documents out of which two are challans and other depositions.
Kowlnama executed in favour of Shaik Hussain was not filed.
The Kowlnama executed in favour of the son, Mohd. Abdul Khader, on December 3, 1950 was filed and was marked as Exhibit C 1.
The document recited: "permitted to utilise garden fruits, flowers and mango fruits".
The tenant was permitted to raise flower trees at his own expenses.
The High Court took into consid eration the judgment in Suit No. 13(1) of 195 1 52 by the tenant.
The High Court on consideration of these documents was of the view that these documents showed unequivocally that the tenancy was in favour of Shaik Hussain from 1935.
After his death Mohd. Abdul Khader was recognised as the tenant.
The land was taken possession of under a panchanama dated 12th of September, 1963.
According to the High Court the documents discussed in the judgment indicated that Shaik Hussain was a tenant from 1935.
After his death on July 18, 1949, his son Mohd. Abdul Khader became a tenant.
In this background the Court addressed itself to the question wheth er Abdul Khader was a protected tenant or not entitled to 60% of the compensation.
No document was filed to show that Abdul Khader was declared by the revenue courts as a pro tected tenant.
1240 The High Court was of the view that there was surfeit of evidence prior to the commencement of the Andhra Pradesh Act that Shaik Hussain was a tenant of the land.
The question was whether on enforcement of the said Act Abdul Khader, respondent herein, was a protected tenant.
The High Court thereafter discussed the facts mentioned hereinbefore about the order of the District Revenue Officer and the orders of this Court referred to hereinbefore.
The High Court noticed the position that under the said Andhra Pradesh Act it was for the revenue authorities to order whether a tenant is a protected tenant under section 34, section 37 'and section 37A of the said Act.
Section 37A was enacted on 12th of March, 1956.
The High Court was, however, of the view that it cannot be said that it was for the revenue authorities alone to decide the issue because the arbitrator was ordered to decide the issue by the High Court on 19th August, 1974 and by this Court on 30th of January, 1975.
The High Court also referred to the directions of this Court dated 19th August, 1985 mentioned hereinbefore.
The High Court was of the view that the arbitrator was to decide that question and the arbitrator was not in error in deciding the issue in the manner it did.
The Court reiterated that there was surfeit of evidence to declare that Abdul Khader was a tenant.
If he was a tenant, the High Court observed.
he was a protected tenant under section 34 read with section 37 or under sec tion 37 A of the Andhra Pradesh Act.
The High Court on reciting the facts came to the conclusions, inter alia: (a) that Abdul Khader because he was a tenant between January, 1942 to January, 1948 for six years, therefore, was a pro tected tenant under sub clause (ii) of clause (1) of section 34 of the Andhra Pradesh Act; (b) that Abdul Khader held the land from October, 1943 to October, 1949, therefore, was a protected tenant of Sail Gulshan under sub clause (iii) of clause (1) of section 34 of Act 21 of 1950.
In these circum stances, the High Court held that Adbul Khader was entitled to 60% of the compensation paid.
Aggrieved by the aforesaid decision, the appellants being the successor of the owner of the land in question is in appeal before us.
Shri Shanker Ghosh, learned counsel for the appellant, urged that under the said Andhra Pradesh Act it was mandatory under section 99 read with section 102 of the said Act in conjunction with the definition of section 2(r) of the Act for the revenue authorities to decide wheth er Abdul Khader was a protected tenant or not.
There being no such finding by the revenue officer, on the other hand there being a finding mat Abdul Khader was not a protected tenant by the revenue authorities it was not open to the arbitrator to decide the question of 1241 protected tenancy.
The arbitrator therefore, exceeded his jurisdiction and the High Court was in error.
Shri A.K. Sen, on behalf of the respondents on the other hand contended that the compensation payable in respect of the requisitioning and acquisition must be determined under the Central Act and the arbitrator was the authority to decide that question.
The question of Abdul Khader 's right to compensation had to be decided in accordance with law.
He had claimed rights of a protected tenant.
He had sought to establish his rights which must be found within the fourcor ners of the Andhra Pradesh Act along with other documents because under section 40(4) of the Andhra Pradesh Act the interest of a protected tenant in the land held by him as a protected tenant formed 60%.
The rights of the protected tenants have been defined in the Andhra Pradesh Act and relevant provisions of that Act namely, sections 34, 37, 37A and 40 in conjunction with the definition under section 2(r) have to be taken into consideration in the background of the facts and circumstances of the case.
The two orders of this Court as we have mentioned hereinbefore dated 30th of Janu ary, 1975 and 19th of August.
1985 reiterated the position that it was for the arbitrator to decide the question and he should decide the question in the light of sections 99 and 102 of the Andhra Pradesh Act as set out hereinbefore.
On behalf of the appellant it was submitted that there was a complete bar for any civil court to go into the question whether Abdul Khader was a protected tenant and as such the arbitrator and the High Court had no jurisdiction to decide this question.
For this reliance was placed on Section 102 of the Andhra Pradesh Act which lays down that the Act will not apply to lands leased, granted, alienated or acquired in favour of or by the Central Government or the State Govern ment etc.
and on Section 99 of the Act which bars the jurisdiction of civil courts to deal with any question which is under the Andhra Pradesh Act required to be settled, to be decided or dealt with by the Tahsildar, Tribunal or Collector.
According to the appellant inasmuch as whether Abdul Khader was a protected tenant had not to be settled by the Collector or the Tribunal, the arbitrator and the High Court were in error in going to that question.
We are unable to accept this submission.
By the scheme of the Central Act compensation was payable to persons who had interest in the land acquired.
Who are the persons who have interest in the land had to be decided in accordance with the law and the evidence.
Determination by the revenue authorities and non determination is not conclusive or decisive.
It is clear that section 102 of the Andhra 1242 Pradesh Act mentions that after acquisition the Act was not to apply in respect of certain land.
Therefore, it was submitted by the respondents that section 99 of the Andhra Pradesh Act.
which made the determination by the Tahsildar to be final and debarred other courts from going into the question did not apply in case of compensation payable.
In the background of the totality of circumstances as manifest in the different orders it appeared to the arbitrator and the Court that the entry which was made in favour of Abdul Khader as the protected tenant was of doubtful validity.
We are of the opinion that the High Court was not in error in so holding.
It was the observation of the revenue authori ties that it was spurious.
That in any event what was the interest of Abdul Khader had to be determined in determining the question of payment of compensation to him and in so determining the facts and circumstances and the proceedings before the revenue authorities and entries and subsequent deletions had to be taken into consideration by the arbitra tor.
The arbitrator has done so.
He had jurisdiction to do so.
The High Court has so held.
This Court by the two orders referred to hereinbefore had also affirmed this position.
In that view of the matter we are unable to accept the challenge to the award.
Furthermore, under section 99 of the Andhra Pradesh Act the bar was not against the arbitrator but against a civil court.
In determining the amount of compensation payable to Abdul Khader under the Central Act, his interests in the property had to be determined.
In another context, the High Court of Andhra Pradesh enunciated the position that it was necessary to determine the interest of the persons claiming compensation.
Reference may be made to the decision in the case of Archi Appalareddi and another vs Special Tahsildar, land Acquisition, Visakhapatnam Municipality and mother, [1979] Andhra Weekly Reporter, Vol.
1 p. 101, where the Court observed in the context of the Land Acquisition Act that a tenant was a 'person inter ested ' as defined in clause (b) of section 3 of the Land Acquisition Act.
He has a right to object to the acquisition and/or the quantum of compensation.
The Land Acquisition Officer or the Court, as the case may be, had to ascertain the value of a claimant 's right in the property acquired and compensate him in that behalf.
We may mention that in the two orders of this Court dated 30th of January, 1975 and 19th of August, 1985 referred to here inbefore, this Court had left it open to the High Court and to the arbitrator to decide whether he is a protected tenant or not.
the arbitrator has decided that question and the High Court found 1243 over wheiming evidence in support of it.
In that view of the matter we must uphold that decision however unsatisfactory it might appear that a fruit plucker gets 60% of the compen sation while the owners get only If that is the law let it be.
In the aforesaid view of the matter this appeal must fail and is accordingly dismissed with costs.
P.S.S. Appeal dismissed.
[/INST]% The appellants were contractors for the supply of ballast to PWD.
They were detained under section 3(2) of the .
It was stated in the grounds of detention that on account of business rivalry, appellants and their companions attacked the complainant with fire arms and hand grenades with intent to kill him, FIR was lodged by the complainant, a case was registered against them under section 147, 149, 307 I.P.C. and section 6 of the Explosives Act, and a chargesheet put up against the appellants, and since they had applied for bail, and if released there was a possibility that they will again start activities causing breach of public order, it was necessary to detain them in order to prevent them from so acting.
The detention orders were approved by the State Government under section 3(4) of the Act, and the representations made by the appellants having been rejected they were directed to be detained for a period of 12 months.
Challenging their detention, the appellants filed writ petitions before the High Court contending that the alleged assault on the complainant affected only an individual and such a solitary act could not be considered to be an act prejudicial to the maintenance of public order.
The High Court, dismissing the writ petitions, held that the assault was to teach a lesson to the complainant and serve as warning to prospective tenderers who may not dare to submit their tenders and that the impact and reach of the act went beyond the individual and affected the community of contractors who take contracts for executing the public works.
Allowing the appeals to this Court, 774 ^ HELD: Disturbance of public order is to be distinguished from acts directed against individuals which do not disturb the society to the extent of causing a general disturbance of public tranquility.
An act by itself is not determinant of its own gravity In its quality it may not differ from another but in its potentiality it may be different.
[778C D] A solitary act of omission or commission can be taken into consideration for being subjectively satisfied, by the detaining authority to pass an Order of detention if the reach, effect and potentiality of the act is such that it disturbs public tranquility by creating terror and panic in the society or a considerable number of the people in a specified locality where the act is alleged to have been committed.
It is the degree and extent of the reach of the act upon the society which is vital for considering the question whether a man has committed only a breach of law and order or has acted in a manner likely to cause disturbance to public order.
[779A C] In the instant case, the alleged act of assault by fire arms is confined to the complainant and not to others.
It is an act infringing law and order and the reach and effect of the act is not so extensive as to affect considerable members of the society.
In other words, this act does not disturb public tranquility, nor does it create any terror or panic in the minds of the people of the locality nor does it affect in any manner the even tempo of the life of the community.
This criminal act emanates from business rivalry between the detenus and the complainant.
Therefore, such an act cannot be the basis for subjective satisfaction of the detaining authority to pass an order of detention on the ground that the impugned act purports to affect public order i.e. the even tempo of the life of the community, which is the sole basis for clamping the order of detention.
Moreover, no injury was caused to the person of the complainant, by the appellants nor any damage was caused to the car though hand grenade was alleged to have been thrown on the car.
No mark has been caused to the car also.
[778E H] Gulab Mehra vs State of U. P. & Ors., 3 SC 559, applied.
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<s>[INST] Summarize the judgementAppeals Nos. 557 & 558 of 1965, Appeal by special leave from the judgment and order dated September 19, 1962 of the High Court of Judicature at Madras (in Tax Case No. 87 of 1960).
R. Ganapathy lyer, for the appellant.
R. M. Hazarnavis and R. N. Sachthey, for the respondent.
The Judgment of the Court was delivered by Shah, J.
Sree Meenakshi Mills Ltd. a company incorporated under the Indian Companies Act with its registered office at Madurai carries on business of cotton spinning and weaving.
In the premises "of the factory of the Company there are installed 80 handloorns 393 These handlooms were found inadequate to weave the yarn pro duced by the factory and a part of the yarn produced was distributed to weavers outside the factory who were engaged by the Company to weave the yarn into cloth.
Under cl.
18 B of the Cotton Cloth and Yarn (Control), Order, 1945, issued by the Government of India, the Textile Commissioner was authorized to direct ally manufacturer or dealer or any class of manufacturers or dealers, inter alia, not to sell or deliver any yarn or cloth of specified description except to such person or persons and subject to such conditions as the Textile Commissioner may specify.
On February 7, 1946, the Textile Commissioner issued an order directing the Company not to sell or deliver any yarn manufactured by the Company except to such person or persons as the Textile Commissioner may specify.
It was recited in the order that "nothing in this Order shall apply to a sale or delivery made, in pursuance of clause 18 A of the said order, to any dealer in yarn not engaged in the production of cloth on handlooms or powerless".
The Company addressed a letter on February 13, 1946 to the Textile Commissioner submitting that the prohibition in general terms was ultra wires the authority conferred by the Cotton Cloth and Yarn (Control) Order.
The Company continued notwithstanding the prohibition to deliver yarn to weavers and did so till February 20, 1946.
This yarn was seized under the orders of the Textile Commissioner.
On February 20,1946, the Provincial Textile Commissioner, purporting to act in exercise of authority conferred upon him by a notification issued by the Government of India, issued an order addressed to the Company that: "You should accordingly confine your delivery to the categories of persons notified below: (a) Licensed yarn dealers (in accordance with the said 18 A of the Control Order).
(b) to consumers who purchased yarn directly from you during the basic period 1940 42 (in accordance with my circular letter dated 4th January 1946 referred to above).
(c) your handloom factory situated in the premises of your Mill at Madurai (just the quantity of yam required).
"Note: Any other delivery of yarn by you which is not covered by a special order or permission of the Textile Control Authorities will accordingly be a contravention of the Textile Commissioner 's order under clause 18 B referred to above." After this order was issued, the Company did not deliver any yarn to weavers.
On March 4, 1946 the Company filed a petition for a writ of nandamus in the High Court of Madras under section 45 of the Specific 394 Relief Act praying for an order directing the Provincial Textile Commissioner, Madras to desist from seizing the yarn supplied to the weavers at or around Madurai and Rajapalayam for the purpose of converting the yarn belonging to the Company into cloth; to restore to the Company or to direct the Provincial Textile Commissioner and his subordinates to restore the yam already seized; and to forbear from seizing or to direct the subordinates of the Provincial Textile Commissioner to forbear from seizing the yarn that may be entrusted to the weavers by the Company in the usual course of business according to the practice already obtaining for conversion into cloth.
This petition was dismissed by Kunhi Raman, J, and the order of dismissal was confirmed in appeal by the High Court.
The matter was then carried in appeal to the Privy Council.
The Judicial Committee dismissed the appeal filed by the Company.
They held, agreeing with the High Court, that the expression "deliver" in cl.
18 B sub cl. 1(b) of the Cotton Cloth and Yarn (Control) Order, 1945, is used in its ordinary broad sense of handing over possession, as distinct from passing of property, and would include delivery of possession to a bailer.
Accordingly, delivery of part of its yarn by the Company to owners of handlooms outside the mill premises for conversion of the yarn into cloth for the Company was in contravention of the order made under cl.
18 B sub.
(1) (b).
The Judicial Committee also held that a petition under section 45 of the , directing the Provincial Textile Commissioner to desist from seizing the yam supplied to the weavers and to restore to the Company the yarn already seized was incompetent as the acts in respect of which relief was asked for took place outside the limits of the ordinary original civil jurisdiction of the High Court.
The Company spent Rs. 20,035/ in prosecuting the proceed ings under section 45 of the and had also to pay Rs. 5,912/ as costs to the Government of the unsuccessful appeal to the Judicial Committee.
In its returns of income the Company claimed deduction of the amounts of Rs. 20,035/ and Rs., 5,9121/for the assessment years 1949 50 and 1950 51 respectively as being expenditure wholly and exclusively laid out for the purpose of its business.
The claims were rejected by the departmental authorities, and by the Income tax Appellate Tribunal.
The Tribunal then referred the following question to the High Court of Judicature at Madras : "Whether the expenses of Rs. 20,035/ incurred in the assessment year 1949 50 and Rs. 5,912/ (relating to the assessment year 1950 5 1) being the cost paid to Government as directed by the Privy Council were expenses incurred in the ordinary course of business and allowable as deductions?" 395 The question as framed is somewhat vague.
But it is common ground that the Company claimed deduction under section 10(2) (xv) of the Indian Income tax.
Act, 1.922 on the footing that the two amounts represented expenditure laid out wholly and, exclusively by the Company for the purpose of its business.
The High Court answered the question in the negative. 'With special leave, the Company has appealed to this Court.
The Tribunal has found that after the order dated February 20, 1946 was issued, the Company did not deliver yarn to any weaver.
it is recited in the judgment of the Tribunal that a "correct order by the proper authorities was passed" on February 20, 1946 and, thereafter the Company did not distribute any yarn to weavers.
The averments made by the Company in the petition under section 45 of the , are somewhat involved, but in substance the claim of the Company was that the Provincial Textile Commissioner was incompetent to pass the order dated February 20, 1946 which placed restrictions on the business of the Company and the order was "likely to cause irreparable and irretrievable injury", and it was prayed that an order do issue under section 45 of the restraining the Provincial Textile Commissioner from enforcing the order and the Textile Commissioner be prohibited by an order from seizing the yarn delivered to the weavers outside the factory and be further ordered to restore the yarn already seized.
No clear averment was made in the petition about the date on which the yarn seized had been delivered by the Company to the weavers.
This petition failed, because the High Court had no jurisdiction to entertain the petition, and also because the expression "deliver" used in cl.
18 B of the Control Order included handing over of yarn to the weavers outside the premises of the factory for conversion into cloth.
But expenditure incurred in prosecuting a civil proceeding relating to the business of an assessee is admissible as expenditure laid out wholly and exclusively for the purpose of the business even if the proceeding is decided against the assessee.
It was held by this Court in Commissioner of Income Tax, West Bengal vs H. Hirjee(1) that the deductibility of expenditure under section 10(2) (xv) must depend on the nature and purpose of the legal proceeding in relation to the business whose profits are under computation and cannot be affected by the final outcome of that.
proceeding.
The proceeding started by the Company was in relation to the business of the Company.
The Company was thereby seeking relief against interference by the executive authorities in the conduct of its business in the manner in which it was being carried on previously.
It was also seeking to obtain an order for restoration of its goods which were seized.
It may be (1) ; : ; M15Sup CI/66 12 396 granted that the Company was, in starting the proceeding, ill advised.
However wrongheaded, ill advised, unduly optimistic, or overconfident in his conviction the assessee may appear in the light of the ultimate decision, expenditure in starting and prosecuting the proceeding may not be denied admission as a permissible deduction in computing the taxable income, merely because the proceeding has failed, if otherwise the expenditure is laid out for the purpose of the business wholly and exclusively, i.e. reasonably and honestly incurred to promote the interest of the business.
Persistence of the assessee in launching the proceeding and carrying it from Court to Court and incurring expenditure for that purpose again cannot be a ground for disallowing the claim.
Under section 10(2)(xv) of the Indian Income tax Act as amended by Act 7 of 1939 expenditure even though not directly related to the earning of income may still be admissible as a deduction.
Expenditure on civil litigation commenced or carried on by an assessee for protecting the business is admissible as expenditure under section 10(2) ((xv) provided other conditions are fulfilled, even though the expenditure does not directly relate to the earning of income.
Expendi ture incurred not with a view to direct and immediate benefit for purposes of commercial expediency and in order indirectly to facilitate the carrying on of the business is therefore expenditure laid out wholly and exclusively for the purposes of the trade.
In Morgan (Inspector of Taxes) vs Tate & Lyle Ltd.(1) the House of Lords held that expenditure incurred by a Company engaged in :sugar refining, in a propaganda campaign to oppose the threatened nationalization of the industry was a sum wholly and exclusively laid out for the purpose of the Company 's trade and was an admissible deduction from its profits for income tax purposes.
majority of the House held that the object of the expenditure being to preserve the assets of the Company from seizure and so to enable it to carry on and earn profits, the expenditure was a permissible deduction under r. 3(a) of the Rules applicable to cases (1) & (2) of Sch.
D of the Income tax Act, 1918.
The object of the petition filed by the Company was to secure a declaration that the order dated February 20, 1946 insofar as it sought to put restrictions upon the right of the Company to carry on its business in the manner in which it was accustomed to do was unauthorized and to prevent enforcement of that order: thereby the Company was seeking to obtain an order from the Court ,enabling the business to be carried on without interference.
Expenditure incurred in that behalf would without doubt be expenditure laid out wholly and exclusively for the purpose of the business of the Company.
(1) : 397 It was argued however that the any delivered by the Company to the weavers contrary to the prohibitory order dated February 20, 1946 was attached under the order of the Provincial Textile Commissioner, and since the Company violated the prohibitory order, the primary object of the petition for mandamus instituted by the Company was to secure protection against prosecution of the Company and an order for return of the goods in respect of which an offence was committed.
Expenditure incurred,in prosecuting that claim was, it was said, not laid out wholly and exclusively for the purpose of the business.
Reliance was placed upon the judgment of this Court in H. Hirjee 's case(1) in which it was held that a person who was prosecuted for an offence under section 13 of the Hoarding and Profiteering Ordinance, 1943, on a charge, of selling goods at prices higher than were reasonable, in contravention of the provisions of section 6 thereof, and a part of his stock was seized and taken away, was not entitled to claim deduction under section 10(2)(xv) of the Income tax Act for the sums spent in defending the criminal proceedings against him because the expenditure could not be said to have been laid out and expended wholly and exclusively for the purpose of the business.
But the assumption underlying the argument is not true.
The Tribunal has in the statement of the case observed in paragraph 2 : "Subsequently, on 20th February 1946, a proper order by the appropriate authority was passed and it is common ground that after that date, at any rate no further distribution of yarn was made by the assessee.
In the interim (period) between 7th February 1946 and 20th February 1946, the yarn which was distributed to the handloom weavers was the subject of seizure by the provincial Textile Commissioner and this the assesse sought to resist by filing an application under section 45 of the 1, of 1877 In the view of the Tribunal the Company did not act in violation of the terms of the order dated February 20, 1946; it cannot there fore be said that the Company was seeking to protect itself against a criminal prosecution and the consequences arising from infringement of the order dated February 20, 1946.
It is true that in the judgment in appeal from the order refusing mandamus, Leach, C.J. speaking for the Court observed: (see Sree Meenakshi Mills vs Provincial Textile Commissioner, Madras(2): "In spite of the fact that this order in effect prohibited the appellant delivering yarn to owners of handlooms situate outside the mill premises, the appellant continued to deliver yarn to such weavers.", and (1) ; (2) A.I.R. 1947 Mad. 82, 398 the Judicial Committee observed: "Despite.
the prohibition the appellant continued to deliver yarn to such owners in order (as already mentioned) that they might turn the yarn into.
cloth and bring the article back to the mills.
" (See Sree Meenakshi Mills Ltd. vs Provincial Textile Commissioner; Madras(1).
But the Tribunal has observed in its order dismissing the appeal filed by the Company that it was "not disputed before" them that, after February 20, 1946 the Company did not distribute any yam.
The question referred in this case must be decided not on what was found or observed by the High Court in appeal from order, in the proceedings under section 45 of the or by the Judicial Committee, but upon findings of fact recorded by.
the Tribunal.
It is unfortunate that the High Court took the facts, not from the statement of the case, but apparently from the judgment.
of the Judicial Committee.
The High Court assumed that the Company had contravened the law because it delivered yarn to weavers in contravention of the order dated February 20, 1946.
But the assumption on which the discussion is founded is erroneous.
The High Court also thought that expenditure to fall within the terms of section 10(2)(xv) must be one for the purpose of earning income, and there was no material on the record to show that the expenditure was so incurred.
If it is intended thereby to imply that the primary motive in incurring the expenditure admissible to deduction under section 10(2)(xv) must be directly to earn income thereby, we are with respect unable to agree with that view.
This Court in Commissioner of Income tax, Kerala vs Malaya lam, Plantations Ltd.(2) observed: "The expression "for the purpose of the business" is wider in scope than the expression "for the purpose of earning profits".
It 's range is wide: it may take in not only the day to day running of a business, but also the rationalizationof administration and modernization of its machinery: it may include measures for the preservation of the business or for the protection of its assets and property from expropriation coercive process or assertion of hostile title: it may also comprehend payment of statutory dues and taxes imposed as a precondition to commence or for carrying (1)L.R. 76, I.A. 191, 195.
(2)[1964] 7 S.C.R. 693,705:53 I.T.R. 140, 150.
399 on of a business; it may comprehend many other acts incidental to the carrying on of a business.
" Expenditure incurred to resist in a civil proceeding the enforcement of a measure legislative or executive, which imposes restrictions on the carrying on of a business, or to obtain a declaration that the measure is invalid would, if other conditions are satisfied, be admissible, in our judgment, under section 10(2)(xv) as a permissible deduction in the computation of taxable income.
The appeals are therefore allowed.
The question referred is answered in the affirmative.
The appellant Company will be entitled to its costs in this Court and the High Court.
One hearing fee.
y. P. Appeals allowed.
[/INST]The tenant of a flat was in arrears of rent for more than six months.
The landlord served a notice on the tenant demanding the rent.
The tenant did not pay it within one month of the notice, but tendered it after the expiry of the month.
The landlord refused to receive it and filed a suit for eviction under section 12(3) (a) of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947.
The tenant claimed the protection of section 12(1) of the Act on the ground that she was ready and willing to pay the rent before the institution of the suit.
HELD : Under section 12(3) (a), the landlord is vested with the right to recover possession of the premises if the rent is in arrears for six months or more, the tenant neglects to pay it until after the expiry of one month after notice demanding the rent and other conditions of sub s.(3) (a) are saitisfied.
This right cannot be defeated by showing that the tenant was ready and willing to pay the rent after the default but before the institution of the suit.
In a case falling within sub section
(3) (a), the tenant must be dealt with under its special provisions and he cannot claim any protection from eviction under the general provisions of sub section
(1): and the court was bound to pass a decree for eviction.
[137 E, F] Bhaiya Punjalal Dhagwanddin vs Dave Bhagwat Prosad Prabhuprasad, [19631 3 S.C.R. 312, followed.
Mohanlal vs Maheshwari Mills Ltd. and Ambala, vs Babaldas, , overrules.
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<s>[INST] Summarize the judgementAppeal No. 628 of 1961.
Appeal from the judgment and order dated February 24, 1960, of the Kerala High Court in Tax Revision Case No. 22 of 1957.
G. B. Pai, J. B. Dadachanji, O. C. Mathur and Ravinder Narain, for the appellant.
609 V. P. Gopalan Nambiar, Advocate General, State of Kerala and Sardar Bahadur, for the respondent.
A. V. Viswanatha Sastri, section N. Andley, Rameshwar Nath andP. L. Vohra, for the interveners.
November30.
The Judgement of the, Court was delivered by KAPUR, J. Thisappeal by certificate of the High Court of Keralaraises the question of the taxability of sales of tea under the Travancore Cochin General Sales Tax Act, hereinafter termed the Act, and the Rules made thereunder.
The assessment period is 1952 53 and the turnover was of a sum of Rs.3,77,644/ on which a tax of Rs. 5900/11/ was levied.
The appellant before us is the assessee company and the respondent is the Deputy Commissioner of ' Agricultural Income tax and Sales tax.
Mr. A. V. Viswanatha Sastri on behalf of Outcherloney Valley Estates (1938) Ltd. has applied for intervention on the ground that in case of that company also the State or Kerala has, on similar fact;, levied sales tax on certain transaction that the High Court of Kerala has upheld the taxability of the transactions relying on the judgment which is under appeal in the present case, and that the intervener has obtained Special leave to appeal against that judgment and the records are under print.
In view of these circumstances we have allowed that company to intervene in the present appeal.
The assessment was made on March 30, 1955, under r. 33(1) of the Act on the ground that the sales of tea had escaped assessment.
The appeal against 610 that order was unsuccessful and thereafter a further appeal was taken to the Sales tax Appellate Tribunal which by its order dated August 12, 1957, held that the ban under article 286(1)(a) of the Constitution on sales which are outside the State applied, in regard to the sales of 'full lots ' and therefore remanded the case to the Sales tax Officer.
Against that order a revision was taken to the High Court which held that the decision of the Appellate Tribunal in regard to the applicability of article 286(1)(a) was erroneous and therefore the sales were subject to sales tax under the Act.
It is against that judgment and order that the assessee company has come to this court on a certificate of the High Court.
Put shortly, the nature and procedure of sales of teas was this; that the teas were stored in the godowns at Willingdon Island which was in the State of Travancore Cochin., samples of those teas etc., were taken to Fort Cochin which at the relevant time was in the State of Madras.
There by the samples the teas were sold by public auction in lots, some were purchased in their entirety and others in parts and after the consideration money was paid at Fort Cochin delivery orders.
were given to the buyers addressed to the godown keepers at Willingdon Island and actual delivery of tea was taken there.
These teas were then sent out from Willingdon Island in Travancore Cochin for consumption either in other parts of India or were exported out of India.
The taxability of the sales of teas in the manner above mentioned will depend upon whether the sales can be held to have taken place at Willingdon Island i.e. within the territory of Travancore Cochin State and were liable to the imposition of sales tax under the Act or they were what for convenience are called Ire outside sales" and therefore not subject to sales tax in the State of Travancore Cochin.
The argument raised on behalf of the assessee company was that 611 these sales were effected at Fort Cochin which was outside the territory of Travancore Cochin and therefore were not liable to tax because of the ban imposed by article 286(1)(a) of the Constitution.
That Aricle with the Explanation at the relevant time was as follows "article 286(1) No law of a State shall impose, or authorise the imposition of, a tax on the sale or purchase of goods where such sale or purchase takes place (a) outside the State; or (b). . . . . . .
Explanation : For the purpose of sub clause (a) a sale or purchase shall be deemed to have taken place in the State in which the goods have actually been delivered as a direct result of ' such sale or purchase for the purpose of consumption in that State, notwith standing the fact that under the general law relating to sale of goods the property in the goods has, by reason of such sale or purchase, passed in another State".
Under the Sale of Goods Act in an auction sale the title in goods passes and the sale is complete as soon as the hammer falls.
The relevant portion of section 64 of the Sale of Goods Act dealing with sale by auction reads as follows In the case of a sale by auction. (1) where goods are put up for sale in lots, each lot is prima 612 facie deemed to be the subject of the separate contract of sale; (2) the sale is complete when the auctioneer announces its completion by the fall of the hammer or in the customery manner; and until such announcement is made any bidder may retract his bid.
" Specific goods in section 2 (14) of the Sale of Goods Act means goodsidentified and agreed upon at the time contract is made.
Therefore on the fall of the hammer theoffer is accepted and if the goods are specified goods the title passes to the buyer.
In the present case as soon as the hammer fell the title in the goods passed to the buyer as the goods were specific goods i.e. goods which were auctioned in full lots and this event took place at Fort Cochin which was in the State of Madras.
But in the case of unascertained goods the title in the goods does not pass to the buyer unless and until the goods are ascertained.
It was for this reason that a distinction was drawn by the Sales tax Appellate Tribunal between goods which were sold in full lots and those which were sold in portions.
In regard to the former it was held that the title passed as soon as the hammer fell but not so in regard to the latter and therefore the sale of "full lots ' was held to have taken place outside the State of Travancore Cochin and of portions of lots inside that State.
The case was consequently remanded to the Sales tax Officer for determining the amount of the tax.
The High Court in revision held that the words in article 286 (1) (a) " 'outside the State" do not mean transfer of ownership, according to the Sale of Goods 613 Act but it was lex situs which determines the taxability of the transaction and the correct position is that the ownership in the goods is transferred according to the law of the place where the goods are situate.
Therefore the sale in the present case was in the State of Travancore Cochin and there is nothing in the Explanation to article 286 (1) (a) which provides to the contrary.
It has been found and it has not been disputed that the title to the goods in the present case passed at Fort Cochin.
The purchase money was paid there and the purchaser obtained from the auctioneer delivery notes directing the godown keepers at Willingdon Island to deliver the goods and only the actual physical delivery of the goods took place at Willingdon Island.
In these circumstances the question is whether the sale was "outside" or "inside sale" as the expressions have been compendiously used in various judgments to indicate sales taking place within a State or without it.
The Explanation to article 286 (1) (a) which has been set out above explains what a sale outside the State is.
According to that Explanation a fiction is created as between two States, one where the goods are delivered for consumption in that State and the other where the title in the goods passes and the former is treated as the situs of the taxable event to the exclusion of the latter.
Therefore where the Explanation applies the difficulty about the situs is resolved but in a case like the present one the difficulty still remains because the explanation does not operate in the sense that the rival States claiming to tax the same taxable event are not the States of delivery for consumption in that State and those where the title in the goods passes.
In somewhat similar circumstances this court in Indian Copper Corporation Ltd. vs State of Bihar (1) held by a majority decision that the opening words of Art: 286 (1) which speak of a sale or purchase taking place and the non obstante clause in (1) ; ,286, 614 the Explanation which refers to the general law relating to the sale of goods, indicated that it was the "passing of property within the State" that was intended to be fastened on, for the purpose of determining, whether the sale in question was "inside" or "outside" the State and therefore subject to the operation of the " 'Explanation", that State in which property passed would be the only State which would have the power to levy a tax on the sale.
At page 286 it was observed: "The conclusion reached therefore is that where the property in the goods passed within a State as a direct result of the sale, the sale transaction is not outside the State for the purpose of article 286 (1) (a) unless the Explanation operates".
The majority decision in Indian Copper Corporation Ltd. vs State of Bihar (1) concludes the point in favour of the appellant.
On the facts of this case it was found by the Sales Tax Appellate Tribunal that in regard to the sales of tea in 'full lots ' the property passed at Fort Cochin and this view has not been challenged in this court.
Therefore, on the majority decision in Indian Copper Corporation Ltd. vs State of Bihar (1) the only State which would have the power to levy a tax on such sales would be the State of Madras and so far as Travancore Cochin was concerned, the sale would be an outside sale.
In the present case therefore the sale was an "outside sale" and cannot be said to be an "inside sale" qua Travancore Cochin because the title passed at Fort Cochin which is in the State of Madras.
Apart.
from that the money was paid there and the delivery order was also received there even though the actual physical delivery of goods was made at a Willingdon Island in the State of Tranvancore Cochin.
The fiction created by the Explanation to, article 286 (1)(a) is inapplicable (1)[1961] 2 S.C.R. 276, 615 because there was no delivery as a direct result of sale for the purpose of consumption in any particular State.
There then remains the question of goods which were exported out of India from Willingdon Island.
In the case of those goods 'also it cannot be said that there was a sale inside the 'State of Travancore Cochin because the same considerations will apply to those sales as to the sales already discussed i.e. goods the title to which passed at Fort Cochin were delivered at Willingdon Island and were delivered for 'consumption in parts of India other than Travancore Cochin.
In our view therefore the High Court was in error and the appeal should therefore be allowed and the judgment and order of the High Court of Kerala set aside.
The appellant will have its costs in this court and in the High Court.
Appeal allowed.
[/INST]Dr. Vimla purchased a car in the name of her minor daughter Nalini aged about 6 months.
The price of tile car was paid by her.
The transfer of the car was notified in the name of Nalini to the Motor Registration Authority.
The insurance policy already issued was transferred in the name of Nalini after the proposal form was signed by Dr. Vimla.
Subsequently, Dr. Vimla filed two claims on the ground that the car met with accidents.
She signed the claim forms as Nalini.
She also signed the receipts acknowledging the pay ment of compensation money as Nalini.
Dr. Vimla and her husband were prosecuted under sections 120 B, 419, 467 and 468 of the Indian Penal Code.
Both the accused were acquitted by the Sessions Judge.
The State went in appeal and the High Court convicted Dr. Vimla under section 467 and 468 of the Indian Penal Code.
Dr. Vimla came to this Court by special leave.
Held, that appellant was not guilty of the offence under section 467 and 468 of the Indian Penal Code.
She was certainly guilty of deceit because though her name was Vimla, she signed in all the relevant papers as Nalini and made the Insurance Company believe that her name was Nalini, but the said deceit did not either secure to her advantage or cause any noneconomic loss or injury to the Insurance Company.
The charge did not disclose any such advantage or injury nor was there any evidence to prove the same.
The entire transaction was that of Dr. Vimla and it was only put through in the name of her minor daughter.
Nalini was in fact either a Benamidar for Dr. Vimla or her name was used for luck or other sentimental considerations.
The Insurance Company would not have acted differently even if the car stood in the name of Dr. Vimla.
586 The definition of 'false document ' is a part of the defini tion of forgery ' and both must be read together.
If so read, the ingredients of the offence of forgery relevant to the present case are as follows: (1) fradulently signing a document or a part of a document with an intention of causing it to be believed that such document or part of a document was signed by another under his authority ; and (2) making of such a document with an intention to commit fraud or that fraud may be committed.
The expression 'fraud ' involves two elements, deceit and injury to the person deceived.
Injury is something other than economic loss, that is, deprivation of property, whether movable or immovable or of money and it will include and any harm whatever caused to any person in body, mind, reputation or such others.
In short, it is a non economic or non pecuniary loss.
A benefit or advantage to the deceiver, will almost always cause loss or detriment to the deceived.
Even in those rare cases where there is a benefit or advantage to the deceiver, but no corresponding loss to the deceived, the second condition is satisfied.
Haycraft vs Creasy, ; , in re.
London and Globe Finance Corporation Ltd., R. vs Welham, , Kotamraju Yenkatrayadu vs Emperor Mad. 90, Surendra Nath Ghose vs Emperor, Cal. 75, Sanjiv Ratnappa vs Emperor, A. I. R. and Emperor vs Abdul Hamid, A. 1.
R. , referred to.
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<s>[INST] Summarize the judgementCivil Appeal No. 774 of 1967.
Appeal by special leave from the judgment and order dated February 6, 1970 of the Madhya Pradesh High Court in Second Appeal No. 327 of 1963.
D. N. Mukherjee, for the appellant.
Janardan Sharma, for the respondents.
The Judgment of the Court was delivered by Mitter, J.
This is an appeal by special leave from a judgment of the Madhya Pradesh High Court dated 6th February 1967 dismissing a Second Appeal by the appellant before this Court against 726 a decree passed by the Additional District Judge of Ratlam for ejectment of the appellant from a house mortgaged by the predecessor in interest of the appellant to one Kesharimal for Rs. 3, 1 00 and further decreeing a claim for arrears of rent amounting to Rs. 731 35 and mesne profits at the rate of Rs. 20 per month until eviction.
The relevant facts are as follows.
On July 29, 1945 Mathuralal, predecessor in interest of the appellant, mortgaged his house in Ratlam to Kesharimal for a sum of Rs. 3,100 with possession.
The deed of mortgage contained the following terms : 1.
That interest would run on Rs. 3, 100 at Rs. 0 1 0 0 per cent per mensem till realization.
The period of redemption would be two years.
During the period of mortgage "the tenant as may be shall execute the rent notes in favour of the mortgagee and whatever rent shall be realised will be credited in lieu of interest and it the amount of rent shall exceed the amount of interest, the difference shall be deducted from the original sum due,, but if the amount of interest shall exceed the amount of interest the difference shall be deducted from the original sum due.
" But if the amount of interest shall exceed the amount of rent, then the mortgagor shall pay it.
Notwithstanding any vacancy during the period of the mortgage the rent would continue.
During the period.
of the mortgage an account of the rent and interest shall be settled after every six months.
The mortgagor undertook to keep the house in repairs during the period of the mortgage and in default of repairs by him the mortgagee was to be entitled to execute the necessary repairs and add the cost to his dues.
"The burden of the mortgage money shall be on the mortgaged house.
In case the amount is not realised from the house, the moragagee shall have a right to take steps to realise his money" from the mortgagor and his property of every kind.
On the same day the mortgagor executed another document in favour of the mortgagee reciting that his house in Ratlam was mortgaged with possession to the creditor who was "having its possession" and the mortgagor had taken the same on rent at Rs. 20 per month on the following terms : 1.
The executant would pay the rent every month regularly and in default of payment of two months ' rent, the mortgagee would be entitled to get him evicted.
727 2.
The executant would white wash and repair the house and keep it in good condition.
Kesharimal would be entitled to increase or decrease the rent.
The executant would vacate the house whenever asked to do so. 5.
The executant would hand over possession of the house in,the same condition in which he had received it.
Kesharimal filed a suit on his mortgage in 1954 and a preliminary decree for sale for the amount of Rs. 5,637 6 0 besides interest at, the rate of Rs. 0 10 0 per cent per mensem for six months.
on the sum of Rs. 3,600 was duly passed.
The defendant was, directed to pay the full amount of the decree before the 24th May 1955 and in case of his doing so the property was to be released from the mortgage and the plaintiffs were to hand over all the documents which they had in their possession, but in case of failure to pay the plaintiffs would be entitled to file an application for the execution of the decree and get the property auctioned; and in case of non satisfaction of the decree 'by the sale, the plaintiffs were to be at liberty to recover the balance of the decretal claim by a personal decree against the defendant.
It appears that Kesharimal had died during the pendency of the suit and his legal representatives were brought on record and the preliminary decree passed in their favour.
Whatever be the reason no application for a final decree for sale of the property was made within the period fixed under the Limitation Act.
The application for this purpose made by the executors to the estate of Kesharimal was dismissed on July 29, 1960 as barred by limitation.
On December 27, 1960 the said executors filed a suit for ejectment against the appellant alleging that the rent for the premises had remained unpaid from September 29, 1957 till November 28, 1960.
An amount of Rs. 731 75 was arrived at by totalling the rent for the period mentioned and mesne profits from 29th November 1960 to 26th December 1960 at the same rate and incidental charges and expenses and deducting therefrom the rent for two months which was barred by the lapse of time the plaintiffs asked for a decree for ejectment and further mesne profits.
The trial Judge dismissed the suit.
But on appeal this was set aside and the plaintiffs claim allowed in full.
The High Court in Second Appeal maintained the decree of the appellate court.
The points urged by counsel for the appellant before us were 1.
The rent note executed simultaneously with the mortgage was a mere device to secure payment of interest and did not record 728 an independent transaction.
Further it did not create any relationship of landlord and tenant.
The plaintiffs ' right as mortgagee merged in the decree and ,execution thereof being 'barred by the laws of limitation the plaintiffs had lost all their rights.
The mortgage being extinguished the mortgagor could not bring a suit for redemption.
Before examining the contentions urged we propose to note the substance of the two documents and what the parties sought to achieve thereby.
It is, clear that the mortgage was with possession of the house and that the mortgagee wanted to make sure of Rs. 20 per month irrespective of the fact as to whether the mortgagor or some other person occupied the house and notwithstanding any vacancy during the period of the mortgage.
The sum of Rs. 20 per month which the mortgagee wanted to ensure payment of every month exceeded the interest stipulated for by Rs. 0 10 0 per month.
There was to be no decrease in this amount even if the mortgagor were to repay a portion of the principal.
The mortgagee had further the right to increase or decrease the rent and the mortgagor covenanted to vacate the property whenever the mortgagee asked for possession.
In other words if the mortgagee chose to go into possession himself, the mortgagor would be entitled to have Rs. 20 p.m. credited towards the dues on the mortgage so long as he continued in possession.
Even during the period of redemption when the mortgagee could not have sued for the mortgage money he still had a right to evict the mortgagor in case the latter defaulted in payment of Rs. 20 a month for two months.
It would appear that the relationship between the parties was not simply that of a mortgagee and mortgagor : the creditor also had the rights of a landlord qua his tenant besides other rights conferred on him which were greater than those possessed by an ordinary landlord.
There can be no doubt that by leasing the property back to the mortgagor in the way mentioned above the mortgagee tried to ensure the regular payment of interest but his rights were not limited to that alone.
In case he decided to go into possession himself the only remedy left to the mortgagor was to sue for redemption.
This right under the Limitation Act of 1908 was to enure for 60 years from the date of the mortgage and the mortgagor had not lost his right to redeem notwithstanding the passing of the preliminary decree in the mortgage suit.
The mortgage security continued even after the passing of the said decree : if the mortgagee had continued in possession of the property after the passing of the preliminary decree and did not apply for a final decree, he would only lose his right to recover the mortgage money 729 by sale of the property unless he applied for that purpose within the period of limitation fixed by the Limitation Act.
After the mortgagee had lost his right to apply for a final decree for sale, he did not lose his status as a mortgagee : he only lost his remedy to recover the mortgage money by sale.
The mortgagor did not lose his right to redeem.
We may now examine the authorities which were cited at the Bar in aid of the respective contentions.
In aid of his first proposition Mr. Mukherjee relied principally on the decisions of the Bombay High Court in Harilal Bhagwanji vs Hemshanker(1) and Ramnarain vs Sukhi(2).
The facts of the Bombay case were as follows.
The defendant appellant mortgaged with possession the house in suit for Rs. 7,500/ on August 23, 1952.
Under the deed of mortgage the principal amount was to carry interest at 9% and both principal and interest were charged on the mortgaged property.
A portion of the house was already in the occupation of the plaintiff as the defendant 's tenant on a monthly rental of Rs. 15 and another portion was let out to one Mansukhlal at the rate of Rs. 17 p.m., the defendant himself occupying the remaining part of the house.
Simultaneously with the mortgage a rent note was executed on the same day in respect of the portion of the house in the defendant 's occupation which was leased back to him by the plaintiff for a term of six months at the rate of Rs. 24 4 0 per month.
The plaintiff sued the defendant for possession of the said portion and for arrears of rent on the strength of the rent note.
The defence was that the rent note was a nominal document executed for securing payment of interest and that no relationship of landlord and tenant was created.
It was contended that the principal money and interest were to be realised from the mortgaged property and a suit for rent alone which was in reality interest would not he.
It was held by the High Court that the fact that the two documents had varying periods of operation would not make any difference in the determination of the question as to whether they formed part of the same transaction or not.
Further the rent to be realised from the tenant Mansukhlal was to be credited towards interest and the significant circumstance was that the rent payable by the defendant under the rent note was fixed with a view to making up the interest on the mortgage sum at 9%.
Although the mortgage deed recited that the plaintiff could let out the property to anyone he liked but as the property was already wholly occupied, the High Court took the view that the question of leasing it out to another tenant was not in contemplation of the parties.
As a result of the above findings the court held that the rent note was a mere device for securing payment of interest.
Reliance was placed on Ramnarain vs Sukhi(2) and it was held that although the decree for eviction of (1) A.I. R. 1958 Bombay 8.
(2) A.T.R.1957 Patna 24.
SupCI(NP)/70 2 730 the defendant from the suit property could not stand, that awarding arrears of rent was to be maintained.
In Ramnarain vs Sukhi(1) an application was made by the defend ant for setting aside the decree of the Small Causes court evicting him.
The defendant had executed a usufructuary mortgage in favour of the plaintiff and by a kerayanama executed on the same day had taken back the house on a rent of Rs. 6 per month from the plaintiff.
He had not paid any rent for over three years and the suit was brought for recovery of arrears of rent for the said period.
It was his contention that the agreement between the parties was not for execution of a usufructuary mortgage but one of a simple mortgage.
It was further contended on his behalf that the mortgage and the kerayanama were one and the same transaction and no relationship of landlord and tenant was created and the ijara term having expired the plaintiff 's remedy to recover the house rent which represented the interest the mortgage money could only lie under section 68 of the Transfer of Property Act.
The High Court referred to several decisions and came to the conclusion that the intention of the parties was that the mortgagee would not get possession of the mortgaged property but would only get interest on the amount advanced in the shape of rent so long as the lease continued and the amount payable under the kerayanama was interest on the mortgage money and not rent for use and occupation of the mortgaged property.
The mortgage bond and the kerayanama being part of the same transaction the mortgagee in execution of his decree for money obtained in respect of the so called rent of the house against the mortgagor would not be entitled to execute the decree for arrears of rent by sale of the property, as such a case would be governed by 0.
34 R. 14 Civil Procedure Code.
In the result the claim of the creditor in excess of 9 % p.a. was rejected but as the defendant had been in occupation of the house, although under an invalid lease, he was directed to pay, compensation to the plaintiff for use and occupation of the house for the period of his occupation.
Reference may also be made to the case of Umeshwar Prasad vs Dwarika Prasad(2).
In this case the mortgagor executed a usufructuary mortgage of certain properties for Rs. 14,400 for a period of seven years.
Soon thereafter the mortgagee leased back the entire property to the mortgagor for a period of about seven years at the annual rent of Rs. 432 which was equal to the interest on the sum advanced.
It was held by the Patna High Court that the mortgage bond and the lease deed were parts of the same transaction and the fact that the periods of the two deeds were not identical was immaterial and the case was governed by 0.
34 r. 14 (1) A.I.R. 1957 Patna 24.
(2) A.I.R. 1944 Patna 5.
731 and as such the mortgagee could not execute the decree for arrear of rent by sale of equity of redemption.
In Ganpat Ruri vs Md. Asraf Ali( ') the plaintiff had filed a suit claiming arrears of rent at the rate of Rs. 20 per month in respect of a house which had been given to him by the defendant in usufructuary mortgage by a registered document, the property being let out to the defendant on lease on the same day at the monthly rent of Rs. 20.
Applying the test as to whether on a reasonable construction of the two documents the property given in security was not only for the principal amount secured under the bond but also for the interest accruing thereupon, the court held that the transactions were two different transactions and for this reliance was placed on the fact that no rate of interest was prescribed in the bond and Rs. 20 p.m. could not possibly be treated as interest due on the principal amount of Rs. 500.
In contrast with the above cases reference may be made to the case of Jankidas vs Laxminarain(2).
In this case the plaintiffs who were usufructuary mortgagees of a house gave a lease of it to the defendant mortgagor on rent and put the lessee in possession thereof on the same day.
The rent remaining unpaid the plaintiff filed a suit for arrears of rent and ejectment.
Ultimately however the High Court of the former State of Marwar granted a decree for arrears of rent but refused the prayer for ejectment.
The plaintiff thereupon filed the suit in 1953 claiming arrears of rent amounting to Rs. 126/ for three years preceding the date of the suit.
The suit was resisted by the defendant who, among other pleas, contended that the suit was barred by 0.
II r. 2 C.P.C.
There was said that although the mortgage and the deed of lease represented one transaction that would not mean that no tenancy came into existence by the execution of the deed of lease.
It was held that the right which arose to the mortgagees to sue for rent was an independent obligation though it might be part of the same transaction in the sense that it was brought into existence by an arrangement made at the same time for a common purpose.
In Lalchand vs Nenuram(3) the defendants had executed a mortgage in favour of the plaintiffs agreeing to pay interest at 8 % p.a. which came to Rs. 27 8 0 per month.
The mortgagors had delivered possession to the mortgagees and a registered qabuliat reciting that they were taking on lease the property described at a monthly rental of Rs. 27 8 0.
The lower courts took the view that the mortgage deed was a rent note and part and parcel of the same transaction and the plaintiffs were not entitled to get a decree for (1) A.I.R. 1961 Patna 133.
(2) I.L.R. (3) I.L.R. 732 ejectment on the basis of the rent note.
Rejecting this the Rajasthan High Court observed at p. 952 : "Whether the two documents represent one transaction or two different transactions, a court of law should be anxious to give effect to the terms in both the documents instead of being unduly critical about them.
Having secured the possession of the mortg age, the mortgagee is further entitled to lease it out even to the mortgagor.
It is in the interest of the mortgagor that the property is; leased out to him as he can better look after it.
There is nothing objectionable in this, nor is there any statutory prohibition for 'such transactions.
Now if the parties do this by executing proper documents, it is the duty of the court of law to give effect to them." The reasoning of the Rajasthan judgment seems to be logical and commends itself to us.
In all such cases the leasing back of the property arises because of the mortgage with possession but we find ourselves unable to hold that the mortgagee does not secure to himself any rights under the deed of lease but must proceed on his mortgage in case the amount secured to him under the deed of lease is not paid.
If the security is good and considered to be sufficient by the mortgagee there is no reason why he should be driven to file a suit on his mortgage when he can file a suit for realisation of the moneys due under the rent note.
The position of the creditor is strengthened where as in this case the interest on the amount of the mortgage is not the same as the rental fixed.
If during the continuance of the security the mortgagee wants to sue the mortgagor on the basis of the rent note and take possession himself or to induct some other tenant thereby securing to himself the amount which the mortgagor had covenanted to pay, there can be no legal objection to it.
Under the provisions of 0.
34 r. 4 he cannot deprive the mortgagor of his right to redeem excepting by proceeding on his mortgage.
Although we express no final opinion on this point it may be that a mortgagee who secures a decree for payment of arrears of rent cannot put the property to sale for realisation of the amount decreed but there can be no objection to his suing for possession if the rent note entitles him to do so.
So long as the mortgagor had a right to redeem the mortgage he can always pay off the mortgagee and get back possession.
This position would continue so long as the property is not sold under a final decree for Sale under the provisions of 0. 34 C.P.C.
In our opinion the second contention put forward on behalf of the appellant has no force.
The rights of a mortgagee do not merge in his rights under the preliminary decree for sale.
As already mentioned, the mortgagee lost his right to recover the money 733 by sale of the mortgaged property; otherwise his security remained intact and the mortgagor continued to have his right to redeem the property.
As regards the third point the only statutory provision to which ,a reference was made was section 28 of the Limitation Act of 1908 which provided that : "At the determination of the period hereby limited to any person for instituting a suit for possession of any property, his right to such property shall be extinguished.
" If the right of the mortgagee arose on the strength of the rent note which continued to be in force notwithstanding that the period for applying for a final decree for sale had expired there could be no extinction of his right to sue for possession because of section 28 of the Limitation Act.
In the result the appeal fails and is dismissed with costs.
G.C. Appeal dismissed.
[/INST]The appellant company had a factory at Varanasi at which chemicals including ammonia were manufactured.
It was considered by the Central Excise authorities that there had been evasion of duty on ammonia by the company.
The Assistant Collector Central Excise issued a warrant for search and seizure of goods and documents, pursuant to which the premises of the aforesaid factory were raided in May, 1968 and certain documents seized.
The company filed a writ petition in the High Court which was dismissed by the Single Judge.
The Division bench upheld the order of the Single Judge.
In appeal to this Court by special leave, the questions that fell for consideration were (i) Whether section 12 of the Central Excise Act was void because the powers delegated to the Central Government thereby including the power to make alterations in the Act applied were excessive; (ii) Whether the Sea Customs Act, 1875 having been re pealed, it was open thereafter to the Central Government under section 12 of the Excise Act to apply section 105 of the ; and (iii) Whether the Assistant Collector issued the warrants in the present case after due application of mind to relevant materials and 'facts in terms of section 105(1) of the .
HELD : (i) In the notifications issued inter alia applying section 105(1) and section 1 10 of the , no such changes had been made as could possibly fall within the meaning of the word 'alterations.
The power to restrict and modify does not import the power to make essential changes.
It is confined to alterations of minor character and no change in principle is involved.
The word 'alteration ' in section 12 must be understood in the sense in which it was open to the legislature to employ it legitimately and in a constitutional manner.
No question was thus involved of delegation either of any essential legislative functions or any change of legislative policy.
[96 B D] In re ; , , referred to.
(ii)S. 8(1) of the General Clauses Act provides that where any Central Act repeals and re enacts with or without modification any provision of the former enactment then references in any such enactment or in any instrument, to the provisions so repealed shall, unless a different intention appears, be construed as references to the provisions so re 93 enacted.
By virtue of this provision it could not be disputed that in section 12 of the Central Excise and Salt Act, 1947, the can be read in place of the .
[96 E] The contention that section 12 of the Act empowers incorporation of the provision of the in the Act itself and, therefore, 8(1) of the General Clauses Act, does not apply could not be accepted.
Section 12 only contained a provision delegating limited powers to the Central Government to draw upon the provisions of the for the purpose of implementing section 3 of the Act.
A] Secretary of State for India in Council vs Hindusthan Co operative Insurance Society, 58 I.A. 259, distinguished; The Collector of Customs Madras vs Nathella Sampatha Chetty The extension of section 105 could not be said to be illegal merely because under section 172 of the it was a Magistrate who after applying judicial mind had to issue search warrant whereas under the present notification after the enactment of the , it was the Assistant Collector of Customs performing executive functions who had been empowered to issue a search warrant.
By the latter notification the previous notification applying the provisions of the was superseded and no question with regard to the validity of the notification issued in 1963 and then amended in 1965 could survive.
Collector Custom & Excise Cochine & Ors, vs A. section Bava , distinguished [98 A C] (iii)On the facts of the case it could not be said that the Assistant Collectorhad no relevant material upon which the belief could be founded in termsof section 105(1) of the
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<s>[INST] Summarize the judgementICTION: Civil Appeal No 1193 of 1984 and 572 573 of 1985.
From the Judgment and Order dated 12.10.1983 of the Punjab and Haryana High Court in C.W.P. Nos.
1659, 1777 and 1659 of 1983.
Writ Petition (C) Nos.
11106 27 of 1984.
PG NO 1053 (Under Article 32 of the Constitution of India) U.R. Lalit, D.N. Goburdhan and Pankaj Kalra for the Appellants.
R.N. Sachthey, D.S. Tewatia, Anip Sachthey and Mahabir Singh for the Respondents.
The Judgment of the Court was delivered by DUTT, J.
In these appeals and writ petitions, the appellants and the petitioners have challenged the validity of the acquisition of their land by the State of Haryana under the Land Acquisition Act, 1894, hereinafter referred to as `the Act ', for a public purpose, namely, for the development and utilisation of land for industrial purpose at Gurgaon under the Haryana Urban Development Authority Act, 1977 by the Haryana Urban Development Authority (for short HUDA).
Although, both in the appeals and in the writ petitions the validity of acquisition has been challenged, we propose to deal with the appeals first.
The appeals are directed against the judgments of the Punjab & Haryana High Court dismissing the writ petitions of the Appellants questioning the validity of the acquisition of their land and praying for the quashing of such acquisition.
The first ground of attack to the acquisition, as urged by Mr. Lalit, the learned Counsel appearing on behalf of the appellants in Civil Appeal No. 1193 of 1984, is the non publication of the substance of the notification under section 4(1) of the Act in the locality of the land sought to be acquired It is true that section 4(1) enjoins that the Collector shall cause public notice of the substance of the notification to be given at convenient places in the locality.
It is however, preeminently a question of fact.
The allegation of the appellants as to the non publication of the notification under section 4(1), as made in the writ petition before the High Court, was emphatically denied and disputed in paragraph 8 of the affidavit in opposition affirmed by the Land Acquisition Collector Paragraph 8 reads as follows: "8.
In reply to para 8 of the writ petition.
it is submitted that the averments of the petitioners are wrong and denied.
The publicity of the substance of the notification was made in concerned locality of village PG NO 1054 Dundahera on 6th July, 1981 through Shri Chhattar Singh Chowkidar with loud voice and beating of empty tin.
The report exists in Roznamcha Vakyati at Serial No. 519 dated 6.7.1981.
Similarly, the publicity was made in concerned locality of village Mulahera through Shri Surjan Singh Chowkidar with loud voice and beat of empty tin (Kanaster).
A report to this effect exists in Roznamcha Vakyati at Serial No. 520 dated 6.7 1981.
The publicity was made on this very day on which the notification was issued.
In response to this publicity 157 land owners filed objection applications which clearly shows that due publicity was made in the concerned locality and the averments of the petitioners are wrong, baseless and hence denied.
" It is apparent from the statement made in paragraph 8 that the substance of the notification under section 4(1) was published in the concerned localities of villages Dundahera and Mulahera.
It is, however, urged on behalf of the appellants that it was not at all possible to make entries in the Roznamcha as to the publication of the notification under section 4(1) on the same day it was published in both the villages.
It is submitted that on this ground the statement in paragraph 8 as to the publication of the substance of the notification in the localities should not be accepted, and it should be held that there was no such publication is alleged.
We are afraid, we are unable to accept the contention.
Apart from the statement that there was publication of the notification, there is further statement in paragraph 8 that pursuant to such publication, 157 land owners filed objections to the proposed acquisition.
This fact has not been disputed before us on behalf of the appellants.
Moreover, Mr. Tewatia, learned Counsel appearing on behalf of the State of Haryana, has produced before us the original objection petitions filed by the land owners.
In each of these objection petitions there is a note at the end which reads as follows: "Note: The above referred notification was announced by the beat of drum in the village Dundahera on 6.7.1981, vide Patwari 's Roznamcha Report No. 519 dated 6.7.1981." Similar notes, as extracted above, are there in the petitions of objections filed by the land owners of village Mulahera.
In view of the facts stated above, the allegation of the appellants that the substance of the notification under section 4(1) of the Act was not published in the localities of the two villages mentioned above, is without any foundation whatsoever.
The contention of the appellants in this regard is rejected.
PG NO 1055 The next ground of attack to the acquisition comes from Mr. Kalra, the learned Counsel appearing on behalf of the appellants in Civil Appeals Nos. 572 & 573 of 1985.
It is urged by the learned Counsel that the sole purpose of the acquisition is for a profiteering venture of the Government to acquire land of the helpless farmers at a nominal price of Rs. 10, Rs. 20 or Rs. 50 per square yard and then to resale the same at a high profit.
It is submitted that a welfare State should work for the poor and the down trodden of the society rather than to displace them from their land for the sake of making profit.
Our attention has been drawn by the learned Counsel to an application filed in this Court by the Haryana State Industrial Development Corporation (for short HSIDC) praying for impleading it as a party respondent in these appeals.
In this application it has been stated, inter alia, by HSIDC that it plays an important role in the industrialisation of the State by providing concessional finance and offering land at no profit no loss basis along with infra structure facilities for setting up new industrial units in the State.
Further, it is stated that the land in Udhyog Vihar, Phase lV, (land which is the subject matter of these appeals), was acquired by HUDA and later sold to HSIDC at the approximate price of Rs 55,000 per acre.
In paragraph 5 of the application, it is stated that on account of the price of the above land of Phase lV, approximately Rs. 1.74 crores was paid by the the HSIDC to HUDA.
The said payment was made out of the amounts received from the intended allottees/entrepreneurs and also out to the funds/reserves of the HSIDC, and that a sum of Rs. 4.90 crores is estimated to be spent on the development of the industrial complex in question.
Relying upon the above statements in the said application of HSIDC, the learned Counsel for the appellants, endeavours to substantiate his contention that the impugned acquisition is nothing but a profiteering venture of the Government.
It is urged that the said statements in the application prove that the Government has made huge profit in the guise of development and utilisation of the land for industrial purpose at Gurgaon.
In support of the contention, Mr. Kalra has placed reliance upon an observation of Mahajan, J. (as he then was) in the State of Bihar vs Maharajadhiraja Sir Kameshwar Singh, , namely, that it is a well accepted proposition of law that property of individuals cannot be appropriated by the State under the power of compulsory acquisition for the mere purpose of adding to the revenues of the State.
The learned Counsel has also placed reliance on the observation in the minority judgment of Wanchoo, J. PG NO 1056 in Arnold Rodricks vs State of Maharashtra, AIR 1966 SC 1788.
In that case, the enquiries purported to be held under section 5A and section 11 of the Act were challenged as illegal, invalid and inoperative in law.
In that connection, the validity of the definition of "Public purpose" in clause (f) of section 3 of the Act, as amended by the Bombay Amendment Act 35 of 1953, also came to be considered.
Clause (2) of the amended definition in clause (f) reads as follows: "(f).
the expression "Public purpose" includes (1) . . . . . . . . . (2) the acquisition of land for purposes of the development of areas from public revenues or some fund controlled or managed by a local authority and subsequent disposal thereof in whole or any part by lease, assignment or sale, will be object of securing further development.
" Wanchoo, J. observed as follows: "(33).
The attack of the petitioners is on the second part of the addition in 1953 which provides for "subsequent disposal thereof in whole or in part by lease, assignment, or sale, with the object of securing further development.
" It is urged that all these words means that after the development envisaged in the first part of the addition the State or the local authority would be free to dispose of the land acquired in whole or in part by lease, assignment or sale, apparently to private persons.
This, it is said, means that the State or the local authority would acquire land in the first instance and develop it in the manner already indicated and thereafter make profit by leasing, assigning or selling it to private individuals or bodies.
It is also said that the object of securing further development which is the reason for sale or lease etc.
is a very vague expression and there is nothing to show what this further development comprises of.
It is true that when this part speaks of "subsequent disposal thereof in whole or in part by lease, assignment or sale", it is not unlikely that this disposal] will take place to private persons and thus in an indirect way the State would be acquiring the land from one set of individuals and disposing it of to another set of PG NO 1057 individuals after some development.
If this were all, there may be some force in the argument that such acquisition is not within the concept of "public purpose" as used in article 31(2).
But this in our opinion is not all.
We cannot ignore the words "with the object of securing further development", which appear in this provision.
It would have been a different matter if the provision had stopped at the words "lease, assignment or sale"; but the provision does not stop there.
It says that such lease, assignment or sale must be with the object of securing further development, and these words must be given some meaning.
It is true that the words "further development" have not been defined, but that was bound to be so, for further development would depend upon the nature of the purpose for which the land is acquired.
Of course, it is possible that further development can be made by the State itself or by the local authority which acquired the land; but we see no reason why the State or the local authority should not have the power to see that further development takes place even through private agencies by lease, assignment or sale of such land.
So long as the object is development and the land is made fit for the purpose for which it is acquired there is no reason why the State should not be permitted to see that further development of the land takes place in the direction for which the land is acquired, even though that may be through private agencies.
We have no doubt that where the State or the local authority decides that further development should take place through private agencies by disposal of the land so acquired by way of lease, assignment or sale, it will see that further development which it has in mind does take place.
We can see no reason why if the land so acquired is leased, assigned or sold, the State or the local authority should not be able to impose terms on such lessees, assignees or vendees that will enable further development on the lines desired to take place.
We also see no reason why when imposing terms, the State or the local authority may not provide that if the further development it desires the lessee, assignee or vendee to make is not made within such reasonable time as the State or the local authority may fix, the land will revert to the State or the local authority so that it may again be used for the purpose of further development which was the reason for the acquisition of the land.
" PG NO 1058 We fail to understand how does the above observation help the contention of the learned Counsel for the appellants that the acquisition has been made by the Government with a motive for profiteering in the guise of development and industrialisation.
The observation of Wanchoo, J relates to the definition of "Public purpose" under section 3(f) of the Act as amended by the Bombay Amendment Act 35 of 1953.
The amended provision specifically provides for the disposal of acquired land in whole or in part by lease, assignment or sale, but there is no such provision in the unamended section 3(f) of the Act with which we are concerned.
Wanchoo, J overruled the contention as to profiteering by the State or local authority as the amended provision made it very clear that such subsequent disposal of the acquired land will be for the purpose of securing further development.
We do not think we are called upon to express any opinion on the correctness or otherwise of the above observation, and all that we say is that there is no such provision like the amended definition in section 3(f) of the Act with which we are concerned.
In the circumstances.
the observation has no manner of application in the instant case.
In the writ petitions, the point was taken as an abstract point of law.
There was no attempt on the part of the appellants to substantiate the point by pleading relevant facts and producing relevant evidence.
It is apparent that there was no material in the writ petitions in support of the contention of the appellants that the impugned acquisition was nothing but a profiteering venture.
The contention was not also advanced before the High Court at the hearing of the writ petitions.
The facts stated in he said application of the HSIDC do not, in our opinion, support the contention of the appellants.
It is true that, as stated in the said application, HSIDC paid a sum of Rs. 1.74 crores to HUDA, but nothing turns out on that.
The land was acquired by the Government for the purpose of development and industrialisation.
The Government can do it itself or through other agencies.
In the instant case, the land was acquired at the instance of HUDA and, thereafter, HUDA had transferred the same to HSIDC.
It is not that the land was transferred in the same condition as it was acquired.
But, we are told by the learned Counsel appearing on behalf of HUDA and HSIDC that before transferring, HUDA had made external developments incurring considerable cost and HSIDC in its turn has made various internal developments and in this way the land has been fully developed and made fit for industrialisation.
Our attention has been drawn by the learned Counsel for HUDA and HSIDC to the various external developments made by HUDA at a cost of Rs. 1,66,200 per acre before it was transferred to HSIDC and the cost that was incurred for external developments was included in the price.
Thus, there was no motive for HUDA to make any profit.
PG NO 1059 The "public purpose" in question, already noticed, is development and industrialisation of the acquired land.
The appellants have not challenged the said "public purpose".
In the absence of any such challenge, it does not lie in the mouth of the appellants to contend that the acquisition was merely a profiteering venture by the State Government through HUDA.
The appellants will be awarded the market value of the land as compensation by the Collector.
If they are dissatisfied with the award they may ask for references to the District Judge under section 18 of the Act.
If they are still aggrieved, they can file appeals to the High Court and, ultimately, may also come to this Court regarding the amount of compensation.
The appellants cannot claim compensation beyond the market value of the land.
In such circumstances, we fail to understand how does the question of profiteering come in.
Even assuming that HUDA has made some profit, that will not in any way affect the public purpose for which the land was acquired and the acquisition will not be liable for any challenge on that ground.
As has been already noticed, although the point as to profiteering by the State was pleaded in the writ petitions before the High Court as an abstract point of law, there was no reference to any material in support thereof nor was the point argued at the hearing of the writ petitions.
Before us also, no particulars and no facts have been given in the special leave petitions or in the writ petitions or in any affidavit, but the point has been sought to be substantiated at the time of hearing by referring to certain facts stated in the said application by HSIDC.
In our opinion, when a point which is ostensibly a point of law is required to be substantiated by facts, the party raising the point, if he is the writ petitioner, must plead and prove such facts by evidence which must appear from the writ petition and if he is the respondent, from the counter affidavit.
If the facts are not pleaded or the evidence in support of such facts is not annexed to the writ petition or to the counter, affidavit, as the case may be, the court will not entertain the point.
In this context, it will not be out of place to point out that in this regard there is a distinction between a pleading under the Code of Civil Procedure and a writ petition or a counter affidavit.
While in a pleading, that is, a plaint or a written statement, the facts and not evidence are required to be pleaded, in a writ petition or in the counter affidavit not only the facts but also the evidence in proof of such facts have to be pleaded and annexed to it.
So, the point that has been raised before us PG NO 1060 by the appellants is not entertainable.
But, in spite of that, we have entertained it to show that it is devoid of any merit.
Equally untenable is the contention of the appellants that the acquisition is for HSIDC which is a `company ' within the meaning of section 3(e) of the Act and, accordingly, the acquisition is invalid for the non compliance with the provisions of Part III of the Act.
In the notification under section 4(1), it has been clearly stated that the development and industrialisation of the acquired land would be made under the Haryana Development Authority Act, 1977 by HUDA.
It is, therefore, manifestly clear that HUDA was the acquiring authority and not HSIDC.
It is for HUDA to develop the land fully either by itself or by any other agency or agencies.
HUDA has transferred the land to HSIDC for the purpose of development and allotment to various persons.
It is too much to say that as HUDA has transferred the acquired land to HSIDC, the latter is the acquiring authority.
We do not think that there is any substance in the contention and it is, accordingly, rejected.
Now we may consider the contention made on behalf of the petitioners in the writ petitions Nos. 11106 to 11127 of 1984.
The first point that has been urged by Mr. Goburdhan, learned Counsel appearing on behalf of the writ petitioners, is similar to that urged by Mr. Lalit in Civil appeal No 1193 of 1984, namely, non publication of the substance of the notification under section 4(1) of the Act in the locality.
This contention need not detain us long, for in the counter affidavit filed by the Land Acquisition Collector, it has been averred that the substance of the notification was published and out of 22 petitioners 16 filed their objections pursuant to the publication of the notification in the locality.
A similar note, as extracted above, appears in all these objections.
In the circumstances, there is no substance in the contention of the petitioners that the substance of the notification under section 4(1) of the Act was not published in the locality.
Next it is urged on behalf of the petitioners that before starting the proceedings for acquisition, the Government had not applied its mind to its policy decision, as contained in the circular No. 2099 R III 82/17113 dated 18.5.1982 wherein it has been stated that "in the matter of State 's need for land for its development activities, utmost restraint should be exercised in the acquisition of land.
" It is submitted that as the land is agricultural, it should not have been acquired in view of the said policy decision PG NO 1061 of the Government.
We are unable to accept the contention.
In a welfare State, it is the duty of the Government to proceed with the work of development and take steps for the growth of industries which are necessary for the country 's progress and prosperity and for solving the question of unemployment.
It is true that agricultural land is necessary and should not ordinarily be converted to non agricultural use, but keeping in view the progress and prosperity of the country, the State has to strike a balance between the need for development of industrialisation and the need for agriculture.
The allegation that before initiating the acquisition proceedings, the Government has not applied its mind to the need for agricultural land is a very vague allegation without any material in support thereof.
The contention is overruled.
Lastly, it is argued by Mr. Goburdhan for the writ petitioners that the petitioners have been discriminated inasmuch as the land of other persons in the village has not been acquired.
This contention is without any substance whatsoever.
The Government will acquire only that amount of land which is necessary and suitable for the public purpose in question.
The land belonging to the petitioners have been acquired obviously considering the same as suitable for the public purpose.
The petitioners cannot complain of any discrimination because the land of other persons has not been acquired by the Government.
The contention is devoid of any merit whatsoever.
Before parting with these cases, we may consider a short submission on behalf of the appellants as also the writ petitioners that as by the acquisition of their land they have become landless, they should be allotted land by HSIDC, after development, so that they may start their businesses and earn their livelihood.
After giving our anxious consideration to this submission, we direct that if any of the appellants or the petitioners, who has become really landless by the acquisition of his land, makes an application for the allotment of land, the HSIDC shall consider such application and give him priority in the matter of allotment provided he fulfils the conditions for such allotment and plot is available.
Another short submission has been made on behalf of the appellants in Civil Appeal No 1193 of 1984.
Our attention has been drawn to paragraphs 4 and 5 of the additional affidavit filed on behalf of the appellants, and affirmed by one Sat Prakash, son of Mathura Prashad, one of the appellants, that in Khasra No 21/6/2 and in Khasra No. 22/10/1, there are a temple, a Piaou and a Dharamshala.
It is submitted that the land comprising the temple, Piaou and Dharamshala may be exempted from acquisition.
We do not PG NO 1062 consider it necessary to give any direction in this respect.
The appellants, however, will be at liberty to make a representation in that regard to the authority concerned.
No other point has been urged in these cases.
For the reasons aforesaid, subject to the directions given on the short submissions, all the appeals and the writ petitions are dismissed.
There will, however, be no order as to costs in any of them.
H.S.K. Appeals and Petitions are dismissed.
[/INST]Somasundram Viswanath, Respondent No. 1 herein was working as an officer in the Defence Accounts Service.
Promotions to Level I & Level II of the Senior Administrative Grade of the said Service were governed by the Indian Defence Accounts Service (Recruitment) Rules, l95X (as amended from time to time) promulgated by the President of India under the proviso to article 309 of the Constitution of India.
Under the Rules, recruitments by promotion to the senior administrative posts were to be made by Selection on merit on the recommendations of a duly constituted Departmental Promotion Committee.
In accordance with the said Rules, when the case of the Respondent came within the Zone of consideration for promotion to the cadre of controller of Defence Accounts, the same was placed before the Departmental Promotion Committee, and the said Committee in order to make appropriate recommendations convened its meeting on 7.8.1986.
At the said meeting one of its members i.e. the Secretary to the Ministry of Defence could not be present even though he was duly notified about the date and time of the meeting.
In his absence the remaining members met and made the recommendation.
The 1st Respondent was graded good ' and was not put in the Select panel.
Aggrieved by the said decision Respondent filed a Petition before the Central Administrative Tribunal, Jabalpur Bench, challenging the validity of the recommendations made by the Department Promotion Committee and prayed for an order directing the appellant union of PG NO 146 PG NO 147 India not to promote his juniors to the higher grade.
The principal contention raised by the Respondent before the Tribunal was that the Departmental Promotion Committee was not properly constituted, as one of its members, was absent with the result the proceedings of its meeting held on 7.8.1986 stood vitiated and recommendation made by it should not be acted upon.
On the other hand the Deptt.
contended that the proceedings of the Committee were protected by the administrative instructions issued by the Government of India with regard to the procedure to be followed by the D.P.C.
In reply thereto the 1st Respondent pleaded that the administrative instructions issued by the Government of India could not override the rules made under the proviso to article 309 of the Constitution and the same has to be ignored.
On consideration of the rival contentions the Central Administrative Tribunal came to the conclusion that the D.P.C. had not been properly constituted at the meeting held on 7.8.1986 because of the absence of the Secretary to the Govt.
of India, Ministry of Defence and therefore the proceedings of the said Committee were not valid.
The Tribunal accordingly set aside the recommendations made by the Committee and directed that a fresh D.P.C. may be convened for reconsidering the agenda which was before the Departmental Committee on 7.8.86.
The Union of India being dissatisfied with the aforesaid order of the Tribunal appealed by special leave, to this Court.
Disposing of the appeal.
the Court, HELD: It is well settled that the norms regarding recruitment and promotion of officers belonging to the Civil appropriate Legislature or by rules made under the proviso to Article 309 of the Constitution of India or by means of executive instructions issued under Article 73 of the Constitution of India in the case of Civil Services under the Union of India and under article 162 of the Constitution of India in the case of Civil Services under the State Governments.
[152B] If there is a conflict between the executive instructions and the rules made under the proviso to Article 309, the rules made under the proviso lo Article 309 prevail, and if there is a conflict between the rules made under the proviso to Article 309 and the law made by the appropriate Legislature the law made by the appropriate Legislature prevails.
[152C] PG NO 148 The Office Memorandum dated 30.12.1976 1s in the nature of complete code with regard to the topics dealt with by it.
Unless there is anything in the Rules made under the proviso to Article 309 which is repugnant to the instructions contained in the Office Memorandum the Office Memorandum which is apparently issued under Article 73 or the Constitution is entitled to be treated as valid and binding on all concerned.
[153B C] This Court does not agree with the decision of the Central Administrative Tribunal that in the instant case the proceedings of the Departmental Promotion Committee on 7.8.1986 have been vitiated solely on account of the reason that the Secretary Ministry of Defence, one of its members was not present at the meeting of the Committee.
The proceedings of the Departmental Promotion Committee at its meeting held.
on 7.8.1986 are not invalid on this account.
[153E] The decision of the Tribunal set aside and the case remitted to the Tribunal to dispose it of afresh.
[153G]
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<s>[INST] Summarize the judgementN: Criminal Appeal No. 468 of 1983.
Appeal by Special leave from the Judgment and Order dated the 2nd February, 1983 of the Gauhati High Court in Civil Rule (HC) No. 4/83.
M.M. Abdul Khader and S.K. Nandy for the Appellants.
V.M. Tarkunde and Mrs. Manik Karanjawala with him for the Respondent.
The Judgment of the Court was delivered by RANGANATH MISRA, J.
The detaining authority under section 3 (2) read with section 3 (3) of the ( 'Act ' for short) being the District Magistrate of Nowgong and the State of Assam assail the decision of the High Court at Gauhati quashing the order of detention.
On October 20, 1982, the District Magistrate made the following order: "Whereas I am satisfied from the dossier submitted by Superintendent of Police, Nowgong that it is necessary to prevent Shri Sarat Mudoi s/o Shri Renu Mudoi, village Senchows, P.S. Nowgong from acting in any manner prejudicial to maintenance of public order and maintenance of supplies and services essential to the community, I. section Kablian, I.A.S., District Magistrate, Nowgong, hereby in exercise of powers conferred under section 3 (2) read with section 3 (3) of , direct that Shri Sarat Mudoi be detained with immediate effect until further orders".
In the grounds of detention which were supplied to the detenu within the time provided by law, six grounds were specified.
Before the High Court several contentions were raised including the one to the effect that if the detaining authority does not specify in the order of detention as to which particular supply and/or service he had in mind while making it, the order of detention is vitiated.
After hearing counsel for the parties, the High Court came to the conclusion: 959 "We are of the view that as while passing the order of detention the authority has to specify the particular prejudicial activity whose prevention he has in mind, so also he must specify the particular supply and service which according to him is being prejudicially affected by the activities of the detenu.
The notified categories of supplies and services thus really get as if implanted in the and an order of detention on this score must have reference to one or more specified supplies and services forming part of notified categories.
Any other view would also pose a possibility of abuse of power as a result of absence of full application of mind." and set aside the order of detention.
At the stage of notice on the special leave petition this Court on March 10, 1983, made the following order: "Issue notice to the respondent returnable within a week confined to the question as to whether according to the ratio laid down by this Court in A.K. Roy vs Union of India ; , it is necessary to specify in the order of detention itself the particular supplies and services essential to the community which are affected by the activities of the detenu or will it suffice if it is mentioned in the grounds for detention".
On behalf of the State this Court was told that even if the appeal was allowed, the respondent would not be detained for the unexpired portion of the period.
The short question that survives for consideration, therefore, is whether without the particulars of supplies and services specified in the order of detention, it is bad.
In A.K. Roy 's case and the connected matters this Court took the view that no person could be detained under section 3 (2) of the with a view to preventing him from acting in any manner prejudicial to the maintenance of supplies and services essential to the community unless by a law or notification made or published fairly in advance the supplies and services the maintenance of which is regarded as essential to the community and in respect of which the order of detention is proposed to be passed are made known properly to the public.
Accordingly, 960 by a notification on February 8,1982,16 specified supplies and services were notified as essential to the community and this notification was duly published in the Gazette of India, Extra ordinary issue of the same day.
Under the the detenu is entitled to make a representation against the order of detention.
It is manifest from the statutory scheme that his right to represent is after the grounds are served on the detenu.
It is the pronounced view of this Court that such right should be without fetters and as wide as possible.
Since the citizen is detained without trial and on the basis of satisfaction of a notified authority the right to represent assumes importance.
The detenu would be in a position to effectively represent only when specific particulars are provided to him and the grounds are intended to provide that material to him.
Mr. Tarkunde who appeared amicus curiae fairly agreed that it is not necessary that the specification should be in the order of detention and it would be adequate to enable the detenu to make an effective representation if the particulars are provided in the grounds of detention.
We are inclined to take the view that a full disclosure made in the grounds in no way prejudices the right guaranteed to the detenu to make an effective representation challenging his detention.
Therefore, non specification of the required particulars in the order of detention would not vitiate the order as long as the particulars are provided in the grounds in support of the order of detention which in quick succession of the detention order are served on the detenu.
Counsel for the appellants argued that while it would be possible for the particulars to be provided with reference to past conduct it would be difficult to specify any of the 16 items of services and supplies included in the notification in regard to future conduct of the detenu and, therefore, to require the detaining authority to so specify would be asking for the performance of something impossible.
In view of the limited question on which notice was issued, this aspect strictly does not fall for consideration.
We also do not find any merit in this stand.
It was pointed out by this Court in Debu Mahto vs State of West Bengal(1), that the basis for an order of preventive detention is the reasonable prognosis of the future behaviour of the person based upon his past conduct.
It is open to the detaining authority to take note of the past conduct of a detenu and apprehending repetition of 961 such conduct in future an order of detention can be made with a view to preventing such action.
If past conduct confined to any or all of the 16 of the items in the notification could be satisfied, the detaining authority could also on the basis of reasonable apprehension of repetition of such conduct in future make an order of detention for its prevention.
We do not propose to say anything more in view of the short question to which the notice was confined.
We are thankful to Mr. Tarkude for assisting us at the hearing as amicus curiae.
This disposes of the appeal.
H.S.K. Appeal allowed.
[/INST]The respondent challenged the order of his detention under the National Security Act on the ground that since the detaining authority did not specify in the order of detention as to which particular supplies and services he had in mind while making it, the order of detention was vitiated.
The High Court set aside the order of detention.
In appeal it was submitted that it would be impossible for the detaining authority to specify any of the 16 items of services and supplies included in the notification in regard to the future conduct of the detenu.
Allowing the appeal, ^ HELD: Under the Act the detenu is entitled to make a representation against the order of detention.
It is manifest from the statutory scheme that his right to represent is after the grounds are served on the detenu.
The right of the detenu to make a representation should be without fetters and as wide as possible.
Since the citizen is detained without trial and on the basis of satisfaction of a notified authority the right to represent assumes importance.
The detenu would be in a position to effectively represent only when specific particulars are provided to him and the grounds are intended to provide that material to him.
A full disclosure made in the grounds of detention in no way prejudices the right guaranteed to the detenu to make an effective representation challenging his detention.
Therefore, non specification of the required particulars in the order of detention would not vitiate the order as long as the particulars are provided in the grounds in support of the order of detention which in quick succession of the detention order are served on the detenu.
[960 B E] It is open to the detaining authority to take note of the past conduct of a detenu.
If past conduct confined to any or all of the 16 items in the notification could be satisfied, the detaining authority could also on the basis of reasonable apprehension of repetition of such conduct in future make an order of detention for its prevention.
[960 H; 961 A] Debu Mahto vs State of West Bengal, AIR 1974 SC 816, referred to. 958
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<s>[INST] Summarize the judgementAppeal No. 873 of 1975. (From the Judgment and Order dated 11 11 1974 of the Allahabad.
High Court in Civil Misc.
Writ Petition No. 6976/74) AND Civil Appeal No. 1748 of 1975.
(Appeal by Special Leave from the Judgment and Order dated ' 8 11 1974 of the Allahabad High Court in Civil Misc.
Writ Petition No. 6932/74).
AND Civil Appeal No. 1425 of 1974.
(From the Judgment and Order dated 1 9 1972 of the Allahabad.
High Court in Special Appeal No. 8/66).
A.N. Parekh, for the appellants in CA 1748/75.
Yogeshwar Prasad, for the appellants in CA 873/75.
D.N. Misra for the appellant in CA 1425/74.
L.N. Sinha, Solicitor General, S.N. Prasad (In CA 873/75) and Girish Chandra, for the respondents iii all the appeals.
The Judgment of the Court was delivered by RAY, C.J.
Civil Appeals Nos. 873 and 1425 are by cer tificate under Article 133(1) of the Constitution of India and Civil Appeal No. 1748 is by special leave.
605 (Ray, C.J.) These appeals turn on the question whether the Commis sion described as the Forward Market Commission under the Forward Contract (Regulation) Act, 1952, can impose condi tions under section 14 A and Section 14 B on the commodities in respect of which business can be carried on by persons who apply for registration.
This Court in Union of India & Anr.
vs M/s. Rajdhani Grains and Jaggery Exchange Ltd. & Ors.
(1975 Supp.
S.C.R.1) dealt with this specific question and came to the conclusion that the specification of the commodities in respect of which the business can be carried on is a condition con cerned with the regulation and control of the business relating to forward contracts.
It is idle to suggest that the Commission in granting certificate of registration to carry on business will not be competent to specify the commodities in which the persons asking for registration will deal.
Another contention was raised before us that the provi sions contained in Section 4 of the Forward Contract (Regu lation) Act 1952 do not confer power on the Commission to impose conditions.
This contention is also repelled by the decision of this Court to which reference has already been made.
It has been held in that case that the Commission alone is vested with power to impose conditions in regard to commodities in respect of which forward contracts can be entered into by a particular association.
Sections 15 to 18 of the Act do not clash with the power of the Commission to impose conditions in respect of commodities in which busi ness of forward contract can be carried on.
Another contention was advanced before us that with regard to the recognised associations the Commission had no power to impose conditions with regard to commodities in which they deal.
This contention is also answered by the decision of this Court (supra).
Further the provisions contained in Chapter III A specifically deal with registra tion of all associations concerned with regulation and control of forward contracts and the power of the Commis sion to grant or refuse such certificate of registration.
All contentions advanced by the appellants are already answered ' by the decision of this Court (supra) and the observations made herein.
The appeals are therefore dis missed.
There will be no order as to costs.
P.H.P. Appeals dismissed.
[/INST]Consequent to reorganisation of States, the Maharash tra Government published seniority lists from time to time, erroneously according to the respondent a lower place of seniority with the result that juniors got promoted and his promotion was unduly delayed.
The respondent filed a writ petition asking for due recognition of his seniority, and later amended his petition, claiming arrears of pay and allowances retrospectively from the date on which he ought to have been promoted according to the final gradation list wherein he was placed correctly and which was approved by the Central Government.
The writ petition was allowed by the High Court.
Before this Court the respondent contended that under rule 21 of the Allocated Government Servants (Absorption, Seniority, Pay and Allowances) Rules, 1957, he was entitled to draw his pay and allowances from the date of his promo tion including the deemed date of promotion.
Allowing the appeal by Special Leave, the Court, HELD: (1) The Maharashtra Government circular No. SRV 1064 dt.
25.2.1965 does not have the effect of altering the respondent 's conditions of service to his prejudice since the said circular issued by the State Government does not fall within the mischief of proviso to section 115(7) of the States Reorganisation Act.
[592 A] (2) The circular deals with cases where Government servants who were superseded for promotion to the higher post are later promoted on orders of higher authorities who considered the supersession unjustified and who having power to set aside orders of supersession have set aside such orders.
[590 D] (3) The circular dt.
25.2.1965 is not intended to govern questions of seniority and supersession arising as a result of Reorganisation of States.
That circular by its language is designed to meet cases in which a Government servant apart from the provisions of States Reorganisation Act and apart from the problems arising out of reorganisa tion of States was denied his rightful seniority but is later accorded a due and appropriate place in the seniority list.
[590 F G] (4) The circular issued by the Government of Maharashtra on February 25, 1965 does not take away from the respondent the right, if any, which was available to him under rule 21.
Rule 21 is not in the nature of an entitlement.
On the other hand, it restricts the right of the allocated Government servant to receive pay and allowances "only with effect from the date" from which he became available for service or would have been so available except for the causes mentioned in rule 2(d).
[592 B D] 588 (5) The respondent 's case must fall within the Bombay Government Circular No. SR INT 1059 VI dt. 10.3.1960 in which case he would not be entitled to the arrears for salary for the period prior to the date of his actual ' promotion.
[591 G]
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<s>[INST] Summarize the judgementCivil Appeal No. 571 of 1987.
From the order dated 5.12.1986 of the Customs Excise and Gold (Control) Appellate Tribunal, New Delhi in Appeal No. 424/86 B 2.
T.R. Andhyarujina, F.H.J. Talyarkhan, Shri Narain, R.K. Krishnamurthi and Sandeep Narain for the Appellants.
A.K. Ganguli, P. Parmeswaran and Ms. Radha Rangaswamy for the Respondents.
39 The Judgment of the Court was delivered by A RANGANATH MISRA, J.
This appeal under section 130 E of the is directed against the decision of the Customs, Excise & Gold (Control) Appellate Tribunal, New Delhi, by which the Tribunal has reversed the appellate decision of the Collector of Customs (Appeals), Bombay.
The short point involves in this appeal is as to whether the imported "special purpose complex machine" has to be charged to customs duty under item 89.59(1) as claimed by the Revenue or under 84.45/48 of the tariff schedule as maintained by the appellant.
If the appellant 's claim is accepted the duty is at the rate of 40 per cent while if the department 's stand is maintained it is at the rate of 60 per cent.
The Assistant Collector took the view that the imported machine was not manufacturing carburettors and was discharging an individual function of plugging holes in the carburettor body with the help of lead shots.
Therefore, the appropriate entry was 84.59(1) of the Customs Tariff.
The appellant challenged the order of the Assistant Collector by preferring an appeal to the Collector (Appeals).
He took the view that the imported machine by plugging holes on the carburettor body with the help of lead shots was clearly a machine which was fully conforming to the description of a machine for treating metals inasmuch as it was treating carburettor body and preparing it for being revetted.
The plugging on the carburettor body, the Collector felt, was, therefore, in the nature of treatment on the metalic body for making it revetable subsequently; even otherwise also the machine by plugging holes on the carburettor body was confirming to the description of a machine tool as given under heading 84.54/48 of the Customs Tariff.
He therefore, accepted the appellant 's contention.
On further appeal the Tribunal after discussing the stand point of the two sides came to the following conclusion: "Our considered view is that the function of the machine is to plug the holes of carburettor body.
The cutting or trimming operation is incidental to this function as it removes the extruded portion of the lead shots.
The function of checking is also a part of the main function of plugging as the object of checking is to ensure that the plugging has been done perfectly to make it air tight.
None of these functions can be considered to be treating metal within the meaning of sub heading (2) of Tariff Heading 40 84.59.
The function of plugging the holes of carburettor body does not amount to working metal.
It does not change the shape or form of the metal.
The portion of the machine which cuts the extruded portion of lead shot is not a reaming machine working the internal surface of an existing hole to exact dimension within the meaning of Explanatory Note 84.45(A)(5) of the CCC N (Volume 3), Chapter 84.45.
The imported machine in question does not fall within the definition of machine tool given in MC.
Graw Hill Dictionary of Scientific and Technical Term as cited by the learned S.D.R. Classification of the impugned machine under Tariff Heading 84.45/48 is, therefore, ruled out.
Even by taking all the functions of the machine into consideration, the classification for the purpose of customs duty will have to be determined keeping in view Section Note 3 in Section XVI and Chapter Note 5 of Chapter 84 of the First Schedule to the , according to which the principal function will be determining factor.
The principal function of this machine is to plug the holes of carburettor body.
The machine does not fall under any of the heading of Chapter 84 of the Tariff." 84.59 of Schedule I provides: "Machines and mechanical appliances having individual functions, not falling within any other heading of this Chapter: (1). . . (2). . . 60%.
" The entry is, therefore, a residuary one and indisputably if any other entry applies, application of entry 84.59 is ruled out.
The appellant maintains that the appropriate entry to apply to its case is 84.45/48.
That provides: "Machine tools for working metal . 40%." Machine tool, according to Tool Engineers Handbook published by Mc Graw Hills means "any machine operating other than by man power which employs a contact tool for working natural or synthetic 41 material.
Graw Hill Dictionary of Scientific and Technical Terms A gives the following meaning: "A stationary power driven machine for the shaping, cutting, turning, boring, drilling, grinding or polishing of solid parts, especially metals." Even according to the Department, machine tools coming under entry 84.45 are machines used for shaping or surface working metal or metal carbides by either: (i) cutting away or otherwise removing metal or metal carbides (for example, lathes, drilling, planing, slotting, milling or grinding machines).
(ii) changing the shape or form of the metal without removing any of it.
The note indicates that machine tools in general remain classified under this heading even if specialised for a particular industry.
Machine tools include slotting machines, drilling and boring machines, tapping machines, reaming machines and riveting machines.
Counsel for the appellant produced before us a carburettor without being treated by the machine and another which has already been treated.
He also produced a lead shot as also a nozle and indicated the drilling process which is carried on by the machine on the carburettor.
We are of the view that the machine in question is indeed a multy purpose one and keeping its performance in view we are inclined to agree with the submission of the counsel for the appellant that the machine is a "machine tool working on metal" and should legitimately find its way into entry 84.45/48.
Once it is so identified it does not get into the residuary entry.
In our view the Collector had reached the correct conclusion.
The appeal is allowed.
The order of the Tribunal is vacated and that of the Collector is restored.
Parties are directed to bear their own costs.
N.V.K. Appeal allowed.
[/INST]% Section 15 of the provided that when a marriage was dissolved by a decree of divorce, it shall be lawful for either of the spouses to marry again, where either there was no right of appeal or where there was such a right of appeal, the time for appealing, had expired, without the appeal being presented or the appeal having been presented, was dismissed.
Proviso to the section provided that it shall not be lawful for either of them to remarry unless at the date of such marriage at least one year had elapsed from the date of decree in the court of first instance.
This proviso was deleted by the Marriage Laws (Amendment) Act, 1976.
A decree for dissolution of marriage was granted by the Additional District Judge against the petitioner wife on the ground of cruelty under section 13(i a) of the .
The petitioner wife 's appeal to the High Court was dismissed in limine.
The petitioner wife filed a Special Leave Petition in this Court.
A preliminary objection was raised on behalf of the respondent husband 1099 that the petition had become infructuous inasmuch as the respondent husband had meanwhile married again on 17th August, 1986, just a month after the dismissal of the petitioner 's appeal by the High Court.
Over ruling the preliminary objection and directing the Special Leave Petition to be placed for hearing, ^ HELD: Under the law laid down in the , monogamy is the rule and a party can only contract valid second marriage after the first ceases to exist in the manner envisaged by section 15.
This rule is an integral part of the proceedings by which alone both the parties to the decree can be released from their incapacity to contract a fresh marriage.
[1102E F] Prior to the Amendment Act of 1976, the proviso to section 15 laid down a period of waiting of one year between the passing of a decree for divorce by the court of first instance and the remarriage of any of the spouses.
The deletion of this proviso, by the Marriage Laws (Amendment Act), 1976 and doing away with the period of waiting has given rise to a question of great difficulty.
[1103A B] The section, when it speaks of a case where there is a "right of appeal" does not in terms cover the case of an application for special leave to appeal to the Supreme Court under Article 136 of the Constitution.
[1103B C] Under Article 133(c) of the a special leave petition can be filed within 90 days from the date of the disposal of the appeal by the High Court.
Therefore, a successful party cannot take away the right of presenting an application from the other spouse by marrying immediately after the High Court 's judgment and must wait till that period was over and make sure whether an application for special leave has been filed in the Supreme Court.
[1103C D] Chandra Mohini Srivastava vs Avinash Prasad Srivastava Ors.
; , , followed.
In the instant case, the High Court having dismissed the appeal on 16th July, 1986, the petitioner could have presented a special leave petition within ninety days therefrom i.e. till 14th September, 1986.
Till that period was over, it was not lawful for either party to marry again as provided by section 15.
[1104C D] 1100 Though the respondent has denied any knowledge of the filing of the appeal in the High Court or of its dismissal, and has justified the second marriage on August 17, 1986, this has been controverted by the petitioner, by filing a copy of the registered notice dated May 31, 1986, intimating the respondent of the filing of the appeal.
It was, therefore, incumbent on the respondent to have apprised himself as to whether the appeal in the High Court was still pending; and if not, whether the period for filing a special leave petition to this Court had expired.
[1104A C] Catterall vs Sweetman, [1845] 9 Jur. 951, 954, referred to.
</s>
|
<s>[INST] Summarize the judgemento. 119 of 1955 with Petition for Special Leave to Appeal No. 140 of 1955.
Petition under Article 32 of the Constitution for the enforcement of fundamental rights and petition under Article 136 of the Constitution for `special leave to appeal from the judgment and order dated March 29, 1955, of the Bombay High Court in appeal No. 63 of 1954.
Hardayal Hardy and R.Jethmalani, for the petitioner.
C. K. Daphtary, Solicitor General of India, Porus A. Mehta and R. H. Dhebar, for the respondent.; 1957.
March 5.
The Judgment of the Court was delivered by SINHA J.
By this petition under article 32 of the Constitution and Petition No. 140 of 1955 for special leave to appeal from the judgment of the Bombay High Court dated March 29, 1955, in Appeal No. 63 of 1954 confirming that of a single Judge of that Court dated April 21, 1954, the petitioner challenges the constitutionality of the Bombay Land Requisition Act (Act XXXIII), 1948, hereinafter referred to as "The Act", and the enforceability 'of the order dated January 27, 1954, made by the Governor of Bombay in pursuance of section 6(4)(a) of the Act.
The petitioner is the widow of one Dharamdas Chellaram, who was a tenant of the premises in question.
The said Dharamdas Chellaram died in November 1953, leaving him surviving his widow and a daughter.
The petitioner alleged that she had been occupying the premises in question as a member of her husband 's family since 1938 and that the tenant aforesaid had at no material date ceased to occupy the premises.
She also alleged that one Narottam Das Dharamsey Patel was a mere lodger who war, occupying a portion of the premises by leave and licence of her husband.
The said Narottamdas had no interest 724 in the premises in question and had, as a matter of fact, vacated the portion in his occupation some time in the year 1953.
On behalf of the State of Bombay, the respondent, it has been stated on affidavit by the Accommodation Officer that it is not a fact that the petitioner resided in the premises in question and that the facts were that the said Dharamdas, the tenant, had vacated the premises in October 1952 and had handed over possession of the premises to the said Narottamdas Dharamsey Patel.
Hence it is alleged that it was not a fact that at the time of her husband 's death in November 1953 the petitioner was residing in the premises in question.
These facts had been stated before the High Court also on an affidavit made in opposition to the petitioner 's case in the High Court.
The petitioner 's grievance is that towards the end of January 1954 she found pasted on the outer door of the premises an order dated January 27, 1954, said to have been made by the Governor of Bombay and which is said to be the occasion for her moving the High Court of Bombay for a writ of mandamus against the State of Bombay to refrain from giving effect to the aforesaid Order.
The Order impugned is in these terms: "No. RA (1) M 13067 Office of the Controller of Accommodation, Jehangir Building, Mahatma Gandhi Road, Bombay, January 27, 1954.
Order Whereas, on inquiry it is found that the premises specified below had become vacant in the month of October 1952 ; Now, therefore, in exercise of the powers conferred by clause (a) of sub section (4) of section 6 of the Bombay Land Requisition Act, 1948 (Bombay Act XXXIII of 1948) the Government of Bombay is pleased to requisition the said premises for a public purpose, namely, for housing a Bombay State Government servant.
Premise,s Flat No. 3 on the 1st floor of the Building known as Hem Prabha situated at 68, Marine Drive, Bombay.
By order and in the name of Governor of Bombay.
" This Order was meant to be served on (1) Shri Hirabhai H. Patel, admittedly the landlord of the premises,(2) Shri Narottam Dharamsey Patel aforesaid, and (3) Shri Dharamdas Chellaram, who, as already indicated, was dead at the date the Order was made.
The petitioner challenged the validity of the Order of requisition set out above.
Her petition was heard by Tendolkar J. who by his judgment dated April 21, 1954, dismissed the same.
The petitioner moved this Court for an appropriate writ, direction or order under article 32 of the Constitution, challenging the vires of the Act, as also the legal efficacy of the Order impugned.
She also filed a petition praying for special leave to appeal from the judgment aforesaid of the Bombay High Court.
Both the matters have been heard together and will be governed by this judgment.
Before dealing with the contentions raised on behalf of the petitioner, it is convenient first to set out, in so far as it is necessary, the legislative history of the law impugned and its certain salient features which are relevant for purposes of this case.
This Act was passed by the Provincial Legislature of Bombay on April 11, 1948, on being empowered by the Governor General in exercise of powers conferred on him by section 104 of the Government of India Act, 1935.
Initially it was to remain in force until March 31, 1950.
But by the amending Act, Bombay Land Requisition (Amendment) Act, 1950 (Bombay Act No. 11 of 1950) published on March 28, 1950, its life was extended up to the end of March 1952.
By the amending Act, sections 8 A, 8 B and 9 A were added making substantial changes which need not be set out here, as they do not enter into the controversy.
The life of the Act was subsequently extended further, up to the end of December 1958.
By the Bombay Land Requisition (Second Amendment) Act, 1950 (Act XXXIX of 1950), the Act was further amended so as to substitute the words "the purpose of the State or any other public purpose" for the word,, "any purpose" in section 5 of the Act.
This was obviously done to satisfy the requirements of article 31 of the 726 Constitution.
Consequential changes were also made in sections 6 and 7 of the Act.
By section 6 of the amending Act it was provided that "The amendments made by this Act shall.
be deemed to have been and always to have been made with effect from the 26th January 1950. . . .
Thus the amendment was given retrospective operation.
The provisions of sections 5, 6 and 13 after the amendments aforesaid (omitting the portions not necessary for our purpose) are in these terms : "5.
(1) If in the opinion of the State Government it is necessary or expedient so to do, the State Government may by order in writing requisition any land for purpose, of the State or any other public purpose: Provided that no building or part thereof wherein the owner, the landlord or the tenant, as the case may be, has actually resided for a continuous period of six months immediately preceding the date of the order shall be requisitioned under this section.
(2)Where any building or part thereof is to be requisitioned under sub section (1), the State Government shall make such enquiry as it deems fit and make a declaration in the order of requisition that the owner, the landlord or the tenant, as the case may be, has not actually resided therein for a continuous period of six months immediately preceding the date of the order and such declaration shall be conclusive evidence that the owner, landlord or tenant has not so resided.
6.(1) If any premises situate in ail area specified by the State Government by notification in the Official Gazette, are vacant on the date of such notification and wherever any such premises are vacant or become vacant after such date by reason of the landlord, the tenant or the sub tenant, as the case may be, ceasing to occupy the premises or by reason of the release of the premises from requisition or by reason of the premises being newly erected or reconstructed or for any other reason the landlord of such premises shall give intimation thereof in the prescribed form to an officer authorised in this behalf by the State Government.
727 (4) Whether or not an intimation under sub section (1)is given and notwithstanding anything contained in section 5, the State Government may by order in writing (a) requisition the premises for the purpose of the State or any other public purpose and may use or deal with the premises for any such purpose in such manner as may appear to it to be expedient, or Provided that where an order is to be made under clause (a) requisitioning the premises in respect of which no intimation is given by the landlord, the State Government shall make such inquirv as it deems fit and make a declaration in the order that the promises were vacant or had become vacant, on or after the date referred to in sub section (1) and such declaration shall be conclusive evidence that the premises were or had so become vacant: Explanation For the purposes of this section, (a) premises which are in the occupation of the landlord, the tenant or the sub tenant, as the case may be, shall be deemed to be or become vacant when such landlord ceases to be in occupation or when such tenant or sub tenant ceases to be in occupation upon termination of his tenancy, eviction, assignment or transfer in any other manner of his interest in the premises or otherwise, notwithstanding any instrument or occupation by any other person prior to the date when such landlord, tenant or sub tenant so ceases to be in occupation; 13.(1) Every order made under sections 5, 6, 7, 8 A or 8 B or sub section (7) of section 9 or section 12 shall (a)if it is an order of a general nature or affecting a class of persons, be published in the mariner prescribed by rules made in this behalf (b)if it is an order affecting an individual, corporation, or firm, be served in the manner provided for the service of a summons in Rule 2 of Order XXIX or Rule 3 of Order XXX, as the case may be, in the First Schedule of the Code of Civil Procedure, 1908 ; 728 (c)if it is an order affecting an individual person other than a corporation or firm, be served on the person (i)personally, by delivering or tendering to him the order, or (ii) by post, or (iii) where the person cannot be found, by leaving an authentic copy of the order with some adult male member of his family or by affixing such copy to some conspicuous part of the premises in which he is known to have last resided or carried on business or worked for gain.
(2) Where a question arises whether a person was duly informed of an order made in pursuance of sections 5, 6, 7, 8 A or 8 B or, sub section (7) of section 9 or section 12 compliance with the requirements of subsection (1) shall be conclusive Proof that he was so informed; but failure to comply with the said requirements shall not preclude proof by other means that he was so informed, or affect the validity of the order.(Underlining ours). . . . . . .
At the outset it is necessary to state that the main grounds of attack against the constitutionality of the Act based on such fundamental rights as are recognised by articles 19(1)(f) and 31(2) of the Constitution must be overruled in view of the decision of the Constitution Bench of this Court in State of Bombau vs Bhanji Munji (1).
In that case this Court upheld the validity of the Act with reference to the provisions of the articles aforesaid of the constitution.
But the learned counsel for the petitioner contended that he attacked the vires of the Act on grounds other than those which had been specifically dealt with by this Court in the decision just referred to.
We now proceed to deal with those fresh grounds on their merits.
It was contended that the Act became invalid on January 26, 1950, inasmuch as it was in conflict with article 31(2) of the Constitution.
The Act was, therefore, as good as dead by the time Act 11 of 1950 extending the life of the Act was enacted as aforesaid.
The Act being void, its extension by Act II of 1950 was equally void, (1) [1955] 1 S.C.R. 777.
729 Similarly, it was further argued that the amendments effected by the amending Act II of 1950 and Act XXXIX of 1950 required the assent of the President and that as admittedly no such assent had been given, they had no effect as provided in article 31(3) of the Constitution.
This chain of submissions is founded on the admitted non compliance with the requirements of article 31(3).
It has not been contended that the Act when passed on April 11, 1948, was not good law.
It is also clear that the Act is not covered by the provisions of el.
(6) of article 31.
The Act is thus covered by the saving clause, el. 5(a), being an existing law other than a law to which the provisions of cl.
(6) apply.
The Act, therefore, would be valid even if the provisions of el.
(2) of article 31 are not in terms fully satisfied, in so far as the Act did not before its amendment by Act XXXIX of 1950 contain the expression "for a public purpose".
As already pointed out, this Court in the case of The State of Bombay vs Bhanji Munji (1) has laid it down that the Act was not invalid even after the commencement of the Constitution simply because it is not provided in express terms that the acquisition or requisition had to be for a public purpose, provided that from the whole tenor and intendment of the Act it could be gathered that the requisition was for a public purpose, and for the benefit of the community at large.
The amending Act only made explicit what had been left to be gathered from the whole tenor of the Act, as pointed out by this Court in the case cited above.
, The 'argument that the amending Acts, II of 1950 and XXXIX of 1950, required the assent of the President under el.
(3) of article 31 has, therefore, no force.
Act 11 of 1950, in so far as it affects the present controversy, only extended the life of the Act by two years and Act XXXIX of 1950 only made explicit what was not so in the Act as originally passed, and are not such laws as come within the purview of cl.
(3) of article 31 inasmuch as those Acts are merely an extension or explanatory of the substantive Act which is an existing ,law within the meaning of the Constitution.
Clause (3) (1) [1955] 1 S.C.R. 777.
91 730 of article 31 in terms applies to a law made by the legislature of a State, after the commencement of the Constitution; whereas the Act had been passed in its substantive form in April 1948.
Hence, there is no difficulty in holding that the Act which was good law before the commencement of the Constitution did not become void under article 13 of the Constitution, because there was nothing in the Act which was inconsistent with the provisions of Part III of the Constitution.
If the Act was good law after the commencement of the Constitution, it follows that the amendments aforesaid made in 1950, were equally good law, even though the assent of the President had not been obtained.
Secondly, the decision of this Court in The State of Bombay vs Bhanji Munji (1) (supra) itself has ruled to the contrary with reference to the provisions of article 31 (2).
We cannot, therefore, go back upon our decision in the case aforesaid.
On these considerations the petition under article
32 of the Constitution must fail on the ground that no fundamental rights of the petitioner as would entitle her to seek redress from this Court, have been contravened.
It remains to consider the other arguments advanced on behalf of the petitioner which have a bearing on the petition for special leave to appeal from the judgment of the Bombay High Court.
It has been contended that sections 5 and 6 of the Act quoted above and underlined by us have made certain matters conclusive, so that the High Court or even this Court could not go behind the order of the State Government holding that the tenant had not resided in the premises for a continuous period of six months immediately preceding the date of the order (section 5), or that the premises had become vacant in the month of October 1952, as stated in the Order impugned in this case.
It is contended that the legislature had, by making those provisions rendering those matters conclusively proved, impaired the powers of the High Court under article 226 and of this Court under article 32 of the Constitution.
Another branch of the argument is that the declaration of vacancy is dependent upon a collateral fact which has (1) [1955] 1 S.C.R. 777. 731 to be found by the Government on such enquiry as it may deem fit and proper and its conclusion on such a collateral fact could not be placed by the Act beyond scrutiny by the High Court or by this Court.
In this connection it was also argued that on the question of vacancy the finding of the State Government may be conclusive on the "factual aspect" but not on the "legal aspect" of the matter.
In other words, it was contended that it was still open to the courts to find whether the facts found constituted in law "vacancy" as defined in the Act.
In this connection strong reliance was placed on the following observations of the Judicial Committee of the Privy Council in the case of Hubli Electricity Co. Ltd. vs Province of Bombay(1) at pages 65 and 66: " The question what obligations are imposed on licensees by or under the Act is a question of law.
Their Lordships do not read the section as making the government the arbiter on the construction of the Act or as to the obligations it imposes.
Doubtless the government must, in expressing an opinion for the purpose of the section, also entertain a view as to the question of law.
But its view on law is not decisive.
If in arriving at a conclusion it appeared that the government had given effect to a wrong apprehension of the obligations imposed on the licensee by or under the Act the result would be that the Government had not expressed such an opinion as is referred to in the section.
" There are several answers to this contention.
In the first place, it is well settled that observations made with reference to the construction of one statute cannot be applied with reference to the provisions of another statute which is not in pari materia with the statute which forms the subject matter of the previous decision.
The Judicial Committee was dealing with the provisions of section 4(1) of the , which did not contain the words "conclusive evidence" or any words to that effect.
That decision of the Judicial Committee, if it can at all be applied to the Act now before us, is against the petitioner in so far as (1) [1948] L.R. 76 I.A. 57.
732 it has construed the words "opinion of the Provincial Government".
Those words or words of similar import appear in the beginning of section 5.
In the words of the Judicial Committee, those words signify the subjective opinion of the Government and not an opinion subject to objective tests.
The observations quoted above only show that on a proper construction of the provisions of the statute then before the Judicial Committee, the opinion of the Government, if it was made nonjusticiable, was confined to the question of whether there had been a willful and unreasonably prolonged default, but did not cover the question of the opinion of Government relating to the obligations imposed by the statute on the licensee, by or under the Act.
Hence those observations are absolutely of no assistance to the petitioner on the question of the full implication of the rule making certain matters "conclusive evidence" under the provisions of sections 5 and 6 of the Act.
This question appears to have been canvassed in a number of cases in the High Court of Bombay.
In the case of Jagatchandra vs Bombay Province( ') Tendolkar J. had ruled that the declaration made by the Government shall be conclusive evidence with regard to all facts involved in the determination of vacancy but that it was not conclusive with regard to the inferences to be drawn from or the legal consequences of such facts.
The correctness of that proposition was questioned in another case before another learned, Judge of that Court, Shah J., who referred it to be determined by a larger Bench.
Chagla C.J. and Gajendragadkar J. (now one of us) examined that question in some detail and overruled the decision of Tendolkar J. (Vide Mohsinali Mohomed Ali vs The State of Bombay(2).
The Bombay High Court in the last mentioned case held that on a declaration being made by the State Government that there was a vacancy, it was conclusive both as to the facts and the constituent elements of "vacancy", as understood under the Act.
The High Court relied in this connection on the observations of the Judicial (1) A.I.R. 1950 Bom.
(2) [1951] 53 Bom.
L.R. 94; A.I.R. 1951 Bom, 303.
733 Committee of the Privy Council in Moosa Goolam Ari vs Ebrahim Goolam Ariff(1) and of Lord Cairns in Peel 's case(2), and of Lord Parker of Waddington in Bowan vs Secular Society Ltd.(3).
In this connection the learned counsel for the petitioner also pressed in aid of his argument the well known distinction between the jurisdiction of a court or authority to decide a certain fact as one of the issues in the controversy and certain collateral facts on which the jurisdiction to determine the controversy could arise.
It was argued that the finding on the question of vacancy by the State Government was a "jurisdictional fact" in the sense that unless it was found that there was a vacancy, the jurisdiction of the State Government to make the declaration and to requisition the permises could not arise.
This aspect of the matter has been considered by this Court in the case of Rai Brij Raj Krishna vs section K. Shau & Brothers(4).
That case concerned the construction of the provisions of the Bihar Buildings (Lease, Rent and Eviction) Control Act (Bihar Act 111) of 1947.
This Court held that, the Controller had been vested with the jurisdiction to determine all questions including the question whether or not there was non payment of rent and on finding that there was default in the payment of rent, with the jurisdiction to order eviction of the tenant.
The finding of the question of default was not a jurisdictional finding in the sense in which learned counsel for the petitioner asks us to hold with reference to the finding of the State Government in this case that there has been a vacancy.
In the reported case this Court held further that even if the Controller had wrongly decided the question of default in the payment of rent, his effective order oil the question of eviction could not be challenged in a court of law.
Mr. Justice Fazl Ali delivering the judgment of the court made reference to the well known observations of Lord Esher, M.R. in the case of Queen vs Commisssioners for Special Purposes of the Income tax(") and to (1) [1912] L.R 39 I.A. 237.
(2) (3) (4) ; (5) , 319.
734 the observations of the Privy Council in the case of the Colonial Bank of Australasia vs Willan(1).
After referring to those observations and to the provisions of the statute then before the Court, this Court held that the Act empowered the Controller alone to decide whether or not there was 'non payment of rent and that decision was essential to his order for eviction of the tenant under section 11.
That decision of the Controller, the Court further held, could not be challenged in a court of law.
The decision of this Court just referred to is an apt illustration of the rule which applies with equal force to the provisions of the Act now before us.
The Act has made a specific provision to the effect that the determination on the questions referred to in sections 5 and 6 of the Act by the State Government shall be conclusive evidence of the declaration so made.
But that does not mean that the jurisdiction of the High Court under article 226 or of this Court under article 32 or on appeal has been impaired.
In a proper case the High Court or this Court in the exercise of its special jurisdiction under the Constitution has the power to determine how far the provisions of the statute have or have not been complied with.
But the special powers aforesaid of this Court or of the High Court cannot extend to reopening a finding by the State Government under section 5 of the Act that the tenant has not actually resided in the premises for a continuous period of six months immediately preceding the date of the order or under section 6 that the premises bad become vacant at about the time indicated in the order impugned.
Those are not collateral matters which could on proper evidence be reopened by the courts.
of law.
The legislature in its wisdom has made those declarations conclusive and it is not for this Court to question that wisdom.
As an offshoot of the argument that we have just been examining it was contended on behalf of the petitioner that Explanation (a) to section 6 quoted above contemplates a vacancy when a tenant omitting other words not necessary) " ceases to be in occupation upon (1) [1874]5 P.C. 417,443.
735 termination of his tenancy, eviction, or assignment or transfer in any other manner of his interest in the premises or otherwise ".
The argument proceeds further to the effect that in the instant case admittedly there was no termination, eviction, assignment or transfer and that the words " or otherwise " must be construed as ejusdem generis with the, words immediately preceding them: and that therefore on the facts as admitted even in the affidavit filed on behalf of the Government there was in law no vacancy.
In the first place, as already indicated, we cannot go behind the declaration made by the Government that there was a vacancy.
In the second place, the rule of ejusdem generis sought to be pressed in aid of the petitioner can possibly have no application.
The legislature has been cautious and thorough going enough to bar all avenues of escape by using the words " or otherwise ".
Those words are not words of limitation but of extension so as to cover all possible ways in which a vacancy may occur.
Generally speaking, a tenant 's occupation of his premises ceases when his tenancy is terminated by acts of parties or by operation of law or by eviction by the landlord or by assignment or transfer of the tenant 's interest.
But the legislature, when it used the words " or otherwise ", apparently intended to cover other cases which may not come within the.
meaning of the preceding clauses, for example, a case where the tenant 's occupation has ceased as a result of trespass by a third party.
The legislature, in our opinion, intended to cover all possible cases of vacancy occurring due to any reasons whatsoever.
Hence, far from using those words ejusdem generis with the preceding clauses of the explanation, the legislature used those words in an all inclusive sense.
No decided case of any court, holding that the words "or otherwise" have ever been used in the sense contended for on behalf of the petitioner, has been brought to our notice.
On the other hand, by way of illustration of decisions to the contrary may be cited the case of Skinner & Co. vs Shew & Co. (1).
In that case the Court of Appeal (1) [1893] 1 Ch.
D 4I3, 736 had to consider the words of section 32 of the Patents Designs & Trade Marks Act, 1883 (46 & 47 Vict.
c. 57), to the following effect: "Where any person claiming to be the patentee of any invention, by circulars, advertisements or otherwise threatens any other person With any legal proceedings. .
Their Lordships repelled the contention that the words "or otherwise" occurring in that section had to be read ejusdem generis with "circulars", and "advertisements".
They observed that by so doing they will be cutting down the intendment of the provisions of the statute when clearly the word,,; "or otherwise" had been used with a contrary intention.
The rule of ejusdem generis is intended to be applied where general words have been used following particular and specific words of the same nature on the established rule of construction that the legislature presumed to use the general words in a restricted sense; that is to say, as belonging to the same genus as the particular and specific words.
Such a restricted meaning has to be given to words of general import only where the context of the whole scheme of legislation requires it.
But where the context and the object and mischief of the enactment do not require such restricted meaning to be attached to words of general import, it becomes the duty of the courts to give those words their plain and ordinary meaning.
In our opinion, in the context of the object and mischief of the enactment there is no room for the application of the rule of ejusdem generis.
Hence it follows that the vacancy as declared by the order impugned in this case, even though it may not be covered by the specific words used, is certainly covered by the legal import of the words "or otherwise".
The only other contention which remains to be dealt with is that the order impugned in this case is not enforceable because it was directed against the petitioner 's husband, who was dead at the date of the order, besides the other two persons indicated in it who were not concerned with the premises.
In our opinion, there is no substance in this contention either.
An order like the one passed under section 6(4)(a) of the Act 737 is not in the nature of an order in judicial proceedings between the Government on the one hand and other parties named.
If the proceedings were intended by the Act in the sense of judicial or quasi judicial proceedings between named parties, it may have been legitimately argued that an order passed against a dead man is a complete nullity.
But the order proceeds on the basis that the tenant had ceased to be in occupation of the premises in October 1952, apparently by reason of the fact that he had handed over possession of the premises to the so called "lodger" or "paying guest".
Admittedly the petitioner 's husband died after October 1952.
The occupation by the said Narottamdas Dharamsey Patel was in the nature of an unauthorised occupation.
The fact that the petitioner 's husband was dead on the date of the order impugned has only this effect that in so far as it mentions his name as one of the persons to be served under section 13 of the Act should be erased from the order But even so, it does not affect the enforceability of the same.
section 13 lays down the different modes of service of an order passed under the Act according as the order is of a general nature or affecting a class of persons or an individual, corporation or firm.
We are here concerned with the case of an individual and the section lays down that it can be served either personally by delivering or tendering the order to him or by post or where he cannot be found, by affixing a copy of the order to some conspicuous part of the premises in which he is known to have last resided.
As the petitioner 's husband had died before the date of the order impugned, it could affect only the so called "lodger" who had been, on the findings, left in occupation of the premises after October 1952.
He has not made any complaint about non service.
The only other person who could be affected by the order, if at all, is the petitioner herself.
She has admitted that she came to know of the order in question at about the time it had been made, because she found a copy of the order affixed at the outer door of the premises.
Thus admittedly, the petitioner had timely notice of 95 738 the order impugned.
Hence in the instant case there is no need to apply the rule of conclusive proof as laid down in sub section
(2) of section 13.
In any event, as the concluding words of the section have provided, any irregularity or failure to comply with the requirements of the section cannot "affect the validity of the order".
As all the grounds urged in support of the petitions fail, they are dismissed with costs, one set.
Petitions dismiss`ed.
[/INST]On October 11, 1973, the Central Government in exercise of power under cl.
(3) of the Fertilizers (Control) order, 1957 promulgated under s.3 of the , issued a notification fixing the maximum retail selling price of certain fertilizer which dealers could charge from consumers leaving with the dealers a very low margin of profit.
Some time later in order to compensate the manufactures for the higher cost of inputs, the Central Government issued another notification on June 1, 1974 fixing a very high retail selling price of the fertilizer to be charged by the dealers from the consumers.
The dealers started charging the higher price fixed by notification dated June 1, 1974 at the lower rate thus earning fabulous profit.
On June 14, 1974 the State of Uttar Pradesh issued a notification (Uttar Pradesh Fertilizer Price (Supplementary) Order, 1974) in exercise of power under rule 114 of the Defence of India Rules, 1971 promulgated under the Defence of India Act, 1971.
This notification stated that the stocks of fertilizer acquired upto May 31,1974 by the dealers and which remained unsold with them should be sold only at the price fixed by the Central Government 's notification dated October 11, 1973 and not by notification of June 1,1974.
The appellants (dealers) challenged before the High Court the legality and validity of the State Government 's notification dated June 14, 1974 on the grounds: (1) that the fertilizer in question having been declared an essential commodity under the , an Act specially enacted inter alia for regulating prices of essential commodities, its price could be regulated only under that Act and not under the Defence of India Rules: (2) that the notification being inconsistent with the Central Government 's notification dated dated June 1, 1974 was invalid : and (3) that the notification being discriminatory was violative of article 14 of the Constitution.
The High Court upheld the 349 validity of the impugned notification and dismissed the writ petitions.
Hence these appeals.
Dismissing the appeals by majority.
^ HELD: (Per Murtaza Fazal Ali and Thakkar, JJ.) Both the , as also the Defence of India Rules of 1971, are Central legislations enacted by the Parliament.
There is no constitutional or jurisprudential limitation on the competence of the Parliament to create two avenues or sources of power for the regulation of prices of articles.
Since Parliament can constitutionally and validly enact two statutes creating two sources of power, and since, under both the statutes prices of fertilizers can be regulated, there is no illegality in acting under either or both.[357 D E] Under the DIR power has been conferred, inter alia, to regulate the price of any article.
The expression `any article ' is wide enough in its amplitude to envelope `fertilizers '.
The fact that `fertilizers ' have been declared as an essential commodity under the and its price can be regulated under the powers conferred by that Act, is altogether immaterial.
[357 H; 358 A] The Centre and the State both cannot speak on the same channel and create disharmony.
If both speak, the voice of the Centre will drown the voice of the State.
The State has to remain `silent ' or it will be `silenced '.
But the State has the right to `speak ' and can `speak ' (with unquestionable authority) where the Centre is `silent ', without introducing disharmony.
If the Centre sits only on a portion of the Chair, the state can sit on the rest of the portion with arms thrown on the shoulders of each other.
While the State cannot sit on the lap or on the shoulders of the Centre, both can certainly walk hand in hand, lending support to each other, in a friendly manner, towards the same destination.
If the Centre. has built a wall, had has left a gap from which intruders can infiltrate, the state can fill the gap in the wall, and thus make its own contribution to the common cause.
What is more, each in theory and principle.
must be presumed to be conscious of the need for accord and need for accommodating each other in the interest of `NATIONAL HARMONY '.
[360C F] A general statute applies to all persons and localities within its jurisdictional scope, prescribing the governing law upon the subject it encompasses, unless a special statute exists to treat a refinement of the subject with particularity or to prescribe a different law for a particular locality.
Where, however, the later special or local statute is not irreconcilable with the general statute to the degree that both statutes cannot have a conterminous operation, the general statute will not be repealed, but the special or local statute will exist as an exception to its terms.
[361 B C] sutherland 's Statutory Construction, 3rd Edition.
Vol, 1.
page 488, referred to One of the tests for ascertaining whether the inconsistency is an irreconcilable or intolerable one, is to pose this question: Can the State law be obeyed or 350 respected without flouting or violating the Central law in letter and spirit? If the answer is in the affirmative, the State law cannot be invalidated.
Not at any rate when the State law merely `promotes ' the real object of both the laws, and is in the real sense `supplementary ' or complementary ' to the Central law.
In the present case, the Central notification is altogether silent on the ramification regarding sales from out of existing stocks acquired by the dealers at lower rates.
The impugned State notification, on the other hand, deals exclusively with this aspect.
The State notification speaks on a refinement of the subject about which the Central notifications is blissfully.
unaware and on which it is altogether silent.
Both notifications can therefore safely be construed as supplementary and friendly rather than inconsistent or hostile.
[360 B C] In the instant case, assuming that there is inconsistency between the Central Government 's notification and that of the State Government, it does not appear to be an irreconcilable or intolerable one, so as to invalidate the State Government 's notification.
In the present case the test answers in favour of the validity of the impugned State notification.
The Central notification is not violated if the dealers sell the fertilizers from out of the existing stocks acquired at the lower rates, for both the notifications fix the minimum selling price and the maximum selling price fixed under the State notification is not higher than that fixed under the Central notification.
What is more, the state notification `promotes and serves ' the object and purpose of both the Centre and the State.
`Promotes and serves ' in the sense, that the manifest object of fixing maximum ceiling price is to make available to the cultivators who grow the food for the NATION to obtain the inputs at reasonable prices and to protect them from exploitation so that the food production is not retarded.
[362 A C] article 254(2) does not envision Presidential assent to `notifications ' issued under an Act (as distinguished from `laws made by legislature).
[363 F] Kerala State Electricity Board vs Indian Aluminium Co. ; at p. 478, referred to.
The impugned notification is not violative of article 14 of the Constitution since the very basis of the challenge on the score of hostile discrimination is found to be non existent.[364 D] (Per Vardarajan J. dissenting) It cannot be assumed that Parliament which had already legislated in the , a permanent measure, in respect of fertilizer intended to legislate once again and could have felt the need to legislate once again in the temporary Defence of India Act, 1971 in respect of the same article especially because what could be done under the Defence of India Act and the Rules which may be framed thereunder could as well be done with equal force under the and orders which may be passed thereunder.
[377 B C] Section 3(2) of the lays down that the Central Government may, having regard to the local conditions of any area and other relevant circumstances, fix different prices or rates in respect of different areas 351 and for different classes of consumers.
The State Government could have requested the Central Government to act under s.3(2) of the and fix a different price or rate for the sale by dealers in that State of fertilizer carried over from the stock held on 31.5.1974.
Section 5(b) of the provides for delegation of powers and says that the Central Government may, by notified order, direct that the power to make or issue notifications under s.3 of that Act shall, in relation to such matters and subject to such conditions, if any, as may be specified in the direction be exercisable also by such State or such officer or authority subordinate to a State Government as may be specified in the direction.
The Central Government has not issued any direction under section 5(b) of the delegating its power to issue notification under s.3 of that Act to the State Government or any officer or authority of that Government.
The State Government has thus not resorted to the provisions contained in s.3(2) or s.5(b) of the , but the proceeded of fix the price of fertilizer on its own under the Defence of India Rules, 1971 which it cannot do under those Rules and the Defence of India Act, 1971 in respect of the essential commodity.
[377 H; 378 A D] The Defence of India Act, 1971, which was a general and temporary Act, and the Rules framed thereunder cannot apply to fertilizer which is an essential commodity government by the and the Fertilizer (Control) Order, 1957 made under the provisions of that Act.
Therefore the State Government cannot without delegation issue any notification under the Defence of India Act and Rules, 1971 in regard to the price of fertilizer, an essential commodity governed by the and the Fertilizer (Control) order, 1957.
[378 H; 379 A B] There does not appear to be any provision in article 254(2) of the Constitution for placing any notification made by a State Government under the Defence of India Rules, 1971 for consideration by the President.
[380 C] If the State Government 's impugned notification is assumed to be a law enacted by that State 's Legislature on Entry 26 of List II, since the Act of Parliament passed on Entry 33 of List III and the Fertilizer (Control) order, 1957 passed under that Act were already in force, the assent of the President had to be received in order that the State Government 's notification assumed to be a law enacted by the State 's Legislature may prevail in the State as required by Article 254(2) of the Constitution.
There is nothing on record to show that the impugned notification of the State Government was placed before the President for his assent and that his assent has been received.
Therefore, the State Government 's impugned notification even as a law cannot prevail over the earlier notification of the Central Government.
[389 F G; 380 C] Zaverbhai Amaidas vs State of Bombay.
[1955] 1 SCR 799, referred to.
There is a clear conflict between the two notifications is respect of the same essential commodity, fertilizer, for under the Central Government 's notification dated 1.6.1974 the price at which a dealer can sell fertilizer of the concerned variety is Rs. 2000 per ton while under the State Government 's notification dated 14.6.1974 is only Rs. 1050 per ton though no doubt it is restricted to the stock carried over from 31.5.1974 which is immaterial in judging the power of the State Government to fix the price of an essential commodity by a notification 352 made under the Defence of India Rules, 1971 in respect of which the Central Government had already fixed the price under the Fertilizer (Control) order, 1957.
Once the Central enactment and the Central Government 's notification govern the price of an essential commodity the State Government 's notification issued in exercise of the delegated authority under the Defence of India Act and the Rules framed thereunder cannot prevail.
[380 F H] The two enactments have to be read in such a way that there is no conflict between them while giving effect to them in their respective fields.
of operation.
If the and the Fertilizer (Control) order, 1957 are considered to apply exclusively to fertilizer, an essential commodity, and the Defence of India Act, 1971 and the Defence of India Rules, 1971 are considered to apply to other commodities excluding essential commodities there would be no conflict whatsoever between the and the Defence of India Act and between the notification issued under Fertilizer (Control) order, 1957 and the Defence of India Rules, 1971.
[381 A; 383 D E] The author of the two enactments, and Defence of India Act, 1971 is the same, namely, Parliament, and Parliament must be held to have not intended to contradict itself while dealing with distinct matters or situations under those enactments.
If the State Governments are free to fix their own prices in notifications issued by them under the Defence of India Rules, 1971 when the Central Government 's notification fixing a single price for the whole country in respect of an essential commodity is in force that notification of the Central Government will become otiose.
The question whether Parliament would have intended such a consequence.
The answer can only be an emphatic No. [382 D E] Craies on Statute Law (seventh edition) at Page 222 and Maxwell on the Interpretation of Statutes, referred to.
What has been done by the State Government under the impugned notification is utterly lacking in power and cannot be allowed to stand merely because it relates only to a comparatively small quantity of fertilizer carried over from the stock of 31.5.1974 and was intended to benefit and protect agricultural consumers and prevent dealers from making undue profits.[384 F]
</s>
|
<s>[INST] Summarize the judgementminal Appeals Nos.
25 27 of 1955.
Appeals from the judgments and order dated February 1, 1955, of the Punjab High Court (Circuit Bench), Delhi in Cr.
Appeals Nos.
5 D, 6 D and 13 D of 1952, arising out of the judgments and orders dated December 22, 1951, of the 1st Class Magistrate, New Delhi in Criminal Cases Nos. 220/2, 221/2 and 223/2 of 1949.
89 Ram Lal Anand and section N. Anand, for the appellant.
H. J. Umrigar and T. M. Sen, for the respondent.
January 20.
The Judgment of the Court was delivered by GAJENDRAGADKAR J.
These three appeals have, been filed with certificates granted by the High Court of Punjab under article 134(1) (c) of the Constitution and they arise from three criminal cases filed against the appellant.
The appellant Gopi Chand was the chief cashier, and Hukam Chand was an assistant cashier, in the United Commercial Bank Ltd., New Delhi.
They were charged with the commission of offences under section 409 in three separate cases.
In the first case No. 223/2 of 1949, the prosecution case was that on or about April 8, 1948, both had agreed to commit, or cause to be committed, criminal breach of trust in respect of the funds of the Bank where they were employed; and in pursuance of the said agreement they had committed criminal breach of trust in respect of the total amount of Rs. 1,65,000.
They were thus charged under sections 408, 409 and 120B of the Indian Penal Code.
The appellant was convicted of the offence under section 409 read with section 120 and sentenced to rigorous imprisonment for seven years.
Against this order of conviction and sentence he preferred an appeal to the High Court of Punjab (No. 5 D of 1952).
The High Court confirmed his conviction but altered the sentence imposed on him by directing that he should suffer four year 's rigorous imprisonment and pay a fine of Rs. 10,000 or in default suffer rigorous imprisonment for fifteen months.
The order of conviction and sentence thus passed gives rise to Criminal Appeal No. 25 of 1955 in this Court.
In the second case (No. 221/2 of 1949) the appellant was charged with having committed an offence under sections 408 and 409 of the Indian Penal Code in that he had committed criminal breach of trust in respect of an amount of Rs. 23,772 8 6.
The trial magistrate ,convicted the appellant of the said offence and sentenced him to suffer rigorous imprisonment for five years.
12 90 On appeal (No. 6 D of 1952) the order of conviction was confirmed but the sentence imposed on him was reduced to three years ' rigorous imprisonment.
This order has given rise to Criminal Appeal No. 26 of 1955 in this Court.
In the third case (No. 220/2 of 1949) the appellant, Hukam Chand and Ganga Dayal were charged with having committed an offence under section 409/408 read with section 120B of the Indian Penal Code in that all of them had agreed to commit criminal breach of trust in respect of the sum of Rs. 10,000 belonging to the Bank and that in pursuance of the said agreement they had committed the criminal breach of trust in respect of the said amount.
The trial magistrate convicted the appellant of the offence charged and sentenced him to four year 's rigorous imprisonment.
On appeal (No. 13 D of 1952) the High Court confirmed the conviction but reduced the sentence to two years ' rigorous imprisonment.
From this order arises Criminal Appeal No. 27 of 1955 in this Court.
The appellant has obtained a certificate from the High Court under article 134(1) (c) of the Constitution because he seeks to challenge the validity of the order of conviction and sentence passe against him in the three cases on the ground that the proceedings in all the said cases are void.
He contends that, whereas the charges framed against him had to be tried according to the procedure prescribed for the trial of warrant cases, the learned trial magistrate tried all the cases according to the procedure prescribed for the trial of summons cases and that makes void all the proceedings including the final orders of conviction and the sentences.
The point arises in this way.
The East Punjab Public Safety Act, 1949 (Punj.
5 of 1949), hereinafter called the Act, which came into force on March 29, 1949, was passed to provide for special measures to ensure public safety and maintenance of public order.
It is common ground that the offences with which the appellant was charged would normally have to be tried under the procedure prescribed by ch.
XXI of the Code of Criminal Procedure for the trial of warrant 91 cases but in fact they have been tried under the procedure prescribed by ch.
XX for the trial of summons cases.
The summons procedure differs from the warrant procedure in some material points.
Under the former procedure a charge is not to be framed while under the latter a charge has to be framed under section 254 of the Code.
Similarly an accused person gets( only one chance of cross examining the prosecution witnesses under the summons procedure whereas under the warrant procedure he is entitled to cross examine the said witnesses twice, once before the framing of the charge and again after the charge is framed.
The appellant concedes that the cases against him were tried according to the summons procedure by reason of section 36 of the Act and the notification issued under it; but be contends that the relevant provisions of the Act are ultra vires and he alternatively argues that the proceedings in respect of a substantial part were continued under the summons procedure even after the Act had expired and the relevant notifications had ceased to be operative.
That is how the validity of the trial and of the orders of conviction and sentence is challenged by the appellant.
It would be relevant at this stage to refer to the material provisions of the Act and the relevant notifications issued under it.
The Act came into force on March 29, 1949.
It was passed to provide for special measures to ensure public safety and maintenance of public order.
Section ' 36 of the Act prescribes the procedure for the trial of specified offences; under sub section
(1) all offences under this Act or under any other law for the time being in force in a dangerously disturbed area, and in any other area all offences under this Act and any other offence under any other law which the Provincial Government may certify to be triable under this Act, shall be tried by the courts according to the procedure prescribed by the Code, provided that in all cases the procedure prescribed for the trial of summons cases by ch.
XX of the Code shall be adopted, subject, in the case of summary trials, to the provisions of sections 263 to 265 of the Code.
For the avoidance of doubt sub section (2) provided that 92 the provisions of sub section
(1) shall apply to the trial of offences mentioned therein committed before the com mencement of this Act, and in a dangerously disturbed area committed before the date of the notification under section 20, in respect of it.
Under section 20 the Provincial Government is authorised by notification to declare that the whole or any part of the Province as may be specified in the notification to be a dangerously disturbed area.
Four notifications were issued under section 20.
By the first notification issued on July 8, 1949, the whole of the Province of Delhi was declared to be a dangerously disturbed area by the competent authority.
It appears that on September 28, 1950, the said authority issued the second notification cancelling the first notification with effect from October 1, 1950.
This notification was followed by the third notification on October 6, 1950, which purported to modify it by inserting the words " except as respect things done or omitted to be done before the date of this notification after the words " with effect from October 1, 1950 in other words, this notification purported to introduce an exception to the cancellation of the first notification caused by the second, and in effect it purported to treat the Province of Delhi as a dangerously disturbed area in respect of things done or omitted to be done before the date of the said notification.
The last notification was issued on April 7, 1951.
This notification was issued by the Chief Commissioner of Delhi in exercise of the powers conferred by sub section
(1) of section 36 of the Act, and by it he certified as being triable under the said Act in any area within the State of Delhi not being a dangerously disturbed area the following offences, viz., any offence under any law other than the aforesaid Act of which cognisance had been taken by any magistrate in Delhi before October 1, 1950, and the trial of it according to the procedure prescribed in ch.
4 of the said Act was pending in any court immediately before the said date and had not concluded before the date of the certificate issued by the notification.
Let us now mention the facts about the trial of the 93 three cases against the appellant about which there is no dispute.
, The First Information Report was filed against the appellant on June 30, 1948.
The trial commenced on July 18, 1949, and it was conducted according to the procedure prescribed by ch.
XX of the Code '.
Some prosecution witnesses were examined and cross examined before January 26, 1950, and the ' whole of the prosecution evidence was recorded before August 14, 1951.
The evidence for the defence was recorded up to November 14, 1951, and the learned magistrate pronounced his judgments in all the cases on December 22, 1951.
For the appellant, Mr. Ram Lal Anand contends that section 36(1) of the Act is ultra vires because it violates the fundamental right of equality before law guaranteed by article 14 of the Constitution.
His argument is that since offences charged against the appellant were triable under the warrant procedure under the Code, the adoption of summons procedure which section 36(1) authorised amounts to discrimination and thereby violates article 14.
It is the first part of sub section
(1) of section 36 which is impugned by the appellant.
The effect of the impugned provisions is that, after an area is declared to be dangerously disturbed, offences specified in it would be tried according to the summons procedure even though they have ordinarily to be tried according to warrant procedure.
The question is whether in treating the dangerously disturbed areas as a class by themselves and in providing for one uniform procedure for the trial of all the specified offences in such areas the impugned provision has violated article 14.
The point about the construction of article 14 has come before this Court on numerous occasions, and it has been consistently held that article 14 does not forbid reasonable classifications for the purpose of legislation.
In order that any classification made by the Legislature can be held to be permissible or legitimate two tests have to be satisfied.
The classification must be based on an intelligible differentia which distinguishes persons or things grouped together in one class from others left out of it, and the differentia must have a 94 reasonable or rational nexus with the object sought to be achieved by the said impugned provision.
It is true that, in the application of these tests uniform approach might not always have been adopted, or, in dealing with the relevant considerations emphasis might have shifted; but the validity of the two tests that have to be applied in determining the vires of the impugned statute under article 14 cannot be doubted.
In the present case the classification has obviously been made on a territorial or geographical basis.
The Legislature thought it expedient to provide for the speedy trial of the specified offences in areas which were notified to be dangerously disturbed areas ; and for this purpose the areas in the State have been put in two categories, those that are dangerously disturbed and others.
Can it be said that this classification is not founded on an intelligible differentia.? In dealing with this question it would be relevant to recall the tragedy of the holocaust and the savage butchery and destruction of property which afflicted several parts of the border State of Punjab in the wake of the partition of India.
Faced with the unprecedented problem.
presented by this tragedy, the Legislature thought that the dangerously disturbed areas had to be dealt with on a special footing; and on this basis it provided inter alia for the trial of the specified offences in a particular manner.
That obviously is the genesis of the impugned statute.
That being the position, it is impossible to hold that the classification between dangerously disturbed areas of the State on the one hand and the non_ disturbed areas on the other was not rational or that it was not based on an intelligible differentia.
Then again, the object of the Act was obviously to ensure public safety and maintenance of public order; and there can be no doubt that the speedy trial of the specified offences had an intimate rational relation or nexus with the achievement of the said object.
There is no doubt that the procedure prescribed for the trial of summons cases is simpler, shorter and speedier; and so, when the dangerously disturbed areas were facing the problem of unusual civil commotion and strife, the Legislature was justified 95 in enacting the first part of section 36 so that the cases against persons charged with the commission of the specified offences could be speedily tried and disposed of.
We are, therefore, satisfied that the challenge to the vires of the first part of sub section
(1) of section 36 cannot be sustained.
In this connection we may refer to the recent decision of this Court in Ram Krishna Dalmia vs Justice Tendolkar (1).
The judgment in that case has considered the previous decisions of this Court on article 14, has classified and explained them, and has enumerated the principles deducible from them.
The application of the principles there deduced clearly supports the validity of the impugned provisions.
It is, however, urged by Mr. Ram Lal Anand that the decision of this Court in Lachmandas Kewalram Ahuja vs The State of Bombay (2) supports his contention that section 36(1) is invalid.
We are not impressed by this argument.
In Ahuja 's case (2) the objects of the impugned Act were the expediency of consolidating and amending the law relating to the security of the State, maintenance of public order and maintenance of supplies and services essential to the community in the State of Bombay.
These considerations applied equally to both categories of cases, those referred to the Special Judge and those not so referred; and so, on the date when the Constitution came into force, the classification on which section 12 was based became fanciful and without any rational basis at all.
That is why, according to the majority decision section 12 contravened article 14 of the Constitution and as such was ultra vires.
It is difficult to see how this decision can help the appellant 's case.
The impugned provision in the present case makes no distinction between one class of cases and another, much less between cases directed to be tried according to the summons procedure before January 26, 1950, and those not so directed.
The summons procedure is made applicable to all offences under the Act or under any other law for the time being in force; in other words, all criminal offences are ordered to be tried according to the summons procedure in the dangerously disturbed areas.
That being (1) ; (2) ; , 731.
96 so, we do not think that the decision in Ahuja 's case (1) has any application at all.
Thus we feel no difficulty in holding that the impugned provision contained in the first part of section 36(1) is constitutional and valid.
Then it is urged that the Act which came into force on March 29, 1949, was due to expire and did expire on August 14, 1951, and so the proceedings taken against the appellant under the summons procedure after the expiration of the temporary Act were invaid.
It is argued that, in dealing with this point, it would not be permissible to invoke the provisions of section 6 of the General Clauses Act because the said section deals with the effect of repeal of permanent statutes.
This argument no doubt is well founded.
As Craies has observed, " as a general rule, unless it contains some special provisions to the contrary, after a temporary Act has expired no proceedings can be taken upon it and it ceases to have any further effect " (2).
This principle has been accepted by this Court in Krishnan vs The State of Madras (3).
" The general rule in regard to a temporary statute is ", observed Patanjali Sastri J., " that, in the absence of special provision to the contrary, proceedings which are being taken against a person under it will ipso facto terminate as soon as the statute expires".
It is true that the Legislature can and often enough does avoid such an anomalous consequence by enacting in the temporary statute a saving provision, and the effect of such a saving provision is in some respects similar to the effect of the provisions of section 6 of the General Clauses Act.
As an illustration, we may refer to the decision in Wicks vs Director of Public Prosecutions (4).
In that case ail offence against Defence (General) Regulations made under the Emergency Powers (Defence) Act, 1939, was committed during the currency of the Act and the offender was prosecuted and convicted after the expiry of the Act.
The contention raised by the offender that his prosecution and conviction were invalid because, at the relevant time, the temporary (1) ; , 731.
(2) Craies on " Statute Law ", 5th Ed., P. 377.
(3) ; , 628.
(4) [1947] A.C. 362.
97 Act had expired was rejected in view of the provisions of.,;.
11, sub section
3 of the Act.
This sub section had provided that the expiry of the Act shall not affect the operation thereof as respects things previously done or omitted to be done.
The House of Lords agreed with the view expressed by the Court of Criminal Appeal and held that it was clear that Parliament( did not intend sub section 3 to expire with the rest of the Act and that its presence in the statute is a provision which preserved the right to prosecute after the date of its expiry.
Since the impugned Act does not contain an appropriate saving section the appellant would be entitled to contend that, after the expiration of the Act, the procedure laid down in it could no longer be invoked in the cases then pending against the appellant.
We would like to add that, in the present case, we are not called upon to consider whether offences created by a temporary statute cease to be punishable on its expiration.
For the respondent, Mr. Umrigar, however, contends that the appellant is wrong in assuming that the Act in fact expired on August 14, 1951.
He has invited our attention to the provisions of Act No. I of 1951 by which the President extended some of the provisions of the earlier temporary Act in exercise of the powers conferred by section 3 of the Punjab State Legislature (Delegation of Powers) Act, 1951 (46 of 1951), The provisions of that Act extended to the whole of the State of Punjab and came into force on September 13, 1951.
Mr. Umrigar relied on section 16 of Act 46 of 1951 which repealed the East Punjab Public Safety Act, 1949 (Punj.
5 of 1949) and the East Punjab Safety (Amendment) Ordinance, 1951 (5 of 1951) but provided that notwithstanding such repeal any order made, notification or direction issued, appointment made or action taken under the said Act and in force immediately before the commencement of this Act shall, in so far as it is not inconsistent therewith, continue in force and be deemed to have been made, issued or taken under the corresponding provisions of this Act.
It must, however, be pointed out that this 13 98 Act does not continue the material provisions of the impugned Act such ass. 20 and section 36 ; and so section 16 cannot be invoked for the purpose of validating the continuation of the subsequent proceedings against the appellant in the cases then pending against him.
Besides, it is necessary to recall that section 36(1) of the Act prescribed the application of the summons procedure in the trial of specified offences only in dangerously disturbed areas; and so, unless it is shown that the relevant area could be treated as a dangerously disturbed area at the material time, section 36(1) would be inapplicable.
In other words, the adoption of the summons procedure would be justified only so long as the area in question could be validly treated ,as a dangerously disturbed area and it is therefore pertinent to enquire whether at the relevant time the area in question was duly and validly notified to be a dangerously disturbed area.
We have already referred to the four notifications issued by the competent authority.
The second notification purported to cancel with effect from October 1, 1950, the first notification which had declared the whole of the Province of Delhi as a dangerously disturbed area.
A week thereafter, the third notification sought to introduce an exception to the cancellation as notified by the second notification.
Apart from the question as to whether, after the lapse of a week, it was competent to the authority to modify the second notification, it is difficult to understand how it was within the jurisdiction of the notifying authority to say that the whole of the Province of Delhi had ceased to be a dangerously disturbed area " except as respects things done or omitted to be done before the date of this notification ".
Section 20 of the Act under which this notification has been issued authorised the Provincial Government to declare that the whole or any part of the Province was a dangerously disturbed area.
The notification could declare either the whole or a part of the Province as a dangerously disturbed area; but section 20 does not empower the notifying authority to treat any area as being dangerously disturbed in respect of certain things and not dangerously disturbed 99 in regard to others.
Authority to ' declare areas as dangerously disturbed has no doubt been validly delegated to the Provincial Government; but no authority has been conferred on the delegate to treat any area as disturbed for certain things and not disturbed for others.
We have, therefore, no doubt that in introducing the exception to the cancellation effected by the second notification the third notification has gone outside the authority conferred by section 20 and is clearly invalid.
If that be so, it must be held that the whole of the Province of Delhi ceased to be a dangerously disturbed area as from October, 1, 1950.
It was probably realised that the third notification would be invalid and hence the fourth notification was issued on April 7, 1951.
This purports to be a certificate issued by the competent authority under the second part of section 36, sub section (1).
This certificate seeks to achieve the same result by declaring that though the State of Delhi was not a dangerously disturbed area, the offences specified in the notification would nevertheless continue to be tried according to the summons procedure.
This notification is clearly not authorised by the powers conferred by the second part of section 36, sub section
What the Provincial Government is authorised to do by the second part of section 36(1) is to direct that in areas other than those which are dangerously disturbed all offences under the Act and any other offence under any other law should be tried according to the summons procedure.
It is clear that the notification which the Provincial Government is authorised to issue in this behalf must relate to all offences under the Act and any other offence under any other law.
In other words, it is the offences indicated which can be ordered to be tried under the summons procedure by the notification issued by the Provincial Government.
The Provincial Government is not authorised to issue a notification in regard to the trial of any specified case or cases; and since it is clear that the notification in question covers only pending cases and has no reference to offences or class of offences under the Indian Penal Code,, it is outside the 100 authority conferred by the second part of section 36(1).
It is obvious that the third and the fourth notifications attempted to cure the anomaly which it was apprehended would follow in regard to pending cases in the absence of a saving section in the Act.
If through inadvertence or otherwise the Act did not contain an appropriate saving section, the defect could not be cured by the notifications issued either under section 20 or under section 36(1) of the Act.
In issuing the said notifications the competent authority was taking upon itself the functions of the Legislature and that clearly was outside its authority as a delegate either under section 20 or under section 36(1) of the Act.
Mr. Umrigar, then, argues that the competent authority was entitled to modify the notification issued by it because the power to issue a notification must also involve the power either to cancel, vary or modify the same; and in support of this argument Mr. Umrigar relies on the provisions of section 19 of the Punjab General Clauses Act, 1898 (Punj. 1 of 1898) which in substance corresponds to cl. 21 of the (10 of 1897).
In our opinion, this argument is not well founded.
Section 19 of the Punjab , like section 21 of the , embodies a rule of construction, the nature and extent of the application of which must inevitably be governed by the relevant provisions of the statute which confers the power to issue the notification.
The power to cancel the notification can be easily conceded to the competent authority and so also the power to modify or vary it be likewise conceded; but the said power must inevitably be exercised within the limits prescribed by the provision conferring the said power.
Now section 20 empowers the Provincial Government to declare the whole or any part of the Province to be a dangerously disturbed area; and if a notification is issued in respect of the whole or any part of the Province it may be either cancelled wholly or may be modified restricting the declaration to a specified part of the Province.
The power to cancel or modify must be exercised in reference to the areas of the Province which it is competent for the Provincial 101 Government to specify as dangerously disturbed.
The power to modify cannot obviously include the power to treat the same area as dangerously disturbed for persons accused of crimes committed in the past and not disturbed for others accused of the same or similar A, offences committed later.
That clearly is a legislative function which is wholly outside the authority conferred on the delegate by section 20 or section 36(1).
We must, therefore, hold that the third and the fourth notifications are invalid and as a result of the second notification the whole of the Province of Delhi ceased to be a dangerously disturbed area from October 1, 1950.
This position immediately raises the question about the validity of the proceedings continued against the appellant in the three cases pending against him under the summons procedure.
So long as the State of Delhi was validly notified to be a dangerously disturbed area the adoption of the summons procedure was no doubt justified and its validity Could not be impeached; but, with the cancellation of the relevant notification section 36(1) of the Act ceased to apply and it was necessary that as from the stage at which the cases against the appellant then stood the warrant procedure should have been adopted; and since it has not been adopted the trial of the three cases is invalid and so the orders of conviction and sentence imposed against him are void.
That in brief is the alternative contention raised before us by Mr. Ram Lal Anand.
Mr. Umrigar, urges that since the trial had validly commenced under the summons procedure, it was unnecessary to change the procedure after October 1, 1950, and his case is that the trial is not defective in any manner and the challenge to the validity of the impugned orders of conviction and sentence should not be upheld.
In support of his argument Mr.
Umrigar has invited our attention to some decisions which may now be considered.
In Srinivasachari vs The Queen (1) the accused was tried by a Court of Sessions in December 1882 on charges some of which were triable by assessors and others by jury.
Before the trial was concluded the Code of Criminal Procedure, 1882, came into force (1) Mad.
336. 102 and under section 269 of the Code all the said charges became triable by jury.
Section 558 of the Code had provided that the provisions of the new Code had to be applied, as far as may be, to all cases pending in any criminal court on January 1, 1883.
The case against the accused which was pending on the date when the new Act came into force was submitted to the High Court for orders; and the High Court directed that by virtue of section 6 of the the trial must be conducted under the rules of procedure in force at the commencement of the trial.
It is clear that the decision of the High Court was based both on the specific provisions of section 558 which provided for the application of the new Code to pending cases only as far as may be and on the principles laid down in section 6 of the .
That is why that decision cannot assist the respondent since section 6 of the is inapplicable in the present case.
The decision on Mukund vs Ladu (1) is also inapplicable for the same reasons.
It was a case where one act was repealed by another and so the question as to the applicability of the provisions of the latter act had to be considered in the light of the provisions of section 6 of the .
The judgment in terms does not refer to section 6 but the decision is obviously based on the principles of the said section.
Then Mr.Umrigar relied on Gardner vs Lucas (2).
In that case section 39 of the Conveyancing (Scotland) Act, 1874, with which the court was dealing affected not only the procedure but also substantive rights; and so it was held that the said section was not retrospective in operation.
This decision is wholly inapplicable and cannot give us any assistance in the present case.
Mr. Umrigar also placed strong reliance on a decision of the Full Bench of the Punjab High Court in Ram Singh vs The Crown (3).
That decision does lend support to Mr. Umrigar 's contention that the continuation of the trial under the summons procedure did not introduce any infirmity and was in fact appropriate (1) (2) (3) A.I.R. 1950 East Punjab 25. 103 and regular.
The case against Ram Singh had been sent to the Court of Session under the provisions of section 37 (1) of the Punjab Public Safety Act, 1948 (Punj. 2 of 1948) at a time when Luahiana District was declared to be a dangerously disturbed area; before, however, the trial in the Court of Session actually commenced the District ceased to be a ' dangerously disturbed area.
Even so, it was held that the Sessions Judge should continue with the trial under the provisions of section 37 (1) of the Act and not under the ordinary provisions of the Code regarding sessions trial, and should follow the procedure prescribed for the trial of summons cases.
It appears that the judgment in the case proceeded on the assumption that the principles enacted by section 6 of the were applicable, and so, since at the commencement of the proceedings the adoption of the summons procedure was justified under section 37 (1) of the Act, the trial could continue under the same procedure even after the area had ceased to be a dangerously disturbed area.
In our opinion, it is erroneous to apply by analogy the provisions of section 6 of the to cases governed by the provisions of a temporary Act when the said Act does not contain the appropriate saving section.
Failure to recognise the difference between cases to which section 6 of the applies and those which are governed by the provisions of a temporary Act which does not contain the appropriate saving section has introduced an infirmity in the reasoning adopted in the judgment.
Besides, the learned judges, with respect, were in error in holding that the application of the ordinary criminal procedure was inadmissible or impossible after the area ceased to be dangerously disturbed.
No doubt the learned judges recognised the fact that ordinarily the procedural law is retrospective in operation, but they thought that there were some good reasons against applying the ordinary procedural law to the case, and that is what influenced them in coming to the conclusion that the summons procedure had to be continued even after the area ceased to be dangerously disturbed.
In this connection the learned 104 judges referred to the observation in Maxwell that " the general principle, however, seems to be that alterations in procedure are retrospective, unless there be some good reason against it (1) ; and they also relied on the decision of the Privy Council in Delhi Cloth and General Mills Co., Ltd. vs Income tax Commissioner, Delhi (2) in which their Lordships have referred with approval to their earlier statement of the law in the Colonial Sugar Refining Co. vs Irving (3) that " while provisions of a statute dealing merely with matters of procedure may properly, unless that construction be textually inadmissible, have retrospective effect attributed to them".
The learned judges took the view that these principles justified their conclusion that "where the provisions of a statute dealing with matters of procedure are inapplicable to a certain proceeding pending at the time the statute came into force, they must be regarded as textually inadmissible so far as those proceedings are concerned ".
We are disposed to think that this view is not sound.
We do not think that the adoption of the ordinary warrant procedure was either inadmissible or inapplicable at the stage where the trial stood in the case against Ram Singh (4).
It was wrong to assume that the ses sions procedure would be inapplicable for the reason that the provisions of the Code in regard to the commitment of the case to the Court of Session had not been complied with.
With respect, the learned judges failed to consider the fact that the procedure adopted in sending the case to the Court of Session under section 37(1) of the relevant Act was valid and the only question which they had to decide was what procedure should be adopted after Ludhiana ceased to be a dangerously disturbed area.
Besides, it was really not a case of retrospective operation of the procedural law; it was in fact a case where the ordinary procedure which had become inapplicable by the provisions of the temporary statute became applicable as soon as the area in question ceased to be dangerously disturbed.
(1) Maxwell on " Interpretation of Statutes ", 9th Ed.
,P. 226.
(2) (3) (4) A.I.R. (1950) East Punjab 25. 105 In this connection it is relevant to refer to the decision of this Court in Syed Qasim Razvi vs The State of Hyderabad (1).
In that case this Court was dealing with the regulation called the Special Tribunal Regulation (V of 1358 Fasli) which had been promulgated by the Military Governor of the Hyderabad State.
The said regulation had provided that the( Military Governor may, by general or special order, direct that any offence or class of offences should be tried by such tribunal, and the procedure for trial laid down by it differed from the provisions of the Hyderabad Criminal Procedure Code in several material particulars.
The cases against the accused were directed to be tried by the Special Tribunal on October 6, 1949.
The accused were convicted in September 1950 and their conviction on some of the charges was upheld by the High Court in appeal in April, 1951.
The accused then appealed to this Court and also applied under article 32 of the Constitution for quashing the orders of conviction and sentence on the ground that the Special Tribunal Regulation became void on January 26, 1950, as its provisions contravened articles 14 and 21 of the Constitution which came into force on that date, and the continuation of the trial and conviction of the accused after that date was illegal.
It is true that the final decision in the case, according to the majority view, proceeded on the footing that the accused had substantially the benefit of a normal trial though there were deviations in certain particulars and so his conviction could not be set aside merely because the Constitution of India came into force before the termination of the trial.
As we will presently point out, the relevant facts in this case in regard to the deviation from the normal procedure are different from those in Syed Qasim Razvi 's case (1), but that is another matter.
What is important for our purpose is the view expressed by this Court that the regulation issued by the Military Governor of Hyderabad State could not be impeached and so the Special Tribunal must be deemed to have taken cognisance of (1) 14 106 the case quite properly and its proceedings up to the date of the coming in of the Constitution would also have to be regarded as valid.
Dealing with this point, Mukherjea, J., who delivered the judgment of the Court, quoted with approval the observations made in Lachmandas Kewalram Ahuja vs The State of Bombay(1) that ,as the Act was valid in its entirety before the date of the Constitution, that part of the proceedings before the Special Judge, which, up to that date had been regulated by the special procedure cannot be questioned ".
Unfortunately this aspect of the matter was not properly placed before the Full Bench of the Punjab High Court in the case of Ram Singh (2).
If the learned judges had proceeded to deal with the question referred to them on the basis that the initial submission of the case to the Court of Session under section 37(1) of the Act was valid they would not have come to the conclusion that the sessions procedure was inadmissible or inapplicable to the continuation of the case after Ludhiana had ceased to be a dangerously disturbed area.
That is why we think that the view taken by the Full Bench is erroneous.
The position then is that as from October 1, 1950, the three cases against the appellant should have been tried according to the warrant procedure.
It is clear that, at the stage where the trial stood on the material date, the whole of the prosecution evidence had not been led and so there was no difficulty in framing charges against the appellant in the respective cases and thereafter continuing the trial accord ing to the warrant procedure.
Having regard to the nature of the charges framed and the character and volume of evidence led, it is difficult to resist the appellant 's argument that the failure to frame charges has led to prejudice; and it is not at all easy to accept the respondent 's contention that the double opportunity to cross examine the prosecution witnesses which is available to an accused person under the warrant procedure is not a matter of substantive and valuable benefit to him.
The denial of this opportunity must, (1) ; , 731, (2) A.I.R. 1950 East Punjab 25.
107 in the circumstances of the present cases, be held to have caused prejudice to him.
We must accordingly hold that the continuation of the trial of the three cases against the appellant according to the summons procedure subsequent to October 1, 1950, has vitiated the trial and has rendered the final orders of conviction and sentence invalid.
We must accordingly set aside the orders of conviction and sentence passed against the appellant in all the three cases.
That takes us to the question as to the final order which should be passed in the present appeals.
The offences with which the appellant stands charged are of a very serious, nature; and though it is true that he has had to undergo the ordeal of a trial and has suffered rigorous imprisonment for some time that would not justify his prayer that we should not order his retrial.
In our opinion, having regard to the gravity of the offences charged against the appellant, the ends of justice require that we should direct that he should be tried for the said offences de novo according to law.
We also direct that the proceedings to be taken against the appellant hereafter should be commenced without delay and should be disposed of as expeditiously as possible.
Appeal allowed.
Retrial ordered.
[/INST]The appellants, owners of the premises in question obtained a decree of eviction against the tenant, Respondent No. 7.
While the decree was under challenge before the High Court, Respondent Nos. 1 to 5 approached the High Court under article 226 of the Constitution, claiming that, being members of Joint Hindu Family, alongwith the lather of Respondent No. 7, they were tenants in their own right under the appellants and were not bound by the decree, since they were not parties in the eviction case.
The appellants denied the claim of independent right of the respondent Nos. 1 to 5 and alleged that they had been subsequently inducted in the premises as sub tenants by respondent No. 7.
The High Court held that since the claim of the Respond ent Nos. 1 to 5 was not examined and decided in the suit and the decree was passed against Respondent No. 7 only, they could not be evicted from the premises.
Allowing the appeal preferred by the landlord appel lants, this Court, HELD: 1.1 The remedy provided under article 226 is not intended to supersede the modes of obtaining relief before a civil court or to deny defences legitimately open in such actions.
The jurisdiction to issue a writ of certiorari is supervisory in nature and is not meant for correcting errors like appellate Court.
[122 E F] State of Andhra Pradesh vs Chitra Venkata Rao, ; ; Thansingh Nathmal & Ors.
A. Mazid; , and M. Naina Mohammed vs K.A. Natarajan & Ors., [1976] 1 SCR 102, relied on.
120 1.2 The Civil Procedure Code contains elaborate and exhaustive provisions for dealing with executability of a decree in all its aspects.
The numerous rules of order XXI of Civil Procedure Code take care of different situations, providing effective remedies not only to judgment debtors and decree holders but also to claimant objectors as the case may be.
In an exceptional case, where provisions are rendered incapable of giving relief to an aggrieved party in adequate measure and appropriate time, the answer is a regular suit in the civil court.
The remedy under the Code is of superior judicial quality than what is generally available under other statutes, and the judge, being en trusted exclusively with administration of justice, is expected to do better.
It will be, therefore, difficult to find a case where interference in writ jurisdiction for granting relief to a judgment debtor or a claimant objector can be justified.
Rules 97 to 106 of Order XXI envisage questions to be determined on the basis of evidence to be led by the parties and after the 1976 Amendment, the deci sion has been made appealable like a decree.
[123C E] 1.3 In the instant case, it was necessary to adjudicate upon the dispute between the parties and record a finding on the character of possession of Respondent Nos. 1 to 7 before proceeding to consider whether the decree is executable or not against them and having not done so, the High Court has seriously erred in law in allowing the writ petition filed by them.
The decision on the disputed issue was dependent on the consideration of the evidence to be led by the parties, and while exercising the writ jurisdiction, the High Court was not expected to go into that question and ought not to have embarked upon a decision on merits, and should have refused to exercise the special jurisdiction on the ground of alternative remedy before the civil court.
[122 B D]
</s>
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<s>[INST] Summarize the judgementiminal Appeal No. 213 of 1960.
Appeal by special leave from the judgment and order dated March 24, 1960, of the Punjab High Court (Circuit Bench)Delhi in Criminal Appeal Case No. 41 D of 1958.
H. L. Anand, and K. Baldev Mehta, for the appellant.
V. D. Mahajan and P. D. Menon, for the respondent.
November 29.
The Judgment of the Court was delivered by 587 SUBBA RAO J.
This appeal by Special leave raises the question as to the true meaning of the expression "fraudulently ' in section 464 of the Indian Penal Code.
The facts either admitted or found by the courts below may be briefly stated.
The appellant is the wife of Siri Chand Kaviraj.
On january 20, 1953, she purchased an Austin 10 Horse Power Car with the registration No. DLA.
4796 from Dewan Ram Swarup in the name of her minor daughter Nalini aged about six months at that time.
The price for the car was paid by Dr. Vimla.
The transfer of the car was notified in the name of Nalini to the Motor Registration Authority.
The car at that time was insured against a policy issued by the Bharat Fire & General Insurance Co., Ltd., and the policy was due to expire sometime in April, 1953.
On a request made by Dewan Ram Swarup, the said policy was transferred in the name of Nalini.
In that connection, Dr. Vimla visited the Insurance Company 's Office and signed the proposal form as Nalini.
Subsequently, she also filed two claims on the ground that the car met with accidents.
In connection with these claims, she signed the claim forms as Nalini and also the receipts acknowledging the payments of the compensation money as Nalini.
On a complaint made by the company alleging fraud on the part of Dr. Vimla and her husband, the police made investigation and prosecuted Dr. Vimla and her husband Siri Chand Kaviraj in the Court of Magistrate 1st Class Delhi.
The 'Magistrate committed Dr. Vimla and her husband to Sessions to take their trial under sections 120 B, 419, 467 and 468 of the Indian Penal Code.
The learned Sessions judge held that no case had been made out against the accused under any one of those sections and on that finding, acquitted both of them.
The State preferred an appeal to the High Court of Punjab and the appeal was disposed of by a Division Bench of that court comprising Falshaw 588 and Chopra,JJ.
The learned judges confirmed the acquittal of Siri Chand; but in regard to Dr.
Vimla, they confirmed her acquittal under section 419 of the Indian Penal Code, but set aside her acquittal under sections 467 and 468 of the Code and instead, convicted her under the said sections and sentenced her to imprisonment till the rising of the court and to the payment of a fine of Rs. 100/ or in default to under , go simple imprisonment for two weeks.
Dr. Vimla has preferred the present appeal by special leave against her conviction and sentence.
The facts found may be briefly summarised thus : Dr. Vimla purchased a motor car with her own money in the name of her minor daughter, had the insurance policy transferred in the name of her minor daughter by signing her name and she also received compensation for the claims made by her in regard to the two accidents to the car.
The claims were true claims and she received the moneys by signing in ,he claim forms and also in the receipts as Nalini.
That is to say, Dr. Vim] a in fact and in substance put through her transactions in connection with the said motor car in the name of her minor daughter.
Nalini was in fact either a benamidar for Dr. Vimla or her name was used for luck or other sentimental considerations.
On the facts found, neither Dr. Vimla got any advantage either pecuniary or otherwise by signing the name of Nalini in any of the said documents nor the Insurance Company incurred any loss, pecuniary or otherwise, by dealing with Dr. Vimla in the name of Nalini.
The Insurance Company would not have acted differently even if the, car stood in the name of Dr. Vimla and she made the claims and received the amounts from the insurance company in her name.
On the said facts, the question that arises in this case is whether Dr. vimla was guilty of offences under sections 463 and 464 of the Indian Penal Code.
589 Learned Counsel for the appellant contends that on the facts found, the appellant would not be guilty of forgery as she did not "fraudulently" sign the requisite forms and the receipts in the name of Nalini, as.
by so signing, she did not intend to cause injury to the insurance company.
In other words, the contention was that a person does not act fraudulently within the meaning of section 464 unless he is not only guilty of deceit but also he intends to cause injury to the person or persons deceived, and as in the present case the appellant had never had the intention to cause injury to the insurance company and as on the facts found no injury had been caused at all to the company, the appellant could not be found guilty under the said sections.
Before we consider the decisions cited at the Bar it would be convenient to look at the relevant provisions of the Indian Penal Code.
Section 463 : Whoever makes any false document or part of a document with intent to cause damage or injury, to the public or to any person, or to support any claim or title, or to cause any person to part with property or to enter into any express or implied contract, or with intent to commit fraud or that fraud may be committed, commits forgery.
Section 464 : A person is said to make a false document First Which dishonestly or fraudulently makes, signs, seals or executes a document or part of a document, or makes any mark denoting the execution of a document, with the intention of causing it to be believed that such document/or part of a document was made, signed, sealed or executed by or by the authority of a person by whom or by whose authority he knows that it was not made, signed, sealed or executed, or at a time 590 at which he knows that it was not made, signed, scaled or executed; or The definition of "false document" is a part of the definition of "forgery".
Both must be read together.
If so read, the ingredients of the offence of forgery relevant to the present enquiry are as follows , (1) fraudulently signing a document or a part of a document with an intention of causing it to be believed that such document or part of a document was signed by another or under his authority ; (2) making of such a document with an intention to commit fraud or that fraud may be committed.
In the two definitions, both mens rea described in s.464 i. e., "fradulently" and the intention to commit fraud in section 463 have the same meaning.
This redundancy has perhaps become necessary as the element of fraud is not the ingredient of other in tentions mentioned in section 463.
The idea of deceit is a necessary ingredient of fraud, but it does not exhaust it; an additional element is implicit in the expression.
The scope of that something more is the subject of may decisions.
We shall consider that question at a later stage in the light of the decisions bearing on the subject.
The second thing to be noticed is that in section 464 two adverbs, "dishonestly" and "fraudulently" are used alternatively indicating thereby that one excludes the other.
That means they are not tautological and must be given different meanings.
Section 24 of the Penal Code defines "dishonestly" thus : "Whoever does anything with the intention of causing wrongful gain to one person or wrongful loss to another person, is said to do that thing dishonestly".
"Fraudulently" is defined in section 25 thus: " A perosn is said to do a thing fraudulently if he does that thing with intent to 591 defrand but not otherwise".
The word "defraud" includes an element of deceit.
Deceit is not an ingredient of the definition of the word "dishonestly" while it is an important ingredient of the definition of the word "fraudulently".
The former involves a pecuniary or economic gain or loss while the latter by construction excludes that element.
Further) the juxtaposition of the two expressions " 'dishonestly" and "fraudulently" used in the various sections of the Code indicates their close affinity and therefore the definition of one may give colour to the other.
To illustrate, in the definition of "dishonestly", wrongful gain or wrongful loss is the necessary enough.
So too, if the expresssion "fraudulently ' were to be held to involve the element of injury to the person or persons deceived, it would be reasonable to assume that the injury should be something other than pecuniary or economic loss.
Though almost always an advantage to one causes loss to another and vice versa, it need not necessarily be so.
Should we hold that the concept of fraud" would include not only deceit but also some injury to the person deceived, it would be appropriate to hold by analogy drawn from the definition of "dishonestly" that to satisfy the definition of " 'fraudulently" it would be enough if there was a non economic advantage to the deceiver or a non economic loss to the deceived.
Both need not co exist.
Let us now consider some of the leading text book writers and, decisions to ascertain the meaning of the word "fraudulently".
The classic definition of the word "fraudulently" is found in Steplien 's History of the Criminal law of England, Vol. 2, at p. 121 and it reads "I shall not attempt to construct a definition which will meet every case which might 592 be suggested, but there is little danger in saving that whenever the words "fraud" or intent to defraud" or "fraudulently" occur in the definition of a crime two elements at least are essential to the commission of the crime : namely, first, deceit or an intention to deceive or in some cases mere secrecy ; and secondly, either actual injury or possible injury or to a risk of possible 'injury by means of that deceit or secrecy. . .
This intent is very seldom the only, or the principal, intention entertained by the fraudulent person, whose principal object in nearly every case is his own advantage. . . .
A practically conclusive test of the fraudulent character of a deception for criminal purposes is this : Did the author of the deceit derive any advantage from it which could not have been had if the truth had been known ? If so it is hardly possible that the advantage should not have had an equivalent in loss or risk of loss to someone else, and if so, there was fraud.
" It would be seen from this passage that " 'fraud" is made up of two ingredients, deceit and injury.
The learned author also realizes that the principal object of every fraudulent person in nearly every case is to derive some advantage though such advantage has a corresponding loss or risk of loss to another.
Though the author has not visualized the extremely rare situation of an advantage secured by one without a corresponding loss to another, this idea is persued in later decisions.
As regards the nature of this injury, in Kenny 's Outline of Criminal Law, 15th Edn., at p. 333, it is stated that pecuniary detriment is unnecessary.
In Haycraft vs Creasy (1) LeBlanc, observed (1) ; 593 "by fraud is meant an intention to deceive; whether it be from any expectation of advantage to the party himself or from the ill will towards the other is immaterial.
" This passage for the first time brings out the distinction between an advantage derived by the person who deceives in contrast to the loss incurred by the person deceived.
Buckley.
J., in Re London & Clobe Finance Corporation Ltd. (1) brings out the ingredients of fraud thus : "To deceive is, I apprehend, to induce a man to believe that a thing is true which is false, and which the person practising the deceit knows or believes to be false.
defraud is to deprive by deceit: it is by deceit to induce a man to act to his injury ' More tersely it may be put, that to deceive is by falsehood to induce a state of mind; to defraud is by deceit to induce a course of action." The English decisions have been elaborately considered by the Court of Criminal Appeal in R. vs Welhant (2).
In that case, hire purchase finance companies advanced money on a hire purchase form and agreement and on credit sale agreements witnessed by the accused.
The form and agreements were forgeries The accused was charged with offences of Uttering forged documents with intent to defraud.
It was not proved that he had intended to cause any loss of once to the finance companies.
His intention had been by deceit to induce any person who was charged with the duty of seeing that the credit restrictions then current were observed to act in a way in which lie would not act if he had known the true facts, namely, not to prevent the advancing of large sums of money exceeding the limits allowed by law It, the time.
The Court held that the said intention amounted to intend to defraud.
(1) (1903) 1 ch. 732.
(2) , 264, 266.
594 Hilbery, J., speaking for the court, pointed out the distinction between deceit and defraud and came to the conclusion that ,to defraud" is to deprive by deceit." Adverting to the argument that the deprivation must be something of value, i. e. economic loss, the learned judge observed "We have, however, come to the conclusion that this is too narrow at view.
While, no doubt, in most cases of an intention to defraud the intention is to cause an economic loss ' there is no reason to introduce any such limitation.
Provided that the intention is to cause the person deceived to act to his real detriment, it matters not that lie suffers no economic loss.
It is sufficient if the intention is to deprive him of a right or to induce him to do something contrary to what it would have been his duty to do, had lie not been deceived.
" On the basis of the said principle it was held that the accused by deceit induced the finance companies to advance moneys contrary to the credit restrictions and that he was guilty of the offence of forgery.
This decision is therefore a clear authority for the position that the loss or, the injury caused to the person deceived need not be economic loss.
Even a deprivation of a right without any economic consequences would be enough.
This decision has not expressed any definite opinion on the question whether a benefit to the accused without a corresponding loss to the person deceived would amount to fraud.
But it has incidentally touched upon that aspect.
The learned judge again observed. ". . . . . .
This the appellant was doing in order that he might benefit by getting further loans.
" This may indicate that a benefit derived by the 595 person deceiving another may amount to an act to defraud that other.
A full Bench of the Madras High Court , in Kotamraju Venkatrayadu vs Emperor (1) had to consider the case of a person obtaining admission to the matriculation examination of the Madras University as a private candidate producing to the Registrar a certificate purporting to have been signed by the headmaster of it recognized High School that he was of good character land had attained his 20th year.
It was found in that case that the candidate had fabricated the signature of the headmaster.
The court held that the accused was guilty of forgery.
White, C.J., observed : "Intending to defraud means, of course, something more than deceiving." He illustrated this by the following example: "A tells B a lie and B believes him.
B is deceived but it does not follow that A intended to defraud B.
But, as it seems to me, if A tells B a lie intending that B should do something which A conceives to be to his own benefit or advantage, 'and which, if done, would be to the loss or detriment of B, A intends to defraud B." The learned Chief justice indicated his line of thought, which has some bearing on the question now raised, by the following observations : "I may observe, however, in this connection that by section 24 of the Code a person does a thing dishonestly who ' does it with the intention of causing wrongful gain or wrongful loss.
It is not necessary that there should be an intention to cause both.
On the analogy of this definition, it might be said that either an intention (1) Mad.
99,96,97.
596 to secure a benefit or advantage on the one hand, or to cause loss or detriment on the other, by means of deceit, is an intent to defraud.
" But, he found in that case that both the elements were present.
Benson,J., pointed out at p. 114 : "I am of opinion that the act was fraudulent not merely by reason of the advantage which the accused intended to secure for himself ' by means of his ' deceit, but also by reason of the injury which must necessarily result to the University and, through it to the public from such acts if unrepressed.
The University is injured, if through the evasion of its byelaws, it is induced to declare that certain persons have fulfilled the conditions prescribed for Matriculation and are entitled to the benefits of Matriculation, when in fact, they have not fulfilled those conditions, for the value of its examinations is, depreciated in the eyes of the public if it is found that the certificate of the University that they have passed its examinations is no longer a guarantee that they have in truth fulfilled the conditions on which alone the University professes to certify them as passed, and to admit them to the benefis of Matriculation.
" Boddam, J., agreed with the learned Chief justice and Benson, J.
This decision accepts the principle laid down by Stephen, namely, that the intention to defraud is made up of two elements, first an intention to deceive and second, the intention to expose some person either to actual injury or risk of possible injury but the learned judges were also inclined to hold on the analogy of the definition of "dishonestly" in section 24 of the Code that intention to secure a or advantage to the deceiver satisfies the second con dition 597 The Calcutta High Court dealt with this question in Surendra Nath Ghose vs Emperor (1) There, the accused affixed his signature to a kabuliat which was not required by law to be attested by witnesses, after its execution and registration, below the names of the attestings witnesses but without putting a date or alleging actual presence at the time of its execution.
The court held that such an act was not fraud within the first clause of section 464.
of the Penal Code inasmuch as it was not done dishonestly or fraudulently within the meaning of sections 24 and 25 thereof.
Mookerjee, J., defined the words "intention to defraud" thus: "The expression, "intent to defraud" implies conduct coupled with intention to deceive and thereby to injury in other words, "defraud" involves two conceptions, namely, deceit and injury to the person deceived, that is, infringement of some legal right possessed by him, but not necessarily deprivation of property.
" This view is in accord with the English decisions and that expressed by the Full Bench of the Madras High Court.
This decision does not throw any light on the other question whether advantage to the deceiver without a corresponding loss to the deceived would satisfy the second ingredient of the expression "intent to defraud".
A division Bench of the Bombay High Court in Sanjiv Ratnappa vs Emperor (2) had also occasion to consider the scope of the expression "fraudulently" in section 464 of the Penal Code.
The court held that for an act to be fraudulent there must be some advantage on the one side with a corresponding loss on the other.
Adverting to the argument that an advantage secured by the deceiver would constitute fraud Broomfield, J., observed thus "I think in view of the Bombay decisions to which I have referred we must hold that that (1) Cal. 75, 89 90.
(2) A.I.R. 1932 Bom.
545, 550.
598 is an essential ingredient in the definition of forgery.
In the great majority of cases, the point is not very material. . .
But there many occasionally be a case in which the element of loss or injury is absent and I think the present is such a case.
" This decision therefore does not accept the view of White C. J., of the Madras High Court.
A Division Bench of the Lahore High Court,, in Emperor vs Abdul had also expressed its view on the meaning of the word "fraudulently." The learned Judges accepted Stephen 's definition but proceeded to observe as follows "It may be noted in this connection that the word " 'injury" as defined in section 44, Penal Code, is very wide as denoting "any harm whatever, illegally caused to any person, in body, mind, reputation or property." The learned judges were willing to assume that in almost every case an advantage to one would result in an injury to the other in the widest sense indicated by section 44 of the Penal Code.
The other decided case cited at the Bar accept the necessity for the combination of a deceit by one and injury to other constitute an act to defraud and therefore, it is not necessary to multiply citations.
No other decision cited at the Bar throws any light on the further question, namely, whether an advantage secured to the deceiver without a corresponding loss to the deceived would satisfy the second condition laid down by the decisions.
To summarize : the expression " 'defraud" inoslves two elements, namely, deceit and injury to the person deceived.
injury is something other than (1) A.I.R. 1944 Lah.
380,382.
599 economic loss that is ', deprivation of property, whether movable or immovable, or of money, and it will include any harm whatever caused to any person in body, mind, reputation or such others.
In short, it is a non economic or non pecuniary loss.
A benefit or advantage to the deceiver will almost always cause loss or detriment to the deceived.
Even in those rare cases where there is a benefit or advantage to the deceiver, but no corresponding loss to the deceived, the second condition is satisfied.
Now let us apply the said principles to the facts of the present case.
Certainly, Dr. Vimla was guilty of deceit, for though her name was Vimla, she signed in all the relevant papers as Nalini and made the insurance company believe that her name was Nalini, but the said , deceit did not either secure to her advantage or cause any non economic loss or injury to the insurance company.
The charge does not disclose any such advantage or injury, nor is there any evidence to prove the same.
The fact that Dr. Vimla said that the owner of the car who sold it to her suggested that the taking of the sale of the car in the name of Nalini would be useful for income tax purposes is not of any relevance in the present case, for one reason, the said owner did not say so in his evidence and for the other, it was not indicated in the charge or in the evidence.
In the charge framed, she was alleged to have defrauded the insurance company and the only evidence given was that if it was disclosed that Nalini was a minor, the insurance company might not have paid the money.
But as we have pointed out earlier, the entire transaction was that of Dr. Vimla and it was only put through in the name of her made minor daughter for reasons best known to herself.
On the evidence as disclosed, neither was she benefited nor the insurance company incurred loss in any sense of the term.
In the result, we allow the appeal and hold that the appellant was not guilty of the offence under 600 sections 467 and 468 of the Indian Penal Code.
The conviction and sentence passed on her are set aside.
Fine, if paid, is directed to be refunded to the appellant, Appeal allowed.
[/INST]The appellant was convicted under s.5(1)(d)of the Prevention of Corruption Act, 1947, on the ground that by abusing his position as a public servant he obtained an assignment of Government land in the name of his brother in law without revealing the relationship and by undervaluing the trees standing on the land.
The High Court on appeal directed that a statement showing the value of the timber calculated on the basis contended by the appellant may be submitted by either of the parties.
The appellant did not file any statement but a statement was filed on behalf of the prosecution.
The High Court without giving an opportunity to the appellant to file objections to the correctness of the report and the reliability of the statement filed by the prosecution relied upon the statement to come to the conclusion that there had been an under valuation by the appellant.
It was contended that section 5(1) (d) did not apply to the case and that before the High Court there had been a failure of natural justice.
Held, that a penal statute must be construed strictly and only such thing,; are offences as come within not merely the letter but also the spirit of the statute.
Dyke, vs Elliot, , referred to.
Held, further, that considering the object and scope of the Prevention of Corruption Act, 1947, the expression otherwise ' in section 5(1) (d) is employed to bring in every abuse of official position by a public servant.
But the juxtaposition of the word otherwise with the words 'corrupt ' or 'illegal means ' and the fact that dishonesty is implicit in the word 'abuse ' indicate the necessity for a dishonest intention as an ingredient of the offence and innocuous acts will not be covered by the said clause.
725 Held, further, that the spirit of the Act which.
is in accord with the words used therein is to take in every form of corruption, and the facts in the instant case if established constitute an offence under.
vs 5(1)(d).
Ram Krishna vs State Of Delhi, ; and Dhaneshwar Narain Saxena vs Delhi Administration, ; , referred to.
Held, also that before the High Court, there had been violation of the principles of natural justice and that the matter had to go back to the High Court for the appellant being given an opportunity to meet the material put in by the prosecution before the High Court.
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<s>[INST] Summarize the judgement: Criminal Appeal No. 68 of 1977.
Appeal by Special Leave from the Judgment and order dated 15th November, 1976 of the Gujarat High Court in Criminal Appeal No. 832 of 1976.
R.H. Dhebar and B. V. Desai for the Appellant.
R.N. Poddar for the Respondent.
The Judgment of the Court was delivered by 284 THAKKAR, J.
To say at the beginning what we cannot help saying at the end: human goodness has limits human depravity has none.
The need of the hour however, is not exasperation.
The need of the hour is to mould and evolve the law so as to make it more sensitive and responsive to the demands of the time in order to resolve the basic problem: "Whether, when, and to what extent corroboration to the testimony of a victim of rape is essential to establish the charge.
" And the problem has special significance for the women in India, for, while they have often been idolized, adored, and even worshipped, for ages they have also been exploited and denied even handed justice Sixty crores anxious eyes of Indian a women are therefore focussed on this problem.
And to that problem we will presently address ourselves.
The learned Sessions Judge Mehsana found the appellant, a Government servant employed in the Sachivalaya at Gandhinagar, guilty of serious charges of sexual misbenaviour with two young girls (aged about 10 or 12) and convicted the appellant for the offence of rape, outraging the modesty of women, and wrongful confinement.
The appeal carried to the High Court substantially failed.
The High Court affirmed the order of conviction under Sec.
342 of the Indian Penal Code for wrongfully confining the girls.
The High Court also sustained the order of conviction under Sec. 354 of the Indian Penal Code for outraging the modesty of the two girls.
With regard to the more serious charge of rape on one of the girls, the High Court came to the conclusion that what was established by evidence was an offence of attempt to commit rape and not of rape.
Accordingly the conviction under Sec. 376 was altered into one under Sec.
376 read with Sec.
511 of the Indian Penal Code.
The appellant has preferred the present appeal with special leave.
The incident occurred on Sunday, September 7, 1975, at about 5.30 p.m. at the house of the appellant.
The evidence of P.W. 1 and P.W. 2 shows that they went to the house of the appellant in order to meet his daughter (belonging to their own age group of 10 or 12) who happened to be their friend.
The appellant induced them to enter his house by creating an impression that she was at home, though, in fact she was not.
Once they were inside, the appellant closed the door, undressed himself in the presence of both the girls, and exposed himself.
He asked P.W. 2 to indulge in an indecent act.
P.W. 2 started crying and fled from there.
P.W. 1 285 however could not escape.
She was pushed into a cot, and was made to undress.
The appellant sexually assaulted her.
P.W. 1 was in distress and was weeping as she went out.
She however could not apprise her parents about what had transpired because both of them were out of Gandhinagar (they returned after 4 or 5 days).
It appears that the parents of P.W. 1 as well as parents of P.W. 2 wanted to hush up the matter.
Some unexpected developments however forced the issue.
The residents of the locality somehow came to know about the incident.
And an alert Woman Social Worker, P.W. 5 Kundanben, President of the Mahila Mandal in Sector 17, Gandhinagar, took up the cause.
She felt indignant at the way in which the appellant had misbehaved with two girls of the age of his own daughter, who also happened to be friends of his daughter, taking advantage of their helplessness, when no one else was present.
Having ascertained from P.W. 1 and P.W. 2 as to what had transpired, she felt that the appellant should atone for his infamous conduct.
She therefore called on the appellant at his house.
It appears that about 500 women of the locality had also gathered near the house of the appellant.
Kundanben requested the appellant to apologize publicly in the presence of the woman who had assembled there.
If the appellant had acceded to .
this request possibly the matter might have rested there and might not have come to the court.
The appellant, however, made it a prestige issue and refused to apologize.
Thereupon the police was contacted and a complaint was lodged by P.W. 1 on 19 Sept. 1975.
P.W. 1 was then sent to the Medical officer for medical examination.
The medical examination disclosed that there was evidence to show that an attempt to commit rape on her had been made a few days back.
The Sessions Court as well as the High Court have accepted the evidence and concluded that the appellant was guilty of sexual misbehavior with P.W. 1 and P.W. 2 in the manner alleged by the prosecution and established by the evidence of P.W. 1 and P.W. 2.
Their evidence has been considered to be worthy of acceptance lt is a pure.
finding of fact recorded by the Sessions Court and affirmed by the High Court.
Such a concurrent finding of fact cannot be reopened in an appeal by special leave unless it is established: (1) that the finding is based on no evidence or (2) that the finding is perverse, it being such as no reasonable person could have arrived at even if the evidence was taken at its face value or (3) the finding is based and built on inadmissible evidence, which evidence, if excluded from vision, would negate the prosecution case or substantially discredit 286 or impair it or (43 some vital piece of evidence which would tilt the balance in favour of the convict has been overlooked, disregarded, or wrongly discarded.
The present is not a case of such a nature.
The finding of guilt recorded by the Sessions Court as affirmed by the High Court has been challenged mainly on the basis of minor discrepancies in the evidence.
We do not consider it appropriate or permissible to enter upon a reappraisal or reappreciation of the evidence in the context of the minor discrepancies painstakingly highlighted by learned counsel for the appellant.
Over much importance cannot be attached to minor discrepancies.
The reasons are obvious: (1) By and large a witness cannot be expected to possess a photographic memory and to recall the details of an incident.
It is not as if a video tape is replayed on the mental screen.
(2) ordinarily it so happens that a witness is overtaken by events.
The witness could not have anticipated the occurrence which so often has an element of surprise.
The mental faculties therefore cannot be expected to be attuned to absorb the details.
(3) The powers of observation differ from person to person.
What one may notice, another may not.
An object or movement might emboss its image on one person 's mind whereas it might go unnoticed on the part of another.
(4) By and large people cannot accurately recall a conversation and reproduce the very words used by them or heard by them.
They can only recall the main purport of the conversation.
It is unrealistic to expect a witness to be a human tape recorder.
(5) In regard to exact time of an incident, or the time duration of an occurrence, usually, people make their estimates by guess work on the spur of the moment 1.1 at the time of interrogation.
And one cannot expect people to make very precise or reliable estimates in such matters.
Again, it depends on the time sense of individuals which varies from person to person.
287 (6) Ordinarily a witness cannot be expected to recall accurately the sequence of events which take place in rapid succession or in a short time span.
A witness is liable to get confused, or mixed up when interrogated later on.
(7) A witness, though wholly truthful, is liable to be overawed by the court atmosphere and the piercing cross examination made by counsel and out of nervousness mix up facts, get confused regarding sequence of events, or fill up details from imagination on the spur of the moment.
The sub conscious mind of the witness sometimes so operates on account of the fear of looking foolish or being disbelieved though the witness is giving a truthful and honest account of the occurrence witnessed by him Perhaps it is a sort of a psychological defence mechanism activated on the spur of the moment.
Discrepancies which do not go to the root of the matter and shake the basic version of the witnesses therefore cannot be annexed with undue importance.
More so when the all important "probabilities factor" echoes in favour of the version narrated by the witnesses.
It is now time to tackle the pivotal issue as regards the need for insisting on corroboration to the testimony of the prosecutrix in sex offences.
This Court, in Rameshwar vs The State of Rajasthan,(1) has declared that corroboration is not the sine que non for a conviction in a rape case.
The utterance of the Court in Rameshwar may be replayed, across the time gap of three decades which have whistled past, in the inimitable voice of Vivian Bose, J. who spoke for the Court The rule, which according to the cases has hardened into one of law, is not that corroboration is essential before there can be a conviction but that the necessity of corroboration, as a matter of prudence, except where the circumstances make it safe to dispense with it, must be present to the mind of the judge . . 288 The only rule of law is that this rule of prudence must be present to the mind of the Judge or the jury as the case may be and be understood and appreciated by him or them.
There is no rule of practice that there must, in every case, be corroboration before a conviction can be allowed to stand.
" And whilst the sands were running out in the time glass, the crime graph of offences against women in India has been scaling new peaks from day to day.
That is why an elaborate rescanning of the jurisprudential sky through the lenses of 'logos ' and 'ethos ', has been necessitated.
In the Indian setting, refusal to act on the testimony of a victim of sexual assault in the absence of corroboration as a rule, is adding insult to injury.
Why should the evidence of the girl or the woman who complains of rape or sexual molestation be viewed with the aid of spectacles fitted with lenses tinged with doubt, disbelief or suspicion ? To do so is to justify the charge of male chauvinism in a male dominated society.
We must analyze the argument in support of the need for corroboration and subject it to relentless and remorseless cross examination.
And we must do so with a logical, and not an opiniated, eye in the light of probabilities with our feet firmly planted on the soil of India and with our eyes focussed on the Indian horizon.
We must not be swept off the feet by the approach made in the Western World which has its own social mileu, its own social mores, its own permissive values, and its own code of life.
Corroboration may be considered essential to establish a sexual offence in the backdrop of the social ecology of the Western World.
It is wholly unnecessary to import the said concept on a turn key basis and to transplate it on the Indian soil regardless of the altogether different atmosphere, attitudes, mores, responses of the Indian Society and its profile.
The identities of the two worlds are different.
The solution of problems cannot therefore be identical.
It is conceivable in the Western Society that a female may level false accusation as regards sexual molestation against a male for several reasons such as: (1) The female may be a 'gold digger ' and may well have an economic motive to extract money by holding out the gun of prosecution or public exposure.
289 (2) She may be suffering from psychological neurosis and may seek an escape from the neurotic prison by phantasizing or imagining a situation where she is desired, wanted, and chased by males.
(3) She may want to wreak vengence on the male for real or imaginary wrongs.
She may have a grudge against a particular male, or males in general, and may have the design to square the account.
(4) She may have been induced to do so in consideration of economic rewards, by a person interested in placing the accused in a compromising or embarassing position, on account of personal or political vendatta.
(5) She may do so to gain notoriety or publicity or to appease her own ego or to satisfy her feeling of self importance in the context of her inferiority complex.
(6) She may do so on account of jealousy.
(7) She may do so to win sympathy of others.
(8) She may do so upon being repulsed.
By and large these factors are not relevant to India, and the Indian conditions.
Without the fear of making too wide a statements or of overstating the case, it can be said that rarely will a girl or a woman in India make false allegations of sexual assault on account of any such factor as has been just enlisted.
The statement is generally true in the context of the urban as also rural Society.
It is also by and large true in the context of the sophisticated, not so sophisticated, and unsophisticated society.
Only very rarely can one conceivably come across an exception or two and that too possibly from amongst the urban elites.
Because: (1) A girl or a woman in the tradition bound non permissive Society of India would be extremely reluctant even to admit that any incident which is likely to reflect on her chastity had ever occurred.
(2) She would be conscious of the danger of being ostracised by the Society or being looked down by the Society including by her own family members, relatives, friends and neighbours.
(3) She would have to brave the 290 whole world.
(4) She would face the risk of losing the love and respect of her own husband and near relatives, and of her matrimonial home and happiness being shattered.
(S) If she is unmarried, she would apprehend that it would be difficult to secure an alliance with a suitable match from a respectable or an acceptable family.
(6) It would almost inevitably and almost invariably result in mental torture and suffering to herself.
(7) The fear of being taunted by others will always haunt her.
(8) She would feel extremely embarrassed in relating the incident to others being over powered by a feeling of shame on account of the upbringing in a tradition bound society where by and large sex is taboo.
(9) The natural inclination would be to avoid giving publicity to the incident lest the family name and family honour is brought into controversy.
(10) The parents of an unmarried girl as also the husband and members of the husband 's family of a married woman would also more often than not, want to avoid publicity on account of the fear of social stigma on the family name and family honour.
(11) The fear of the victim herself being considered to be promiscuous or in some way responsible for the incident regardless of her innocence.
(12) The reluctance to face interrogation by the investigating agency, to face the court, to face the cross examination by Counsel for the culprit, and the risk of being disbelieved, acts as a deterrent.
In view of these factors the victims and their relatives are not too keen to bring the culprit to books.
And when in the face of these factors the crime is brought to light there is a built in assurance that the charge is genuine rather than fabricated.
On principle the evidence of a victim of sexual assault stands on par with evidence of an injured witness.
Just as a witness who has sustained an injury (which is not shown or believed to be self inflicted) is the best witness in the sense that he is least likely to exculpate the real offender, the evidence of a victim of a sex offence is entitled to great weight, absence of corroboration notwithstanding.
And while corroboration in the form of eye witness account of an independent witness may often be forthcoming in physical assault cases, such evidence cannot be expected in sex offences, having regard to the very nature of the offence.
It would therefore be adding insult to injury to insist on corroboration drawing inspiration from the rules devised by the courts in the Western World.
Obseisance to which has perhaps become a habit presumably on account of the colonial hangover.
We are therefore of the opinion that if the evidence of the victim does not suffer from any basic infirmity, and the probabilities factors does not render it unworthy of credence, as a general 291 rule, there is no reason to insist on corroboration except from the medical evidence, where, having regard to the circumstances of the case, medical evidence can be expected to be forthcoming, subject to the following qualification: Corroboration may be insisted upon when a woman having attained majority is found in a compromising position and there is a likelihood of her having levelled such an accusation on account of the instinct of self preservation.
Or when the 'probabilities factor ' is found to be out of tune.
Now we return to the facts of the present case.
Testing the evidence from this perspective, the evidence of P.W. 1 and P.W. 2 inspires confidence.
The only motive suggested by defence was that there was some history of past trade union rivalry between the father of P.W. 2 and the appellant.
It must be realized that having regard to the prevailing mores of the Indian Society, it is inconceivable that a girl of 10 or 12 would invent on her own a false story of sexual molestation.
Even at the age of 10 or 12 a girl in India can be trusted to be aware of the fact that the reputation of the entire family would be jeopardised, upon such a story being spread.
She can be trusted to know that in the Indian Society her own future chances of getting married and settling down in a respectable or acceptable family would be greatly marred if any such story calling into question her chastity were to gain circulation in the Society.
It is also unthinkable that the parents would tutor their minor daughter to invent such a story in order to wreak vengence on someone.
They would not do so for the simple reason that it would bring down their own social status in the Society apart from ruining the future prospects of their own child.
They would also be expected to be conscious of The traumatic effect on the psychology of the child and the disastrous consequences likely to ensue when she grows up.
She herself would prefer to suffer the injury and the harassment, rather than to undergo the harrowing experience of lodging a complaint in regard to a charge reflecting on her own chastity.
We therefore refuse to countenance the suggestion made by the defence that the appellant has been falsely roped in at the instance of the father of P.W. 2 who was supposed to have some enmity against the appellant.
It is unthinkable that the parents of P.W. 2 would tutor her to invent a story of sexual misbehavior on the part of the appellant merely in order to implicate him on account of past trade union rivalry.
The parents would have also realized the danger of traumatic effect on the psychology of their daughter.
In fact it would have been considered to be extremely distasteful to 292 broach the subject.
It is unthinkable that the parents would go to the length of inventing a story of sexual assault on their own daughter and tutor her to narrate such a version which would bring down their own social status and spoil their reputation in Society.
Ordinarily no parents would do so in Indian society as at present.
Under the circumstances the defence version that the father of P.W. 2 had tutored her to concoct a false version in order to falsely implicate the appellant must be unceremoniously thrown overboard.
Besides, why should the parents of P.W. 1 mar the future prospects of their own daughter ? It is not alleged that P.W. 1 had any motive to falsely implicate the appellant.
So also it is not even suggested why P.W. 1 should falsely implicate the appellant.
From the stand point of probabilities it is not possible to countenance the suggestion that a false story has been concocted in order to falsely implicate the appellant.
The medical evidence provided by P.W 6, Dr. Hemangini Desai, fully supports the finding of the High Court that there was an attempt to commit rape on P.W. 1.
Under the circumstances the conclusion reached by the High Court cannot be successfully assailed.
The only question that now remains to be considered is as regards the sentence.
The appellant has behaved in a shockingly indecent manner.
The magnitude of his offence cannot be overemphasized m the context of the fact that he misused his position as a father of a girl friend of P.W. 1 and P.W. 2.
P.W. 1 and P.W. 2 were visiting his house unhesitatingly because of the fact that his daughter was their friend.
To have misused this position and to have tricked them into entering the house, and to have taken undue advantage of the situation by subjecting them to sexual harassment, is a crime of which a serious view must be taken.
But for the following facts and circumstances, we would not have countenanced the prayer for leniency addressed to us on behalf of the appellant.
The special circumstances are these.
The appellant has lost his job in view of the conviction recorded by the High Court.
The incident occurred some 7 years back.
The appeal preferred to the High Court was dismissed in November 15, 1976.
About 6 1/2 years have elapsed thereafter.
In the view that we are taking the appellant will have to be sent back to jail after an interval of about 6 1/2 years.
The appellant must have suffered great humiliation in the Society.
The prospects of getting a suitable match for his own daughter have perhaps been marred in view of the stigma in the wake of the finding of guilt recorded against him in the context of such an offence.
293 Taking into account the cumulative effect of these circumstances, and an overall view of the matter, we are of the opinion that the ends of Justice will be satisfied if the substantive sentence imposed by the High Court for the offence under Sec. 376 read with Sec.
511 is reduced from one of 2 1/2 years ' R. I., to one of 15 months ' R.I.
The sentence of fine, and in default of fine, will be course remain undisturbed.
So also the sentence imposed in the context of the offence under Sec.
342 and Sec 354 of the Indian Penal Code will remain intact.
Subject to the modification in the sentence to the aforesaid extent the appeal fails and is dismissed The appellant shall surrender in order to undergo the sentence.
The bail bonds will stand cancelled.
S.R. Appeal dismissed.
[/INST]The appellant, a government servant employed in the Sachivalaya at Gandhinagar was found guilty, by the Sessions Judge, Mehsna, of serious charges of sexual misbehaviour with two young girls (aged about 10 or 12 and was convicted for the offence of rape, outraging the modesty of women, and wrongful confinement The appeal carried to the High Court substantially failed.
The High Court affirmed the orders of conviction under section 342 I.P.C. for wrongfully confining the girls and conviction under Section 354 I.P.C. for outraging the modesty of the two girls.
With regard to the more serious charge of rape on one of the girls, the High Court came to the conclusion that what was established by evidence was an offence or attempt to commit rape and not of rape.
Accordingly, the conviction under Section 376 was altered into one under Section 376 read with Section Sl I I.P.C. Dismissing the appeal and maintaining the conviction on all counts, Court ^ HELD: 1:1 A concurrent finding of fact as recorded by the Sessions Court and affirmed by the High Court, cannot be reopened in an appeal by Special Leave unless it is established (1) that the finding is based on no evidence or (2) that the finding is perverse, it being such as no reasonable person could have arrived at even if the evidence was taken at its face value or (3) the finding is based and built on inadmissible evidence, which evidence if excluded from vision, would negate the prosecution case or substantially discredit or impair it or (4) some vital piece of evidence which would tilt the balance in favour of the convict has been overlooked, disregarded, or wrongly discarded.
The present is not a case of such a nature.
[285 G H, 286 A] 1:2.
Discrepancies which do not go to the root of the matter and shake the basic version of the witnesses therefore cannot be annexed with undue 281 importance.
More so when the all important "probabilities factor" echoes in favour of the version narrated by the witnesses.
The reasons are: (1) By and large a witness cannot be expected to possess a photographic memory and to recall the details of an incident.
It is not as if a video tape is replayed on the mental screen; (2) ordinarily it so happens that a witness is overtaken by events.
The witness could not have anticipated the occurrence which so often has an element of surprise.
The mental faculties therefore cannot be expected to be attuned to absorb the details; (3) The powers of observation differ from person to person.
What one may notice, another may not.
An object or movement might emboss its image on one person 's mind whereas it might go unnoticed on the part of another; (4) By and large people cannot accurately recall a conversation and reproduce the very words used by them or heard by them.
They can only recall the main purport of the conversation.
It is unrealistic to expect a witness to be a human tape recorder; (5) In regard to exact time of an incident, or the time duration of an occurrence, usually, people make their estimates by guess work on the spur of the moment at the time of interrogation.
And one cannot expect people to make very precise or reliable estimates in such matters.
Again, it depends.
On the 'timesense ' of individuals which varies from person to person.
(6) ordinarily a witness cannot be expected to recall accurately the sequence of events which take place in rapid succession or in a short time span.
A witness is liable to get confused, or mixed up, when interrogated later on; (7) A witness, though wholly truthful, is liable to be overawed by the court atmosphere and the piercing cross examination made by counsel and out of nervousness mix up facts; get confused regarding sequence of events, or fill up details from imagination on the spur of moment.
The subconscious mind of the witness sometimes so operates on account of the fear of looking foolish, or being disbelieved, though the witness is giving a truthful and honest account of the occurrence witnessed by him Perhaps it is a sort of a psychological defence mechanism activated on the spur of the moment.
[286 B H, 287 A E] 2:1.
Corroboration is not the sine quo non for a conviction in a rape case.
In the Indian setting, refusal to act on the testimony of a victum of sexual assault in the absence of corroboration as a rule, is adding insult to injury.
Viewing the evidence of the girl or the women who complains of rape or sexual molestation with the aid of spectacles fitted with lenses tinged with doubt, disbelief or suspicion, is to justify the charge of male chauvinism in a male dominated society.
C D] Rameshwar vs The State of Rajasthan, ; @ 386 followed.
Corroboration may be considered essential to establish a sexual offence in the backdrop of the social ecology of the Western World.
It is wholly unnecessary to import the said concept on a turn key basis and to transplant it on the Indian soil regardless of the altogether different atmosphere, attitudes, mores, responses of the Indian Society, and its profile.
The identities of the two worlds are different.
The solution of problems cannot therefore be idential.
It is conceivable in the Western Society that a female may level false accusation as regards sexual molestation against a male for several reasons such as: (1) The female may be a 'gold 282 digger ' and may well have an economic motive to extract money by holding out the gun of prosecution or public exposure; (2) She may be suffering from psychological neurosis and may seek an escape from the neurotic prison by phantasizing or imagining a situation where she is desired, wanted and chased, by males.
(3) She may want to wreak vengence on the male for real or imaginary wrongs.
She may have a grudge against a particular male, or males in general, and may have the design to square the account; (4) She may have been induced to do so in consideration of economic rewards, by a person interested in placing the accused in a compromising or embarassing position, on account of personal or political vendetta; (5) She may do so to gain notoriety or publicity or to appease her own ego, or to satisfy her feeling of self importance in the context of her inferiority complex; (6) She may do so on account of jealousy; (7) She may do so to win sympathy of others; (8) She may do so upon being repulsed.
By and large these factors are not relevant to India, and the Indian Conditions.
[288 F H, 289 A E] 2:3.
Rarely will a girl or a woman in India make such false allegations of sexual assault, whether she belongs to the urban or rural society, or, sophisticated, or, not so sophisticated, or, unsophisticated society.
Only very rerely can one conceivably come accross an exception or two and that too possibily from amongst the urban elites.
Because: (1) A girl or a woman in the tradition bound non permissive Society of India would be extremely reluctant even to admit that any incident which is likely to reflect on her chastity had ever occurred; (2) She would be conscious of the danger of being ostracised by the Society or being looked down by the society including by her own family members, relatives, friends, and neighbours; (3) She would have to brave the whole world; (4) She would face the risk of losing the love and respect of her own husband and near relatives, and of her matrimonial home and happiness being shattered; (5) If she is unmarried, she would apprehend that it would be, difficult to secure an alliance with a suitable match from a respectable or an acceptable family; (6) lt would almost inevitably and almost invariably result in mental torture and suffering to herself; (7) The tear of being taunted by others will always haunt her; (8) She would feel extremely embarrassed in relating the incident to others being over powered by feeling of shame on account of the upbringing in a tradition bound society where by and large sex is taboo; (9) The natural inclination would be to avoid giving publicity to the incident lest the family name and family honour is brought into controversy; (10) The parents of an unmarried girl as also the husband and members of the husband 's family of a married woman, would also more often than not, want to avoid publicity on account of the fear of social stigma on the family name and family honour; (11) The fear of the victim herself being considered to be promiscuous or in some way responsible for the incident regardless of her innocence; (12) The reluctance to face interrogation by the investigating agency, to face the court, to face the cross examination by Counsel for the culprit, and the risk of being disbelieved, acts as a deterrent.
In view of these factors the victims and their relatives are not too keen to bring the culprit to books.
And when in the face of these factors the crime is brought to light there is a built in assurance that the charge is genuine rather than fabricated.
[289 F H, 290 A E] 283 2:4.
On principle the evidence of a victim of sexual assault stands on par with evidence of an injured witness.
Just as a witness who has sustained an injury (which is not shown or believed to be self inflicted) is the best witness in the sense that he is least likely to exculpate the real offender, the evidence of a victim of a sex offence is entitled to great weight, absence of corroboration notwithstanding.
And while corroboration in the form of eye witness account of an independent witness may often be forthcoming in physical assault cases, such evidence cannot be expected in sex offences, having regard to the very nature of the offence.
It would therefore be adding insult to injury to insist on corroboration drawing inspiration from the rules devised by the courts in the Western World.
[290 E G] 2:5.
Therefore, if the evidence of the victim does not suffer from any basic infirmity, and the 'probabilities factor ' does not render it unworth of credence, as a general rule, there is no reason to insist on corroboration except from the medical evidence, where, having regard to the circumstances of the case, medical evidence can be expected to be forthcoming, subject to the following qualification: Corroboration may be insisted upon when a woman having attained majority is surprised in a compromising position and there is a likelihood of her having levelled such an accusation on account of the instinct of self preservation.
Or when the 'probabilities factor ' is found to be out of tune.
[290 G H, 291 A B] 2:6.
To countenance the suggestion, in the instant case, that the appellant has been falsely roped in at the instance of the father of P.W. 2 who was supposed to have some enmity against the appellant would be wrong.
Ordinarily no parents would do so in Indian Society as at present and thereby bring down their own social status and spoil their reputation in Society, not to speak of the danger of traumatic effect on the psychology of their daughter.
Having regard to the prevailing mores of the Indian Society, it is inconceivable that a girl of 10 or 12 would invent on her own a false story of sexual molestation.
Moreover, the medical evidence fully supports the finding of the High Court that there was an attempt to commit rape on P.W. 1 by the appellant.
[291 G H, 292 A D]
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<s>[INST] Summarize the judgementAppeal No. 153 of 1951.
Appeal from the Judgment and Decree dated 2nd January, 1946, of the Chief Court of Auadh in First Civil Appeal No. 9 of 1940 arising out of the Decree dated 6th November, 1939, of the Court of Civil Judge in Regular Suit No. 36 of 1937.
Bakshi Tek Chand (Onkar Nath Srivstava, with him) for the appellants.
Achhru Ram (Bishan Singh, with him) for the respondents.
January 23.
The Judgment of the Court was delivered by BHAGWATI J.
This is an appeal from the judgment and decree passed by the late Chief Court of Oudh, affirming the judgment and decree passed by the Civil Judge of Sitapur, dismissing the plaintiffs ' suit.
One, Thakur Shankar Bux Singh, proprietor of the Estate known as Rampur Kelali, situated in District Sitapur (Oudh) was heavily indebted and the estate had been in the possession of Deputy Commissioner of Sitapur as receiver from 1892 up to 11th July, 1901.
Thereafter he was declared a disqualified proprietor under the provisions of Section 8 (D) (1) of the U.P. Court of Wards Act (U.P. Act III of 1899) and the Court of Wards took possession of the estate on the 1st August, 1901.
Under Section 34 of the Act he was 916 not competent to dispose his property by will without the consent in writing of the Court of Wards, though prior to the 1st August, 1901, he had made four successive wills, the last being dated 19th June, 1901, under which he gave his estate absolutely to his wife.
On the 30th November, 1901, he made a will giving a life interest to his wife and the remainder over to his cousin Ganga Bux Singh after providing for certain legacies by way of maintenance in favour of his three daughters, his father 's sister and his mother.
The Court of Wards withheld its consent to this will which thus fell through.
On the 7th January, 1904, Ganga Bux Singh executed in his favour a registered deed of agreement agreeing to pay him Rs. 50 per month during his lifetime with effect from the month in which he would execute a will in favour of Ganga Bux Singh and his sons and submit the same for sanction of the Members of the Board of Revenue.
A draft of the will was accordingly prepared by him on the 18th January, 1904, under which he gave a life interest to his wife and the residue of the property to Ganga Bux Singh and after him to his sons after providing legacies for maintenance in favour of his daughters, father 's sister and mother.
The Board of Revenue intimated on the 25th May, 1904, that it would not withhold its consent to a will similar to that contained in the draft but altered in the light of the proposals contained in the further letter dated 27th April, 1904.
He thereupon duly made and published a will on the 28th July, 1904, in accordance with the suggestions contained in the Board 's letter dated 25th May, 1904, cancelling all the previous wills executed by him.
It appears that he handed over the original of this will to Ganga Bux Singh but did not give any intimation of the execution thereof to the authorities and the authorities could only come to know of the same when Ganga Bux Singh gave the original will to the Special Manager on or about the 19th December, 1905.
He appears to have changed his mind thereafter and having embraced Christianity intended to marry a Christian woman and submitted to the Court of Wards on the 8th June, 1906, the draft of a new will which he 917 intended to execute in favour of his Christian wife.
The Board withheld its consent to that new will and intimated on the 13th July, 1906, its refusal and also communicated thereby the withholding of its consent to the will already executed by him on the 28th July, 1904.
A further attempt by him on the 21st November, 1906, to obtain the consent of the Court of Wards to another draft will was also unsuccessful and the will dated the 28th July, 1904, was the only last will and testament executed by him and got registered after consent obtained from the Court of Wards.
Shankar Bux Singh died thereafter on the 28th July, 1922, and he being a Christian at the time of his death successsion to his property was governed by the Indian Succession Act.
His wife got 1/3rd of the estate and the remaining 2/3rds were divided in equal shares between his surviving daughter and the son of a predeceased daughter of his.
Mutation was effected in the records of rights and the name of the widow was .shown there as the owner of the estate in his place and stead.
The Court of Wards relinquished charge of the estate sometime in November, 1925.
The widow executed on the 16th August, 1927, a deed of gift conveying the bulk of the estate to her daughter and the son of the predeceased daughter.
She also executed another deed of gift in the same year conveying the rest of the properties and on the 8th September, 1928, Ganga Bux Singh filed a suit in the Court of the Subordinate Judge of Sitapur for a declaration that under the aforesaid will she had only a life interest in the property and the transfers made by her were void.
This suit was contested by her and one of the defences taken was that Ganga Bux Singh could not maintain the suit without first obtaining letters of administration with the will annexed.
This defence was upheld and the suit was dismissed on the 14th July, 1930.
Ganga Bux Singh having died in the meanwhile on the 19th October, 1929, his sons applied for letters of administration with the will annexed on the 25th September, 1930, on the original side of the Chief Court of Oudh.
This application was opposed by the 918 widow and other heirs of Shankar Bux Singh inter alia on the ground that the will had been executed without the sanction of the Court of Wards.
Mr. Justice Kisch delivered an elaborate judgment, negatived all the objections and granted letters of administration with the will annexed to the sons of Ganga Bux Singh on the 16th November, 1931.
An appeal filed by the widow and heirs of Shankar Bux Singh against that decision was allowed by the Bench of the Chief Court of Oudh at Lucknow on the 8th September, 1933, and the orders passed by the lower court granting letters of administration with the will annexed were set aside.
The sons of Ganga Bux Singh took an appeal to the Privy Council and their Lordships of the Privy Council on the 7th May, 1937, reversed the decree of the Appeal Court and restored the decree passed by Mr. Justice Kisch.
Their Lordships however observed that the only effect of their decision was that letters of administration with a copy of the will annexed must be granted as prayed but that would not in any way prejudice any proceedings against any of the beneficiaries which may be open to the respondents or any of them.
On the 9th September, 1937, the widow, the daughter and the son of the predeceased daughter of Shankar Bux Singh, the plaintiffs, 'filed the suit out of which this appeal arises, against the three sons of Ganga Bux Singh, the defendants, for a declaration that the will dated the 28th July, 1904, was inoperative and ineffectual and that in any case the defendants had no right, title or interest in the properties in suit, that plaintiff I was entitled to hold the property in suit under the will of Shankar Bux Singh dated 19th June, 1901, or that the plaintiffs 1 to 3 were entitled to the same as heirs at law of Shankar Bux Singh deceased under the provisions of the Indian Succession Act, and for further and other reliefs.
In the plaint they alleged that the will was inoperative as Shankar Bux Singh had no animus testandi and that it was void and inoperative in respect of the testamentary disposition in favour of Ganga 919 Bux Singh and his sons because Ganga Bux Singh failed to perform his part of the contract as regards the payment of monthly allowance and the defendants therefore could not take advantage of or claim any benefit tinder that testamentary disposition and further the payment of the said allowance being a condition precedent and the condition not having been fulfilled the disposition became inoperative.
The defendant 3 filed a written statement on the 7th February, 1938, contesting the plaintiff 's claim.
He contended that the plea as to the validity or effect of the will was barred by resjudicata by virtue of the judgment of the Privy Council dated 7th May, 1937.
He denied that the will was executed in consideration of the agreement.
He also denied that there was any contingent or conditional contract or any trace of the alleged condition in the whole of the correspondence between Shankar Bux Singh and the Board of Revenue.
The learned Civil Judge, Sitapur, after considering the evidence, oral as well as documentary, led before him held that the will as well as the agreement formed one contract, that Ganga Bux Singh had failed to perform his promise or his part of the contract, that the only point which was agitated before their Lordships of the Privy Council was as regards the consent of the Court of Wards and that therefore even though the plaintiffs were precluded from disputing the genuineness of the will they were not precluded from seeking a declaration to the effect that the defendants were not entitled to any benefit under the will, and that the decision therefore did not operate as res judicata so far as issues in the present case were concerned.
He however held that the contract clearly provided a remedy for breach on the part of either party, that Shankar Bux Singh did not in fact cancel the will and could not be said to have treated it as inoperative, that Ganga Bux Singh acquired a vested interest in the estate on the death of the testator and that on his death that interest devolved on his sons amongst whom were the defendants in the suit and that the plaintiffs were, not entitled to any relief as claimed, The 920 plaintiffs filed an appeal to the Chief Court of Oudh.
The Chief Court of Oudh negatived the contention that Shankar Bux Singh had no animus testandi and that it was a will in form only and not in substance, holding that it was barred by res judicata by reason of the decision of their Lordships of the Privy Council.
It also negatived the contention that the bequest in favour of Ganga Bux Singh was a conditional bequest or that Ganga Bux Singh having failed to fulfil his obligation to pay the gujara his original character as a legatee changed into that of a trustee and he must hold the beneficial interest for the testator or his heirs.
The appeal was therefore dismissed with costs.
The plaintiffs applied for leave to appeal to the Privy Council and the necessary certificate was granted by the Chief Court of Oudh on the 8th August, 1947.
It is necessary at the outset to set out the deed of agreement and the will executed by Ganga Bux Singh and Shankar Bux Singh respectively on dates the 7th January, 1904, and the 28th July, 1904.
The deed of agreement dated the 7th January, 1904, ran as under: "Whereas, my cousin Thakur Shankar Bakhsh Singh, Taluqdar of Rampur Kalan, has proposed to make a bequest of his taluka, immovables, movables, rights etc.
in favour of his wife and, after her death in my favour and that of my sons Dwarka Nath Singh, Ajodhya Nath Singh and Tirbhuwan Nath Singh, there fore by way of consideration for this concession and favour, I, the executant, out of my own free will do hereby execute this agreement in favour of my cousin aforesaid that in the month in which the said cousin might execute the said will in my favour and that of my sons and lays the same along with an application before the Deputy Commissioner, Sitapur district, for sanction of the Members of the Board of Revenue, I shall from the 1st date of the month following that month, continue to pay to my said cousin Rs. 50 in cash every month during his life, so long as the said will remains in force and under this contract I make my person liable and hypothecate the same by virtue 921 of this agreement.
If I, the executant, fail to perform the said contract the said cousin has power to have the same performed by me, the executant, through Court.
If the will mentioned above executed by the said cousin, be not sanctioned by the Members of the Board of Revenue or if under any circumstance, the kV said cousin may himself revoke the said will, then from the time of revocation or refusal by the Board of Revenue the said cousin shall not be entitled to receive the aforesaid monthly amount of Rs. 50 and whatever money the said cousin might have received from me, the executant, up to the said refusal or revocation the said cousin shall necessarily be bound to refund that money to me, the executant.
" The will dated the 28th July, 1904, was executed by Shankar Bux Singh in the terms following: " I am Thakur Shankar Baksh alias section John son of Thakur Anant Singh, Taluqdar of Rampur and Grantee of Piprawan, district Sitapur.
Out of my own free will, inclination and accord and consent I make a will that after my death my wife for her lifetime shall remain in possession of my entire Ilaqa (estate) as well as the movable and immovable property, left by me, together with the rights etc., relating to the said properties, without the power of any sort to transfer the said properties and rights, that on the death of the said wife all the aforesaid property and the rights shall devolve on my real cousin, Ganga Bakhsh with all the proprietary powers, and that on the death of Ganga Bakhsh the said entire property and the rights shall devolve on Dwaraka Nath, Ajodhia Nath and Tirbhuwan Nath, sons of Ganga Bakhsh, like Ganga Bakhsh himself, in the following shares: Dwaraka Nath annas 6, Ajodhia Nath aninas 5, Tirbhuwan Nath annas 5: and that the persons mentioned below shall continue to get the maintenance allowance (Guzara) according to the amounts and conditions noted below: Musammat Permeshuri, my eldest daughter, married at Allahabad to the son of Rai Anant Ram, generation 922 after generation, (limited) to male issue, Rs. 100 per month; Musammat Chandrani, my younger sister, married to Rai Raghubir Bakhsh, son of Rai Kunwar Bahadur, Rais of Shahabad, district Hardoi, generation after generation (limited) to male issue, Rs. 60 per month; Mussamat Roop Rani, my real paternal aunt (father 's sister), wife of Munshi Chedi Prasad deceased, Rais of Qasba Mahona, district Lucknow, generation after generation, (limited) to male issue, Rs. 45 per month; Musammat Sohni, my mother for her life, Rs. 70 per month.
* * * * * Be it also known that my estate (Ilaqa) is under the Superintendence of the Court of Wards and the Hon 'ble Members of the Board of Revenue have granted me power to execute the will so I do hereby execute this my last will cancelling all the previous wills executed by me ' " It is clear from the terms of the deed of agreement that Ganga Bux Singh agreed to pay Rs. 50 in cash every month during the lifetime of Shankar Bux Singh in consideration of Shankar Bux Singh having proposed to make a bequest of the remainder in favour of Ganga Bux Singh and his sons and that it was after the deed of agreement was got registered by Ganga Bux Singh on the 11 th January, 1904, that the draft of the will was submitted on the 18th January by Shankar Bux Singh to the Court of Wards.
It was this draft of the will amended as it was by the letter dated 27th April, 1904, that was engrossed in the will which was ultimately executed on the 28th July, 1904, after the letter of sanction obtained from the Board on 25th May, 1904.
The learned Civil Judge under the circumstances came rightly to the conclusion that the deed of agreement and the will formed part of the same transaction, that the consideration for the will was the deed of agreement and the consideration for the agreement was the will and that the will 923 as well as the agreement formed one contract.
This finding was not challenged before the Chief Court of Oudh and could not be challenged before us.
There was also a further finding of fact which was recorded by the learned Civil Judge and it was that Ganga Bux Singh failed and neglected to make any payment to Shankar Bux Singh in terms of the deed of agreement even though Shankar Bux Singh executed the will and laid the same along with the application before the Deputy Commissioner, Sitapur, for sanction of the Members of the Board of Revenue and that Ganga Bux Singh thus failed to perform his part of the contract.
This finding also was not challenged before the Chief Court of Oudh and could not be challenged before us.
The question therefore which falls to be considered by us is what is the effect of the failure on the part of Ganga Bux Singh to make the payments to Shankar Bux Singh in terms of the deed of agreement.
It was urged by Dr. Tekchand, who appeared for the plaintiffs before us that by reason of such non payment and the breach of contract on the part of Ganga Bux Singh the will became ineffective and inoperative, that the payment of Rs. 50 per month during the lifetime of Shankar Bux Singh was a condition precedent to the vesting of the legacy in favour of Ganga Bux Singh and that condition not having been fulfilled the legacy did not vest in Ganga Bux Singh and that on a true construction of the terms of the will Ganga Bux Singh acquired no vested interest in the remainder.
He also urged that the scope of the Privy Council judgment was misunderstood by the Chief Court of Oudh and that both the questions as regards animus testandi and the payment of Rs. 50 per month being a condition precedent though they were barred by res judicata in regard to the due execution of the will were still open to him as affecting the right of Ganga Bux Singh to the legacy which was provided for him by Shankar Bux Singh under the will.
In regard to the last contention urged by Dr. Tekchand both the courts below were of the opinion that the question of animus testandi was barred by res 924 judicata.
It was held by their Lordships of the Privy Council that the will in dispute was not revoked and that it was the last will and testament of Shankar Bux Singh.
That decision necessarily meant that the testator when he appended his signature to the will was in a sound and disposing state of mind, was a free agent and 'duly executed the will in accordance with the law.
The decision was conclusive as regards the testamentary capacity, due execution and the representative title of the person to whom the letters of administration with the will annexed were granted.
It was not open therefore to the plaintiffs to contend that the will which was executed by Shankar Bux Singh was a will merely in form and not in substance.
The question of animus testandi was therefore barred by res judicata.
In regard however to the question whether the bequest in favour of Ganga Bux Singh could take effect by reason of default in payment the decision of the Privy Council did not constitute res judicata and it was open to the plaintiffs to urge that contention.
Both the courts ' below therefore allowed the plaintiffs to agitate that ques tion though they came to a conclusion adverse to the plaintiffs.
We are of the opinion that there was no bar of res judicata and the courts below were right in allowing the plaintiffs to agitate that question.
The payment of Rs. 50 per month to Shankar Bux Singh during his lifetime might be a condition precedent to the whole will coming into operation or might, be a condition precedent to the vesting of the legacy in favour of Ganga Bux Singh.
If the plaintiffs urged the former position that plea would certainly be barred by res judicata.
No court would grant a probate or letters of administration with the will annexed in regard to a will which has ceased to be operative and was a mere scrap of paper.
The plaintiffs could not therefore be heard to say that 'by reason of the non fulfilment of the condition precedent the whole will had become inoperative, for that would run counter to the decision of the Privy Council.
Even on merits such a position would be untenable for the simple reason that besides 925 Ganga Bux Singh there was the widow, who was given a life interest and there were the three daughters, the father 's sister and the mother who were given legacies by way of maintenance and they were certainly not guilty of non fulfilment of any condition precedent.
The will would certainly therefore stand so far as they were concerned and the whole effect of the non fulfilment of the condition precedent qua Ganga Bux Singh would be to prevent the vesting of the legacy in his favour.
The latter position therefore would be available to the plaintiffs and they could contend that by reason of the non fulfilment of the condition precedent by Ganga Bux Singh the legacy provided in his favour did not vest in him.
If the payment of Rs. 50 per month therefore constituted a condition precedent the plaintiffs were on firm ground and that position could not and was not contested before us by the learned counsel appearing for the defendants.
It therefore remains to be considered whether the payment of Rs. 50 pet month to Shankar Bux Singh during his lifetime constituted a condition precedent to the vesting of the legacy in favour of Ganga Bux Singh.
There is no doubt, as held by the learned Civil Judge, that the consideration for the will was the deed of agreement and the consideration for the agreement was the will and that the will as well as the agreement formed one contract.
But for Ganga Bux Singh having executed the deed of agreement Shankar Bux Singh would not have forwarded the draft will to the Court of Wards for its sanction and he would also not have executed the will on the 28th July, 1904.
The contract was an overall contract under which both the parties had to perform their respective obligations.
The obligation on the part of Ganga Bux Sigh was to execute the deed of agreement, agreeing to pay the moneys to Shankar Bux Singh in accordance with the terms thereof.
The obligation on the part of Shankar Bux Singh was to execute the will and submit it to the Court of Wards for its sanction.
Both these obligations were fulfilled by the parties and the two documents were supported by consideration and became binding 926 on both the parties.
The nonperformance of the agreement to pay by Ganga Bux Singh constituted at best a failure.
to fulfil his obligation and Shankar Bux Singh became entitled to pursue his rights and remedies against Ganga Bux Singh by reason of the breach of contract by him.
It was urged by Dr. Tekchand that the consideration here constituted a condition precedent and that the non payment of Rs. 50 per month by Ganga Bux Singh constituted non fulfilment of condition precedent.
He relied upon the observations of Chief Justice Wills in Acherley vs Vernon, 125 English Reports 1106 at page 1108 (Willes 153 at page 156): " I know of no words that either in a will or deed necessarily make a condition precedent, but the same words will either make a condition precedent or subsequent according to the nature of the thing and the intent of the parties.
If therefore a man devise one thing in lieu and consideration of another, or agree to do anything or pay a sum of money in consideration of anything to be done, in these cases that which is the consideration is looked upon as a condition precedent.
So is the case of Peters vs Opie, I Ventr.
177, and I Saund.
If a man agree to pay a sum of money to another pro labore suo in pulling down a house, the pulling down of the house is a condition precedent.
So is the case of Thorpe and Thorpe.
I Salk.
171, where a man agreed to pay a sum of money to another he releasing the equity of redemption in certain lands.
And so is the case of Turner vs Goodwin, adjudged by Lord Macclesfield and the rest of the Judges of B. R. upon great consideration, P. 13 Anne, in which case Goodwin was to pay Turner 15001.
be assigning a judgment.
In all which cases it was holden that the party who was to receive the money was not entitled to demand it until he had performed that which was the consideration of the payment, and which was considered in all these cases to be in the nature of a condition prece dent.
* * * * 927 So likewise if it plainly appear to be the intent of the testator that the devise shall not have the benefit of the devise unless he perform a certain act enjoined him by the devisor, this is a condition precedent; and the devisee shall have no benefit of the devise until he perform it, even though the condition be never so unreasonable if it be not illegal or impossible; for cujus est dare ejus est disponere.
" These observations were particularly relied upon by Dr. Tekehand in support of his contention that the payment of Rs. 50 per month to Shankar Bux Singh during his lifetime constituted a condition precedent to the vesting of the legacy in favour of Ganga Bux Singh.
While recognising the force of these observations we are constrained to observe that the terms of the deed of agreement negative any such contention.
The agreement itself provided what was to happen if payment was not made in accordance with the terms thereof.
If Ganga Bux Singh failed to perform the contract Shankar Bux Singh was to have the power to have the same performed by Ganga Bux Singh through Court.
This consequence could not be contemplated if the payment constituted a condition precedent and the non fulfilment of the condition precedent was to have the effect of rendering the agreement inoperative.
In that event the agreement itself would become inoperative and no rights under the agreement would survive to Shankar Bux Singh.
The right which was therefore given to Shankar Bux Singh to have the agreement performed by Ganga Bux Singh contemplated the existence and the continued existence of the agreement so as to enable Shankar Bux Singh to hold Ganga Bux Singh to its performance, The continued existence of the contract was in contemplation of the parties and so far as Ganga Bux Singh is concerned it was at no stage contemplated that he could forego the performance of the obligation on his part to pay Rs. 50 per month to Shankar Bux Singh during his lifetime so long as the will stood unrevoked.
928 It is significant to observe on the other hand that two events were contemplated so far as Shankar Bux Singh himself was concerned.
The one was the withholding of the consent of the Court of Wards and the other was the revocation of the will by Shankar Bux Singh himself.
The sum of Rs. 50 per month was agreed to be paid by Ganga Bux Singh to him from the month when Shankar Bux Singh executed the will and laid it before the Court of Wards for its sanction.
The Court of Wards might withhold its consent to the will and in that event whatever payments were made during the interval by Ganga Bux Singh to Shankar Bux Singh had to be refunded by the latter.
Even though the Court of Wards might sanction the will Shankar Bux Singh might later on revoke the will and the consequence of such revocation was also provided in that Shankar Bux Singh was to refund to Ganga Bux Singh the amounts which he had paid up to the time of revocation to Shankar Bux Singh in accordance with the terms of the agreement.
It has to be observed moreover that all these constituted independent obligations on the part of both the parties.
The obligation on the part of Ganga Bux Singh was so long as the will stood unrevoked to pay to Shankar Bux Singh Rs. 50 per month during his lifetime and the obligation on the part of Shankar Bux Singh was to obtain the consent of the Court of Wards and to leave the will unrevoked during his lifetime.
These obligations were independent of each other and the consequences of the non performance of these obligations on the part of each of the parties were expressly provided in the agreement itself.
It could not therefore be contended that the payment of Rs. 50 per month to Shankar Bux Singh during his lifetime constituted a condition precedent to the vesting of the legacy in his favour.
That was merely a consideration provided by Ganga Bux Singh for the execution of the will by Shankar Bux Singh in his favour and if Ganga Bux Singh committed a breach of the agreement the only result was that Shankar Bux Singh would become entitled to recover the amount due on such default 929 from Ganga Bux Singh by having recourse to a court of law.
The contract would continue to subsist, the parties being relegated to their rights and remedies thereunder as contemplated by the parties.
In spite of the non payment by Ganga Bux Singh of the sum of Rs. 50 per month to Shankar Bux Singh in accordance with the terms of the agreement at no time did Shankar Bux Singh revoke the will nor did he pursue Ganga Bux Singh in a court of law for the recovery of the amounts in respect of which Ganga Bux Singh was in default.
He left the will unrevoked and on his death the will became effective as his last will and testament and operated to vest in Ganga Bux Singh ail interest in the remainder as therein provided.
There is nothing in the will itself which in terms makes the bequest conditional on regular payment of the amount under the agreement.
The argument which was advanced by Dr. Tekchand based on section 81 of the Indian Trusts Act could not avail him for the simple reason that the intention of Shankar Bux Singh had to be gathered as on the date of the execution of the will and not at any subsequent time thereafter.
That intention was clearly to effect a testamentary disposition of the remainder in favour of Ganga Bux Singh.
It was certainly farthest from the thought of Shankar Bux Singh not to dispose of the beneficial interest in the remainder in favour of Ganga Bux Singh with the result that there could neither be a secret trust nor a trust of imperfect obligation created in favour of the heirs at law of the testator Shankar Bux Singh.
The argument of Dr. Tekchand that the remainder did not vest in Ganga Bux Singh but fell into residue by reason of his having predeceased the widow of Shankar Bux Singh is equally of no avail.
The legacy in favour of Ganga Bux Singh was a legacy of the remainder of the estate which vested in Ganga Bux Singh but was deferred in possession till after the extinction of the life interest created in favour of the plaintiff 1.
Such vested interest could devolve upon the defendants, the heirs and legal representatives of 120 930 Ganga Bux Singh on the death of the latter and the defendants were therefore as the heirs and legal repre sentatives of Ganga Bux Singh since deceased rightly entitled to the same.
As the bequest was not conditional and did not lapse there could be no question of any resulting trust or of any intestacy with respect to the remainder.
The result therefore is that the appeal fails and must be dismissed with costs.
Appeal dismissed.
Agent for the appellants : Rajinder Narain.
[/INST]On the 7th January, 1904, G, a cousin of S, executed an agreement in favour of S, the material portion of which ran as follow&: "Whereas my cousin S has proposed to make a request of his taluka in favour of his wife and after her death in my favour and 118 914 that of my sons therefore by way of consideration for this concession and favour, I, the executant, out of my own free will do hereby execute this agreement in favour of my cousin aforesaid that in the month in which the said cousin may execute the said will in my favour and that of my sons and lays the same along with an application before the Deputy Commissioner, Sitapur district, for sanction of the Members of the Board of Revenue, I shall from the 1st date of the month following that month continue to pay the said cousin the sum of Rs. 50 in cash every month during his life so long as the said will remains in force If I fail to perform the said contract the said cousin has power to have the same performed by me through the Court.
" This agreement was registered on the 11th January.
On the 18th January, S submitted a draft will for sanction and the will as amended and sanctioned was executed on the 28th July, 1904.
This will provided as follows: "after my death my wife for her lifetime shall remain in possession of my entire estate without the power of any sort to transfer the said properties and rights, that on the death of the said wife all the aforesaid property and rights shall devolve on my cousin G with all proprietary powers and that on the death of G, the said entire property and rights shall devolve on X, Y, Z, sons of G, in the following shares . " The will also provided for maintenance for the daughter, sister, aunt and mother of section On the application of G 's sons (G having died) letters of administration with the will annexed were granted to them by the Chief Court of Oudh and this decision was affirmed by the Privy Council on appeal in 1937.
The heirs of S thereupon instituted a suit against the sons of G for a declaration that the will was inoperative and ineffectual and that G 's sons had in any case no right to the properties of S, as S had no animus testandi and G had also failed to pay Rs. 50 to S as agreed: Held, (i) that the deed of agreement and the will formed parts of one transaction and formed one contract, consideration for the will being the agreement, and consideration for the agreement being the will; (ii) as the Privy Council had decided that the will was the last will and testament of S and granted letters of administration, the question of animus testandi was res judicata ; (iii) with regard to the plea that the monthly payment of Rs. 50 was a condition precedent to the validity of the will and that by reason of the non fulfilment of this condition the will had become inoperative, such a plea was also barred by res judicata as the Privy Council bad granted letters of administration; and even on the merits the plea was untenable as the wife and other relations of the testator had also certain rights under the will which did not depend on the monthly payment by G; (iv) the question whether the payment of Rs. 50 was a con dition precedent to the vesting of the legacy in G or G 'B sons was 915 not, however, res judicata and it was open to the plaintiff to raise such a plea; (v) on a proper interpretation of the terms of the agreement, the payment of Rs. 50 per month was not a condition precedent to the vesting of the legacy in G, but merely a consideration, and the plaintiffs ' remedy was to enforce the agreement if it was not duly performed; (vi) that as G obtained a vested remainder under the will, his interest did not fall into the residue on his death before the widow, but vested in his sons; and as the bequest to G did not lapse there was no question of any resulting trust or of any intestacy with respect to the remainder, and G 's sons were entitled to the estate under the will.
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<s>[INST] Summarize the judgement72 of 1950.
Petition under article 32 of the Constitution of India for a writ of mandamus.
V.K.T. Chari, J.S. Dawdo, Alladi Kuppuswami, and C.R. Pattabhi Raman, for the petitioner.
M.C. Setalvad, Attorney General for India (G. N. Joshi with him) for opposite party Nos. 1 and 2.
G.N. Joshi, for opposite party Nos.
3 to 5 and 7 to 10. 1950.
December 4.
The Court delivered Judgment as follows.
KANIA C.J. This is an application by the holder of one ordinary share of the Sholapur Spinning and Weaving Company Ltd. for a writ of mandamus and certain other reliefs under article 32 of the Constitution of India.
The authorized capital of the company is Rs. 48 lakhs and the paid up capital is Rs. 32 lakhs, half of which is made up of fully paid ordinary shares of Rs. 1,000 each.
875 I have read the judgment prepared by Mr. Justice Mukher jea.
In respect of the arguments advanced to challenge the validity of the impugned Act under articles 31 and 19 of the Constitution of India, I agree with his line of reasoning and conclusion and have nothing more to add.
On the question whether the impugned Act infringes article 14, two points have to be considered.
The first is whether one individual shareholder can, under the circum stances of the case and particularly when one of the re spondents is the company which opposes the petition, chal lenge the validity of the Act on the ground that it is a piece of discriminatory legislation, creates inequality before the law and violates the principle of equal protec tion of the laws under article 14 of the Constitution of India.
The second is whether in fact the petitioner has shown that the Act runs contrary to article 14 of the Con stitution.
In this case having regard to my conclusion on the second point, I do not think it is necessary to pro nounce a definite opinion on the first point.
I agree with the line of reasoning and the conclusion of Mr. Justice Mukherjea as regards the second point relating to the inva lidity of the Act on the ground that it infringes article 14 of the Constitution and have nothing more to add.
In my opinion therefore this petition fails and is dismissed with costs.
FAZL ALI J.
I am strongly of the opinion that this peti tion should be dismissed with costs.
The facts urged in the petition and the points raised on behalf of the petitioner before us are fully set forth in the judgments of my brethren, Sastri, Mukherjea and Das JJ., and I do not wish to repeat them here.
It is sufficient to say that the main grounds on which the Sholapur Spinning and Weaving Company (Emergency Provisions) Act, 1950 (Act No. XXVIII of 1950), which will hereinafter be referred to as "the Act", has been assailed, is that it infringes three fundamental rights, these being: 876 (1) the right to property secured by article 31 of the Constitution; (2) the right to acquire, hold and dispose of property, guaranteed to every citizen by article 19 (1) (f); and (3) the right to equal protection of the laws, guaran teed by article 14.
It has been held in a number of cases in the United States of America that no one except those whose rights are directly affected by a law can raise the question of the constitutionality of that law.
This principle has been very clearly stated by Hughes J. in McCabe vs Atchison(1), in these words : "It is an elementary principle that in order to justify the granting of this extraordinary relief, the complainant 's need of it and the absence of an adequate remedy at law must clearly appear.
The complainant cannot succeed because someone else may be hurt.
Nor does it make any difference that other persons who may be injured are persons of the same race or occupation.
It is the fact, clearly established, of injury to the complainant not to others which justifies judicial interference.
" On this statement of the law, with which I entirely agree, the scope of the discussion on this petition is greatly restricted at least in regard to the first two fundamental rights.
The company and the shareholders are in law separate entities, and if the allegation is made that any property belonging to the company has been taken possession of without compensa tion or the right enjoyed by the company under article 19 (1) (f) has been infringed, it would be for the company to come forward to assert or vindicate its own rights and not for any individual shareholder to do so.
In this view, the only question which has to be answered is whether the peti tioner has succeeded in showing that there has been an infringement of his rights as a shareholder under articles 31 and 19 (1) (f) of the Constitution.
This question has been so elaborately dealt with by Mukherjea J., that I do not wish to add anything to what he has said in his judg ment, and all that is necessary for me to say is that I adopt his conclusions, (1) 235 u.s. 151.
877 without committing myself to the acceptance of all his reasonings.
The only serious point, which in my opinion, arises in the case is whether article 14 of the Constitution is in any way infringed by the impugned Act.
This article corresponds to the equal protection clause of the Fourteenth Amendment of the Constitution of the United States of America, which declares that "no State shall deny to any person within its jurisdiction the equal protection of the laws".
Professor Willis dealing with this clause sums up the law as prevail ing in the United States in regard to it in these words: "Meaning and effect of the guaranty The guaranty of the equal protection of the laws means the protection of equal laws.
It forbids class legislation, but does not forbid classification which rests upon reasonable grounds of distinction.
It does not prohibit legislation, which is limited either in the objects to which it is directed or by the territory within which it is to operate. 'It merely requires that all persons subjected to such legislation shall be treated alike under like circumstances and condi tions both in the privileges conferred and in the liabili ties imposed. ' 'The inhibition of the amendment . was designed to prevent any person or class of persons from being singled out as a special subject for discriminating and hostile legislation '.
It does not take from the states the power to classify either in the adoption of police laws, or tax laws, or eminent domain laws, but permits to them the exercise of a wide scope of discretion, and nullifies what they do only when it is without any reasonable basis.
Mathematical nicety and perfect equality are not required.
Similarity, not identity of treatment, is enough.
If any state of facts can reasonably be conceived to sustain a classification, the existence of that state of facts must be assumed.
One who assails a classification must carry the burden of showing that it does not rest upon any reasonable basis."( ') Having summed up the law in this way, the same learned author adds : "Many different classifications (1) Constitutional Law by Prof. Willis, (1st Edition).
p.579. 878 of persons have been upheld as constitutional.
A law apply ing to one person or one class of persons is constitutional if there is sufficient basis or reason for it.
" There can be no doubt that article 14 provides one of the most valuable and important guarantees in the Constitution which should not be allowed to be whittled down, and, while ac cepting the statement of Professor Willis as a correct exposition of the principles underlying this guarantee, 1 wish to lay particular emphasis on the principle enunciated by him that any classification which is arbitrary and which is made without any basis is no classification and a proper classification must always rest upon some difference and must bear a reasonable and just relation to the things in respect of which it is proposed.
The petitioner 's case is that the shareholders of the Sholapur company have been subjected to discrimination visa vis the shareholders of other companies, inasmuch as section 13 of the Act subjects them to the following disabilities which the shareholders of other companies governed by the Indian Companies Act are not subject to: : "(a) It shall not be lawful for the shareholders of the company or any other person to nominate or appoint any person to be a director of the company.
(b) No resolution passed at any meeting of the share holders of the company shall be given effect to unless approved by the Central Government.
(c) No proceeding for the winding up of the company or for the appointment of a receiver in respect thereof shall lie in any court unless by or with the sanction of the Central Government.
" Primafacie, the argument appears to be a plausible one, but it requires a careful examination, and, while examining it, two principles have to be borne in mind : (1) that a law may be constitutional even though it relates to a single individual, in those cases where on account of some special circumstances or reasons applicable to him and not applica ble to others, 879 that single individual may be treated as a class by himself; (2) that it is the accepted doctrine of the American courts, which I consider to be well founded on principle, that the presumption is always in favour of the constitutionality of an enactment, and the burden is upon him who attacks it to show that there has been a clear transgression of the constitutional principles.
A clear enunciation of this latter doctrine is to be found in Middleton vs Texas Power and Light Company(1), in which the relevant passage runs as follows : "It must be presumed that a legislature understands and correctly appreciates the need of its own people, that its laws are directed to problems made manifest by experience and that its discriminations are based upon adequate grounds.
" The onus is therefore on the petitioner to show that the legislation which is impugned is arbitrary and unreasonable and there are other companies in the country which should have been subjected to the same disabilities, because the reasons which led the Legislature to impose State control upon the Sholapur company are equally applicable to them.
So far as article 14 is concerned, the case of the share holders is dependent upon the case of the company and if it could be held that the company has been legitimately sub jected to such control as the Act provides without violation of the article, that would be a complete answer to the petitioner 's complaint.
Now, the petitioner has made no attempt to discharge the burden of proof to which I have referred, and we are merely asked to presume that there must necessarily be other compa nies also which would be open to the charge of mismanagement and negligence.
The question cannot in my opinion be treated so lightly.
On the other hand, how important the doctrine of burden of proof is and how much harm can be caused by ignor ing it or tinkering with it, will be fully illustrated, by referring to the proceedings in the Parliament in connec tion with the enactment of the (1) ,157.
880 Act, where the circumstances which necessitated it are clearly set out.
I am aware that legislative proceedings cannot be referred to for the purpose of construing an Act or any of its provisions, but I believe that they are relevant for the proper understanding of the circumstances under which it was passed and the reasons which necessitat ed it.
A reference to the Parliamentary proceedings shows that some time ago, a representation was made on behalf of a section of the shareholders of the Sholapur company to the Registrar of Joint Stock Companies in Bombay, against the conduct of the managing agents, and the Government of Bombay was moved to order a special inquiry into the affairs of the company.
For the purpose of this inquiry, two special inspectors were appointed by the Bombay Government and their report revealed "certain astounding facts" and showed that the mill had been grossly mismanaged by the Board of Direc tors and the managing agents.
It also revealed that the persons who were responsible for the mismanagement were guilty of certain acts and omissions which brought them under the purview of the law.
The Bombay Government accept ed the report of the inspectors and instructed the Advocate General of Bombay to take legal proceedings against certain persons connected with the management of the company.
Thereafter, the Government of India was approached by the Provincial Government and requiested to take special action in order to secure the early opening of the mill.
The Government of India found that they had no power to take over the management of a particular mill, unless its working could be ensured through the existing management acting under the direction of a Controller appointed under the Essential Supplies Act, but they also found that a peculiar situation had been created in this case by the managing agents themselves being unable or unwilling to conduct the affairs of the company in a satisfactory and efficient manner.
The Government of India, as a matter of precaution and lest it should be said that they were going to interfere unnecessarily in the affairs 881 of the company and were not allowing the existing provisions of the law to take their own course, consulted other inter ests and placed the matter before the Standing Committee of the Industrial Advisory Council where a large number of leading industrialists of the country were present, and ultimately it was realized that this was a case where the Government could rightly and properly intervene and there would be no occasion for any criticism coming from any quarter.
It appears from the discussion on the floor of the House that the total number of weaving and spinning mills which were closed down for one reason or other was about 35 in number.
Some of them are said to have closed for want of cotton, some due to overstocks, some for want o[ capital and some on account of mismanagement.
The Minister for Indus try, who sponsored the Bill, in explaining what distin guished the case of the Sholapur mill from the other mills against whom there might be charges of mismanagement, made it clear in the course of the debate that "certain condi tions had to be fulfilled before the Government can and should intervene", and he set out these conditions as fol lows : "(1) The undertaking must relate to an industry which is of national importance.
Not each and every undertaking which may have to close down can be taken charge of tempo rarily by Government.
(2) The undertaking must be an economic unit.
If it appears that it is completely uneconomic and cannot be managed at all, there is no sense in Government taking charge of it.
If anything, it will mean the Government will have to waste money which belongs to the taxpayer on an uneconomic unit.
(3) There must be a technical report as regards the condition of the plants, machinery, etc.
which either as they stand, or after necessary repairs and reconditioning can be properly utilised.
(4) Lastly, and this is of considerable importance there must be a proper enquiry held before Government take any action.
The enquiry should show that 113 882 managing agents have so misbehaved that they are no longer fit and proper persons to remain in charge of such an impor tant undertaking.
"(1) It appears from the same proceedings that the Sholapur mill is one of the largest mills in Asia and employs 13,000 workers.
Per shift, it is capable of producing 25 to 30 thousand pounds of yarn, and also one lakh yards of cloth.
It was working two shifts when it was closed down on the 29th August, 1949.
The closure of the mill meant a loss of 25 lakhs yards of cloth and one and a half lakhs pounds of yarn per month.
Prior to 1947, the highest dividend paid by the company was Rs. 525 per share and the lowest Rs. 100, and, in 1948, when the management was taken over by the managing agents who have been removed by the impugned Act, the accounts showed a loss of Rs. 30 lakhs, while other textile companies had been able to show very substantial profits during the same period.
Another fact which is brought out in the proceedings is that the.
managing agents had acquired control over the majority of the shares of the company and a large number of shareholders who were dissatisfied with the management had been rendered powerless and they could not make their voice heard.
By reason of the preponderance of their strength, the managing agents made it impossible for a controller under the Essential Supplies Act to function and they also made it difficult for the company to run smoothly under the normal law.
It was against this background that the Act was passed, and it is evident that the facts which were placed before the Legislature with regard to the Sholaput mill were of an extraordinary character.
and fully justified the company being treated as a class by itself.
There were undoubtedly other mills which were open to the charge of mismanagement, but the criteria adopted by the Government which, in my opinion, cannot be said to be arbitrary or unreasonable, is not applicable (1) parliamentary Debates, Volume III, No. 14; 31st March 1950, pp.2394 5 883 to any of them.
As we have seen, one of the criteria was that a mere allegation of mismanagement should not be enough and no drastic step such as is envisaged in the Act should be taken without there being a complete enquiry.
In the case of the Sholapur mill, a complete enquiry had been made and the revelations which were made as a result of such enquiry were startling.
We are familiar with the expression "police power" which is in vogue in the United States of America.
This expression simply denotes that in special cases the State can step in where its intervention seems necessary and impose special burdens for general benefit.
As one of the judges has pointed out, "the regulations may press with more or less weight upon one than upon another, but they are designed not to impose unequal or unnecessary restrictions upon anyone, but to promote, with as little individual inconvenience as possible, the general good.
"(1) It need not be emphasized that the principles underlying what is known as police power in the United States of America are not peculiar to that country, but are recognized in every modern civilized State.
Professor Willis dealing with the question of classification in exercise of police power makes the following observa tions: "There is no rule for determining when classification for the police power is reasonable.
It is a matter for judicial determination, but in determining the question of reasonableness the Courts must find some economic, political or other social interest to be secured, and some relation of the classification to the objects sought to be accomplished.
In doing this the Courts may consider matters of common knowledge, matters o[ common report, tile history of the times, and to sustain it they will assume every state of facts which can be conceived of as existing at the time Of legislation.
The fact that only one person or one object or one business or one locality is affected is not proof of denial of the equal protection of the laws.
For such (1) Per Field J. in Barbier vs Connally. ; 884 proof it must be shown that there is no reasonable basis for the classification.
" In this particular case, the Government initially took control of the Sholapur Company by means of an Ordinance (Ordinance No. II of 1950), of which the preamble runs as follows : "Whereas on account of mismanagement and neglect a situation has arisen in the affairs of the Sholapur Spinning and Weaving Company, Limited, which has prejudicially af fected the production of an essential commodity and has caused serious unemployment amongst a certain section of the community; And whereas an emergency has arisen which renders it necessary to make special provision for the proper manage ment and administration of the aforesaid Company; Now, therefore,. . . . " In the course of the Parliamentary debate, reference was made to the fact that the country was facing an acute cloth shortage, and one of the reasons which apparently influenced the promulgation of the Ordinance and the passing of the Act was that the mismanagement of the company had gravely affected the production of an essential commodity.
The facts relating to the mismanagement of this mill were care fully collected and the mischief caused by the sudden clos ing of the mill to the shareholders as well as to the gener al public were fully taken into consideration.
Therefore, it seems to me that to say that one particular mill has been arbitrarily and unreasonably selected and subjected to discriminatory treatment, would be an entirely wrong propo sition.
Article 14 of the Constitution, as already stated, lays down an important fundamental right, which should be closely and vigilantly guarded, but, in construing it, we should not adopt a doctrinaire approach which might choke all benefi cial legislation.
The facts to which I have referred are to be found in a public document, and, though some of them may (1) Constitutional Law by Prof. Willis (1st Edition) p. 580.
885 require further investigation forming as they do part of a one sided version, yet they furnish good prima, facie grounds for the exercise of the utmost caution in deciding this case and for not departing from the ordinary rule as to the burden of proof.
In the last resort, this petition can be disposed of on the simple ground that the petitioner has not discharged the onus which lies upon him, and I am quite prepared to rest my judgment on this ground alone.
I think that the petitioner has failed to make out any case for granting the writs or directions asked for, and the petition should therefore be dismissed with costs.
PATANJALI SASTRI J. This is an application under article 32 of the Constitution seeking relief against alleged infringe ment of certain fundamental rights of the petitioner.
The petitioner is a shareholder of the Sholapur Spinning and Weaving Company, Limited, Sholapur, in tim State of Bombay, (hereinafter referred to as "the Company ").
The authorised share capital of the Company consisted of 1590 fully paid up ordinary shares of Rs. 1,000 each, 20 fully paid up ordinary shares of Rs. 500 each and :32,000 partly paid up redeemable cumulative preference shares of Rs. 100 each, of which Rs. 50 only was paid up.
Of these, the petitioner held one ordinary share in his own name and 80 preference shares which, however, having been pledged with the Bank of Baroda Ltd., now stand registered in the Bank 's name.
The company was doing flourishing business till disputes arose recently between the management and the employees, and in or about August, 1949, the mills were temporarily closed and the company, which was one of the largest producers of cotton textiles, ceased production.
Thereupon, the Gover nor General intervened by promulgating on the 9th January, 1950, an Ordinance called the Sholapur Spinning and Weaving Company (Emergency Provisions) Ordinance (No. II ' of 1950), which empowered tim Government of India to 886 take over the control and management of the company and its properties and effects by appointing their own Directors and to delegate all or any of their powers to the Provincial Government.
In exercise of the powers thus delegated, the Government of Bombay appointed respondents 3 to 9 as Direc tors to take charge of the management and administration of the properties and affairs of the company.
Subsequently, on 10th April, '1950, the Ordinance was repealed and was re placed by an Act of Parliament containing similar provisons, namely the Sholapur Spinning and Weaving Company (Emergency Provisions) Act (No. XXVIII of 1950) (hereinafter referred to as the "impugned Act").
The petitioner complains that the impugned Act and the action of the Government of Bombay pursuant thereto have infringed the fundamental rights conferred on him by arti cles 11, 19 and 31 of the Constitution with the result that the enactment is unconstitutional and void, and the inter ference by the Government in the affairs of the company is unauthorised and illegal.
He accordingly seeks relief by way of injunction and mandamus against the Union of India and the State of Bombay impfended as respondents 1 and 2 respec tively in these proceedings and against respondents a to 9 who are now in management as already stated.
The company is irapleaded proforma as the 10th respondent.
Before discussing the issues involved, it is necessary to examine the relevant provisions of the impugned Act in order to see in what manner and to what extent the petition er 's rights have been affected thereby.
The preamble to the repealed Ordinance stated that "on account of mis management and neglect a situation has arisen in the affairs of the Sholapur Spinning and Weaving Company, Limited, which has prejudicially affected the production of an essen tial commodity and has caused serious unemployment amongst a certain section of the community and that an emergency has arisen which renders it necessary to make special provi sion for the proper management and administration of the aforesaid 887 Company." This preamble was not reproduced in the impugned Act.
Section a empowers the Central Government to appoint as many persons as it thinks fit to be directors of the company "for the purpose of taking over its management and administration.
" Section 4 states the effect of the order appointing directors to be that (1) the old directors shall be deemed to have vacated their office, (2) the contract with the managing agents shall be deemed to have been termi nated, (3) that the properties and effects of the company shall be deemed to be in the custody of the new directors who are to be "for all purposes" the directors of the compa ny and "shall alone be entitled to exercise all the powers of the directors of the company whether such powers are derived from the Companies Act or from the memorandum or articles of association or otherwise.
" Section 5 defines the powers of the new directors.
They are to manage the busi ness of the company "subject to the control of the Central Government" and shall have the power to raise funds offering such security as they think fit, to carry out necessary repairs to the machinery or other property in their custody and to employ the necessary persons and define the necessary conditions of their service.
Section 12 provides for the restoration of the management to directors nominated by the shareholders when the purpose of the Government 's interven tion has been fulfilled.
Section 13 is important and reads thus: "13.
Application of the Companies Act. (1) Notwith standing anything contained in the Companies Act or in the memorandum or articles of association of the company (a) it shall not be lawful for the shareholders of the company or any other person to nominate or appoint any person to be a director of the company; (b) no resolution passed at any meeting of the shareholders of the company shall 'be given effect to unless approved by the Central Government; (c) no proceeding for the winding up of the company or for the appointment of a receiver in respect, thereof shall lie in any Court unless by or with the sanction of the Central Government.
(2) Subject.
888 to the provisions contained in sub section (1) and to the other provisions of this Act.
and subject to such excep tions, restrictions and limitations as the Central Govern ment may, by notified order, specify, the Companies Act shall continue to apply to the company in the same manner as it applied thereto before the issue of the notified order under section 3.
" By section 14 the provisions of the Act are to have effect "notwithstanding anything inconsistent therewith contained in any other law or in any instrument having effect by virtue of any law other than this Act.
" Section 16 provides for delegation of powers to the Govern ment of Bombay to be exercised subject to the directions of the Central Government, and section 17 bars suits or other proceedings against the Central Government or the Government of Bombay or any director "for any damage caused or likely to be caused by anything which is in good faith done or intended to be done in pursuance of this Act.
" As a result of these provisions all the properties and effects of the company passed into the absolute power and control of the Central Government or its delegate the Gov ernment of Bombay, and the normal functioning of the company as a corporate body came to an end.
The shareholders have been reduced to the position of interested, if helpless, onlookers while the business is carried on against their will and, may be, to their disadvantage by the Government 's nominees.
The declared purpose of this arrangement was, according to the Preamble of the repeated Ordinance to keep up the production of an essential commodity and to avert serious unemployment amongst a certain section of the commu nity.
The question accordingly arises whether the impugned Act.
which thus affects the petitioner and his co sharehold ers, while leaving untouched the shareholders of all other companies, including those engaged in the production of essential commodities, denies to the petitioner the equal protection of the laws under article 14 of the Constitution.
The correct approach to 889 this question is first to see what rights have been con ferred or protection extended to persons similarly situated.
The relevant protection is to be found in the provisions of the Indian Companies Act which regulates the rights and obligations of the shareholders of incorporated companies in India.
Section 21 of the Act assures to the shareholders the protection of the stipulations contained in the memoran dum and articles of association by constituting.
them a binding contract, so that neither the company nor the share holders have the power of doing anything inconsistent there with.
The basic right of the shareholders to have their undertaking managed and conducted by the directors of their own choice is ensured by section 83B. Their right to exer cise control and supervision over the management by the directors by passing resolutions at their general meeting is regulated by various provisions of the Act.
The important safeguard of winding up the company in certain unfavourable circumstances either through court or by the shareholders thems elves voluntarily is provided for in sections 162 and 203.
All these rights and safeguards, on the faith of which the shareholders embark their money in their undertaking, are abrogated by the impugned Act in the case of the share holders of this company alone.
In fact, the Central Govern ment is empowered to exclude, restrict or limit the opera tion of any of the provisions of the Companies Act in rela tion to this company.
It is thus plain that the impugned Act denies to the shareholders of this particular company the protection of the law relating to incorporated joint stock companies in this country is embodied in the Companies Act and is primafacie within the inhibition of article 14.
It is argued, however, that article 14 does not make it incumbent on the Legislature always to make laws applicable to all persons generally, and that it is open to the Legis lature 'to classify persons and things and subject them to the operation of a particular law according to the aims and objects which that law is designed to secure.
In the present case, Parliament, 114 890 it was said, came to the conclusion, on the materials placed before them, that the affairs of the company were being grossly mismanaged so as to result in the cessation of production of an essential commodity and serious unemploy ment amongst a section of the community.
In view if the detriment thus caused to public economy, it was competent for Parliament to enact a measure applicable to this company and its shareholders alone, and Parliament must be the judge as to whether the evil which the impugned Act was designed to remedy prevailed to such an extent in this company as to call for special legislation.
Reliance was placed in support of this argument on certain American decisions dealing with the equal protection clause of the Fourteenth Amendment of the Federal Constitution.
It is, however, unnecessary to discuss those decisions here, for it is undeniable that equal protection of the laws cannot mean that all laws must be quite general in their character and application. ' A legislature empowered to make laws on a wide range of sub jects must of necessity have the power of making special laws to attain particular objects and must, for that pur pose, possess large powers of distinguishing and classifying the persons or things to be brought under the operation of such laws, provided the basis of such classification has a just and reasonable relation to the object which the legis lature has in view.
While, for instance, a classification in a law regulating labour in mines or factories may be based on age or sex, it may not b`e based on the colour of one 's skin.
It is also true that the class of persons to whom a law is made applicable may be large or small, and the degree of harm which has prompted the enactment of a particular law is a matter within the discretion of the law makers.
It is not the province of the court to canvass the legislative judgment in such matters.
But the issue here is not whether the impugned Act was ill advised or not justified by the facts on which it was based, but whether it transgresses the explicit constitutional restriction on legislative power imposed by article 14.
891 It is obvious that the legislation is directed solely against a particular company and shareholders and not against any class or category of companies and no question, therefore, of reasonable legislative classification arises.
If a law is made applicable to a class of persons or things and the classification is based upon differentia having a rational relation to the object sought to be attained, it can be no objection to its constitutional validity that its application is found to affect only one person or thing.
For instance, a law may be passed imposing certain restric tions and burdens on joint stock companies with a share capital of, say, Rs. 10 crores and upwards, and it may be found that there is only one such company for the time being to which the law could be applied.
If other such companies are brought into existence in future the law would apply to them also, and no discrimination would thus be involved.
But the impugned Act, which selects this particular company and imposes upon it and its shareholders burdens and disa bilities on the ground of mismanagement and neglect of duty on the part of those charged with the conduct of its under taking, is plainly discriminatory in character and is, in my judgment, within the constitutional inhibition of article 14.
Legislation based upon mismanagement or other miscon duct as the differentia and made applicable to a specified individual or corporate body is not far removed from the notorious parliamentary procedure formerly employed in Britain of punishing individual delinquents by passing bills of attainder, and should not, I think, receive judi cial encouragement.
It was next urged that the burden of proving that the impugned Act is unconstitutional lay on the petitioner, and that, inasmuch as he has failed to adduce any evidence to show that the selection of this company and its shareholders for special treatment under the impugned Act was arbitrary, the application must fail.
Whilst all reasonable pre sumption must undoubtedly be made in support of the consti tutional validity of a law made by a competent legislature, the circumstances of the present case would seem, to my 892 mind to exclude such presumption.
Hostile discrimination is writ large over the face of the impugned Act and it dis closes no grounds for such legislative intcrvcntion.
For all that appears no compelling public intercsts were involved.
Even the preamble to the original Ordinance was omitted.
Nor did respondents 1 and 2 file any counter statement in this proceeding explaining the circumstances which led to the enactment of such an extraordinary measure.
There is thus nothing in the record even by way of allegation which the petitioner need take steps to rebut.
Supposing, howev er, that the impugned Act was passed on the same grounds as were mentioned in the preamble to the repealed Ordinance, namely, mismanagement and neglect prejudicially affecting the production of an essential commodity and causing seri ous unemployment amongst a section of the community, the petitioner could hardly be expected to assume the burden of showing, not that the company 's affairs were properly man aged, for that is not his case, but that there were also other companies similarly mismanaged, for that is what, according to the respondents, he should prove in order to rebut the presumption of constitutionality.
In other words, he should be called upon to establish that this company and its shareholders were arbitrarily singled out for the impo sition of the statutory disabilities.
How could the peti tioner discharge such a burden ? Was he to ask for an inves tigation by the Court of the affairs of other industrial concerns in India where also there were strikes and lock outs resulting in unemployment and cessation of production of essential commodities? Would these companies be willing to submit to such an investigation ? And even so, how is it possible to prove that the mismanagement and neglect which is said to have prompted the legislation in regard to this company was prevalent in the same degree in other companies ? In such circumstances, to cast upon the petitioner a burden of proof which it is as needless for him to assume as it is impracticable to discharge is to lose sight of the realities of the case.
893 Lastly, it was argued that the constitutionality of a statute could not be impugned under article 32 except by a person whose rights were infringed by the enactment.
and that, inasmuch as there was no infringement of the individ ual right of a shareholder, even assuming that there was an injury to the company as a corporate body, the petitioner was not entitled to apply for relief under that article.
Whatever validity the argument may have in relation to the petitioner 's claim based on the alleged invasion of his right of property under article 31, there can be little doubt that, so far as his claim based on the contravention of article 14 is concerned, the petitioner is entitled to relief in his own right As has been pointed out already, the impugned Act deprives the shareholders of the company of important rights and safeguards which are enjoyed by the shareholders of other joint stock companies in Indian under the Indian Companies Act.
The petitioner is thus denied the equal protection of the laws in his capacity as a sharehold er, and none the less so because the other shareholders of the company are also similarly affected.
The petitioner is thereled to seek relief under article 32 of the Constitu tion.
In this view it becomes unnecessary to consider the questions raised under articles 19 and 31 of the Constitu tion.
In the result]t, I would allow the application.
MUKHERJEA J. This is an application presented by one Chiranjitlal Chowdhuri, a shareholder of the Sholapur Spinning and Weaving Company Limited (hereinafter referred to as the company), praying for a writ of mandamus and certain other reliefs under article 32 of the Constitution.
The company, which has its registered office within the State of Bombay and is governed by the provisions of the Indian Companies Act, was incorporated with an authorised capital of Rs. 48 lakhs divided into 1590, fully paid up ordinary shares of Rs. 100 each, 20 fully paid up ordinary shares of Rs. 500 each and 32,000 partly paid up cumulative preference shares of Rs. 100 each.
The 894 present paid up capital of the company is Rs. 32 lakhs half of which is represented by the fully paid up ordinary shares and the other half by the partly paid up cumulative prefer ence shares.
The petitioner states in his petition that he holds in his own right three ordinary shares and eighty prefercnce shares in the company, though according to his own admission the ,preference shares do not stand in his name but have been registered in the name of the Baroda Bank Limited with which the shares are pledged.
According to the respondents, the petitioner is the registered holder of one single ordinary share in the company.
It appears that on July 27, 1949, the directors of the company gave a notice to the workers that the mills would be closed, and pursuant to that notice, the mills were in fact closed on the 27th of August following.
On January 9, 1950, the Governor General of India promulgated an Ordinance which purported to make special provisions for the proper man agement and administration of the company.
It was stated in the preamble to the Ordinance that "on account of mis management and neglect, a situation has arisen in the af fairs of the Sholapur Spinning and Weaving Company Limited which has prejudicially affected the production of an essen tial commodity and has caused serious unemployment amongst a certain section of the community ", and it was on account of the emergency arising from this situation that the promulga tion of the Ordinance was necessary.
The provisions of the Ordinance, so far as they are material for our present purpose, may be summarised as follows: Under section 3 of the Ordinance, the Central Government may, at any time, by notified order, appoint as many persons as it thinks fit, to be directors of the company for the purpose of taking over its management and administration and may appoint one of such directors to be the Chairman.
Section 4 provides that on the issue of a notified order under section 3 all the directors of the company holding office as such immediately before the issue of the order shall be deemed to have vacated their offices.
and any existing 895 contract of management between the company and any managing agent thereof shall be deemed to have terminated.
The directors thus appointed shall be for all purposes the directors of the company duly constituted under the Compa nies Act and shall alone be entitled to exercise all the powers of the directors of the company.
The powers and the duties of the directors are specified in section 5 and this section inter alia empowers the directors to vary or cancel, with the previous sanction of the Central Government, any contract or agreement entered into between the company and any other person if they are satisfied that such contract or agreement is detrimental to the interests of the company.
Section 10 lays down that no compensation for premature termination of any contract could be claimed by the managing agent or any other contracting party.
It is provided by section 12 that so long as the management by the statutory directors continues, the shareholders would be precluded from nominating or appointing any person to be a director of the company and any resolution passed by them will not be effective unless it is approved by the Central Government.
This section lays down further that during this period no proceeding for winding up of the company, or for appointment of a receiver in respect thereof could be instituted in any court, unless it is sanctioned by the Central Government, and the Central Government would be competent to impose any restrictions or limitations as regards application of the provisions of the Indian Companies Act to, be affairs of the company.
The only other material provision is that contained in section 15, under which the Central Government may, by notified order, direct that all or any of the powers exercisable by it under this Ordinance may be exercised by the Government of Bombay.
In accordance with the provisions of section 15 men tioned above, the Central Government, by notification issued on the same day that the Ordinance was promulgated, delegat ed all its powers exercisable under the Ordinance to the Government of Bombay, 896 On the next day, the Government of Bombay appointed respond ents 3 to 7 as directors of the company in terms of section 3 of the Ordinance.
On the 2nd of March, 1950, the re spondent No. 9 was appointed a director and respondent No. 5 having resigned his office in the meantime, the re spondent No. 8 was appointed in his place.
On the 7th of April, 1950, the Ordinance was repealed and an Act was passed by the Parliament of India, known as the Sholapur Spinning and Weaving Company (Emergency Provisions)Act which re enacted almost in identical terms all the provisions of the Ordinance and provided further that all actions taken and orders made under the Ordinance shall be deemed to have been taken or made under the corresponding provisions of the Act.
The preamble to the Ordinance was not however repro duced in the Act.
The petitioner in his petition has challenged the con stitutional validity of both the Ordinance and the Act.
As the Ordinance is no longer in force and all its provisions have been incorporated in the Act, it will not be necessary to deal with or refer to the enactments separately.
Both the Ordinance and the Act have been attacked on identical grounds and it is only necessary to enumerate briefly what these grounds are.
The main ground put forward by the petitioner is that the pith and substance of the enactments is to take posses sion of and control over the mills of the company which are its valuable assets and such taking of possession of proper ty is entirely beyond the powers of the Legislature. 'The provisions of the Act, it is said, amount to deprivation of property of the shareholders as well as of the company within the meaning of article 31 of the Constitution and the restrictions imposed on the rights of the shareholders in respect to the shares held by them constitute an unjustifia ble interference with their rights to hold property and as such are void under article 19 (1) (f).
It is urged that there was no public purpose for which the Legislature could authorise the taking possession or acquisition of 897 property and such acquisition or taking of possession with out payment of compensation is in violation of the funda mental rights guaranteed by article 31 (2) of the Constitu tion.
It is said further that the enactment denies to the company and its shareholders equality before the law.
and equal protection of laws and thus offends against the provi sions of article 14 of the Constitution.
The only other material point raised is that the legislation is beyond the legislative competency of the Parliament and is not covered by any of the items in the legislative lists.
On these allegations, the petitioner prays, in the first instance.
that it may be declared that both the Act and the Ordinance are ultra vires and void and an injunction may be issued restraining the respondents from exercising any of the powers conferred upon them by the enactments.
The third and the material prayer is for issuing a writ of mandamus, "restraining the respondents 1 to 9 from exercising or purporting to exercise any powers under the said Ordinance or Act and from in any manner interfering with the manage ment or affairs of the company under colour of or any pur ported exercise of any powers under the Ordinance or the Act," The other prayers are not material for our purpose.
Before I address myself to the merits of this applica tion it will be necessary to clear up two preliminary matters in respect to which arguments were advanced at some length from the Bar.
The first point relates to the scope of our enquiry in the present case and raises the question as to what precisely are the matters that have to be inves tigated and determined on this application of the petition er.
The second point relates to the form of relief that can be prayed for and granted in a case of this description.
Article 32 (1) of the Constitution guarantees to every body the right to move this court, by appropriate proceed ing, for enforcement of the fundamental rights which are enumerated in Part 1II of the Constitution.
Clause (2) of the article lays down that the 115 898 Supreme Court shall have the power to issue directions or orders or writs including writs in the nature of habeas corpus, mandamus, prohibition, quo warranto and certiorari whichever may be appropriate for the enforcement of any of the rights conferred by this part.
Thus anybody who complains of infraction of any of the fundamental rights guaranteed by the Constitution is at liberty to move the Supreme Court for the enforcement of such rights and this court has been given the power to make orders and issuue directions or writs similar in nature to the prerogative writs of English law as might be considered appropriate in particular cases.
The fundamental rights guaranteed by the Constitution are available not merely to individual citizens but to corporate bodies as well except where the language of the provision or the nature of the right compels the inference that they are applicable only to natural persons.
An incorporated company, there fore, can come up to this court for enforcement of its fundamental rights and so may the individual shareholders to enforce their own; but it would not be open to an individual shareholder to complain of an Act which affects the funda mental rights of the company except to the extent that it constitutes an infraction of his own rights as well.
This follows logically from the rule of law that a corporation has a distinct legal personality of its own with rights and capacities, duties and obligations separate from those of its individual members.
As the rights are different and inhere in different legal entities, it is not competent to one person to seek to enforce the rights of another except where the law permits him to do so.
A well known illustra tion of such exception is furnished by the procedure that is sanctioned in an application for a writ of habeas corpus.
Not only the man who is imprisoned or detained in confine ment but any person, provided he is not an absolute stranger, can institute proceedings to obtain a writ of habeas corpus for the purpose of liberating another from an illegal imprisonment.
899 The application before us under article 32 of the Con stitution is on behalf of an individual shareholder of the company.
Article 32, as its provisions show,.
is not di rectly concerned with the determination of constitutional validity of particular legislative enactments.
What it aims at is the enforcing of fundamental rights guaranteed by the Constitution, no matter whether the necessity for such enforcement arises out of an action of the executive or of the legislature.
To make out a case under this article, it is incumbent upon the petitioner to establish not merely that the law complained of is beyond the competence of the particular legislature as not being covered by any of the items in the legislative lists, but that it affects or invades his fundamental rights guaranteed by the Constitu tion, of which he could seek enforcement by an appropriate writ or order.
The rights that could be enforced under article 32 must ordinarily be the rights of the petitioner himself who complains I of infraction of such rights and approaches the court for relief.
This being the position, the proper subject of our investigation would be what rights, if any, of the petitioner as a shareholder of the company have been violated by the impugned legislation.
A discussion of the fundamental rights of the company as such would be outside the purview of our enquiry.
It is settled law that in order to redress a wrong done to the company, the action should prima facie be brought by the company itself.
It cannot be said that this course is not possible in the circumstances of the present case.
As the law is alleged to be unconstitutional, it is open to the old directors of the company who have been ousted from their position by reason of the enactment to maintain that they are directors still in the eye of law, and on that footing the majority of shareholders can also assert 'the rights of the company as such.
None of them, however, have come forward to institute any proceeding on behalf of the compa ny.
Neither in form nor in substance does the present application purport to be one made by the company itself.
Indeed, the company 900 is one of the respondents, and opposes the petition.
As regards the other point, it would appear from the language of article 32 of the Constitution that.
the sole object of the article is the enforcement of fundamental rights guaranteed by the Constitution.
A proceeding under this article cannot really have any affinity to what is known as a declaratory suit.
The first prayer made in the petition, n seeks relief in the shape of a declaration that the Act is invalid and is apparently inappropriate to an application under article 32; while the second purports to be framed for a relief by way of injunc tion consequent upon the first.
As regards the third pray er, it has been contended by Mr. Joshi, who appears for one of the respondents, that having regard to the nature of the case and the allegations made by the petitioner himself, the prayer for a writ of mandamus, in the form in which it has been made, is not tenable.
What is argued is that a writ of mandamus can be prayed for, for enforcement of statutory duties or to compel a person holding a public office to do or forbear from doing something which is incumbent upon him to do or forbear from doing under the provisions of any law.
Assuming that the respondents in the present case are public servants, it is said that the statutory duties which it is incumbent upon them to discharge are precisely the duties which are laid down in the impugned Act itself.
There is no legal obligation on their part to abstain from exercising the powers conferred upon them by the impeached enact ment which the court can be called upon to enforce.
These is really not much substance in this argument, for according to the petitioner the impugned Act is not valid at all and consequently the respondents cannot take their stand on this very Act to defeat the application for a writ in the nature of a mandamus.
Any way, article 32 of the Constitution gives us very wide discretion in the matter of framing our writs to suit the exigencies of particular cases, and the application of the petitioner cannot be thrown out simply on the 901 ground that 'the proper writ or direction has not been prayed for.
Proceeding now to the merits of the case, the first contention that has been pressed before us by the learned Counsel for the petitioner is that the effect of the Shola pur Spinning and Weaving Company Limited (Emergency Provi sions) Act, has been to take away from the company and its shareholders, possession of property and other interests in commercial undertaking and vest the same in certain persons who are appointed by the State, and the exercise of whose powers cannot be directed or controlled in any way by the shareholders.
As the taking of possession is not for any public purpose and no provision for compensation has been made by the law which authorises it, such law, it is said, violates the fundamental rights guaranteed under article 31 of the Constitution.
To appreciate the contention, it would be convenient first of all to advert to the provisions of the first two clauses of article 31 of the Constitution.
The first clause of article 31 lays down that "no person shall be deprived of his property save by authority of law" The second clause provides: "No property, movable or immovable, including any interest in, or in any company owning, any commercial or industrial undertaking, shall be taken possession of or acquired for public purposes under any law authorising the taking of such possession or such acquisition, unless the law provides for compensation for the property taken posse sion of or acquired and either fixes the amount of the compensation, or specifies the principles on which, and the manner in which, the compensation is to be determined and given.
" It is a right inherent in every sovereign to take and appropriate private property belonging to individual citi zens for public use. 'this right, which is described as eminent domain in American law, is like the power of taxation, an offspring of political necessity, and it is supposed to be based upon an implied reservation by Govern ment that private property acquired by its 902 citizens under its protection may be taken or its use con trolled for public benefit irrespective of the wishes of the owner.
Article 31 (2) of the Constitution prescribes a two fold limit within which such superior right of the State should be exercised.
One limitation imposed upon acquisition or taking possession of private property which is implied in the clause is that such taking must be for public purpose.
The other condition is that no property can be taken, unless the law which authorises such appropriation contains a provision for payment of compensation in the manner laid down in the clause.
So far as article S1 (2) is concerned, the substantial question for our consideration is whether the impugned legislation authorises any act amounting to acquisition or taking possession of private property within the meaning of the clause.
It cannot be disputed that acquisition means and implies the acquiring of the entire title of the expropriated owner, whatever the nature or extent of that title might be.
The entire bundle of rights which were vested in the original holder would pass on acquisition to the acquirer leaving nothing in the former.
In taking possession on the other hand, the title to the property admittedly remains in the original holder, though he is excluded from possession or enjoyment of the property.
Article 31 (,?) of the Constitu tion itself makes a clear distinction between acquisition of property and taking possession of it for a public purpose, though it places both of them on the same footing in the sense that a legislation authorising either of these acts must make provision for payment of compensation to the displaced or expropriated holder of the property.
In the context in which the word "acquisition" appears in article 31 (2), it can only mean and refer to acquisition of the entire interest of the previous holder by transfer of title and I have no hesitation in holding that there is no such acquisition either as regards the property of the company or of the shareholders in the present case.
The question, therefore, narrows down to this as to whether the legisla tion in 903 question has authorised the taking of possession of any property or interest belonging to the petitioner.
It is argued by the learned Attorney General that the taking of possession as contemplated by article 31 (2) means the taking of possession of the entire bundle of rights which the previous holder had, by excluding him from every part or item thereof.
If the original holder is still left to exercise his possession with regard to some of the rights which were within the folds of his title, it would not amount to taking possession of the property for purposes of article 31 (2) of the Constitution.
Having laid down this proposition of law, the learned Attorney General has taken us through the various provisions of the impugned Act and the contention advanced by him substantially is that nei ther the company nor the shareholders have been dispossessed from their property by reason of the enactment.
As regards the properties of the company, the directors, who have been given the custody of the property, effects and actionable claims of the company, are, it is said, to exercise their powers not in their own right but as agents of the company, whose beneficial interest in all its assets has not been touched or taken away at all.
No doubt the affairs of the company are to be managed by a body of directors appointed by the State and not by the company, but this, it is argued, would not amount to taking possession of any property or interest within the meaning of article 31 (2).
Mr. Chari on the other hand, has contended on behalf of the petitioner that after the management is taken over by the statutory directors, it cannot be said that the company still retains possession or control over its property and assets.
Assuming that this State management was imposed in the interests of the shareholders themselves and that the statutory directors are acting as the agents of the company, the possession of the statutory directors could not, it is argued, be regarded in law as possession of the company so long as they are bound to act in obedience to the dictates of the Central Government and not of the company itself in the administra tion of its affairs.
Possession of an 904 agent, it is said, cannot juridically be the possession of the principal, if the agent is to act not according to the commands or dictates of the principal, but under the direc tion of an exterior authority.
There can be no doubt that there is force in this con tention, but as I have indicated at the outset, we are not concerned in this case with the larger question as to how far the inter position of this statutory management and control amounts to taking possession of the property and assets belonging to the company.
The point for our consider ation is a short one and that is whether by virtue of the impugned legislation any property or interest of the peti tioner himself, as a shareholder of the company, has been taken possession of by the State or an authority appointed under it, as contemplated by article 31 (2) of the Constitu tion.
The petitioner as a shareholder has undoubtedly an interest in the company.
His interest is represented by the share he holds and the share is movable property according to the Indian Companies Act with all the incidence of such property attached to it.
Ordinarily, he is entitled to enjoy the income arising from the shares in the shape of divi dends; the share like any 'other marketable commodity can be sold or transferred by way of mortgage or pledge.
The hold ing of the share in his name gives him the right to vote at the election of directors and thereby take a part, though indirectly, in the management of the company 's affairs.
If the majority of shareholders sides with him, he can have a resolution passed which would be binding on the company, and lastly, he can institute proceedings for winding up of the company which may result in a distribution of the net assets among the shareholders.
It cannot be disputed that the petitioner has not been dispossessed in any sense of the term of the shares he holds.
Nobody has taken the shares away from him.
His legal and beneficial interest in respect to the shares he holds is left intact.
If the company declares dividend, he would be entitled to the same.
He can sell or otherwise dispose of the shares at any 905 time at his option.
The impugned Act has affected him in this way that his right of voting at the election of direc tors has been kept in abeyance so long as the management by the statutory director continues; and as a result of that, his right to participate in the management of the company has been abridged to that extent.
His rights to pass resolutions or to institute winding up proceedings have also been restricted though they are not wholly gone; these rights can be exercised only with the consent or sanction of the Central Government.
In my opinion, from the facts stated above, it cannot be held that the petitioner has been dispossessed from the property owned by him.
I may apply the test which Mr. Chari himself formulated.
If somebody had taken possession of the petitioner 's shares and was clothed with the authority to exercise all the powers which could be exercised by the holder of the shares under law, then even if he purported to act as the petitioner 's agent and exer cise these powers for his benefit, the possession of such person would not have been the petitioner 's possession if he was bound to act not under the directions of the petitioner or in obedience to his commands but under the directions of some other person or authority.
There is no doubt whatsoever that is not the position in the present case.
The State has not usurped the shareholders ' right to vote or vested it in any other authority.
The State appoints directors of its own choice but that it does, not in exercise of the share holders ' right to vote but in exercise of the powers vested in it by the impugned Act.
Thus there has been no dispos session of the shareholders from their right of voting at all.
The same reasoning applies to the other rights of the shareholders spoken of above, namely, their right of passing resolutions and of presenting winding up petition.
These rights have been restricted undoubtedly and may not be capable of being exercised to the fullest extent as long as the management by the State continues.
Whether the restric tions are such as would bring the case within 116 906 the mischief of article 19 (1) (f) of the Constitution, 1 will examine presently; but 1 have no hesitation in holding that they do not amount to dispossession of the shareholders from these rights in the sense that the rights have been usurped by other people who are exercising them in place of the displaced shareholders.
In the view that I have taken it is not necessary to discuss whether we can accept as sound the contention put forward by the learned Attorney General that the word "property" as used in article 31 of the Constitution con notes the entire property, that is to say the totality of the rights which the ownership of the object connotes.
According to Mr. Setalvad, if a shareholder is not deprived of the entirety of his rights which he is entitled to exer cise by reason of his being the owner or holder of the share and some rights, however insignificant they might be, still remain in him, there cannot be any dispossession as contem plated by article 31(2).
It is difficult, in my opinion, to accept the contention formulated in such broad terms.
The test would certainly be as to whether the owner has been dispossessed substantially from the rights held by him or the loss is only with regard to some minor ingredients of the proprietory right.
It is relevant to refer in this connection to an observation made by Rich J. in a Full Bench decision of the High Court of Australia,(1) where the ques tion arose as to whether the taking of exclusive possession of a property for an indefinite period of time by the Com monwealth of Australia under Reg.
54 of the National Securi ty Regulation amounted to acquisition of property within the meaning of placitum 31, section 51, of the Commonwealth Constitution.
The majority of the Full Bench answered the question in the affirmative and the main reason upon which the majority decision was based is thus expressed in the language of Rich J. "Property, in relation to land, is a bundle of rights exercisable with respect to the land.
The tenant of an unencumbered estate in fee simple in possession has the largest possible bundle.
But there is nothing in (1) See Minister of Stain for the Army vs Dalziel, 68 C L.R. p. 261, 907 the placitum to suggest that the legislature was intended to be at liberty to free itself from the restrictive provisions of the placitum by taking care to seize something short of the whole bundle owned by the person whom it was expropriat ing.
" It is not, however, necessary for my purpose to pursue the matter any further, as in my opinion there has been no dispossession of the rights of a shareholder in the present case.
Mr. Chari in course of his opening relied exclusively on clause (2) of article 31 of the Constitution.
During his reply, however, he laid some stress on clause (1) of the article as well, and his contention seems to be that there was deprivation of property in the present case in contra vention of the terms of this clause.
It is difficult to see what exactly is the contention of the learned Counsel and in which way it assists him for purposes of the present case.
It has been argued by the learned Attorney General that clause (1) of article 31 relates to a power different from that dealt with under clause (2).
According to him, what clause (1) contemplates is confiscation or destruction of property in exercise of what are known as 'police powers ' in American law, for which no payment of compensation is neces sary.
I do not think it proper for purposes of the present case to enter into a discussion on this somewhat debatable point which has been raised by the learned Attorney General.
In interpreting the provisions of our Constitution, we should go by the plain words used by the Constitution makers and the importing of expressions like 'police power ; which is a term of variable and indefinite connotation in American law can only make the task of interpretation more difficult.
It is also not necessary to express any opinion as to wheth er clauses (1) and (2) of article 31 relate to exercise of different kinds of powers or they are to be taken as cumula tive provisions in relation to the same subjectmatter, namely, compulsory acquisition of property.
If the word "deprived" as used in clause (1) connotes the idea of de struction or confiscation of property, obviously no such thing has happened in the present 908 case.
Again if clauses (1) and (2) of article 31 have to be read together and "deprivation" in clause (1) is given the same meaning as compulsory acquisition in clause (2), clause (1), which speaks neither of compensation nor of public purpose, would not by itself, and apart from clause (2), assist the petitioner in any way.
If the two clauses are read disjunctively, the only question that may arise in connection with clause (1) is whether or not the depriva tion of property is authorised by law.
Mr. Chari has raised a question relating to the validity of the legislation on the ground of its not being covered by any of the items in the legislative list and to this question I would advert later on; but apart from this, clause (1) of article 31 of the Constitution seems to me to be altogether irrelevant for purposes of the petitioner 's case.
This leads me to the consideration of the next point raised by Mr. Chari, namely, whether these restrictions offend against the provision of article 19(1)(f) of the Constitution.
Article 19(1) of the Constitution enumerates the dif ferent forms of individual liberty, the protection of which is guaranteed by the Constitution.
The remaining clauses of the article prescribe the limits that may be placed upon these liberties by law, so that they may not conflict with public welfare or general morality.
Article 19(1)(f) guarantees to all citizens ' the right to acquire, hold or dispose of property. ' Any infringement of this provision would amount to a violation of the fundamental rights, unless it comes within the exceptions provided for in clause (5) of the article.
That clause permits the imposition of reasonable restrictions upon the exercise of such righ teither in the interests of the general public or for the protection of the interests of any Scheduled Tribe.
Two questions, therefore, arise in this connection: first, whether the restrictions that have been imposed upon the rights of the petitioner as a shareholder in the company under the Sholapur Act amount to infringement of his.right to acquire, hold or dispose of property within the meaning of article 19(1)(f) of the Constitution and 909 secondly, if they do interefere with such rights, whether they are covered by the exceptions 1aid down in clause (5) of the article.
So far as the first point is concerned, it is quite clear that there is no restriction whatsoever upon the petitioner 's right to acquire and dispose of any property.
The shares which he holds do remain his property and his right to dispose of them is not lettered in any way.
If to 'hold ' a property means to possess it, there is no infringe ment of this right either, for, as I have stated already, the acts complained of by the petitioner do not amount to dispossession of him from any property in the eye of law.
It is argued that 'holding ' includes enjoyment of all benefits that are ordinarily attached to the ownership of a property.
The enjoyment of the fruits of a property is undoubtedly an incident of ownership.
The pecuniary benefit, which a share.
holder derives from the shares he holds, is the dividend and there is no limitation on the petitioner 's right in this respect.
The petitioner undoubtedly has been precluded from exercising his right of voting at the elec tion of directors so long as the statutory directors contin ue to manage the affairs of the company.
He cannot pass an effective resolution in concurrence with the majority of shareholders without the consent or sanction of the Central Government and without such sanction, there is also a disa bility on him to institute any winding up proceedings in a court of law.
In my opinion, these are rights or privileges which are appurtenant to or flow from the ownership of property, but by themselves and taken independently, they cannot be reck oned as property capable of being acquired, held or disposed of as is contemplated by article 19 (1) (f) of the Constitu tion.
I do not think that there has been any restriction on the rights of a shareholder to hold, acquire or dispose of his share by reason of the impugned enactment and conse quently article 19 (1) (f) of the Constitution is of no assistance to the petitioner.
In this view, the other point does not arise for consideration, but I may state here that even if it is conceded for argument 's sake that the 910 disabilities imposed by the impugned legislation amount to restrictions on proprietory right, they may very well be supported as reasonable restraints imposed in the interests of the general public, viz., to secure the supply of a commodity essential to the community and to prevent a seri ous unemployment amongst a section of the people.
They are, therefore, protected completely by clause (5)of article 19.
This disposes of the second point raised by Mr. Chari.
The next point urged on behalf of the petitioner raises an important question of constitutional law which turns upon the construction of article 14 of the Constitution.
It is urged by the learned Counsel for the petitioner that the Sholapur Act is a piece of discriminatory legislation which offends against the provision of article 14 of the Constitu tion.
Article 14 guarantees to all persons in the territo ry of India equality before the law and equal protection of the laws and its entire object, it is said, is to prevent any person or class of persons from being singled out as a special subject of discriminatory legislation.
It is pointed out that the law in this case has selected one particular company and its shareholders and has taken away from them the right to manage their own affairs, but the same treatment has not been meted out to all other companies or shareholders situated in an identical manner.
Article 14 of the Constitution, it may be noted, corre sponds to the equal protection clause in the Fourteenth Amendment of the American Constitution which declares that "no State shall deny to any person within its jurisdiction the equal protection of the laws.
" We have been referred in course of the arguments on this point by the learned Counsel on both sides to quite a number of cases decided by the American Supreme Court, where questions turning upon the construction of the 'equal protection ' clause in the Ameri can Constitution came up for consideration.
A detailed examination of these reports is neither necessary nor prof itable for our present purpose but we think we can cull a few general principles from some of the pronouncements of 911 the American Judges which might appear to us to be consonant with reason and help us in determining the true meaning and scope of article 14 of our Constitution.
I may state here that so far as the violation of the equality clause in the Constitution is concerned, the peti tioner, as a shareholder of the company, has as much right to complain as the company itself, for his complaint is that apart from the discrimination made against the company, the impugned legislation has discriminated against him and the other shareholders of the company as a group vis a vis the shareholders of all other companies governed by the Indian Companies Act who have not been treated in a similar way.
As the discriminatory treat ment has been in respect to the shareholders of this company alone, any one of the shareholders, whose interests are thus vitally affected, has a right to complain and it is immate rial that there has been nodiscrimination inter se amongst the shareholders themselves.
It must be admitted that the guarantee against the denial of equal protection of the laws does not mean that identically the same rules of law should be made applicable to all persons within the territory of India in spite of differences of circumstances and conditions.
As has been said by the Supreme Court of America, "equal protection of laws is a pledge of the protection of equal laws( ')," and this means "subjection to equal laws applying alike to all in the same situation(").
" In other words, there should be no discrimination between one person and another if as regards the subject matter of the legislation their position is the same.
I am unable to accept the argument of Mr. Chari that a legislation relating to one individual or one family or one body corporate would per se violate the guarantee of the equal protection rule.
There can certainly be a law applying to one person or to one group of persons and it cannot be held to be (1) Yick Wo vs Hopkins, 118 U.S. at 369 (2) Southern Raliway Company vs Greene, ; ,412.
912 unconstitutional if it is not discriminatory in its charac ter (1).
It would be bad law "if it arbitrarily selects one individual or a class of individuals, one corporation or a class of corporations and visits a penalty upon them, which is not imposed upon others guilty of like delinquency(2).
" The legislature undoubtedly has a wide field of choice in determining and classifying the subject of its laws, and if the law deals alike with all of a cer tain class, it is normally not obnoxious to the charge of denial of equal protection; but the classification should never be arbitrary.
It must always rest upon some real and substantial distinction bearing a reasonable and just rela tion to the things in respect to which the classification is made; and classification made without any ' substantial basis should be regarded as invalid(3).
The question is whether judged by this test the im pugned Act can be said to have contravened the provision embodiedin article 14 of the Constitution.
Obviously the Act purports to make provisions which are of a drastic character and against the general law of the land as laid down in the Indian Companies Act, in regard to the admin istration and management of the affairs of one company in indian territory.
The Act itself gives no reason for the legislation but the Ordinance, which was a precursor of the Act expressly stated why the legislation was necessary.
It said that owing to mismanagement and neglect, a situation had arisen in the affairs of the company which prejudicially affected the production of an essential commodity and caused serious unemployment amongst a certain section of the community.
Mr. Chari 's contention in substance is that there are various textile companies in India situated in a simi lar manner as the Sholapur company, against which the same charges could be brought and for the control and regulation of which all the reasons that are mentioned in the preamble to the Ordinance (1) Willis Constitutional Law, p. 580.
(2) Gulf C. & section F.R. Co. vs Ellis. , at 159.
(3) Southern Railway Co. vs Greene, ; , at 412 913 could be applied.
Yet, it is said, the legislation has been passed with regard to this one company alone.
The argument seems plausible at first sight, but on a closer examination I do not think that I can accept it as sound.
It must be conceded that the Legislature has a wide discretion in determining the subject matter of its laws.
It is an accepted doctrine of the American Courts and which seems to me to be well founded on principle, that the presumption is favour of the constitutionality of an enactment and the burden is upon him who attacks it to show that there has been a transgression of constitutional principles.
As was said by the Supreme Court of America in Middleton vs Texas Power and Light Company(1), 'It must be presumed that a Legislature understands and correctly appreciates the needs of its own people, that its laws are directed to problems made manifest by experience and that its discriminations are based upon adequate grounds.
" This being the position, it is for the petitioner to establish facts which would prove that the selection of this particular subject by the Legislature is unreasona ble and based upon arbitrary grounds.
No allegations were made in the petition and no materials were placed before us to show as to whether there are other companies in India which come precisely under the same category as the Sholapur Spinning and Weaving Company and the reasons for imposing control upon the latter as mentioned in the preamble to the Ordinance are applicable to them as well.
Mr. Chari argues that these are matters of common knowledge of which we should take judicial notice.
I do not think that this is the correct line of approach.
It is quite true that the Legislature has, in this instance, proceeded against one company only and its shareholders; but even one corporation or a group of persons can be taken as a class by itself for the purpose of legislation, provided it exhibits some excep tional features which are not possessed by others.
The courts should prima facie (1) 219 u.s. 152 at p. 157.
117 914 lean in favour of constitutionality and should support the legislation if it is possible to do so on any reasonable ground, and it is for the party who attacks the validity of the legislation to place all materials before the court which would go to show that the selection is arbitrary and unsupportable.
Throwing out of vague hints that there may be other instances of similar nature is not enough for this purpose.
We have not even before us any statement on oath by the petitioner that what has been alleged against this particular company may be said against other companies as well.
If there was any such statement, the respondents could have placed before us the whole string of events that led up to the passing of this legislation.
If we are to take judi cial notice of the existence of similar other badly managed companies, we must take notice also of the facts which appear in the parliamentary proceedings in connection with this legislation which leave been referred to by my learned brother, Fazl Ali J. in his judgment and which would go to establish that the facts connected with this corporation are indeed exceptional and the discrimination that has been made can be supported on just and reasonable grounds.
I purpose ly refrain from alluding to these facts or basing my deci sion thereon as we had no opportunity of investigating them properly during the course of the hearing.
As matters stand, no proper materials have been placed before us by either side and as I am unable to say that the legislature cannot be supported on any reasonable ground, I think it to be extremely risky to overthrow it on mere suspicion or vague conjectures.
If it is possible to imagine or think of cases of other companies where similar or identical condi tions might prevail, it is also not impossible to conceive of something" peculiar" or "unusual" to this corporation which led the legislature to intervene in its affairs.
As has been laid down by the Supreme Court of America, "The Legislature is free to recognise degrees of harm and it may confine its restrictions to those cases where the need is deemed to be the clearest"(1).
We should (1) Radics, vs New York, 264 U.S. 915 bear in mind that a corporation, which is engaged in produc tion of a commodity vitally essential to the community, has a social character of its own, and it must not be regarded as the concern primarily or only of those who invest their money in it.
If its possibilities are large and it had a prosperous and useful career for a long period of time and is about to collapse not for any economic reason but through sheer perversity of the controlling authority, one cannot say that the legislature has no authority to treat it as a class by itself and make special legislation applicable to it alone in the interests of the community at large.
The combination of circumstances which are present here may be of such unique character as could not be existing in any other institution.
But all these, I must say, are matters which require investigation on proper materials which we have not got before us in the present case.
In these circum stances I am constrained to hold that the present applica tion must fail on the simple ground that the petitioner made no attempt to discharge the primafacie burden that lay upon him and did not place before us the materials upon which a proper decision on the point could be arrived at.
In my opinion , therefore, the attack on the legislation on the ground of the denial of equal protection of law cannot succeed.
The only other thing that requires to be considered is the argument of Mr. Chari that the law in question is in valid as it is not covered by any of the items in the legis lative list.
In my opinion, this argument has no substance.
What the law has attempted to do is to regulate the affairs of this company by laying down certain special rules for its management and administration.
It is fully covered by item No. 43 of the Union List which speaks inter alia of "incor poration, regulation and winding up of trading corporations.
" The result is that the application fails and is dis missed with costs.
DAS J.
As I have arrived at a conclusion different from that reached by the majority of this Court, I 916 consider it proper, out of my respect for the opinion of my learned colleagues, to state the reasons for my conclusions in some detail.
On January 9, 1950, the Governor General of India, acting under section 42 of the Government of India Act, 1935, promulgated an Ordinance, being Ordinance No. II of 1950, concenrning the Sholapur Spinning and Weaving Company, Limited, (hereafter referred to as the said company).
The preambles and the provisions of the Ordinance have been referred to in the judgment just delivered by Mukherjea J. and need not be recapitulated by me in detail.
Suffice it to say that the net result of the Ordinance was that the managing agents of the said company were dismissed, the directors holding office at the time automatically vacated their office, the Government was authorised to nominate directors, the rights of the shareholders of this company were curtailed in that it was made unlawful for them to nominate or appoint any director, no resolution passed by them could be given effect to without the sanction of the Government and no proceeding for winding up could be taken by them without such sanction, and power was given to the Government to further modify the provisions of the Indian Companies Act in its application to the said company.
On the very day that the Ordinance was promulgated the Central Government acting under section 15 delegated all its powers to the Government of Bombay.
On January 10, 1950, the Government of Bombay appointed Respondents Nos. 3 to 7 as the new directors.
On March 2, 1950, Respondent No. 5 having resigned, Respondent No. 8 was appointed a director in his place and on the same day Respondent No. 9 was also appointed as a director.
In the meantime the new Constitu tion had come into force on January 26, 1950.
On February 7, 1950, the new directors passed a resolution sanctioning a call for Rs. 50 on the preference shares.
Thereupon a suit being Suit No. 438 of 1950 was filed in the High Court of 917 Bombay by one Dwarkadas Shrinivas against the new directors challenging the validity of the Ordinance and the right of the new directors to make the call.
Bhagwati J. who tried the suit held that the Ordinance was valid and dismissed the suit.
An appeal (Appeal No. 48 of 1950) was taken from that decision which was dismissed by a Division Bench (Chagla C.J. and Gajendragadkar J.) on August 29, 1950.
In the meantime, on April 7, 1950, the Ordinance was replaced by Act No. XXVIII of 1950.
The Act substantially reproduced the provisions of the Ordinance except that the preambles to the Ordinance were omitted.
On May 29, 1950, the present petition was filed by one Chiranjitlal Chowdhuri.
The petitioner claims to be a shareholder of the said company holding 80 preference shares and 3 ordinary shares.
The preference shares, according to him, stand in the name of the Bank of Baroda to whom they are said to have been pledged.
As those preference shares are not registered in the name of the petitioner he cannot assert any right as holder of those shares.
According to the respondents, the petitioner appears on the register as holder of only one fully paid up ordinary share.
For the purposes of this application, then, the petitioner 's interest in the said company must be taken as limited to only one fully paid up ordinary share.
The respondents are the Union of India, the State of Bombay and the new directors besides the company itself.
The respondent No. 5 having resigned, he is no longer a director and has been wrongly impleaded as respond ent.
The reliefs prayed for are that the Ordinance and the Act are ultra vires and void, that the Central Government and the State Government and the directors be restrained from exercising any powers under the Ordinance or the Act, that a writ of mandamus be issued restraining the new direc tors from exercising any powers under the Ordinance or the Act or from in any manner interfering with the management of the affairs of the company under colour of or in purported exercise of any powers under the said Ordinance or Act.
918 The validity of the Ordinance and the Act has been challenged before us on the following grounds: (i) that it was not within the legislative competence (a) of the Gover nor General to promulgate the Ordinance, or (b) of the Parliament to enact the Act, and (ii) that the Ordinance and the Act infringe the fundamental rights of the shareholders as well as those of the said company and are, therefore, void and inoperative under article 13.
Re (i) .
The present application has been made by the petitioner under article 52 of the Constitution.
Sub section (1) of that article guarantees the right to move this Court by appropriate proceedings for the enforcement of the rights conferred by Part [1] of the Constitution.
Sub section (2) empowers this Court to issue directions or orders or writs, including certain specified writs, whichever may be appro priate, for the enforcement of any of the rights conferred by that Part.
It is clear, therefore, that article 32 can only be invoked for the purpose of the enforcement of the fundamental rights.
Article 32 does not permit an applica tion merely for the purpose of agitating the competence of the appropriate legislature in passing any particular enact ment unless the enactment also infringes any of the funda mental rights.
In this case the claim is that the fundamen tal rights have been infringed and, therefore, the question of legislative competence may also be incidentally raised on this application.
It does not appear to me, however, that there is any substance in this point for, in my opinion, entry 33 of List I of the Seventh Schedule to the Government of India Act, 1935, and the corresponding entry 43 of the Union List set out in the Seventh Schedule to the Constitu tion clearly support these pieces of legislation as far as the question of legislative competency is concerned.
Sec tions 83A and 83 B of the Indian Companies Act can only be supported as valid on the ground that they regulate the management of companies and are, therefore, within the said entry.
Likewise, the provisions of the Ordinance and the Act relating to the appointment of directors by the 919 Government and the curtailment of the shareholders ' rights as regards the election of directors, passing of resolutions giving directions with respect to the management of the company and to present a winding up petition are matters touching the management of the company and, as such, within the legislative competence of the appropriate legislative authority.
In my judgment, the Ordinance and the Act cannot be held to be invalid on the ground of legislative incompe tency of the authority promulgating or passing the same.
Re (ii) The fundamental rights said to have been in fringed are the right to acquire, hold and dispose of property guaranteed to every citizen by Article 19(1)(f) and the right to property secured by article 31, In Gapalan 's case (1) 1 pointed out that the rights conferred by article 19 (1) (a) to (e) and (g) would be available to the citizen until he was, under article 21, deprived of his life or personal liberty according to procedure established by law and that the right to property guaranteed by article 19 (1)(f) would likewise continue until the owner was, under article 31, deprived of such property by authority of law.
Therefore, it will be necessary to consider first whether the shareholder or the company has been deprived of his or its property by authority of law under Article 31 for, if he or it has been so deprived, then the question of his or its fundamental right under article 19 (1) (f) will not arise.
The relevant clauses of article 31 run as follows "31.
(1) No person shall be deprived of his property save by authority of law.
(2) No property, movable or immovable, including any interest in, or in any company owning, any commercial or industrial undertaking, shall be taken possession of or acquired for public purposes under any law authorisingthe taking of such possession or such acquisition, unless the law provides for compensation for the property taken posses sion of or acquired (1) ; 920 and either fixes the amount of the compensation, or speci fies the principles on which, and the manner in which, the compensation is to be determined and given.
" Article 31 protects every person, whether such ' person is a citizen or not.
and it is wide enough to cover a natu ral person as well as an artificial person.
Whether or not, having regard to the language used in article 5, a corpora tion can be called a citizen and as such entitled to the rights guaranteed under article 19, it is quite clear that the corporation is protected by article 31, for that article protects every "person" which expression certainly includes an artificial person.
The contention of the peitioner is that the Ordinance and the Act have infringed his fundamental right to property as a shareholder in the said company.
Article 31, like article 19(1) (f), is concerned with "property ".
Both the articles are in the same chapter and deal with fundamental rights.
Therefore, it is reasonable to say that the word "property" must be given the same meaning in construing those two articles.
What, then, is the meaning of the word "property"? It may mean either the bundle of rights which the owner has over or in respect of a thing, tangible or intangible, or it may mean the thing itself over or in respect of which the owner may exercise these rights.
It is quite clear that the Ordinance or the Act has not deprived the shareholder of his share itself.
The share still be longs to the shareholder.
He is still entitled to the dividend that may be declared.
He can deal with or dispose of the share as he pleases.
The learned Attorney General contends that even if the other meaning of the word "proper ty" is adopted, the shareholder has not been deprived of his" property" understood in that sense, that is to say he has not been deprived of the entire bundle of rights which put together constitute his "property ".
According to him the" property" of the shareholder, besides and apart from his right to elect directors, to pass resolutions giving directions to the directors and to present a winding up petition, consists in his right to participate 921 in the dividends declared on the profits made by the working of the company and, in case of winding up, to participate in the surplus that may be left after meeting the winding up expenses and paying the creditors.
Those last mentioned rights, he points out, have not been touched at all and the shareholder can yet deal with or dispose of his shares as he pleases and is still entitled to dividends if and when declared.
Therefore, concludes the learned Attorney General, the shareholder cannot complain that he has been deprived of his "property", for the totality of his rights have not been taken away.
The argument thus formulated appears to me to be somewhat too wide, for it will then permit the legisla ture to authorise the State to acquire or take possession, without any compensation, of almost the entire rights of the owner leaving to him only a few subsidiary rights.
This result could not, in my opinion, have been intended by our Constitution.
As said by Rich J. in the Minister for State for the Army vs Datziel (i) while dealing with section 31 (XXXI) of the Australian Constitution "Property, in relation to land, is a bundle of rights exercisable with respect to the land.
The tenant of an unencurnbered estate in fee simple in possession has the largest possible bundle.
But there is nothing in the placi tum to suggest that the legislature was intended to be at liberty to free itself from the restrictive provisions of the placitum by taking care to seize something short of the whole bundle owned by the person whom it is expropriating.
" The learned Judge then concluded as follows at p. 286 : "It would in my opinion, be wholly inconsistent with the language of the placitum to hold that whilst preventing the legislature from authorising the acquisition of a citi zen 's full title except upon just terms, it leaves it open to the legislature to seize possession and enjoy the full fruits of possession indefinitely, on any terms it chooses or upon no terms at all." (1) ; 118 922 In my judgment the question whether the Ordinance or the Act has deprived the shareholder of his "property" must depend, for its answer, on whether it has taken away the substantial bulk of the rights constituting his "property".
In other words, if the rights taken away by the Ordinance or the Act are such as would render the rights left un touched illusory and practically valueless, then there can be no question that in effect and substance the "property" of the shareholder has been taken away by the Ordinance or the Act.
Judged by this test can it be said that the right to dispose of the share and the right to receive dividend, if any, or to participate in the surplus in the case of winding up that have been left to the shareholder are illu sory or practically valueless, because the right to control the management by directors elected by him, the right to pass resolutions giving directions to the directors and the right to present a winding up petition have, for the time being, been suspended ? I think not.
The right still pos sessed by the shareholder are the most important of the rights constituting his "property", although certain privi leges incidental to the ownership have been put in abeyance for the time being.
It is, in my opinion, impossible to say that the Ordinance or the Act has deprived the shareholder of his "property" in the sense in which that word is used in article 19 (1) (f) and article 31.
The curtailment of the incidental privileges, namely, the right to elect directors, to pass resolutions and to apply for winding up may well be supported as a reasonable restraint on the exercise and enjoyment of the shareholder 's right of property imposed in the interests of the general public under article 19 (5), namely, to secure the supply of an essential commodity and to prevent unemployment.
Learned counsel for the petitioner, however, urges that the Ordinance and the Act have infringed the sharehold er 's right to property in that he has been deprived of his valuable right to elect directors, to give directions by passing resolutions and, in case of apprehension of loss, to present a petition for the winding 923 up of the company.
These rights, it is urged, are by them selves "property" and it is of this "property" that the shareholder is said to have been deprived bythe State under a law which does not provide for payment of compensation and which is, as such, an infraction of the shareholder 's funda mental right to property under article 31 (2).
Two ques tions arise on this argument.
Are these rights "property" within the meaning of the two articles I have mentioned ? These rights, as already stated, are, no doubt, privileges incidental to the ownership of the share which itself is property, but it cannot, in my opinion, be said that these rights, by themselves, and apart from the share are "proper ty" within the meaning of those articles, for those articles only regard that as "property" which can by itself be ac quired, disposed of or taken possession of.
The right to vote for the election of directors, the right to pass reso lutions and the right to present a petition for winding up are personal rights flowing from the ownership of the share and cannot by themselves and apart from the share be ac quired or disposed of or taken possession of as contemplated by those articles.
The second question is assuming that these rights are by themselves "property ", what is the effect of the Ordinance and the Act on such "property".
It is nobody 's case that the Ordinance or the Act has autho rised any acquisition by the State of this "property" of the shareholder or that there has in fact been any such acquisi tion.
The only question then is whether this "property" of the shareholder, meaning thereby only the rights mentioned above, has been taken possession of by the State.
It will be noticed that by the Ordinance or the Act these particular rights of the shareholder have not been entirely taken away, for he can still exercise these rights subject 0 course, to the sanction of the Government.
Assuming, however, that the fetters placed on these rights are tantamount to the taking away of the rights altogether, there is nothing to indicate that the Ordinance or the Act has, after taking away the rights from the shareholder, 924 vested them in the State or in any other person named by it so as to enable the State or any other person to exercise those rights of the shareholder.
The Government undoubtedly appoints directors under the Act, but such appointment is made in exercise of the the powers vested in the Government by the Ordinance or the Act and not in exercise of the shareholder 's right.
As already indicated, entry 43 in the Union List authorises Parliament to make laws with respect, amongst other things, to the regulation of trading corpora tions.
There was, therefore, nothing to prevent Parliament from amending the Companies Act or from passing a new law regulating the management of the company by providing that the directors, instead of being elected by the shareholders, should be appointed by the Government.
The new law has undoubtedly cut down the existing rights of the shareholder and thereby deprived the shareholder of his unfettered right to appoint directors or to pass resolutions giving direc tions or to present a winding up petition.
Such depriva tion, however, has not vested the rights in the Government or its nominee.
What has happened to the rights of the shareholder is that such rights have been temporarily de stroyed or kept in abeyance.
The result, therefore, has been that although the shareholder has been for the time being deprived of his "property", assuming these rights to be "property", such "property" has not been acquired or taken possession of by the Government.
If this be the result brought about by the Ordinance and the Act, do they offend against the fundamental rights guaranteed by article 31 ? Article 31 (1) formulates the fundamental right in a nega tive form prohibiting the deprivation of property except by authority of law.
It implies that a person may be deprived of his property by authority of law.
Article 31 (2) prohib its the acquisition or taking possession of property for a public purpose under any law, unless such law provides for payment of compensation.
It is suggested that clauses (1) and (2)o[ article 31 deal with the same topic, namely, compulsory acquisition or taking possession 925 of property, clause (2) being only an elaboration of clause (1).
There appear to me to be two objections to this sug gestion.
If that were the correct view, then clause (1).must be held to be wholly redundant and clause (2), by itself, would have been sufficient.
In the next place, such a view would exclude deprivation of property otherwise than by acquisition or taking of possession.
One can conceive of circumstances where the State may have to deprive a person of his property without acquiring or taking possession of the same.
For example, in any emergency, in order to prevent a fire spreading, the authorities may have to demolish an intervening building.
This deprivation of property is sup ported in the United States of America as an exercise of "police power ".This deprivation of property is different from acquisition or taking of possession of property which goes by the name of "eminent domain" in the American Law.
The construction suggested implies that our Constitution has dealt with only the law of "eminent domain ", but has not provided for deprivation of property in exercise of police powers ' '.
I am not prepared to adopt such construction, for I do not feel pressed to do so by the language used in article 31.
On the contrary, the language of clause (1) of article 31 is wider than that of clause (2), for deprivation of property may well be brought about otherwise than by acquiring or taking possession of it.
I think clause (1) enunciates the general principle that no person shall be deprived of his property except by authority of law, which, put in a positive form, implies that a person may be de prived of his property, provided he is so deprived by au thority of law.
No question of compensation arises under clause (1).
The effect of clause (2) is that only certain kinds of deprivation of property, namely those brought about by acquisition or taking possession of it, will not be permissible under any law, unless such law provides for payment of compensation.
If the deprivation of property is brought about by means other than acquisition or taking possession of it, no compensation is required, provided that such deprivation is by 926 authority of law.
In this case, as already stated, although the shareholder has been deprived of certain rights, such deprivation has been by authority of law passed by a compe tent legislative authority.
This deprivation having been brought about otherwise than by acquisition or taking pos session of such rights, no question of compensation can arise and, therefore, there can be no question of the infraction of fundamental rights under article 31 (2).
It is clear, therefore, that so far as the shareholder is concerned there has been no infringement of his fundamental rights under article 19 (1) (f) or article 31, and the shareholder cannot question the constitutionality of the Ordinance or the Act on this ground.
As regards the company it is contended that the Ordi nance and the Act by empowering the State to dismiss the managing agent, to discharge the directors elected by the shareholders and to appoint new directors have in effect authorised the State to take possession of the undertaking and assets of the company through the new directors appoint ed by it without paying any compensation and, therefore, such law is repugnant to article 31 (2) of our Constitution.
It is, however, urged by the learned Attorney General that the mills and all other assets now in the possession and custody of the new directors who are only servants or agents of the said company are, in the eye of the law, in the possession and custody of the company and have not really been taken possession of by the State.
This argument, however, overlooks the fact that in order that the posses sion of the servant or agent may be juridically regarded as the possession of the master or principal, the servant or agent must be obedient to, and amenable to the directions of, the master or principal.
If the master or principal has no hand in the appointment of the servant or agent or has no control over him or has no power to dismiss or discharge him, as in this case, the possession of such servant or agent can hardly, in law, be regarded as the possession of the company(1).
In this view of the (1) See Elements of Law by Markby.
6th Edition.
Para 371.
p. 192.
927 matter there is great force in the argument that the proper ty of the company has been taken possession of by the State through directors who have been appointed by the State in exercise of the powers conferred by the Ordinance and the Act and who are under the direction and control of the State and this has been done without payment of any compen sation.
The appropriate legislative authority was no doubt induced to enact this law, because, as the preamble to the Ordinance stated, on account of mismanagement and neglect, a situation had arisen in the affairs of the company which had prejudicially affected the production of an essential com modity and had caused serious unemployment amongst a certain section of the community, but, as stated by Holmes J. in Pennsylvania Coal Company vs Mahon(1), "A strong public desire to improve the public condition is not enough to warrant achieving the desire by a shorter cut than the constitutional.
way of paying for the change.
" Here, there fore, it may well be argued that the property of the company having been taken possession of by the State in exercise of powers conferred by a law which does not provide for payment of any compensation, the fundamental right of the company has, in the eye of the law, been infringed.
If the fundamental right of the company has been in fringed, at all, who can complain about such infringement ? Primafacie the company would be the proper person to come forward in vindication of its own rights.
It is said that the directors having been dismissed, the company cannot act.
This, however, is a misapprehension, for if the Act be void on account of its being unconstitutional, the directors appointed by the shareholders have never in law been dis charged and are still in the eye of the law the directors of the company, and there was nothing to prevent them from taking proceedings in the name of the company at their own risk as to costs.
Seeing that the directors have not come forward to make the application on behalf of the company and in its name the question arises whether (1) ; 928 an individual shareholder can complain.
It is well settled in the United States that no one but those whose rights are directly affected by a law can raise the question of the constitutionality of that law.
Thus in McCabe vs Atchison(1) which arose out of a suit filed by five Negros against five Railway Companies to restrain them from making any distinction in service on account of race pursuant to an Oklahoma Act known as ' 'The Separate Coach Law," in uphold ing the dismissal of the suit Hughes J. observed : "It is an elementary principle that in order to justify the granting of this extraordinary relief, the complainants ' need of it and the absence of an adequate remedy at law must clearly appear.
The complaint cannot succeed because some one else may be hurt.
Nor does it make any difference that other persons who may be injured are persons of the same race or occupation.
It is the fact, clearly established, of injury to the complainant not to others which justi fies judicial interference.
" In that case there was no allegation that anyone of the plaintiffs had ever travelled on anyone of the rail roans or had requested any accommodation in any of the sleeping cars or that such request was refused.
The same principle was laid down in Jeffrey Manufacturing Company vs Blagg(2), Hendrick vs MaCyland(3) and Newark Natural Gas and Fuel Company vs The City of Newark(1).
In each of these cases the Court declined to permit the person raising the question of constitutionality to do so on the ground that his rights were not directly affected by the law or Ordinance in ques tion.
On the other hand, in Truax vs Raich(5) and in Bu chanan vs Warley(5) the Court allowed the plea because in both the cases the person raising it was directly affected.
In the first of the two last mentioned cases an Arizona Act of 1914 requiring employers employing more than five workers to employ not less than eighty per cent.
native born citi zens was (1) 235 u.s. 151.
(4) 242 u.s. 403.
(2) 235 u.s. 571.
(5) 239 u.s. 33.
(3) ; (6) 245 u.s. 60.
929 challenged by an alien who had been employed as a cook in a restaurant.
That statute made a violation of the Act by an employer punishable.
The fact that the employment was at will or that the employer and not the employee was subject to prosecution did not prevent the employee from raising the question of constitutionality because the statute, if en forced, would compel the employer to discharge the employee and, therefore, the employee was directly affected by the statute.
In the second of the two last mentioned cases a city Ordinance prevented the occupation of a plot by a colored person in a block where a majority of the residences were occupied by white persons.
A white man sold his property in such a block to a Negro under a contract which provided that the purchaser should not be required to accept a deed unless he would have a right, under the laws of the city, to occupy the same as a residence.
The vendor sued for specific performance and contended that the Ordinance was unconstitutional.
Although the alleged denial of con stitutional rights involved only the rights of coloured persons and the vendor was a white person yet it was held that the vendor was directly affected, because the Courts below, in view of the Ordinance, declined to enforce his contract and thereby directly affected his right to sell his property.
It is, therefore, clear that the constitutional validity of a law can be challenged only by a person whose interest is directly affected by the law.
The question then arises whether the infringement of the company 's rights so directly affects its shareholders as to entitle any of its shareholders to question the constitutional validity of the law infringing the company 's rights.
The question has been answered in the negative by the Supreme Court of the United States in Darnell vs The State of Indi ana(1).
In that case the owner of a share in a Tennessee corporation was not allowed to complain that an Indiana law discriminated against Tennessee corporations in that it did not make any allowance, as it did in the case of Indiana corporations, where the corporation (1) 119 930 had property taxed within the State.
This is in accord with the well established legal principle that a corporation is a legal 'entity capable of holding pro perty and of suing or being sued and the corporators are not, in con templation of law, the owners of the assets of the corpora tion.
In all the cases referred to above the question of constitutionality was raised in connection with the equal protection clause in the Fourteenth Amendment of the American Federal Constitution.
If such be the require ments of law in connection with the equal protection clause which corresponds to our article 14, it appears to me to follow that only a person who is the owner of the property can raise the question of constitutionality under article 31 of a law by which he is so deprived of his property.
If direct interest is necessary to permit a person to raise the question of constitutionality under article 14, a direct interest in the property will, I apprehend, be necessary to entitle a person to challenge a law which is said to infringe the right to that property under article 31.
In my opinion, although a shareholder may, in a sense be interested to see that the company of which he is a shareholder is not deprived of its property he cannot, as held in Darnell vs Indiana(1), be heard to complain, in his own name and on his own behalf, of the infringement of the fundamental right to property of the company, for, in law, his own right to property has not been infringed as he is not the owner of the company 's properties.
An interest in the company owning an undertak ing is not an interest in the undertaking itself.
The interest in the company which owns an undertaking is the "property" of the shareholder under article 31 (2), but the undertaking is the property of the company and not that of the shareholder and the latter cannot be said to have a direct interest in the property of the company.
This is the inevitable result of attributing a legal personality to a corporation.
The proceedings for a writ in the nature of a writ of habeas corpus appear to be somewhat different for the (1) 226 u.
section 338 931 rules governing those proceedings permit, besides the person imprisoned, any person, provided he is not an utter strang er, but is at least a friend or relation of the imprisoned person, to apply for that particular writ.
But that special rule does not appear to be applicable to the other writs which require a direct and tangible interest in the appli cant to support his application.
This must also be the case where the applicant seeks to raise the question of the constitutionality of a under articles 14, 19 and 31.
For the reasons set out above the present petitioner cannot raise the question of constitutionality of the impugned law under article 31.
He cannot complain of any infringement of his own rights as a shareholder, because his "property" has not been acquired or taken possession of by the State although he has been deprived of his right to vote and to present a winding up petition by authority of law.
Nor can he complain of an infringement of the compa ny 's right to property because he is not, in the eye of law, the owner of the property in question and accordingly not directly interested in it.
In certain exceptional cases where the company 's property is injured by outsiders, a shareholder may, under the English law, alter making all endeavours to induce the persons in charge of the affairs of the company to take steps, file a suit on behalf of himself and other shareholders for redressing the wrong done to the company, but that principle does not apply here for this is not a suit, nor has it been shown that any attempt was made by the petitioner to induce the old directors to take steps nor do these proceedings purport to have been taken by the petitioner on behalf of himself and the other shareholders of the.company.
The only other ground on which the Ordinance and the Act have been challenged is that they infringe the the fundamen tal rights guaranteed by article 14 of the Constitution. "Equal protection of the laws", as observed by Day 3.
in Southern Railway Company vs Greene (1), "means subjection to equal laws, applying (1) ; 932 alike to all in the same situation".
The inhibition of the article that the State shall not deny to any person equality before the law or the equal protection of the laws was designed to protect all persons against legislative discrim ination amongst equals and to prevent any person or class of persons from being singled out as a special subject for discriminating and hostile legislation.
It does not, howev er, mean that every law must have universal application, for all persons are not, by nature, attainment or circumstances, in the same position.
The varying needs of different class es of persons often require separate treatment and it is, therefore, established by judicial decisions that the equal protection clause of the Fourteenth Amendment of the Ameri can Constitution does not take away from the State the power to classify persons for legislative purposes.
This classi fication may be on different bases.
It may be geographical or according to objects or occupations or the like.
If law deals equally with all of a certain well defined class it is not obnoxious and it is not open to the charge of a denial of equal protection on the ground that it has no applica tion to other persons, for the class for whom the law has been made is different from other persons and, there fore, there is no discrimination amongst equals.
It is plain that every classification is in some degree likely ' to produce some inequality, but mere production of inequality is not by itself enough.
The inequality produced, in order to encounter the challenge of the Constitution, must be "actually and palpably unreasonable and arbitrary.
" Said Day J. in Southern Railway Company vs Greene(1) : " While reasonable classification is permitted, without doing vio lence to the equal protection of the laws, such classifica tion must be based upon some real and substantial distinc tion, bearing a reasonable and just relation to the things in respect to which such classification is imposed; and the classification cannot be arbitrarily made without any substantial basis.
Arbitrary selection, it has been said, cannot be justified by calling it classification".
Quite conceivably there may be a law 933 relating to a single individual if it is made apparent that, on account of some special reasons applicable only to him and inapplicable to anyone else, that single individual is a class by himself.
In Middieton vs Texas Power and Light Company(1) it was pointed out that there was a strong presumption that a legislature understood and correctly appreciated the needs of its own people, that its laws were directed to problems made manifest by experience and that the discriminations were based upon adequate grounds.
It was also pointed out in that case that the burden was upon him who attacked a law for unconstitutionality.
In Lindsley vs Natural Carbonic Gas Company(2) It was also said that one who assailed the classification made in a law must carry the burden of showing that it did not rest upon any reasonable basis but was essentially arbitrary.
If there is a classi fication, the Court will not hold it invalid merely because the law might have been extended to other persons who in some respects might resemble the class for which the law was made, for the legislature is the best judge of the needs of the particular classes and to estimate the degree of evil so as to adjust its legislation according to the exigency found to exist.
If, however, there is, on the face of the stat ute, no classification at all or none on the basis of any apparent difference specially peculiar to any particular individual or class and not applicable to any other person or class of persons and yet the law hits only the particular individual or class it is nothing but an attempt to arbi trarily single out an individual or class for discriminating and hostile legislation.
The presumption in favour of the legislature cannot in such a case be legitimately stretched so as to throw the impossible onus on the complainant to prove affirmatively that there are other individuals or class of individuals who also possess the precise amount of the identical qualities which are attributed to him so as to form a class with him.
As pointed out by Brewer J. in the Gulf, Colorado and Santa Fe 'Railway vs
W.H. Ellis (3), while good faith (1} ; (2) ; (3) 165 U.S. 150. 934 and a knowledge of existing conditions on the part of a legislature was to be presumed, yet to carry that presump tion to the extent of always holding that there must be some undisclosed and unknown reason for subjecting certain indi viduals or corporations to hostile and discriminating legis lation was to make the protecting clause a mere rope of sand, in no manner restraining State action.
The complaint of the petitioner on this head is formu lated in paragraph 8 (iii) of the petition as follows : "The Ordinance denied to the company and its sharehold ers equality before the law and equal protection of the laws and was thus a violation of article 14 of the Constitution.
The power to make regulations relating to trading corpo rations or the control or production of industries was a power which consistently with article 14 could be exercised only generally or with reference to a class and not with reference to a single company or to shareholders of a single company.
" The Act is also challenged on the same ground in paragraph 9 of the petition.
The learned Attorney General contends that the petitioner as an individual shareholder cannot complain of discrimination against the company.
It will be noticed that it is not a case of a shareholder complaining only about discrimination against the company or fighting the battle of the company but it is a case of a shareholder complaining of discrimination against himself and other shareholders of this company.
It is true that there is no complaint of discrimination inter se the share holders of this company but the complaint is that the share holders of this company, taken as a unit, have been discrim inated vis a vis the shareholders of other companies.
Therefore, the question as to the right of the shareholder to question the validity of a law infringing the right of the company does not arise.
Here the shareholder is com plaining of the infringement of his own rights and if such infringement can be established I see no reason why the shareholder cannot come within article 32 to vindicate his own rights.
The fact that these proceedings have been taken by 935 one single shareholder holding only one single fully paid up share does not appear to me to make any the least difference in principle.
If this petitioner has, by the Ordinance or the Act, been discriminated against and denied equal protec tion of the law, his fundamental right has been infringed and his right to approach this Court for redress cannot be made dependent on the readiness or willingness of other shareholders whose rights have also been infringed to join him in these proceedings or of the company to take substan tive proceedings.
To take an example, if any law discrimi nates against a class, say the Punjabis, any Punjabi may question the constitutionality of the law, without joining the whole Punjabi community or without acting on behalf of all the Punjabis.
To insist on his doing so will be to put a fetter on his fundamental right under article 32 which the Constitution has not imposed on him.
Similarly, if any law deprives a particular shareholder or the shareholders of a particular company of the ordinary rights of sharehold ers under the general law for reasons not particularly and specially applicable to him or them but also applicable to other shareholders of other companies, such law surely offends against article 14 and any one so denied the equal protection of law may legitimately complain of the infringe ment of his fundamental right and is entitled as of right to approach this Court under article 32 to enforce his own fundamental right under article 14, irrespective of whether any other person joins him or not.
To the charge of denial of equal protection of the laws the respondents in the affidavit of Sri Vithal N. Chandavar kar filed in opposition to the petition make the following reply: "With reference to paragraph 6 of the petition, I deny the soundness of the submissions that on or from the 26th January, 1950, when the Constitution of India came into force the said Ordinance became void under article 13(1) of the Constitution or that the provisions thereof were inconsistent with the provisions of Part III of the said Constitution or for any of the other grounds mentioned in paragraph 8 936 of the said petition.
" In the whole of the affidavit in opposition there is no suggestion as to why the promulgation of the Ordinance or the passing of the Act was considered necessary at all or on what principle or basis either of them was founded.
No attempt has been made in the affidavit to show that the Ordinance or the Act was based upon any principle of classification at all or even that the particu lar company and its shareholders possess any special quali ties which are not to be found in other companies and their shareholders and which, therefore, render this particular company and its shareholders a class by themselves.
Neither the affidavit in opposition nor the learned Attorney General in course of his arguments referred to the statement of the objects and reasons for introducing the bill which was eventually enacted or the Parliamentary debates as showing the reason why and under what circumstances this law was made and, therefore, apart from the question of their admis sibility in evidence, the petitioner has had no opportunity to deal with or rebut them and the same cannot be used against him.
The learned Attorney General takes his stand on the presumption that the law was founded on a valid basis of classification, that its discriminations were based upon adequate grounds and that the law was passed for safeguard ing the needs of the people and that, therefore, the onus was upon the petitioner to allege and prove that the classi fication which he challenged did not rest upon any reasona ble basis but was essentially arbitrary.
I have already said that if on the face of the law there is no classification at all or, at any rate, none on the basis of any apparent difference specially peculiar to the individual or class affected by the law, it is only an instance of an arbitrary selection of an individual or class for discriminating and hostile legislation and, therefore, no presumption can, in such circumstances, arise at all.
Assuming, however, that even in such a case the onus is thrown on the complainant, there can be nothing to prevent him from proving, if he can, from the text of.
the law itself, that 937 it is "actually and palpably unreasonable and arbitrary" and thereby discharging the initial onus.
The Act is intituled an Act to make special provision for the proper management and administration of the Sholapur Spinning and Weaving Company, Limited.
" There is not even a single preamble alleging that the company was being misman aged at all or that any special reason existed which made it expedient to enact this law.
The Act, on its face, does not purport to make any classification at all or to specify any special ' vice to which this particular company and its shareholders are subject and which is not to be found in other companies and their shareholders so as to justify any special treatment.
Therefore., this Act, ex facie, is nothing but an arbitrary selection of this particular compa ny and its shareholders for discriminating and hostile treatment and read by itself.is palpably an infringement of Article 14 of the Constitution.
The learned Attorney General promptly takes us to the preambles to the Ordinance which has been replaced by the Act and suggests that the Act is based on the same consider ations on which the Ordinance was promulgated.
Assuming that it is right and permissible to refer to and utilise the preambles, do they alter the situation ? The preambles were as follows : "Whereas on account of mismanagement and ne glect a situation has arisen in the affairs of the Sholapur Spinning and Weaving Company, Limited, which has prejudi cially affected the production of an essential commodity and has caused serious unemployment amongst a certain section of the community;And whereas an emergency has arisen which renders it necessary to make special provision for the proper management and administration of the aforesaid compa ny; " The above preambles quite clearly indicate that the justification of the Ordinance rested on mismanagement and neglect producing certain results therein specified.
It will be noticed that apart from these preambles there is no material whatever before us establishing or even suggesting that this company and its shareholders have in fact been guilty of any 938 mismanagement or neglect.
Be that as it may, the only reason put forward for the promulgation of the Ordinance was mismanagement resulting in falling off of production and in producing unemployment.
I do not find it necessary to say that mismanagement and neglect in conducting the affairs of companies can never be a criterion or basis of classifica tion for legislative purposes.
I shall assume that it is permissible to make a law whereby all delinquent companies and 'their shareholders may be brought to book and all companies mismanaging their affairs and the shareholders of such companies may, in the interest of the general public, be deprived of their right to manage the affairs of their companies.
Such a classification made by a law would bear a reasonable relation to the conduct of all delinquent compa nies and shareholders and may, therefore, create no inequal ity, for the delinquent companies and their shareholders from a separate class and cannot claim equality of treatment with good companies and their shareholders who are their betters.
But a distinction cannot be made between the delinquent companies inter se or between shareholders of equally delinquent companies and one set cannot be punished for its delinquency while another set is permitted to continue, or become, in like manner, delinquent without any punishment unless there be some other apparent difference in their respective obligations and unless there be some cogent reason why prevention of mismanagement is more imperative in one instance than in the other.
To do so will be nothing but an arbitrary selection which can never be justified as a permissible classiffication.
I am not saying that this particular company and its shareholders may not be guilty of mismanagement and negligence which has brought about seri ous fall in production of an essential commodity and also considerable unemployment.
But if mismanagement affect ing production and resulting in unemployment is to be the basis of a classification for making a law for preventing mismanagement and securing production and employment, the law must embrace within its 939 ambit all companies which now are or may hereafter become subject to the vice.
This basis of classification, by its very nature, cannot be exclusively applicable to any partic ular company and its shareholders but is capable of wider application and, therefore, the law founded on that basis must also be wide enough so as to be capable of being ap plicable to whoever may happen at any time to fall within that classification.
Mismanagement affecting production can never be reserved as a special attribute peculiar to a particular company or the shareholders of a particular company.
It it were permissible for the legislature to single out an individual or class and to punish him or it for some delinquency which may equally be found in other individuals or classes and to leave out the other individu als or classes from the ambit of the law the prohibition of the denial of equal protection of the laws would only be a meaningless and barren form of words.
The argument that the presumption being in favour of the legislature, the onus is on the petitioner to show there are other individuals or companies equally guilty of mismanagement prejudicially affecting the production of an essential commodity and causing serious unemployment amongst a certain section of the community does not, in such.
circumstances, arise, for the simple reason that here there has been no classification at all and, in any case, the basis of classification by its very nature is much wider and cannot, in it application, be limited only to this company and its shareholders and, that being so, there is no reason to throw on the petitioner the almost impossible burden of proving that there are other companies which are in fact precisely and in all particu lars similarly situated In any event, the petitioner, in my opinion, may well claim to have discharged the onus of showing that this company and its shareholders have been singled out for discriminating treatment by showing that the Act, on the face of it, has adopted a basis of classifica tion which, by its very nature, cannot be exclusively ap plicable to this company and its shareholders but Which may be equally appplicable to other companies 940 and their shareholders and has penalised this particular company and its shareholders, leaving out other companms and their shareholders who may be equally guilty of the alleged vice of mismanagement and neglect of the type referred to in the preambles.
In my opinion the legislation in question infringes the fundamental rights of the petitioner and offends against article 14 of our Constitution.
The result, therefore, is that this petition ought to succeed and the petitioner should have an order in terms of prayer (3) of the petition with costs.
Petition dismissed.
Agent for the petitioner: M.S.K. Aiyengar.
Agent for opposite party Nos. 1 & 2:P.A. Mehta.
Agent for opposite party Nos.
3 to 5 and 7 to 10: Rajinder Narain.
[/INST]The workmen claimed bonus for the year 1956 equivalent to nine months ' total earnings on the ground that the employers had admitted their capacity to pay and that there was a big gap between the wage actually received and the living wage.
The employers contended that they were paying the workmen a living wage and they were not entitled to any bonus.
The employers relying mainly on the Report of the Textile Labour Committee, 1940, contended that if the living wage in 1940, i.e., Rs. 55/ was multiplied by 35 (due to rise in prices) it gave Rs. 192.50 as the living wage in 1956 and they were paying their workmen at a higher rate.
The workmen relied on the recommendations of the Indian Labour Conference, 1957, to show that Rs. 209.70 approximated to the standard of the need based minimum wage and that the average wage paid by the employers was nothing more than this.
The Tribunal held that the wages paid were fair but that there was still a gap between the actual wage and the living wage and awarded bonus equivalent to five months ' basic wages.
Held, that the employers had failed to establish that they were paying a living wage to the workmen.
In construing wage structure the considerations of right and wrong, propriety and impropriety, fairness and unfairness are also taken into account to some extent.
As the social conscience of the general community becomes more alive and active, as the welfare policy of the State takes a more dynamic form, as the national economy progresses from stage to stage, and as under the.
growing strength of the trade union movement collective bargaining enters the field, wage structure ceases to be a purely arithmetical problem.
Wages are usually divided into three broad categories: the basic minimum wage, the fair wage and the living wage.
The concept of these three wages cannot be described in definite words ,is their contents are elastic and vary from time to time and from place to place.
The concept of a living wage is not a static concept; it is expanding and the number of its constituents and their 537 respective contents are bound to expand and widen with the development and growth of national economy.
In an under developed country no wage structure could be described as reaching the ideal of a living wage.
It is unreasonable and unsafe to treat the Report of the Textile Labour Committee, 1940, as to the monetary value of the living wage in 1940 as sound.
The figure reached by the committee in 1940 did not represent anything like a living wage; it really represented the minimum need based wage.
Besides, the method of multiplying the figure by 35 was materially defective ; the proper approach was to evaluate each constituent of the concept of the living wage in the light of the present day prices.
Even the highest average wage paid by the employers was much below the standard of the living wage though it was above the need based minimum.
Express Newspapers (P.) Ltd. vs Union of India, , Standard Vacuum Oil Company vs Their Workmen, , Burmah Shell, etc., Oil Companies in Madras vs Their Employees, , Woykers of S.V.O.C., Ltd. (Standayd Vacuum Employees ' Union) vs Standard Vacuum Oil Co. Ltd., and Standard Vacuum Oil Company vs Their Employees, , referred to.
Burmah Shell Oil Storage and Distributing Co. of India, Ltd., Bombay vs Their Workmen, , approved.
Quaeye: Whether the workmen would be entitled to bonus even if a living wage is paid to them by the employers.
Muir Mills Co. Ltd. vs Suti Mills Mazdoor Union, Kanpur, and Syee Meenakshi Mills Ltd. vs Their Workmen, ; , referred to.
</s>
|
<s>[INST] Summarize the judgementAppeal No. 176 of 1960.
Appeal from the judgment and decree dated June 2, 1958, of the Mysore High Court in R. A. No. 268 of 1957.
section K. Javali, K. P. Bhat and B. R. L. Iyengar, for the appellants.
section K. Venkataranga Iyengar and R. Gopalakrishnan, for the respondents.
November 14.
The judgment of the Court was delivered by AYYANGAR, J.
On March 27, 1954, the three Kapurs who are the respondents before us filed original Suit No. 29 of 1954 before the District 48 judge Banglore, against the 3 appellants who are brothers for the recovery of over Rs. 50,000/ and subsequent interest and costs due on a simple mortgage.
Before the suit came on for trial the parties filed a memo of compromise dated September 30, 1955 and they prayed that the suit may decreed in terms there of The Court accepted the application and passed a decree as prayed for the order reading "It is ordered and decreed that the plaintiff 's suit be and the same is hereby decreed as per terms of the compromise, the copy of which is hereunto annexed".
The terms of the Razinama ran as follows "1.
That the defendants herein agree to a decree being passed as prayed for.
That the mortgaged properties are hereby sold for the amount of the decree in full satisfaction thereof.
The defendants will execute a regular sale and within ten days from this date.
That the mortgaged properties are hereby put in possession of the plaintiff (decree holder) by the 3rd, defendant (judgment debtor) and judgment debtors 1 & 2 agreeing to pay rent at Rs. 75 each for the two shops bearing Nos. 12 and 14 respectively, Godown Street, Bangalore City in their actual occupation and by attornment of the other properties in the occupation of the other tenants.
That on the judgment debtors or their nominees tendering the aforesaid decree amount through court or otherwise within the aforesaid one year from the date of 49 the decree, the decrce holders bind themselves to reconvey the properties which are sold to them under this rajinama at their cost provided it is distinctly agreed that time is essence of the contract and provided also that if the judgment debtors default in paying the rents as aforesaid on or before the 15th of any month they will lose the concession hereby offered to thee of having reconveyance of 'the properties in one years ' time.
Attachment on the properties belonging to the 2nd 'and 3rd defendants obtained before judgment stands hereby raised.
The defendants hereby assure that the properties hereby sold are not subject to any attachment.
In ; the event of any attachment subsisting on the properties, it is hereby agreed that the mortgage security shall not be merged by the sale.
" Broadly stated, the question raised in this appeal relates to the executability of cl. 2 of this compromise decree but before examining this contention it is necessary to state a few ' facts.
It would be noticed that under the second sentence of cl. 2 the appellants had to execute a regular sale deed within ten days from September 30, 1955.
They, however, did not do so and thereupon the respondents filed, on ;October 31, 1955, Interlocutory application No. 6 of 1955 (later numbered as Execution Application No. 83 of 1956) for directing the appellants to 'execute the sale deed and they annexed to their application a draft sale deed in which cls.
3 to 6 of the razmama were recited.
Apparently there were disputes between the parties ' each accusing the other :that it had not conformed to its undertaking under :the compromise, but with these we are not now 50 concerned.
Thereafter the appellants filed an application in the suit on March 16, 1956, praying that a sale deed might be executed in favour of a third party to the proceedings who had agreed to purchase the property on terms of paying the full decree amount as provided for by cl. 4 of the Razinama.
This application was opposed by the respondents and there were further applications of a similar type which it is not necessary to detail except to point out that they all proceeded on the basis that the compromise decree was capable of execution without any necessity for a further suit.
The appellants did not succeed in these applications.
It is sufficient if hereafter attention were confined to the application by the respondents E. A. 83 of 1956 by which they sought to get the appellants to execute a sale deed in their favour in accordance with the opening sentence of cl. 2 of the compromise.
The appellants opposed this application on the technical ground that the relief sought could not be had in execution but only by a separate suit in as much as the same did not ""relate to the suit" within O. XXIII, r. 3, Code of Civil Procedure, to whose terms we shall refer presently.
This objection was upheld by the learned District judge of Bangalore and the prayer of the respondents for directing the appellants to execute a sale deed in their favour was rejected.
This order has been reversed by the learned judges of the High Court on appeal by the respondents and it is the correctness 'of this judgment that is canvassed in this appeal which comes before us on a certificate of fitness granted by the High Court under article 133 (1)(a) of the Constitution.
It would be seen from this narration that the point involved in the appeal is very narrow and turns on the question whether the High Court was justified in directing the appellants to execute a sale deed conveying the suit properties to the respondents in the proceedings in execution of the decree in original 51 suit No. 29 of 1954 or whether the respondents could obtain that relief only in an independent suit instituted for that purpose.
It is common ground that the decree embodied the entire razinama including all its terms.
The relevant statutory provision for the passing of decrees by compromise is O. XXIII, r. 3, Code of Civil Procedure, which runs: "Where it is proved to the satisfaction of the Court that a suit has been adjusted wholly or in part by any lawful agreement or compromise, or where the defendant satisfies the plaintiff in respect of the whole or any part of the subject matter of the suit, the Court shall order such agreement, compromise or satisfaction to be recorded and shall pass a decree in accordance therewith, so far as it relates to the suit.
" We do not having regard to the facts of this case, consider it necessary to examine the position whether, when a decree has been passed embodying all the terms as part of the decree, an objection as to the executability of any particular term could be raised in execution proceedings, but shall proceed on the basis that it could be.
There is no dispute that the agreement was lawful and an executable decree could be passed "so far as it related to the suit".
Though in the courts below most of the argument turned on the import of the expression "so far as it relates to the suit" occurring in r. 3, learned Counsel for the appellants did not stress that contention before us, but rather on the construction of the several clauses of the compromise and their inter relation to which we shall advert presently.
We might, however, point out that the learned Judges were right in the view they took that the.
terms of the compromise " related" to the suit.
The property which was to be conveyed consisted entirely of property included in the mortgage and which was therefore liable to be sold in execution of the mortgage decree which was 52 the relief sought in the plaint.
The sale Price for the conveyance under the.
Razinama was the sum for the recovery of which the suit was laid.
There was therefore nothing which was outside the scope of the suit.
Besides all this the conveyance was the consideration 'for the compromise.
In these circumstances, it is not a matter for surprise that learned Counsel for the appellants laid little emphasis on the point which persuaded the teamed District judge to dis miss the respondents application.
Learned Counsel for the appellants however raised before us two contentions in the alternative.
His first and primary contention was that on a proper construction of the compromise, the consideration there for was not the actual execution of the conveyance by the judgment debtor to the decree holder but merely the argument to execute such a conveyance.
He pointed out that under cl. 1 of the compromise the defendants had agreed to a decree being passed as ,prayed for, which meant that a mortgage decree drawn up in the usual form had to be passed.
That decree, it was submitted, was under the compromise agreed to be treated as satisfied and full satisfaction to be recorded immediately on the filing of the 'compromise, and he suggested that the opening words in cl. 2 ',The mortgaged properties are hereby sold ,for the amount of the decree in full satisfaction thereof" was a reference to the agreement to execute the conveyance.
There were other clauses in the compromise 'cls.
3 to 6 but these,he submitted, related ,to the inter se rights between the parties.
The contention was that these other clauses of the razinama including the second limb of cl. 2 were intended to be enforced or implemented not by way of execution of the decree in this suit but that the decree to be passed under cl. 1 was to be treated as fully satisfied on the filing into court of the memo of compromise and the same being recorded by the court with the result that thereafter no portion of the 53 decree remained alive.
We find ourselves wholly unable to accept this argument.
No doubt. under cl 1 there, was to be a simple mortgage decree as prayed for in the suit, but it would, however, not be a proper construction of the 1st sentence of cl. 2 to say that the mere agreement to, convey and not an actual conveyance was intended to operate as a satisfaction of the decree passed or to be passed under cl. 1.
Learned Counsel is, no doubt, 'right in his submission that the sale of ' the property to the decree holders under cl. 2 was not to be absolute in the sense of conferring a right to an unconditional conveyance since the title to be obtained under the sale was subject to the conditions contained in cls.
3 ,to 6 and particularly cl. 4 under which it was stipulated that the title to the property might,, on the happening of certain contingencies, be divested from decree: holders to whom it had been conveyed under cl. 2.
In that sense cls.
2 to 6 might constitute an integrated scheme for adjusting the rights of parties but on that account it would not be open to the construction that the mere agreement to convey contained in cl. 2 (subject to the conditions stipulated in cls.
3 to 6) by itself amounted to a satisfaction of the decree.
The other submission of learned Counsel was that the learned judges should not have directed the execution of a conveyance in favour of the respondents without attaching to it the conditions laid down in cls.
3 to 6 and also without an examination of the question whether the appellants were entitled to enforce the reconveyance provided by those clauses.
On this matter the learned Judges expressed themselves thus: "The decree holder is entitled to execute the decree in respect of clause 2 of the compromise.
No opinion is expressed as to the executability 54 of the other clauses of the compromise as that question has not been raised before us.
" The fact, therefore, was that this point about either the inter relation between cl. 2 on the one hand and cls.
3 to 6 on the other or the contention of the appellants that they were entitled to relief under cls.
3 to 6 was not raised before the High Court and the matter was therefore left open.
The appellants can in the circumstances obviously have no cause for complaint that the High Court did not deal with it.
The question as to whether the appellants are entitled to relief under cls.
3 to 6 or whether they had lost their right to do so, is one which would have to be investigated on facts and cannot therefore be urged before us.
We do not, therefore, propose to pronounce upon it either.
It would, of course, be open to the appellants to agitate their rights in appropriate proceeding if they are 'so advised.
No other point has been urged before us.
The appeal fails and is dismissed with costs.
Appeal dismissed.
[/INST]C and some other persons went on a shoot with guns where two persons were shot dead.
In order to create evidence in his favour C got a false report entered by the appellant, a Head constable, in the General Diary purporting to have been made on the previous day to the effect that 0 had deposited his gun.
C and the appellant and the others were tried for various offences including offences under sections 304 A and 218/109 Indian Penal Code.
All the accussed were acquitted but the appellant was convicted under section 218.
The appellant contended that after the acquittal of C, his conviction under section 218 couple not be sustained and (ii) that the prosecution having been launched more than three ' months after the entry was made was barred by limitation under section 42 Police Act.
39 Held, that the appellant was rightly convicted.
Whether C was guilty or not, at the time the entry was made there Was every likelihood of C being prosecuted, for causing the death of two persons.
The acquittal of C did not affect the finding that the false entry was made with the intention to save or knowing it to be likely to save C from legal punishment.
The acquittal of C under section 218/109 did not exonerate the appellant as it had been found that he had made the false entry with a view to save C. Held, further, that the prosecution was not barred by section 42 of the Police Act.
Sections 36 and 42 read together showed that section 42 was applicable only to prosecutions for offences under the Police Act and not to prosecutions under the Penal Code or other Acts.
</s>
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<s>[INST] Summarize the judgementN: Criminal Appeal No. 3 13 of 1987 etc.
From the Judgment and order dated 12.6.1987 of the Gujarat High Court in Misc.
Appln.
No. 680 of 1987 P.S. Poti, G.A. Shah, Shankar Ghosh, M.N. Shroff, Vimal Dave, M.R. Barot, E.C. Agarwala, Vijay Pandit, Ms. P. Bhatt, Shakil Ahmad Syed, N.M. Ghatate, S.V. Deshpande, B.R. Dutta, Mrs. H. Wahi, S.S. Khanduja, S.R. Srivastava, Mrs. R. Gupta, K.K. Gupta, 229 A.S. Bhasma and A.M. Khanwilkar,for the appearing parties.
The Judgment of the Court was delivered by SEN,J.
This appeal by special leave petition are directed against the judgment and order of the Gujarat High Court dated May 12, 1987 and the orders passed by various Designated Court in the State constituted under section 9(1) of the Terrorist & Disruptive activities (prevention) Act, 1987 mainly raise two questions of substantial importance.
First of these is as to the jurisdiction and power of the High Court to grant bail under section 439 of the Code of Criminal Procedure, 1973 or by resource to its inherent powers under section 482 to a person held in custody accused of an offence under sections 3 and 4 of the Act, and secondly, as to the nature of the restraint placed on the power of the Designated Courts to grant bail to such person in view of the limitations placed on such power under section 20(8) of the Act.
By the judgment under appeal, the High Court has held that under the Act there is total exclusion of the jurisdiction of the High Courts and therefore it cannot entertain an application for grant of bail under section 439 of the Code.
In other cases, the persons under detention have applied for grant of special leave under article 136 of the Constitution against the orders passed by various Designated Courts in the State refusing to grant bail on the ground that the power of a Designated Court to grant bail is circumscribed by the limitations prescribed by section 20(8) of the Act i.e. due to the non fulfilment of the conditions laid down therein.
As to the facts.
It is enough for our purposes to set out the facts giving rise to Civil Appeal No. 313 of 1987.
The prosecution case in brief is as follows.
On the morning of March 10, 1987, there was an armed clash between the appellants who are members of a cooperative housing society, and the two sons of the original vendor Babubhai Kansara @ Mohamed Ramzan Alabux and their companions over possession of the disputed plot admeasuring 16,000 square yards resulting in multiple injuries to members of both the groups.
The appellants as such members were in possession of the said plot, and as law abiding citizens had instituted Civil Suit No. 108 of 1987 in the Court of the Civil Judge, Junior Division, Narol, applied for and obtained temporary injunction and had gone with the bailiff to have the injunction order served on the opposite party.
Their case is that they had entered into an agreement dated August 11, 1979 with the original vendor 230 Babubhai Kansara for the purchase of the disputed plot.
The price fixed was Rs. 35 per square yard and Rs. 60,000 were paid as earnest money.
They as such members of the society had also paid from time to time by instalments a total amount of Rs.3,50,000 which was equivalent to 30% of the total sale consideration and had been placed in possession of the land by the vendor by a deed acknowledging the receipt of money and mentioning the delivery of possession.
After the death of the vendor, his two sons Karam Ali and Iqbal Ali disowned the transaction and started creating obstructions in the enjoyment of the land by the society, as a result of which on March 9, 1987 the society was constrained to institute the aforesaid suit and obtained a temporary injunction, and also a direction from the learned Civil Judge ordering the Chief Bailiff to execute the injunction order on the two sons of the original vendor.
They had also intimated the police about the grant of injunction and sought help to prevent breach of peace but the police took no action despite the endorsement made by the Inspector of Police on their application directing P.S.I., Satellite Station to take appropriate action and prevent any untoward incident.
As apprehended, the two sons of the original vendor Karam Ali and Iqbal Ali put up armed resistance and in the scuffle both sides sustained injuries.
At the time of the incident, the police arrived at the spot and apprehended the appellants The appellants were straightaway produced before the Designated Court within a period of 24 hours after their arrest without receiving the complaint of facts which constitute offences alleged to have been committed or a police report as required under section 14(1).
The appellants moved an application for bail but the Designated Court by its order dated March 24, 1987 rejected the same holding that there were no reasonable grounds for it to believe that the appellants were not guilty of an offence under section 3 of the Act apart from various other offences under the Indian Penal Code, 1860.
We are informed that the police have now filed a charge sheet against the appellants before the Designated Court for having committed offences punishable under sections 143, 147, 148, 149, 307, 504, 324, 323 and 120B of the Indian Penal Code, section 27 of the Arms Act and sections 3 and 4 of the Act.
It would thus be seen that the police invoked the Act as against the appellants although they had taken recourse to their legal remedy by filing a suit and obtained a temporary injunction and accompanied the bailiff to execute the order.
They were apprehended and as many as eight of them sustained injuries.
Assuming there was a scuffle wherein there was a free fight, the appellants being the owners in possession were entitled to act in self defence.
As against the two 231 sons of the original vendor, both of whom are cited as prosecution witnesses, the police have filed a charge sheet for the self same offences except for the offences under sections 3 and 4 of the Act in the Court of the Chief Judicial Magistrate, Narol as a result of which they are liable to be enlarged on bail while the appellants cannot be, due to the constraints on the powers of the Designated Courts to grant bail under section 20(8) of the Act.
The Designated Court having refused to grant bail to the appellants, they moved the High Court by way of an application under section 439 read with section 482 of the Code.
The High Court by its order dated June 12, 1987 rejected the bail application on the ground that the High Court had no jurisdiction to entertain any such application under section 439 of the Code ar by recourse to its inherent powers under section 482.
The decision of the High Court proceeds on the ground that the Act being a special Act and the Designated Court constituted by the State Government under section 9(1) to try the offences under the Act, was not a Court subordinate to the High Court, and further that in view of the provision contained in sub section
(1) of section 19 of the Act which provided that an appeal as a matter of right shall lie against any judgment or order of the Designated Court, not being an interlocutory order, to the Supreme Court, and in view of the explicit bar contained in sub section
(2) thereof which provided that no appeal or revision shall lie before any Court i.e. including the High Court, there was exclusion of jurisdiction of the High Court in regard to the proceedings before a Designated Court.
Hence this appeal by special leave.
Facts in the connected special leave petitions which are all directed against the orders passed by different Designated Courts rejecting the applications for bail, are apt to differ from case to case.
On the view that we take as to the nature of the function of the Designated Courts in dealing with applications for bail within the constraints of section 20(8), it is not necessary to deal with the facts of these cases in any detail.
Broadly speaking, the cases fall into three distinct categories, namely: (1) Cases of communal riots resulting in offences of murder, arson, looting etc.
where there are overt acts on the part of persons of one community against the other.
(2) Incidents giving rise to acts of physical violence resulting in communal riots due to instigation.
(3) Cases connected with trade union activities started at the instance of the management, or at the instance of owners of property to settle private disputes on the allegations that there were acts of physical violence.
The statutory provisions bearing on the questions involved may be set out.
Sub section
(1) of section 3 of the Act which gives a meaning to the 232 expression 'terrorist act ' is in the following terms: "3.
(1) Whoever with intent to overawe the Government as by law established or to strike terror in the people or any section of the people or to alienate any section of the people or to adversely affect the harmony amongst different sections of the people does any act or thing by using bombs, dynamite or other explosive substances or inflammable substances or fire arms or other lethal weapons or poisons or noxious gases or other chemicals or by any other substances (whether biological or otherwise) of a hazardous nature in such a manner as to cause, or as is likely to cause, death of, or injuries to, any person or persons or loss of, or damage to, or destruction of, property or disruption of any supplies or services essential to the life of the community, or detains any person and threatens to kill or injure such person in order to compel the Government or any other person to do or abstain from doing any act, commits a terrorist act.
" Sub section
(2) thereof reads: "(2) Whoever commits a terrorist act, shall,: (i) if such act has resulted in the death of any person, be punishable with death or imprisonment for life and shall also be liable to fine; (ii) in any other case be punishable with imprisonment for a term which shall not be less than five years but which may extend to imprisonment for life and shall also be liable to fine.
" Sub section
(1) of section 4 provides for punishment for disruptive activities and reads: "4.(1) Whoever commits or conspires or attempts to commit or abets, advocates, advises, or knowingly facilitates the commission of, any disruptive activity or any act preparatory to a disruptive activity shall be punishable with imprisonment for a term which shall not be less than five years but which may extend to imprisonment for life and shall also be liable to fine.
" 233 Sub section
(2) thereof gives a meaning to the expression 'disruptive A activity ' and it is as follows: "(2) For the purposes of sub section (1), "disruptive activity" means any action taken, whether by act or by speech or through any other media or in any other manner whatsoever, (i) which questions, disrupts or is intended to disrupt, whether directly or indirectly, the sovereignty and territorial integrity of India; or (ii) which is intended to bring about or supports any claim, whether directly or indirectly, for the cession of any part of India or the secession of any part of India from the Union.
Explanation For the purposes of this sub section, (a) "cession" includes the admission of any claim of any foreign country to any part of India, and (b) "secession" includes the assertion of any claim to determine whether a part of India will remain within the Union.
" Sec.
19 ousts the jurisdiction of the High Court altogether and reads "19.(1) Notwithstanding anything contained in the Code, an appeal shall lie as a matter of right from any judgment, sentence or order, not being an interlocutory order, of a Designated Court to the Supreme Court both on facts and on law.
(2) Except as aforesaid, no appeal or revision shall lie to any court from any judgment, sentence or order including an interlocutory order of a Designated Court.
" Sub section
(8) of section 20 of the Act which has an important bearing on these cases is in these terms: "(8) Notwithstanding anything contained in the Code, no 234 person accused of an offence punishable under this Act or any rule made thereunder shall, if in custody, be released on bail or on his own bond unless (a) the Public Prosecutor has been given an opportunity to oppose the application for such release, and (b) where the Public Prosecutor opposes the application, the court is satisfied that there are reasonable grounds for believing that he is not guilty of such offence and that he is not likely to commit any offence while on bail." Sub section
(9) thereof provides that the limitations on granting of bail specified in sub section
(8) are in addition to the limitations under the Code or any other law for the time being in force on granting of bail.
In support of the appeal and the connected special leave petitions, learned counsel for the appellants and the petitioners, put forth the following submissions, namely: (1) Part III of the Act is 'supplemental ' to the Code and the Code still applies except to the extent that it stands modified by the provisions of the Act, and particularly those contained in Part IV.
(2) While section 11(1) creates a special tribunal for trial of offences under section 3 or section 4 of the Act viz. the Designated Courts constituted by the Central or the State Government under section 9(1), the various sub sections of section 14 provide that the procedure and powers of such Designated Courts shall be as specified therein.
Particular emphasis is laid upon the provision contained in sub section
(3) thereof which reads: " 14(3) .
Subject to the other provisions of this Act, a Designated Court shall, for the purpose of trial of any offence, have all the powers of a Court of Session and shall try such offence as if it were a Court of Session so far as may be in accordance with the procedure prescribed in the Code for the trial before a Court of Session . " (3)The 'source of power ' of a Designated Court to grant bail is not section 20(8) of the Act but section 439 of the Code and that section 20(9) only places limitations on such power.
This is made explicit by section 20(9) which provides that the limitations on the granting of bail specified in sub section
(8) are 'in addition to the limitations under the Code or any other law for the time being in force '.
(4) Though the legislature has made an 235 express provision in section 20(7) of the Act which provides that nothing in s.438 of the Code which deals with the power of the High Court or the Court of Session to grant anticipatory bail, shall apply in relation to a case involving the arrest of any person on an accusation of having committed an offence punishable under the Act or any rule made thereunder, there is no like provision making section 439 of the Code dealing with the power of the High Court or the Court of Sessions to grant bail.
A fortiori, Chapter XXXIII of the Code is still preserved as otherwise the Designated Courts would have no power to grant bail.
As regards the jurisdiction and power of the High Court to grant bail under section 439 of the Code or by recourse to its inherent powers under section 482, the contention on behalf of the appellants and the petitioners is that Chapter XXXIII of the Code being applicable, the source of power of a Designated Court to grant bail being section 439, the necessary concomitant is that the jurisdiction and power of the High Court to entertain an application for bail on its own under section 439 or by recourse to its inherent powers under section 482, is applicable.
The argument is that it is impermissible for the legislature to set up a new hierarchy of Courts different from the one envisaged by the Constitution and byepass the High Court.
Under the Constitution the High Court is the repository of all judicial authority within the State.
To take away the power of the High Court would be tantamount to strike at the very foundation of an independent judiciary, free from executive control.
It is pointed out that section 20(4) of the Act makes section 167 of the Code applicable in relation to a case involving an offence punishable under the Act, subject to the modifications specified therein.
(a) thereof provides that reference in sub section
(1) of section 167 to 'Judicial Magistrate ' shall be construed as reference to 'Judicial Magistrate or Executive Magistrate or Special Executive Magistrate ', while cl.
(b) provides that references in sub section
(2) of that section to 'fifteen days ', 'ninety days ' and 'sixty days ' wherever they occur, shall be construed as references to 'sixty days ', 'one year ' and 'one year ' respectively.
The effect of the amendment to section 167 by section 20(4) is to invest the Executive Magistrates, who are not subject to the control of the High Court, with an unlimited power to grant police remand or remand to judicial custody without the filing of a challan for indefinite duration from time to time upto a period of one year.
It is said that the affect of this virtually means detention without trial.
The learned counsel accordingly characterised the Act as 'a piece of draconian legislation ' which makes serious in roads into the rights of the citizens to life and liberty guaranteed under article 21 of the Constitution without the constitutional safeguards enshrined in article 22.
However, it was expressly stated 236 before us that the constitutionality of the Act is not under challenge in these cases and that this question is under the consideration of a larger bench of this Court in another case Our attention was particularly drawn to the view expressed by Chandrachud, CJ in delivering the majority opinion in the Presidential reference in Re the Special Courts Bill, 1978 where the Court upheld the Special Courts Bill mainly because of the provision for appointment of a sitting High Court Judge as a Judge of the Special Court as a sufficient safeguard against Executive interference.
The learned Chief Justice in the course of his judgment observed: "It is of the greatest importance that in the name of fair and unpolluted justice, the procedure for appointing a Judge of the Special Court, should inspire the confidence not only of the accused but of the entire community.
Administration of justice has a social dimension and the society at large has a stake in impartial and even handed justice.
" It is pointed out that the Act though patterned on the lines of the instead leaves it to the discretion of the Central Government or a State Government, as the case may be to appoint a person of their choice, to be a Judge of the Designated Court.
It is further pointed out that the State Government has under section 9(4) of the Act appointed retired District Judges to be Judges of some of the Designated Courts in the State, constituted under section 9(1).
It is apprehended that a retired District Judge would be completely at the mercy of the Executive.
Essentially, the submission is that the creation of a Designated Court which is not subject to the control and superintendence of the High Court is detrimental to the constitutional concept of judicial independence.
It is apprehended that the entrustment of the power to the Executive Magistrates to grant police remand extending over one year by amendment of sub section
(1) of section 167 of the Code was capable of misuse.
Our attention was also drawn to the various provisions of the Act which take away the various safeguards provided to an accused as provided in the Code as well as section 25 of the Evidence Act which, according to the learned counsel, offend against article 21 of the Constitution.
See: sections 11(2), 14(2), 14(5), 15(1), 16(1), (2) and (3), and 21(2).
It is said that the procedure contemplated by article 21 must be right and just and fair, and not arbitrary, fanciful or oppressive.
Otherwise, it would not be procedure at all and the requirements of article 21 would not be satisfied.
We do not think it necessary to go into these aspects for the constitutionality of the Terrorist & Disruptive Activities (Prevention) Acts, 1985 and 1987 and their provisions is not a question before us.
We feel that these questions should best be left open to be dealt with by the Constitution Bench 237 At the very outset, Shri Poti, learned counsel appearing for the State Government with his usual fairness, unequivocally accepted that the provisions of the Act do not take away the constitutional remedies available to a citizen to approach the High Court under article 226 or article 227 or move this Court by a petition under article 32 for the grant of an appropriate writ, direction or order.
It must necessarily follow that a citizen can always move the High Court under article 226 or article 227 or this Court under article 32 challenging the constitutional validity of the Act or its provisions on the ground that they offend against articles 14, 21 and 22 or on the ground that a notification issued by the Central Government or the State Government under section 9(1) of the Act constituting a Designated Court for any area or areas or for such case or class or group of cases as specified in the notification, was a fraud on powers and thus constitutionally invalid.
As to the merits, the submissions advanced by learned counsel for the State Government proceeded more or less on these lines.
Where an enactment provides for a complete procedure for the trial of certain offences, it is that procedure that must be followed and not the one prescribed by the Code.
Under section 14(1), the Designated Court has exclusive jurisdiction for the trial of such offences and by virtue of section 12(1), the Designated Court may also try any other offence with which the accused may under the Code, be charged at the same trial if the offence is connected with such other offence.
Where there is a special enactment on a specific subject as the Act in question which is a special law, the Act as a special Act must be taken to govern the subject and not the Code in the absence of a provision to the contrary.
The legislature by the use of the words 'as if it were ' in section 14(3) endowed a Designated Court with the status of a Court of Session, but the legal fiction must be restricted to procedure alone, that is to say, the procedure for the trial of an offence must be in accordance with the procedure prescribed under the Code for trial before a Court of Session, insofar as applicable.
But some meaning must be given to the opening words of section 14(3) 'Subject to the other provisions of the Act '.
Where an enactment provides for a complete procedure for the trial of an offence, it is that procedure that must be followed and not the one prescribed by the Code.
Our attention was drawn to section 4(1) of the Code which provides that all offences under the Indian Penal Code, 1860 shall be investigated, inquired into, tried, and otherwise dealt with according to the provisions contained therein i.e. in accordance with the procedure prescribed under the Code.
Sub section
(2) thereof however engrafts an 238 exception to the general rule as to the procedure to be followed for the A trial of offences under any other laws, and it reads: "4(2).
All offences under any other laws shall be investigated, inquired into, tried, and otherwise dealt with according to the same provisions, but subject to any enactment for the time being in force regulating the manner or place of investigating, inquiring into, trying or other vise dealing with such offences".
In support of the contention that the procedure to be followed is the special procedure laid down by the Act, reliance is placed on section S of the Code which is in these terms: "(5).
Nothing contained in this Code shall, in the absence of a specific provision to the contrary, affect any special or local law for the time being in force, or any special jurisdiction or power conferred, or any special form of procedure prescribed, by any other law for the time being in force.
" It is submitted that there is no express provision excluding the applicability of section 439 of the Code similar to the one contained in section 20(7) of the Act in relation to any case involving the arrest of any person on an accusation of having committed an offence punishable under the Act or any rule made thereunder, but that result must, by necessary implication, follow.
According to the learned counsel, the source of power of a Designated Court to grant bail is not section 439 of the Code but section 437 which speaks of 'a Court other than a High Court or a Court of Session ' and it, insofar as material, reads as follows: "437(1).
When bail may be taken in case of non bailable offence When any person accused of, or suspected of, the commission of any non bailable offence is arrested or detained without warrant by an officer in charge of a police station or appears or is brought before a Court other than the High Court or Court of Session, he may be released on bail . " (Emphasis supplied) Before dealing with the contentions advanced, it is well to remember that the legislation is limited in its scope and effect.
The Act is an extreme measure to be resorted to when the police cannot tackle the situation under the ordinary penal law.
The intendment is to pro 239 vide special machinery to combat the growing menace of terrorism in different parts of the country.
Since, however, the Act is a drastic measure, it should not ordinarily be resorted to unless the Government 's law enforcing machinery fails.
As a matter of construction, we must accept the contention advanced by learned counsel appearing for the State Government that the Act being a special Act must prevail in respect of the jurisdiction and power of the High Court to entertain an application for bail under section 439 of the Code or by recourse to its inherent powers under section 482.
Under the scheme of the Act, there is complete exclusion of the jurisdiction of the High Court in any case involving the arrest of any person on an accusation of having committed an offence punishable under the Act or any rule made thereunder.
There is contrariety between the provisions of the Act and those contained in the Code.
Under the Code, the High Court is invested with various functions and duties in relation to any judgment or order passed by criminal court subordinate to it.
Those powers may be briefly enumerated, namely, the jurisdiction and power to hear an appeal under section 374 against any judgment or sentence passed by the Court of Session, the power to hear an appeal against an order of acquittal by a criminal court including the Court of Session under section 378, the power to hear a reference as to the validity of.
any Act, ordinance or regulation or any provision contained therein made by a criminal court under section 395, the confirmation of a death sentence on a reference by a Court of Session under sections 366 371 and section 392, the power to grant bail under section 439 subject to certain limitations, the inherent power under section 482 to make such orders as may be necessary or to prevent abuse of the process of the Court or otherwise to secure the ends of justice.
Undoubtedly, the High Court has the jurisdiction and power to pass such orders as the ends of justice require, in relation to proceedings before all criminal courts subordinate to it.
The legislature by enacting the law has treated terrorism as special criminal problem and created a special court called a Designated Court to deal with the special problem and provided for a special procedure for the trial of such offences.
A grievance was made before us that the State Government by notification issued under section 9(1) of the Act has appointed District & Sessions Judges as well as Additional District & Sessions Judges to be Judges of such Designated Courts in the State.
The use of ordinary courts does not necessarily imply the use of standard procedures.
Just as the legislature can create a special court to deal with a special problem, it can also create new 240 procedures within the existing system.
Parliament in its wisdom has adopted the frame work of the Code but the Code is not applicable.
The Act is a special Act and creates a new class of offences called terrorist acts and disruptive activities as defined in sections 3(1) and 4(2) and provides for a special procedure for the trial of such offences.
Under section 9(1), the Central Government or a State Government may by notification published in the official Gazette, constitute one or more Designated Courts for the trial of offences under the Act for such area or areas, or for such case or class or group of cases as may be specified in the notification.
The jurisdiction and power of a Designated Court is derived from the Act and it is the Act that one must primarily look to in deciding the question before us.
Under section 14(1), a Designated Court has exclusive jurisdiction for the trial of offences under the Act and by virtue of section 12(1) it may also try any other offence with which the accused may, under the Code, be charged at the same trial if the offence is connected with such other offence.
Where an enactment provides for a special procedure for the trial of certain offences, it is that procedure that must be followed and not the one prescribed by the Code.
No doubt, the legislature by the use of the words 'as if it were ' in section 14(3) of the Act vested a Designated Court with the status of a Court of Session.
But, as contended for by learned counsel for the State Government, the legal fiction contained therein must be restricted to the procedure to be followed for the trial of an offence under the Act i.e. such trial must be in accordance with the procedure prescribed under the Code for the trial before a Court of Session, insofar as applicable.
We must give some meaning to the opening words of section 14(3) 'Subject to the other provisions of the Act ' and adopt a construction in furtherance of the object and purpose of the Act.
The manifest intention of the legislature is to take away the jurisdiction and power of the High Court under the Code with respect to offences under the Act.
No other construction is possible.
The expression 'High Court ' is defined in section 2(1)(e) but there are no functions and duties vested in the High Court.
The only mention of the High Court is in section 20(6) which provides that sections 366 371 and section 392 of the Code shall apply in relation to a case involving an offence triable by a Designated Court, subject to the modifications that the references to 'Court of Session ' and 'High Court ' shall be construed as references to 'Designated Court ' and 'Supreme Court ' respectively.
19(1) of the Act provides for a direct appeal, as of right, to the Supreme Court from any judgment or order of the Designated Court, not being an interlocutory order.
There is thus a total departure from different classes of Criminal 241 Courts enumerated in section 6 of the Code and a new hierarchy of Courts is sought to be established by providing for a direct appeal to the Supreme Court from any judgment or order of a Designated Court, not being an interlocutory order, and substituting the Supreme Court for the High Court by section 20(6) in the matter of confirmation of a death sentence passed by a Designated Court.
Though there is no express provision excluding the applicability of section 439 of the Code similar to the one contained in section 20(7) of the Act in relation to a case involving the arrest of any person on an accusation of having committed an offence punishable under the Act or any rule made thereunder, but that result must, by necessary implication, follow.
It is true that the source of power of a Designated Court to grant bail is not section 20(8) of the Act as it only places limitations on such power.
This is made explicit by section 20(9) which enacts that the limitations on granting of bail specified in section 20(8) are 'in addition to the limitations under the Code or any other law for the time being in force '.
But it does not necessarily follow that the power of a Designated Court to grant bail is relatable to section 439 of the Code.
It cannot be.
doubted that a Designated Court is 'a Court other than the High Court or the Court of Session ' within the meaning of section 437 of the Code.
The exercise of the power to grant bail by a Designated Court is not only subject to the limitations contained therein, but is also subject to the limitations placed by section 20(8) of the Act.
The controversy as to the power of the High Court to grant bail under section 439 of the Code must also turn on the construction of section 20(8) of the Act.
It commences with a non obstante clause and in its operative part by the use of negative language prohibits the enlargement on bail of any person accused of commission of an offence under the Act, if in custody, unless two conditions are satisfied.
The first condition is that the prosecution must be given an opportunity to oppose the application for such release and the second condition is that where there is such opposition, the Court must be satisfied that there are reasonable grounds for believing that he is not guilty of such offence and that he is not likely to commit any offence while on bail.
If either of these two conditions is not satisfied, the ban operates and the person under detention cannot be released on bail.
It is quite obvious that the source of power of a Designated Court to grant bail is not section 20(8) of the Act but it only places limitations on such powers.
This is implicit by section 20(9) which in terms provides that the limitations on granting of bail specified in sub section
(8) are in addition to the limitations under the Code or any other law for the time being in force on granting of bail.
It there 242 fore follows that the power derived by a Designated Court to grant bail to a person accused of an offence under the Act, if in custody, is derived from the Code and not from section 20(8) of the Act.
In Balchand Jain vs State of Madhya Pradesh, ; while interpreting a similar provision contained in r. 184 of the Defence and Internal Security of India Rules, 1971, Bhagwati, J. speaking for a three Judge Bench observed: "The Rule, on its plain terms, does not confer any power on the Court to release a person accused or convicted of contravention of any Rule or order made under the Rules, on bail.
It postulates the existence of power in the Court under the Code of Criminal Procedure and seeks to place a curb on its exercise by providing that a person accused or convicted of contravention of any Rule or order made under the Rules, if in custody, shall not be released on bail unless the aforesaid two conditions are satisfied.
It imposed fetters on the exercise of the power of granting bail in certain kinds of cases and removes such fetters on fulfilment of the aforesaid two conditions.
When these two conditions are satisfied, the fetters are removed and the power of granting bail possessed by the Court under the Code of Criminal Procedure revives and becomes exercisable.
The non obstante clause at the commencement of the Rule also emphasises that the provision in the Rule is intended to restrict the power of granting bail under the Code of Criminal Procedure and not to confer a new power exercisable only on certain conditions.
It is not possible to read Rule 184 as laying down a self contained code for grant of bail in case of a person accused or convicted of contravention of any Rule or order made under the Rule so that the power to grant bail in such case must be found only in Rule 184 and not in the Code of Criminal Procedure.
Rule 184 cannot be construed as displacing altogether the provisions of the Code of Criminal Procedure in regard to bail in case of a person accused or convicted of contravention of any Rule or order made under the Rules.
These provisions of the Code of Criminal Procedure must be read along with Rule 184 and full effect must be given to them except in so far as they are, by reason of the non obstante clause overridden by rule 184.
" 243 The learned Judge placing emphasis on the words 'if in custody ' in r. 184, further observed: "It is an application for release of a person in custody that is contemplated by Rule 184 and not an application for grant of 'anticipatory bail ' by a person apprehending arrest.
Section 438 and Rule 184 thus operate at different stages, one prior to arrest and the other, after arrest and there is no overlapping between two provisions so as to give rise to a conflict between them.
And consequently, it must follow as a necessary corollary that Rule 184 does not stand in the way of a Court of Session or a High Court granting 'anticipatory bail ' under section 438 to a person apprehending arrest on an accusation of having committed contravention of any Rule or order made under the (Defence and Internal Security of India) Rules, 1971.
" Upon that view, the Court in Balchand Jain 's case held that r. 184 of the Defence and Internal Security of India Rules, 1971, does not take away the power conferred on a Court of Session or a High Court under section 438 of the Code to grant anticipatory bail.
We have been referred to the decision of R.S. Pathak, CJ speaking for a Division Bench of the Himachal Pradesh High Court in Ishwar Chand vs State of Himachal Pradesh, ILR (1975) HP 569 holding that r. 184 did not affect the jurisdiction and power of the High Court under sections 438 and 439 of the Code which were independent of the power of the special tribunal to try an offence for contravention of an order made under section 3 of the Defence & Internal Security of India Act, 1971.
Both these decisions are clearly distinguishable.
The view expressed in Balchand Jain 's case is not applicable at all for more than one reason.
There was nothing in the Defence & Internal Security of India Act or the Rules framed thereunder which would exclude the jurisdiction and power of the High Court altogether.
On the contrary, section 12(2) of that Act expressly vested in the High Court the appellate jurisdiction in certain specified cases.
In view of the explicit bar in section 19(2), there is exclusion of the jurisdiction of the High Court.
It interdicts that no appeal or revision shall lie to any Court, including the High Court, against any judgment, sentence or order, not being an interlocutory order, of a Designated Court.
The Act by section 16(1) confers the right of appeal both on facts as well as on law to the Supreme Court.
Further, while it is true that Chapter XXXIII of the Code is still preserved as otherwise the Designated Courts would have no power to grant bail, still the source of power is not section 439 of the Code but section 437 being a Court other 244 than the High Court or the Court of Session.
Any other view would lead to an anomalous situation.
If it were to be held that the power of a Designated Court to grant bail was relatable to section 439 it would imply that not only the High Court but also the Court of Session would be entitled to grant bail on such terms as they deem fit.
The power to grant bail under section 439 is unfettered by any conditions and limitations like section 437.
It would run counter to the express prohibition contained in section 20(8) of the Act which enjoins that notwithstanding anything in the Code, no person accused of an offence punishable under the Act or any rule made thereunder shall, if in custody, be released on bail unless the conditions set forth in clauses (a) and (b) are satisfied.
Lastly, both the decision in Balchand Jain and that in Ishwar Chand turn on the scheme of the Defence & Internal Security of India Act, 1971.
They proceed on the well recognised principle that an ouster of jurisdiction of the ordinary Courts is not to be readily inferred except by express provision or by necessary implication.
It all depends on the scheme of the particular Act as to whether the power of the High Court and the Court of Session to grant bail under sections 438 and 439 exists.
We must accordingly uphold the view expressed by the High Court that it had no jurisdiction to entertain an application for bail under section 439 or under section 482 of the Code.
That takes us to the approach which a Designated Court has to adopt while granting bail in view of the limitations placed on such power under section 20(8).
The sub section in terms places fetters on the power of a Designated Court on granting of bail and the limitations specified therein are in addition to the limitations under the Code.
Under section 20(8), no person accused of an offence punishable under the Act or any rule made thereunder shall, if in custody be released on bail or on his own bond unless the two conditions specified in cls.
(a) and (b) are satisfied.
In view of these more stringent conditions a Designated Court should carefully examine every case coming before it for finding out whether the provisions of the Act apply or not.
Since before granting bail the Court is called upon to satisfy itself that there are reasonable grounds for believing that the accused is innocent of the offence and that he is not likely to commit any offence while on bail, the allegations of fact, the police report along with the statements in the case diary and other available materials should be closely examined.
A prayer for bail ought not to be rejected in a mechanical manner.
At the conclusion of the hearing on the legal aspect, Shri Poti, learned counsel appearing for the State Governrment contended, on 245 instructions, that an order passed by a Designated Court for grant or refusal of bail is not an 'interlocutory order ' within the meaning of section 19(1) of the Act and therefore an appeal lies.
We have considerable doubt and difficulty about the correctness of the proposition.
The expression 'interlocutory order ' has been used in section 19(1) in contradistinction to what is known as final order and denotes an order of purely interim or temporary nature.
The essential test to distinguish one from the other has been discussed and formulated in several decisions of the Judicial Committee of the Privy Council, Federal Court and this Court.
One of the tests generally accepted by the English Courts and the Federal Court is to see if the order is decided in one way, it may terminate the proceedings but if decided in another way, then the proceedings would continue.
In V. C. Shukla vs State through C.B.I., , Fazal Ali, J. in delivering the majority judgment reviewed the entire case law on the subject and deduced therefrom the following two principles, namely, (i) that a final order has to be interpreted in contra distinction to an interlocutory order; and (ii) that the test for determining the finality of an order is whether the judgment or order finally disposed of the rights of the parties.
It was observed that these principles apply to civil as well as to criminal cases.
In criminal proceedings, the word 'judgment ' is intended to indicate the final order in trial terminating in the conviction or acquittal of the accused.
Applying these tests, it was held that an order framing a charge against an accused was not a final order but an interlocutory order within the meaning of section 11(1) of the and therefore not appealable.
It cannot be doubted that the grant or refusal of a bail application is essentially an interlocutory order.
There is no finality to such an order for an application for bail can always be renewed from time to time.
It is however contended that the refusal of bail by a Designated Court due to the non fulfilment of the conditions laid down in section 20(8) cannot be treated to be a final order for it affects the life or liberty of a citizen guaranteed under article 21.
While it is true that a person arraigned on a charge of having committed an offence punishable under the Act faces a prospect of prolonged incarceration in view of the provision contained in section 20(8) which places limitations on the power of a Designated Court to grant bail, but that by itself is not decisive of the question as to whether an order of this nature is not an interlocutory order.
The Court must interpret the words 'not being an interlocutory order ' used in section 19(1) in their natural sense in furtherance of the object and purpose of the Act to exclude any interference with the proceedings before a Designated Court at an intermediate stage.
There is no finality attached to an order of a Designated Court grant 246 ing or refusing bail.
Such an application for bail can always be renewed from time to time.
That being so, the contention advanced on behalf of the State Government that the impugned orders passed by the Designated Courts refusing to grant bail were not interlocutory orders and therefore appealable under section 19(1) of the Act, cannot be accepted.
Surprisingly enough, a few days after the hearing had concluded and the judgment reserved, the State Government adopted a different stand in another case and contended that an order refusing to grant bail due to non fulfilment of the conditions laid down in section 20(8) of the Act was an interlocutory order.
We really fail to appreciate such inconsistent stands being taken by the same government on a question of principle.
In view of the stand adopted by the State Government in these cases, we with the assistance of the learned counsel for the parties went through the facts of each case.
We regret to find that the Designated Courts have not carefully considered the facts and circumstances and have rejected the applications for bail mechanically.
As already mentioned, the cases fall into three broad categories.
The facts in Criminal Appeal No. 313 of 1987 have been set out earlier.
In Special Leave Petitions Nos. 2369 and 2469 of 1987 the prosecution has been started at the instance of the management of a textile mill in Ahmedabad.
The other category of cases have arisen out of communal riots.
Normally such cases have to be dealt with under the ordinary procedure prescribed by the Code, unless offences under sections 3 and 4 of the Act are made out.
The Designated Courts were under a duty to examine the circumstances closely from this angle.
That has not been done.
It is, therefore, desirable to set aside the orders passed by the various Designated Courts and remit the cases for fresh consideration.
Accordingly, the appeal and the special leave petitions partly succeed and are allowed.
While upholding the judgment and order of the High Court dismissing the applications for bail under section 439 of the Code of Criminal Procedure, 1973 we grant leave and set aside the impugned orders passed by the various Designated Courts in the State dismissing the applications for bail and direct them to consider each particular case on merits as to whether it falls within the purview of sections 3 and/or 4 of the Terrorist & Disruptive Activities (Prevention) Act, 1987; and if so, whether the accused in the facts and circumstances of the case were entitled to bail while keeping in view the limitations on their powers under section 20(8) of the Act.
Where the Designated Courts 247 find that the acts alleged in the police report or complaint of facts A under section 14(1) do not fall within the purview of sections 3 and/ or 4 of the Act, they shall in exercise of the powers under section 10 of the Act transfer the cases for trial to the ordinary criminal courts.
The accused persons who have been enlarged on bail by this Court shall continue to remain on bail until their applications for bail are dealt with by the Designated Courts with advertence to the observations made above.
S.L. Appeal & Petitions partly allowed.
[/INST]The word 'Copy ' occurring in section 419 Of the Code of Criminal Procedure means a certified copy and a petition of appeal filed under that section must, therefore, be accompanied by a certified copy of the judgment or order appealed against.
Ram Lal vs Ghanasham Das, A.I.R. (1923) Lah.
150, referred to.
Firm Chota Lal Amba Parshad vs Firm Basdeo Mal Hira Lal, A.I.R. (1926) Lah.
404, distinguished.
Consequently, where a State Government filed an appeal against an order of acquittal under section 417 of the Code of Criminal Procedure with a plain copy of the judgment appealed against and put in a certified copy of it after the period of limitation prescribed for the appeal had expired and the High Court dismissed the appeal as time barred, that order was correct and must be affirmed.
</s>
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<s>[INST] Summarize the judgementAppeals Nos.165 168 of 1956.
Appeals from the judgment and order dated March 22, 1955, of the Mysore High Court in Writ Petitions Nos. 20 to 22 and 25 of 1954.
788 H. N. Sanyal, Addl.
Solicitor General of India, R. Ganapathy Iyer and R. H. Dhebar, for the appellant.
A. V. Viswanatha Sastri, K. R. Choudhury and G. Gopalakrishnan, for the respondent.
April 28.
The Judgment of the Court was delivered by S.K. DAS J.
These four appeals brought by the Income tax Officer, Special Circle, Bangalore, on a certificate granted by the High Court of Mysore, are from the judgment and order of the said High Court dated March 22, 1955, by which it quashed certain proceedings initiated, and orders of assessment made, against the respondent assesse in the matter of reassessment of income tax for the years 1945 46, 1946 47, 1947 48, and 1948 1949.
The relevant facts are these.
The respondent K. N. Guruswamy was carrying on business as an excise contractor in the Civil and Military Station of Bangalore, hereinafter called the retroceded area, in Mysore.
He was assessed to income tax for each of the four years mentioned above under the law then in force in the retroceded area by the Income tax Officer having jurisdiction therein.
For 1945 46 the original assessment was made on February 12,1946, for 1946 47 on January 21, 1949, for 1947 48 on January 22, 1949, and for 1918 49 also sometime in the year 1949.
The tax so assessed was duly paid by the assessee.
On January 5, 1954, more than four years after, the Income tax Officer, Special Circle, Bangalore, served a notice on the assessee under section 34 of the Indian Income tax Act, 1922, for the purpose of assessing what was described as escaped ' or 'under assessed ' income chargeable to income tax for the said years.
The assessee appeared through his auditors and contested the jurisdiction of the Income tax Officer to issue the notice or make a re assessment under section 34 of the Indian Income tax Act, 1922.
On February 19, 1954, the Income tax Officer overruled the assessee 's objection, and made a re assessment order for the year 1945 46.
On February 25, 1954, the assessee filed four writ petitions in the Mysore High Court in 789 which he challenged the jurisdiction of the Income tax Officer to take proceedings under section 34 or to make an order of re assessment in such proceedings; he asked, for appropriate orders or writs quashing the pending proceedings for three years and the order of re assessment for 1945 46.
During the pendency of the cases in the High Court, the Income tax Officer was permitted to make an assessment order for 1946 47, subject to the condition that if the assessee succeeded in establishing that the Income tax Officer had no jurisdiction, that order would also be quashed.
The High Court heard all the four petitions together, and by its judgment and order dated March 22, 1955, allowed the writ petitions and quashed the proceedings in assessment as also the two orders of reassessment, holding that the Income tax Officer had no jurisdiction to initiate the proceedings or to make the orders of re assessment.
The High Court, however, granted a certificate that the cases were fit for appeal to this Court, and these four appeals have been brought on that certificate.
Before us, the appeals have been heard together and will be governed by this judgment.
For a clear understanding and appreciation of the issues involved in these appeals, it is necessary to set out, in brief outline, the political and constitutional changes which the retroceded area has from time to time undergone; because those changes had important legal consequences.
Under the Instrument of Transfer executed sometime in 1881, when there was installation of the Maharaja of Mysore by what has been called " the rendition of the State of Mysore ", the Maharaja agreed to grant to the Governor General in Council such land as might be required for the establishment and maintenance of a British cantonment and to renounce all jurisdiction therein.
Pursuant to that agreement, the retroceded area was granted to the Governor General in Council, and jurisdiction therein was exercised by virtue of powers given by the Indian (Foreign Jurisdiction) Order in Council, 1902, made under the Foreign Jurisdiction Act, 1890.
The laws administered in the area included various enactments made applicable thereto from time to 790 time by the promulgation of notifications made under the aforesaid Order in Council, and one of such enactments was the Indian Income tax Act, 1922.
The year 1947 ushered in great political and constitutional changes in India, which affected not merely what was then called British India but also the Indian States, such as Mysore etc.
The Indian Independence Act, 1947, brought into existence two independent Dominions, India and Pakistan, as from August 15, 1947.
The Act, however, received Royal assent on July 18, 1947.
Section 7 set out the consequences of the setting up of the two new Dominions: one such consequence was that the suzerainty of His Majesty over the Indian States lapsed, and with it lapsed all treaties, agreements etc., between His Majesty and the rulers of Indian States, including all powers, rights, authority or jurisdiction exercisable by His Majesty in an Indian State by treaty, grant, usage, suffrage etc.
In view of the aforesaid provision perhaps in anticipation of it, the retroceded area was given back to the State of Mysore on July 26, 1947 by a notification Made by the Crown Representative under the Indian (Foreign Jurisdiction) Order in Council, 1937.
This did not, however, mean that the Mysore laws at once came into force in the retroceded area.
On August 4, 1947, the Maharaja of Mysore enacted two laws: the Retrocession (Application of Laws) Act 1947, being Act XXIII of 1947, and the Retrocession (Transitional Provisions) Act, 1947 being Act XXIV of 1947.
The combined effect of these laws was this: all laws in force in the retroceded area prior to the the date of retrocession, which was July 26, 1947, continued to have effect and be operative in the retroceded area (vide section 3 of Act XXIII of 1947) and the Mysore officers were given jurisdiction to deal with proceedings under the laws in force prior to the date of retrocession (see section 12 of Act XXIV of 1947).
This state of affairs continued till June 30, 1948, on which date was promulgated the Mysore Income tax and Excess Profits Tax (Application to the Retroceded Area) (Emergency) Act, 1948, being Act XXXI of 1948.
Section 3 of this Act said 791 "Notwithstanding anything to the contrary in section 3 of the Retrocession (Application of Laws) Act, 1947, (i) the Mysore Income tax Act, 1923, and (ii) the Mysore Excess Profits Tax Act, 1946, except sub section (4) of section 2, and all rules, orders and notifications made or issued tinder the aforesaid Acts and for the time being in force shall with effect from the first day of July, 1948, and save as otherwise provided in this Act, take effect in the Retroceded Area to the same extent and in the same manner as in the rest of Mysore.
" Section 6 said " Subject to the provisions of this Act, the Indian Income tax Act, 1922, and the Excess Profits Tax Act, 1940, as continued by the Retrocession (Application of Laws) Act, 1947, are hereby repealed.
" The repeal of the Indian Income tax Act, 1922, effected by section 6 aforesaid, was subject to other provisions of Act XXXI of 1948, and one such provision which is material for the dispute before us was contained in section 5, the relevant portion whereof was in these terms " section 5.
Notwithstanding anything to the contrary in the Mysore Income tax Act, 1923, or the Mysore Excess Profits Tax Act, 1946, (a). . . . . . . . . . (b)in respect of the total income or profits chargeable to income tax or excess profits tax in the Retroceded Area prior to the first day of July, 1948, but which has not been, assessed until that date, the provisions of the Indian Income tax Act, 1922,and the Excess Profits Tax Act, 1940, as in force in the Retroceded Area immediately before that date shall apply to proceedings relating to the assessment of such in come or profits until the stage of assessment, and the determination of the income tax and excess profits tax payable thereon, and the Mysore Income tax Act, 1923, or the Mysore Excess Profits Tax Act, 1946, as the case may be, shall apply to such proceedings after that stage ; 101 792 (c). . . (d). . . (e). . .
The effect of sections 3, 5 (b) and 6 of Mysore Act, XXXI of 1948, inter alia, was that though the Indian Incometax Act, 1922, stood repealed and the Mysore Incometax Act, 1923, came into effect from July 1, 1948 the former Act as in force in the retroceded area prior to July 1, 1948, continued to apply in respect of the total income chargeable to income tax in the retroceded area prior to July 1, 1948 but which had not been assessed until that date, and it further applied to all proceedings relating to the assessment of such income until the stage of assessment and the determination of incometax but the Mysore Act, 1923, applied to such proceedings after that stage.
On August 5, 1948, was promulgated the Retroceded Area (Application of Laws) Act, LVII of 1948, which came into effect from August 15, 1948.
Sections 3 and 4 of Act LVII of 1948, are material for our purpose and may be quoted "section 3.
Except as hereinafter in this Act provided, (3) all laws in force in Mysore shall apply to the Retroceded Area; and (b)the laws in force in the Retroceded Area immediately before the appointed day shall not, from that day, have effect or be operative in the Retroceded Area,." " section 4.
The enactments in force in Mysore which are set out in the first column of Schedule A to this Act shall apply to the Retroceded Area subject to the modifications and restrictions specified in the second column of the said Schedule and, the provisions of this Act.
" Schedule A, paragraph (2), sub paragraph (b) repeated ' in substance what was stated earlier in section 5 (b).
of Act XXXI of 1948.
It read " 2.
Notwithstanding anything to the contrary in the Mysore.
Income tax Act, 1923, or the Mysore Excess Profits Tax Act, 1946 (a). . . . 793 (b) in respect of the total income or profits chargeable to income tax or excess profits tax in the Retroceded Area prior to the first day of July 1948, but which has not been assessed until that date, the provisions of the Indian Income tax Act, 1922, and the Excess Profits Tax Act, 1940, as in force in the Retroceded Area immediately before that, date shall apply to proceedings relating to the assessment of such income or profits until the stage of assessment, and the determination of the income tax and excess profits tax payable thereon, and the Mysore Incometax Act, 1923, or the Mysore Excess Profits Tax Act, 1946, as the case may be, shall apply to such proceedings after that stage; " There were further far reaching political and constitutional changes in 1949 50.
The Maharaja of Mysore had acceded to the Dominion of India in 1947; this, however, did not empower the Dominion legislature to impose any tax or duty in the State of Mysore or any part thereof.
By a proclamation dated November 25, 1949, the Maharaja of Mysore accepted the Constitution of India, as from the date of its commencement, as the Constitution of Mysore, which superseded and abrogated all other constitutional provisions inconsistent therewith and in force in the State.
On January 26, 1950, the Constitution of India came into force, and Mysore became a Part B State within the Constitution of India.
On February 28, 1950, there was a financial agreement between the Rajpramukh of Mysore and the President of India in respect of certain matters governed by articles 278, 291, 295 and 306 of the Constitution.
Under article 277 of the Constitution, however, all taxes which immediately before the commencement of the Constitution were being levied by the State continued to be so levied, notwithstanding that those taxes were mentioned in the Union List, until provision to the contrary was made by Parliament by law.
Such law was made by the Finance Act, 1950, by which the whole of Mysore including the retroceded area became " taxable territory " within the meaning of the Indian Income tax Act, 1922, from April 1, 1950, and the 794 Indian Income tax Act again came into force in the retroceded area from the aforesaid date.
Section 13 of the Finance Act, 1950, dealt with repeals and savings.
As the true scope and effect of sub section
(1) of section 13 is one of the questions at issue before us, it is necessary to read it.
" If immediately before the 1st day of April, 1950, there is in force in any Part B State other than Jammu and Kashmir or in Manipur, Tripura or Vindhya Pradesh or in the merged territory of CoochBehar any law relating to income tax or super tax or tax on profits of business that law shall cease to have effect except for the purposes of the levy, assess ment and collection of income tax and super tax in respect of any period not included in the previous year for the purposes of assessment under the Indian Income tax Act, 1922, for the year ending on the 31st day of March, 1951, or for any subsequent year, or, as the case may be, the levy, assessment and collection of the tax on profits of business for any chargeable accounting period ending on or before the 31st day of March, 1949: Provided that any reference in any such law to an officer, authority, tribunal or court shall be construed as a reference to the corresponding officer, authority, tribunal or court appointed or constituted under the said Act, and if any question arises as to who such corresponding officer, authority, tribunal or court is, the decision of the Central Government thereon shall be final.," Now, the legal effect of the constitutional changes referred to above, so far as it has a bearing on the present dispute, may be briefly summarised as follows: the Indian Income tax Act, 1922, remained in force in the retroceded area till June 30, 1948 ; from July 1, 1948, the Mysore Income tax Act, 1923, applied, subject to this saving that the Indian Income tax Act continued to apply in respect of the total income chargeable to income tax in the retroceded area prior to July 1, 1948, and the provisions of that Act as in force in the retroceded area prior to that date applied to all proceedings relating to the assessment of such income 795 upto the stage of assessment and determination of income tax payable thereon.
This position continued till April 1, 1950, when the Finance Act, 1950, came into force and the Indian Income tax Act, 1922, again came into force in the retroceded area, subject to the saving mentioned in section 13(1) thereof.
The principal question before us, as it was before the High Court, is one of jurisdiction.
Did the Income tax Officer concerned have jurisdiction to issue the notice under section 34 of the Indian Income tax Act, 192 and to make a re assessment order pursuant to sue notice ? The High Court pointed out that though the notice did not clearly say so, the Income tax Officer clearly acted under section 34 of the Indian Income tax Act, 1922, as it was in force in the retroceded area prior to July 1, 1948, and the writ applications were decided on that footing.
The four main lines of argument on which the respondent assessee rested his contention that the Incometax Officer concerned had no jurisdiction were these : firstly, it was urged that section 34 of the Indian Incomtax Act, 1922, was not saved by section 13(1) of the Finance Act, 1950, because what was saved was the prior law " for the purposes of the levy, assessment and collection of income tax ", which expression did not include re assessment proceedings; secondly, it was argueed that, even otherwise, the financial agreement made between the President of India and the Rajpramukh of Mysore on February 28, 1950, which received constitutional sanctity in article 278 of the Constitution rendered the impugned proceedings unconstitutional and void; thirdly, it was submitted that the Indian Income tax Act, 1922, as in force in the retroceded area stood repealed on June 30, 1948, by Mysore Act XXXI of 1948, and the saving provisions in section 5(b) thereof or in paragraph (2), sub paragraph (b), of Schedule A to Mysore Act LVII of 1948, did not save section 34 in so far as it permitted re assessment proceedings in respect of years in which there had been an assessment already; and lastly, it was contended that after June 30, 1948, and until April 1, 1950, the Income tax Officer in the retroceded area could re open 796 the assessment under section 34 of the Mysore Incometax Act, 1923, within a period of four years specified therein, but there was no authority to re open the assessment under section 34 of the Indian Income tax Act.
Following its own decision, City Tobacco Mart and Others vs Income tax Officer, Urban Circle, Bangalore (1), on certain earlier writ petitions (nos. 52 and 53 of 1953 and 105 and 106 of 1954), the High Court held in favour of the assessee on the construction of section 13 (1) of the Finance Act, 1950 and also oil the effect of the saving provisions in section 5 (b) of Mysore Act XXXI of 1948, and paragraph (2), sub paragraph (b) of Schedule A to Mysore Act LVII of 1948.
On these findings, it held that the Income tax Officer concerned had no jurisdiction or authority to start the impugned pro ceedings or to make the impugned orders of assessment.
It did not feel called upon to pronounce on the validity of the argument founded on the financial agreement dated February 28, 1950.
In Civil Appeals 143 145 of 1954, Civil Appeals 27 to 30 of 1956 and Civil Appeals 161 to 164 of 1956, Lakshmana Shenoy vs The Income tax Officer, Ernakulam (2), in which judgment has been delivered today, we have fully considered the arguments as to the true scope and effect of section 13(1) of the Finance Act, 1950, and of the financial agreement of February 28, 1950, taken along with the recommendations of the Indian States Finances, Enquiry Committee.
We have held therein that the expression I levy, assessment and collection of income tax in section 13 (1) is wide enough to comprehend re assessment proceedings under section 34 and that the financial agreement aforesaid, on a true construction of the recommendations of the Enquiry Committee, does not render the impugned proceedings Unconstitutional and void.
That decision disposes of these two arguments in the present appeals.
The two additional points which remain for consideration depend on the interpretation to be put on the saving provisions in section 5(b) of Mysore Act XXXI of 1948 and paragraph (2), sub paragraph (b) of Schedule (1) A.I.R. 1955 MYS.
(2) [1959] S.C.R. 751.
797 A to Mysore Act LVII of 1948.
These provisions are expressed in identical terms, and the question is if they save section 34 of the Indian Income tax Act with regard to re assessment proceedings.
We think that they do.
It is worthy of note that the saving provisions say that the Indian Income tax Act, 1922, as in force in the retroceded area prior to July 1, 1948, shall apply in respect of the total income chargeable to income tax prior to that date and it shall apply to proceedings relating to the assessment of Such income, until the stage of assessment and determination of income tax payable thereon. 'Total income ' means the total amount of income, profits and gains computed in the manner laid down in the Act, and there are no good reasons why the word 'assessment ' occurring in the saving provisions should be restricted in the manner suggested so as to exclude proceedings for assessment of escaped income or under assessed income.
On behalf of the assessee our attention has been drawn to the words "in respect of the total income chargeable to income tax. . but which has not been assessed until that date " occurring in the saving provisions and the argument is that, those words show that there was no intention to permit reopening of assessments which had been made already.
We are unable to accept this argument.
In its normal sense, I to assess ' means 'to fix the amount of tax or to determine such amount '.
The process of re assessment is to the same purpose and is included in the connotation of the term " assessment ".
The reasons which led us to give a comprehensive meaning to the word " assessment " in section 13 (1) of the Finance Act, 1950, operate equally with regard to the saving provisions under present consideration.
We agree with the view expressed in Hirjibhai Tribhuvandas vs Income tax Officer, Rajnandgaon and another (1), that section 34 of the Income _tax Act contemplates different cases in which the power to assess escaped income has been given; where there has been no assessment at all, the, term " assessment " may be appropriate and where there was assessment at too low a rate or with (1) A.I.R. 1957 M.P. 171.
798 unjustified exemptions, the term re assessment ' may be appropriate, and it may have been necessary to use two different terms to cover with clarity the different cases dealt with in the section ; but this does not mean that the two terms should be treated as mutually exclusive or that the word 'assessment ' in the saving provisions should be given a restricted meaning.
The object of the saving provisions was obviously to make the prior law available in all cases in which the income was assessed or was assessable according to that law before July 1, 1948, and it is difficult to see why only a part of the process of assessment should be saved and the other part repealed.
We, therefore, hold that the saving provisions save section 34 of the Indian Income tax Act, 1922, in its entirety, as it was in force in the retroceded area prior to July 1, 1948, and the contention of the respondent that it stood repealed from that date is not correct.
As to the period of limitation, it would be the period laid down in section 34 of the Indian Income tax Act as it was in force in the retroceded area prior to July 1, 1948.
The result, therefore, is that these appeals succeed and the judgment and order of the High Court of Mysore dated March 22, 1955, are set aside and the writ petitions filed by the respondent assessee are dismissed.
The appellant will get his costs in this Court and the High Court.
Appeals allowed.
[/INST]The respondent was carrying on business as an excise con tractor in the Civil and Military Station of Bangalore in the State of Mysore, called the retroceded area.
The jurisdiction ' over this area was originally exercised by the Governor General in Council by virtue of an agreement with the Maharaja of Mysore, and the income tax law applicable was the Indian Income tax Act, 1922.
On July 26, 1947, the retroceded area was given back to the State of Mysore but the income tax law in force in that area prior to that date continued to have effect and be operative till June 30, 1948, on which date was promulgated the Mysore Income tax Act and Excess Profits Tax (Application to the Retroceded Area) (Emergency) Act, 1948, the effect of which was that the Indian Income tax Act, 1922, stood repealed and the Mysore Income tax Act, 1923, came into force subject to certain saving provisions.
On August 5, 1948, was promulgated the Retroceded Area (Application of Laws) Act, 1948.
Between 1947 and 1950 there were political and constitutional changes which ultimately resulted in Mysore becoming a Part B State within the Constitution of India.
The legal effect of these changes was that the income tax law applicable to the retroceded area till June 30, 1948, was the Indian Income tax Act, 1922 ; from July 1, 1948, the Mysore Income tax Act, 1923, became applicable except that the Indian Income tax Act continued to apply in respect of the total income chargeable to income tax in the retroceded area prior to July 1, 1948, and the provisions of that Act as in force in the retroceded area prior to that date applied to all proceedings relating to the assessment of such income upto the stage of assessment and determination of income tax payable thereon.
This position continued till April 1, 1950, when the Finance Act, 1950, came into force and as a result the Indian Income tax Act, 1922, became applicable again to the retroceded area, subject to the saving provisions of section 13(1) of the former Act.
In respect of the assessment for the four years between 1945 and 1949, the respondent was assessed to income tax under the law then in force in that area; subsequently, in 1954 the Income tax Officer served a notice on the respondent under section 34 of the Indian Income tax Act, 1922, for the purpose of assessing " escaped " or " under assessed " income chargeable to income tax for the said years.
The respondent challenged the jurisdiction of the Income tax Officer to take proceedings under section 34 or to make an order of re assessment on the grounds inter alia (1) that section 34 Of the Indian Income tax Act, 1922, was not saved by section 13(1) of the Finance Act, 1950, because what was saved was the prior law " for the purposes of the levy, assessment and collection of income tax ", which expression did not include re assessment proceedings, (2) that the 787 financial agreement made between the President of India and the Rajpramukh of Mysore dated February 28, 1950, rendered the impugned proceedings unconstitutional and void, (3) that the Indian Income tax Act, 1922, as in force in the retroceded area stood repealed on June 30, 1948, by the Mysore Income tax and Excess Profits (Application to the Retroceded Area) (Emergency) Act, 1948, and the saving provisions in section 5(b) thereof or in para (2), sub para (b) of Sch.
A to the Retroceded Area (Application of Laws) Act, 1948, did not save section 34 in so far as it permitted re assessment proceedings in respect of years in which there had been an assessment already, and (4) that after June 30, 1948, and until April 1, 1950, the Income tax Officer in the retroceded area could re open the assessment under section 34 Of the Mysore Income tax Act, 1923, within a period of four years specified therein, but there was no authority to re open the assessment under section 34 Of the Indian Income tax Act.
Held : (1) that the expression " levy, assessment and collection of income tax " in section 13(1) Of the Finance Act, 1950, was wide enough to comprehend re assessment proceedings under section 34 Of the Indian Income tax Act, 1922, and that the financial agreement between the President of India and the Rajpramukh of Mysore, on a true construction of the recommendations of the Indian States Finance Enquiry Committee, did not render the impugned proceedings unconstitutional or void ; Lakshmana Shenoy vs The Incomc tax Officer, Ernakulam, [1959] S.C.R. 751, followed.
(2) that the saving provisions in the Mysore Income tax and Excess Profits (Application to the Retroceded Area) (Emergency) Act, 1948, and the Retroceded Area (Application of Laws) Act, 1948, made the prior law available in all cases in which the income was assessed or was assessable according to that law before July 1, 1948, and, therefore, they saved section 34 of the Indian Income tax Act, 1922, with regard to re assessment proceedings ; City Tobacco Mart and Others vs Income tax Officer, Urban Circle, Bangalore, A.I.R. 1955 Mys.
49, overruled.
Hirjibhai Tribhuwandas vs Income tax Officer, Rajnandgaon and another, A.I.R. 1957 M. P. 171, approved.
(3) that the Income tax Officer had the authority to re open the assessments in the present case because the period of limitation was that laid down in section 34 of the Indian Income tax Act, as it was in force in the retroceded area prior to July 1, 1948.
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<s>[INST] Summarize the judgementN: Criminal Appeal No. 420 of 1974.
Appeal by Special Leave from the Judgment and Order dated 27 11 74 of the Allahabad High Court in Criminal Appeal No. 2646/73 and Referred No. 95/73.
Frank Anthony, E.C. Agarwala and A. T. M. Sampath; for the Appellants.
O.P. Rana; for the Respondent.
The Judgment of the Court was delivered by CHANDRACHUD, J.
The appellants, Subhash and Shyam Narain, were convicted by the learned Civil and Sessions Judge, Farrukhabad under section 302 of the Penal Code on the charge that at about 9 a.m. on June 9, 1972 they committed the murder of one Ram Sanehi.
Subhash was sentenced to death and Shyam Narain to imprisonment for life.
The judgment of the trial court having been confirmed in appeal by the High Court of Allahabad, the two accused have filed this appeal by special leave of this Court.
588 The case of the prosecution is briefly as follows: on the morning of June 9, 1972 the deceased Ram Sanehi had gone to his field along with his son Bal Kishore and his daughter Kusuma Devi for eating Kharbuzas.
While they were returning from the field at about 9 a.m. the appellants, who were lying in wait near a culvert, suddenly accosted Ram Sanehi.
The Appeallent Subhash pointed the barred of his gun towards the chest of Ram Sanehi and said that since he, Ram Sanehi, was a witness against him in a complaint filed by Pooran Lal and since he was also doing Pairvi on behalf of Pooran Lal he would not be allowed to remain alive.
The appellant Shyam Narain was armed with a lathi.
Bal Kishore and Kusuma Devi pleaded with the appellants to spare their father but Shyam Narain asked Subhash not to delay the matter and finish Ram Sanehi quickly.
Subhash thereupon fired three shots from his double barrelled gun, the last of which misfired.
Ram Sanehi fell down, whereupon the appellants dragged him by his legs over a distance of 6 or 7 paces.
Bal Kishore and Kusuma Devi then raised an alarm whereupon Brij Bhusan, Shyam Lal Mangali Prasad and Jhabbo Singh Thakur reached the place of occurecnce and challenged the appellants.
Before running away, the appellant Subhash told his companion Shyam Narain that he on his own part was going to surrender before a court and that Shyam Narain should make his own arrangements.
Ram Sanehi died within about 10 minutes after receiving the injuries.
Bal Kishore first went to his house which is at about a distance of 120 yards from the scene of offence.
At about 12 o 'clock at noon he went to the Kamalgani police station and lodged his First Information Report (exhibit Ka 3).
S.I. Vishwanath Sharma who was posted as a 2nd officer at the police station recorded Bal Kishore 's complaint.
went to the scene of occurrence, prepared the inquest report and handed over the dead body for being sent for post mortem examination to the District Hospital at Farrukhabad which is about 10 miles away form the village of Kandharpur where the incident took place.
S.I Sharma took samples of earth from the place of occurrence an seized a mis fired cartridge which was lying concealed in the folds of the deceased 's Dhoti.
The Fard in that behalf is exhibit Ka 10 and the site plan is exhibit Ka 11.
The appellant Subhash surrendered before the Additional District Magistrate (Judicial) at Farrukhabad at about 4 p.m. on the very day.
The appellant Shyam Narain was arrested at about 2 40 p.m. on the same day under section 122 of the Railway Act for crossing The railines at Fatehgarh.
The appellants denied the charge that they had committed the murder of Ram Sanehi and stated that they were involved in the case due to enmity.
This defence has been rejected both by the Sessions Court and the High Court.
Before referring to the evidence in the case it has to be mentioned that the High Court had before it not only the appeal filed by the accused but also a reference made by the Sessions Court for confirma tion of the capital sentence under section 374 of the Code of Criminal 589 Procedure.
Time and again this Court has pointed out that on a reference for confirmation of the sentence of death, the High Court is under an obligation to proceed in accordance with the provisions of sections 375 and 376 of the Criminal Procedure Code.
Under these sections the High Court must not only see whether the order passed by the Sessions Court is correct but it is under an obligation to examine the entire evidence for itself, apart from and independently of the Sessions Court 's appraisal and assessment of that evidence.
From the long line of decisions which have taken this view it would be enough to refer to the decisions in Jumman and ors.
vs The State of Punjab, Ram Shanker Singh & ors.
vs State of West Bengal and Bhupendra Singh vs The State of Punjab.
The High Court has failed to show due regard to this well established position in law.
It did not undertake a full and independent examination of the evidence led in the case and it mainly contented itself with finding out whether the Sessions Court had in any manner erred in reaching the conclusion that the charge of murder levelled against the appellants was established beyond a reasonable doubt.
The High Court is right in saying that the main question in the case was whether Bal Kishore and Kusuma Devi who were examined as eye witnesses were truthful witnesses.
But then it did not subject their evidence to any minute scrutiny.
Impressed overbearingly by the circumstance that the Sessions Court "had the opportunity of observing the demeanour" of the witnesses, the High Court apparenty thought that such an opportunity gave to the Sessions Court 's judgment a mystical weight and authority, even though the learned Sessions Judge had not, in his judgment or while recording the evidence, made any special reference to the demeanour of the witnesses.
The High Court accepted the evidence of Ram Sanehi 's children by observing that there was no material contradiction ill their evidence and that certain statements in the F.I.R. afforded a guarantee that the two witnesses were present when their father was done to death.
We will now proceed to show how several significant circumstances either escaped the attention of the High Court or were not given their due and rightful importance.
First as to the manner in which S.I. Sharma conducted investigation into the case.
The offence took place at about 9 a.m. on June 9 and though the District Hospital at Farrukaabad was just 10 miles away, the dead body was not received at the hospital for nearly 24 hours after the incident had taken place.
The excuse offered by the prosecution that cartman was not willing to take the body at night is utterly flimsy because the Investigating officer could have easily made some alternate arrangement for despatchin the dead body for postmortem examination expeditiously.
With the dead body lying at the scene of offence for nearly 12 hours and thereafter at the police station for another 8 or 9 hours, it was easy enough for the witnesses to mould 590 their statements so as to accord with the nature of injuries.
The lnvestigating Officer did not make any note at all in the General Diary as to which witnesses were examined by him on the date of the occurrence which was obligatory upon him to do under paragraph 44 of the U.P. Police Act.
The time when the investigation was commenced and the time when it was concluded are not mentioned in the case diary.
The time when the Investigating officer reached the village and the time when he returned to the police station are also not noted in the case diary.
S.I. Sharma stated in his evidence that several important facts concerning the investigation were being stated by him in his evidence from memory.
He reached the scene of offence at about 2 30 p.m. but it was not until about 6 p.m. that he inspected the site.
The dead body was not removed from the scene of offence till about 9 p.m. and even that is open to grave doubt because the Investigating officer has admitted in his evidence that he was unable to say as to when the dead body was taken way from the spot and whether it was taken directly to the hospital or was detained somewhere on the way.
He was unable to say whether it was right or wrong that the dead body remained in the village till about 4 'O 'clock on the morning of the 10th.
Forty or fifty persons had gathered at the scene of offence when the Investigating officer arrived but the record of the case does not show that the statement of any of those persons was ever recorded.
In fact even the statement of Kusuma Devi was recorded late at night for which the reason is stated to be that her elder sister Pushpa Devi died of shock on the evening of the 9th after hearing of her father 's murder.
It may be that Pushpa Devi died on the 9th, but apart from the cause of her death, the statement of Kusuma Devi need not have been held up so long.
We are doubtful if the Investigating officer at all knew on the 9th that Pushpa Devi had died.
He has admitted that his knowledge in that behalf was derived from hearsay reports.
The appellant Subhash had surrendered before the Additional District Magistrate, Farrukhabad on the afternoon of the 9th itself while the other appellant Shyam Narain was arrested at Fatehgarh at about 2 40 p.m.
The Investigating officer did not even know of these significant developments, though they had taken place just a few miles away from the scene of investigation.
He says that he learnt of the surrender and the arrest of the appellants on the evening of the 12th.
Mangali Prasad has been examined by the prosecution as an eye witness and his name is mentioned in the F.I.R. as one of the four persons who arrived at the scene of offence even before the appellants had run away.
His statement was recorded 11 days later on June 20.
The F.I.R. mentions expressly that the appellants caught hold of the legs of the deceased and started dragging him.
The Investigating officer has not stated in the Panchnama of the scene of offence whether the ground was soft or hard or sandy which had great relevance on the allegation that the deceased was dragged over a certain distance.
Finally, it is surprising that the Investigating officer did not think it worthwhile to pay a visit to the field where the deceased is alleged to have gone with his children for eating Kharbuzas.
Indeed he stated that he was not in a position to say if there were Kharbuzas at all in the field, when the occurrence took place.
591 The High Court has condoned these lapses on the part of the Investigating officer with the observation that he "appears to have been inexperienced and somewhat negligent".
The Investigating officer has stated in his evidence that he had put in 7 years of service.
It is difficult to understand on what basis the High Court attributed the lapses on his part to mere inexperience.
We will presently indicate the significance of the various lapses and loopholes in investigation but to say, as the High Court has done, that the Investigating Officer was "somewhat negligent" seems to us in the circumstances a grave euphemism.
We will now proceed to deal with the various circumstances which, in our opinion, render it unsafe to accept the prosecution case.
Dr. S.C. Pandiya who performed the post mortem examination has described in his evidence the injuries received by Ram Sanehi.
In all he found 7 injuries on the dead body, out of which injuries 1, 3 and 7, injuries 2 and 4, and injuries 5 and 6 are interconnected.
Injury No. 1 is described as a "shot wound" with its entry above the left nipple.
Injury No. 3 is described as multiple rounded abrasions on the left side of the chest.
Injury No. 7 is the wound of exit on the right scapular region, corresponding to injury No. 1.
rnjury No. 2 consists of 8 gunshot wounds of entry below the right nipple while injury No. 4 consists of multiple rounded abrasions above the right nipple.
Injury No. 5 is a gun shot wound of entry on the back of the left forearm while injury No. 6 is the corresponding wound of exit near the ulnar aspect of the left forearm.
The evidence of Dr. Pandiya and the description of the injuries given by him in the post mortem report tend to show that two different kinds of firearms were used by the assailants of Ram Sanehi.
Injury No. 1 was caused by a bullet and that is clear not only from the description of the injury but from what Dr. Pandiya has stated in his evidence.
He says: "The bullet, which had entered through injury No. 1 went out straight after emerging from injury No. 7".
Injuries Nos. 2 and 5 were caused by pellets.
This shows that whereas injury No. 1 was caused by a firearm in the nature of a rifle, injuries 2 and 5 were caused by an ordinary gun.
The medical evidence thus falsifies the eye witnesses ' account according to which, the appellant Subhash alone was armed with a double barrelled gun, the other appellant Shyam Narain being armed with a lathi.
The objective inference arising from the nature of injuries received by the deceased has a significant impact on the case of the prosecution, which has been overlooked by both the Sessions Court and the High Court.
While we are on the medical evidence it would be appropriate to mention that there was no tatooing or charring on any of the firearm injuries which, according to the doctor, shows that the firing was done from a distance of more than 4 feet.
In the First Information Report Bal Kishore has stated that as soon as he, his father and sister, reached the culvert, Subhash "touching the chest" of Ram Sanehi "with the 592 barrel of his gun" said that he shall not leave him alive; Shyam Narain thereupon exhorted Subhash not to delay and fire immediately; Subhash then fired three shots in quick succession, one of which mishred.
The trend of the F.I.R. is that Subhash fired the first two shots at Ram Sanehi from a point blank range, in which event indisputably, there would have been tatooing and charring around the injuries.
Bal Kishore has attempted to offer an explanation that what he meant to say in his compaint was that Subhash trained his gun "towards" Ram Sanehi 's chest and not "on" his chest.
This explanation is an after thought and in the circumstances difficult to accept.
Thus in another important respect, the medical evidence falsifies the case of the prose cution.
There is another aspect of the medical evidence which, though, not as important as the two aspects mentioned above, may also be referred to.
The case of the prosecution is that Ram Sanehi had gone to his Kharbuza field with his son and daughter for eating Kharobuzsas.
There is evidence that they did eat Kharbuzas and almost immediately there after they started back for home.
Within less than 5 minutes, Ram Sanehi met with his deat near the culvert.
The post mortem report shows that Ram Sanehi 's stomach was empty which means that the evidence that he had eaten Kharbuzas just a little time before his death is untrue.
Bal Kishore tried to wriggle out of this situation by saying that Ram Sanehi had eaten just a small slice of Kharbuza.
But even there, Dr. Pandiya has stated that if the entire slice of Kharbuza was eaten by Ram Sanehi, its remains would be found in the stomach provided there was no vomiting after the gun shot injuries.
Since Ram Sanehi had not vomited, his large intestines could not have been found to be empty if the story of his children was true.
This last circumstance may at first sight seem trivial but its importance consists in the fact that the visit of Ram Sanehi, along with his children, to the Kharbuza field for the purpose of eating Kharbuzas is the very genesis of the incident which happened on June 9, 1972.
Coupled with the circumstance that the Investigating officer did not even pay a visit to the Kharbuza field, leave alone making a Panchnama thereof, the conclusion is irresistible that the story that the children had accompanied their father to the Kharbuza field lacks a factual basis.
The other circumstances which render the prosecution case suspect are these (1) Ram Sanehi is alleged to have been drageed over 6 or 7 paces by the appellants but not even an abrasion was found on his back or stomach which could be attributed to dragging.
(2) Thirty or forty persons are alleged to have collected at the sence of occurrence but Bal Kishore was not able to mention the name of even one of them and it is common ground that the Investigating officer did not record the statement of any of them.
(3) Jhabboo Singh, Shyam Lal Brij Bhushan and Mangali Prasad reached the scene of offence even before the appellants had fled away but none from amongst the first three was examined by the prosecution.
Mangali Prasad was examin 593 ed as an eye witness but he has been concurrently disbelieved by the Sessions Court and the High Court.
(4) Though the motive of the offence is alleged to be that in a complaint filed by Pooran Lal against the appellant Subhash, the deceased Ram Sanehi was cited as a witness, Mangali Prasad 's evidence shows that immediately after the firing, Bal Kishore told him that Ram Sanehi was murdered because of the disputes concerning the election to the Pradhanki.
What Bal Kishore told Mangali Prasad immediately after the incident seems more probable because, one Virendrapal had contested that election and the appellant Subhash had defeated him.
When Bal Kishore went to lodge his F.I.R. at the police station he was accompanied by Virendrapal, though an attempt was made to show that Virendrapal was only standing outside the police station and had met Bal Kishore accidently.
(5) The story of Bal Kishore that after the appellant Subhash fired 2 shots he re loaded his gun but the re loaded cartridge misured makes hardly any sense.
Subhash was armed with a double barrelled gun and having fired 2 fatal shots from a close range at his target, it is unlikely that he would re load the gun and that too with only one cartridge.
And if that cartridge misfired, it is impossible to understand how it could be found concealed in the folds of Ram Sanehi 's dhoti.
There is only one other aspect of the matter which remains to be considered and since the High Court has placed great reliance thereon, it is necessary to deal with it.
The F.I.R. which lodged at about 12 O 'clock at noon on the 9th itself mentions that after Ram Sanehi was murdered, the appellant Subhash told his companion Shyam Narain that he himself was going to surrender before a court and that Shyam Narain should make his own arrangement.
In fact, Subhash did surrender in the court of the Additional District Magistrate, Farrukhabad, at about 4 p.m. on the 9th.
What the High Court has over looked is that Subhash did not surrender in connection with the murder of Ram Sanehi but he surrendered along with the 13 or 14 other accused against whom Pooran Lal had filed a complaint.
In so far as Shyam Narain is concerned, the High Court is wrong in saying that he managed somehow to get himself arrested.
The evidence of Constable Virendra Singh shows that Shyam Narain was arrested because he was crossing the railway lines and if he was not caught, he would have been run over by the two trains coming from Kanpur and Farrukhabad.
This was hardly any sensible way of making an "arrangement" for himself, as directed by Subhash.
It is therefore not as if the statement attributed to Subhash in the F.I.R. is corroborated by subsequent events so as to afford a guarantee to Bal Kishore 's presence at the culvert.
We are conscious that the Sessions Court and the High Court have both held that the appellants committed the murder of Ram Sanehi but the weight of the circumstances which we have discussed above is so preponderating that even the concurrent finding cannot be allowed 594 to stand.
In any event, it seems to us impossible to hold that the prosecution has established its case beyond a reasonable doubt.
We therefore allow this appeal, set aside the order of conviction and sentence recorded by the High Court and the Sessions Court and direct that the appellants shall be set at liberty.
M.R. Appeal allowed.
[/INST]The appellants filed three suits (the earliest of the three suits was filed on December 18, 1945) for possession of lands claiming that K, the last owner of the lands died on August 15, 1945.
Those suits were dismissed on August 3, 1951, as premature on the ground that the fact of the death of K had not been established.
The appellants again instituted three suits in October 1952, December 1952 and May 1953 for the same relief as in the previous suits alleging that the right to sue had ac crued after August 16, 1952, that is, after a period of seven years, under section 108 of Evidence Act; that K died three years before the date.
of the filing of the suits; and that they were within time under article 2(b) of the.
Schedule annexed to the Punjab Limitation (Customs) Act, 1920 which provides that the period of limitation for a suit for pos session of ancestral immovable property which has been alienated, is three years, if a declatory decree has been obtained, and that period commences from the date on which the right to sue accrues.
On appeal, a single Judge of the High Court decreed the suits holding that K having been treated as alive by the High Court when it passed the previous decree in 1951, the conclusion of the lower courts that he had been dead for seven.
years before the institution of the suits could not be sustained and also excluded the time spent on the previ ous litigation from 1945 to 1951 under section 14(1) of the Limitation Act.
On Letters Patent appeal, the Division Bench held: (1) that the single Judge was in error in ex cluding the time spent on the previous litigation by apply ing section 14(1) of the Limitation Act; (ii) that the words "or other cause of a like nature" occurring in section 14(1) had to be read ejusdem generis with the preceding words "relating to the defects of jurisdiction" and that it was not possible to give the benefit of that provision to the plaintiffs.
Dismissing the appeal to this Court (per A.N. Ray, C.J. and Jaswant Singh, J) HELD: (1) Under article 2(b) of the Schedule to the Punjab Limitation (Customs) Act, 1920 in order to be able to succeed the plaintiffs must bring their suits within three years of the accrual of the right to sue (which ac cording to well settled judicial opinion means the accrual of the right to seek relief), namely within three years of the death of K.
They had to prove affirmatively that the death of K took place within three years of the institution of the suits.
Granting that K has to be presumed to be dead, it cannot be overlooked that under section 108 of the Evidence Act, the precise time of the death is not a matter of presumption but of evidence and the onus of proving that the death took place at any particular time within seven years lies upon the person who claims the right for the establishment of which the proof of that fact is essential.
The plaintiffs had not only, therefore, to prove that K had not been heard of for a period of seven years and was to be taken to be dead, but it also lay heavily on them to prove the particular point of time within seven years when K 's death occurred.
This they have failed to prove.
In the absence of such proof, it cannot be held that the present suits had not been brought within three years of the accrual of the right to sue.
[263 D G] 251 Nepean vs Doe D. Knight ; ; , Jayawant Jivarao Deshpande vs Ramachandra Narayan Joshi (A.1.R. 1916 Born.
300), Lalchand Marwari vs Ramrup.
Gir (LIII I.A.24; A.I.R. 1926 P.C. 9), Jiwan Singh vs Kuar Reoti Singh & Anr.
(A.I.R. 1930 All. 427), Kottappalli Venkates warla vs Kottapalli Bapayya & Ors.
(A.I.R. 1957 A.P. 380), Punjab and Ors.
vs Natha & Ors.
(A.I.R. and Ram Kali & Ors.
vs Narain Singh (A.I.R. 1934 Oudh 298 F.B.) referred to.
(2) If K had died beyond three years, from the date of the suits, the suits would be barred by limitation because the appellants cannot claim the benefit of section 14 of the Limitation Act 1908.
The three important requirements of the section are: (1) that the plaintiff must have prosecuted the earlier civil proceeding with due diligence; (2) the former proceeding must have been prosecuted in good faith in a court which from defect of jurisdiction or other cause of a like nature was unable to entertain it and (3) the earlier proceeding and the later proceeding must be based on the same cause of action.
[265 D] (3) The contention that the appeals had been rendered untenable as a result of the amendment made to section 7 of the Punjab Customs Power to Contest) Act 1920 by the Amending Act 12 of 1973 has no force and must be rejected.
Section 4 of the Act provides that the Act shall not affect any right to contest any alienation or appointment of an heir made before the Act came into force.
This section has been left untouched by the Amending Act of 1973.
In the instant case, the alienation was made before the 1920 Act came into force and was not affected by that Act.
[261 F H] (4) The words "or other cause of a like nature" in section 14(1) take their colour from the preceding words "defect of jurisdiction" according to the rule of ejusdem generis.
Therefore, the defect must be of a character analogous to jurisdiction barring the Court from entertaining the previ ous suit.
In the instant case, the Court which tried and dismissed the previous suits as premature did not suffer from inability or incapacity to entertain the suits on the ground of lack of jurisdiction or any other ground analogous to the defect of jurisdiction.
The exclusion of the period during which the previous suits were pending, could not, therefore, be allowed to the plaintiffs while computing the period of limitation.
[265 E; I 1; 266 A] Bhai lai Kishan Singh vs People Bank of Northern India, I.L.R. , Dwarkanath Chakravarti vs Atul Chan dra Chakravarti (I.L.R. and Palla Pattabhira mayya & Ors.
vs Velga Narayana Rao (A.I.R. referred to.
[Obiter: The causes of action in the previous suits and in the present suits are also different.
And hence the appellants cannot press section 14 into service.] Beg, .J. (Dissenting) The Division Bench of the High Court was wrong in ignor ing the effect of the finding of the single Judge that a new cause of action had arisen within three years before the filing of the plaintiffs ' suits.
[281 C] The question of time bar or its removal by resorting to section 14(1) of Limitation Act postulates that a point of time from which limitation could run had been ascertained.
As that point could not be the date of the death of K, which was unknown the suits could not be dismisses on that ground.
[281 D] (1) The single Judge had sufficiently indicated that the cause of action in the previous litigation was different from the one in the later inasmuch as the facts proved in the later case showing that K must be presumed to be dead could not be and were not set up in the earlier suits.
The cause of action had not accrued in 1945.
The effect of the judgment in the former suits was that these suits were premature, which is not the case in the suits in appeal.
The plaints in the later cases set out the case founded on new facts not in existence at the time of the earlier liti gation and expressly stated why the plaintiffs rely on the presumption of death of K.
If the previous suits were dismissed on the ground that they were premature, the cause of action could only, be said to have accrued after their institution.
[268 G; 269 C] 252 The findings of the single Judge showed that the.
plain tiffs were entitled to the benefit of the presumption laid down by section 108 of the Evidence Act.
He found that till August 3, 1951 when the judgment of the High Court in the previous suits was delivered, the position was that the death of K had not been established.
This meant that on new facts asserted and proved, K could be presumed dead when the subsequent suits were instituted in 1952 and 1953.
This presumption of death having become available to the plain tiffs within.
three years of the suits and not before, no occasion for applying section 14 of the Limitation Act could arise.
The evidence sought to be given in the previous suits was that K had died on a particular date but the evidence in the subsequent suit was not that he had died on a particular date but that he had not been heard of from August 5, 1945 upto the time of filing of the subsequent suits.
[269 H; 270 H] Modi Khalil Khan vs Mahboob Ali Mian, A.I.R. 1949 PC 78 at 86 referred to.
(2) (a) If causes of action differ from suit to suit, the accrual of the cause of action can also not be tied down to a particular kind of fact such as the date of actual death of the holder of the property.
Once it is held that the causes of action differ for purposes of their accrual, their accrual could not be made to depend on facts of one type only.
Facts denoting their accrual must differ from case to case.
Proof of date of actual death is conclusive.
But, where the basis of the right to sue is presumption of death, the. date; of accrual of the right is the date on which that presumption matures.
[271 C] Indian Electric Works Ltd. vs James Montosh & ,Anr. ; followed.
Rante Surno Moyee vs Shooshee Mokhee Burmonia & Ors.
12 Moore 's I.A. 244, State of Madras
V.P. Agencies & Anr.
AIR 1960 SC 1309 at 1310 and Mst.
Chand Kour vs Partap Singh, , referred to.
(b) The expression "cause of action" has sometimes been employed to convey the restricted idea of facts or circum stances which constitute either the infringement or the basis of a right and no more.
In a wider and more compre hensive sense it has been used to denote the whole bundle of material facts which a plaintiff must prove in order to succeed.
These are all those essential facts without the proof of which the plaintiff must fail in his suit.
[272 G] (c) Applying these tests, in the instant case, the causes of action in the earlier and later litigations would be materially different.
No cause of action had arisen at all if it is assumed that K had not died at all.
K 's death was an essential part of the cause of action.
It had to be proved to enable the plaintiffs to put forward their claims to succeed.
But proof of the date of death was not essen tial or indispensable for that purpose.
It could only become material in deciding whether the right accrued had been extinguished by the law of limitation.
Both the narrow and wider sense of the term "cause of action ' would include all those facts and circumstances on the strength of which the plaintiffs urged that they were entitled to the benefit of the obligatory presumption of law contained in section 108 of the Evidence Act.
As these were not available to the plain tiffs before the expiry of seven years from August 5, 1945, it was not possible to urge that this cause of action had arisen more than three years before the filing of the suits.
Therefore, the date of its accrual could not lie a day earlier than seven years after August 5, 1945 when K was last heard of.
[272 G H; 273 A B] (d) It was for the defendants to establish that K was either alive or had died more than three years before the suits were filed.
The presumption under section 107 of the Evidence Act could not come to the aid of the defendants when the plaintiffs had established facts necessary to raise the presumption under section 108 of the Evidence Act.
[273 E] (e) The suits are not barred by limitation.
The plaintiffs discharged their burden as to when the accrual of their cause of action was within the prescribed period of limita tion.
If the "media" upon which the plaintiffs rest their cases 253 are different in the previous and subsequent litigations, the causes of action are different.
If the alleged date of death of K was the date of accrual of the previous cause of action, the date of accrual of the second could only be something other than the date of death of K, it could not possibly be the same.
The other date of accrual could only be subsequent to August 5, 1945 because it was held in the previous suit that the suit was premature on the ground that seven years since K was last heard of had not elapsed then.
Since the evidence was that he was last heard of on August 5, 1945, the only possible date of accrual of the subsequent cause of action could be seven years after the date.
The suits were filed within three years of that date.
[273 H; 274 A C] (3)(a) The term 'right to sue ' occurring in article 2 of Schedule to the Punjab Limitation (Customs) Act 1 of 1920 must be equated with cause of action.
" The "date of death" cannot be substituted for the date of accrual of the "right to use".
In the Limitation Act the accrual when intended to be tied to the date of some event is specified as the date of that event.
In this case, it is not so.
It cannot be held that the date of accrual in both sets of suits is one and the same, that is to say, the actual date.
of death.
[274 D] (b) Wherever the accrual of a right or commencement of a period of limitation, within which a suit must be shown by the plaintiffs to have been brought, could only be estab lished by proving the date of a person 's death, that duty must be discharged by the plaintiffs or the suit will fail.
But to carry the doctrine beyond that and to lay down that the date of death must invariably be proved, whenever the question of limitation is raised in such cases must result in stultifying or defeating legal right and wiping out the effects of a statutory presumption.
The accrual of a cause of action based on untraceability of the owner could not be said to depend at all on proof of either actual death or the date of actual death of the owner.
It accrues as soon as death can be presumed and not a day earlier.
[278 D F] (c) It is not in every suit for possession that the com mencement of the date of dispossession must be established by the plaintiffs.
It is only in a suit for possession based on the allegation by the plaintiff of his own dispos session that the burden is governed by Art, 142 of the Limi tation Act.
[274 G] (d) In the instant ease, the plaintiffs were never in pos session and, therefore,there was no question of their dis possession.
It was a pure and simple suit for possession on the basis of title against which the defendants had not even alleged adverse possession.
Therefore, there is no need to bring in the actual date of death constructively, as the date of the presumed dispossession or adverse possession has not been asserted anywhere.
[275 B] (e) The plaintiffs have asserted and proved that the period of seven years when K was last heard of by those who would in the natural course of events have heard of or about him if he was alive, had elapsed and that their cause of action matured within three years of their suits.
Assuming that the concept of adverse possession of the defendants was to be introduced, the legal position is that possession of defendants could not be adverse to K 's reversioners even before K could be presumed to be dead.
The defendants them selves had set up.
the plea that he must be still deemed to be alive.
The plaintiffs could only be required to prove K 's death but not the date of his death or the date of the plaintiffs ' dispossession.
Neither cases dealing with recov ery of possession on the plaintiffs ' allegation of their own dispossession nor those where proof of date of death was a necessary statutory duty for showing that the suit was within time; are applicable in these cases.
[275 E F] Nepean vs Doe D. Knight (English Reports 150 Exchequer p. 1021), Jayawant Jivanrao Deshpande vs Ramachandra Narayan Joshi, AIR 1916 Bom.
300 & 301.
, Lal Chand Marwari vs Mahant Ramrup Git & Anr.
AIR 1926 PC 9, Jiwan Singh vs Kuar Reoti Singh & Anr.
AIR 1930 All.
427, Kottapalli Venkateswarlu vs Kottapalli Bapayya & Ors.
AIR 1957 AP 380 Punjab v Natha AIR 1931 Lab.
582 (FB) & Ram Kali & Ors vs Naraian Singh AIR 1934 Oudh 298 & 299 300, refrered to.
254 (f) It is neither a part of the case of any plaintiff in these cases nor necessary for the success of his case to prove that K died on a particular date or that K died before or after somebody else.
The plaintiffs cannot be saddled with the responsibility to prove this date.
[279 ,B] (4) The suits were not barred by limitation because the causes of action in the previous litigation and the litiga tion now are different and the subsequent cause of action has arisen within three years before the filing of the suits.
Assuming that the suits were filed beyond the period of limitation on the actual basis of their claims the plaintiffs are entitled to succeed because this is a fit case in which section 14(1) Limitation Act could come to the aid of the appellants.
They had been asserting repeatedly that the basis of their claim was that although the actual date of death of K could not be proved, yet, he has not been heard of for seven years.
That basis having emerged within three years before the filing of the suits, their suits could not be barred by time.
If the causes of action did not arise no question of its exceeding by the law of limitation, could emerge.
[280 G] The previous suits did not fail for want of jurisdic tion.
The delay in bringing the present suits was due to the fact that no court could decree the claim before the cause of action matured.
Therefore, the cause of action of a "like nature" to a defect of jurisdiction is present in these cases, since the provision has to be liberally con strued.
The defect revealed by the evidence in the latter litigation was that the suits did not lie at all as they were premature.
This was a defect reasonably comparable to a want of jurisdiction.
[280 A C] India Electric Works Ltd. vs James Mantosh & Anr. ; , followed.
(5)(a) If no cause of action could accrue at all unless and until the date of actual death of K was established, there could be no commencement of a period of limitation.
The only possible point from which limitation could start framing in these, cases is the date on which seven years expired from the date on which K was last heard of.
This was within three years before filing of the suits.
[280 D] (b) The issue in the earlier litigation was whether K was actually shown to have died on a particular date.
This was quite different from the issue decided now, which was whether K 's whereabouts had remained unknown for seven years so that he could be presumed to be dead.
[280 F] ARGUMENTS For the appeliants: The legal presumption under Section 108 was not sought to be raised in the prior suits.
It was for the first time raised in the subsequent group of suits instituted in Octo ber, 1952 based on the allegation that Kishan Singh was not heard of since 15th August, 1945.
This submission opens the questions (i) when is the presumption of death to be raised and (ii) whether for the purpose of proceedings in which it is raised or any prior proceedings.
The presumption is to be raised in the pro ceedings where the question has been raised i.e. the second group of suit.
However, there is no presumption as to the time of death of the person whose death is accepted as a result of presumption.
The two are distinct matters (i) the legal presumption of death and (ii) the time of death preceding the period when presumption is drawn.
The death may be at any time during the preceding period of 7 years the period that has enabled the court to draw presumption of death.
The law requires that if one has to establish the pre cise period during these 7 years at which such person died he must do so by evidence.
255 The conclusion of the court of presumption of death based upon disappear ance from 15th August, 1945 cannot be ignored.
Death at any time on or after 15th August, 1945 does not in any manner adversely affect the case of the appellants, inasmuch as the parties had instituted suits (of course premature) on 18th December 1945 (other suits some time later decided by a common judgment).
If the parties are held entitled to the benefit of deduction of time from 18th December 1945 to 3rd August, 1951, the death of Kishan Singh even if it took place between 15th August, 1945 to any date before 3rd August, 1951 the suit are not barred by limita tion.
On the pleading of the parties it cannot be assumed that the presumption of death would justify acceptance of date of death, any time prior to 15th August, 1945.
The period of limitation for the suit for possession was 3 years The defendants had not pleaded in the prior suit that the suit was.
barred by limitation as instituted.
In other words it was not alleged that he had died at any time 3 years prior to the institution of the suit (18th December, 1945).
Actually death has not been admitted even on 15th August, 1945.
The trial Court and the District Judge held the suit to be time barred not on the ground that his death had taken place at a period exceeding 3 years from the date of the institution of the first suit.
They have apparently not ignored the possibility of death having taken place during the period between 18th December, 1945 to 3rd August., 1951.
They have held the. suit to be time barred because it was considered that the appellants are not entitled to deduct the stated period spent in the prior suits.
Even if it is considered that death had taken place during this period or any time after 15th August, 1945 or during the 3rd August to 31st October, 1952 the suits are not time barred.
Preliminary objection was raised by the respondents as to the effect of the Punjab Customs (Power to Contest) Amendment Act, 1973 (Punjab Act 12 of 1973).
It was urged that the Act had come into force on 23rd January, 1973, it has retrospective operation and bars all suits to contest alienation also including the suits for possession of the property following a declaratory decree.
It was urged that the appeals are barred as a consequence of repeal of the provisions of Punjab Act II of 1920.
The contention as to the effect of Act 12 of 1973 is not correct.
The previous law on the subject of right to contest alienation of immovable property and the limitation of suits relating to alienation of ancestral immovable property is regulated by two Acts.
(1) Punjab Act II of 1920 Described an Act to restrict the powers of the descendents or collaterals to contest an alienation of immovable property; and (2) Punjab Act I of 1920 Described as an Act to amend and consolidicate the law govern ing the limitation of suits relating to alien ations of ancestral immovable property etc.
The present Act 12 of 1973 repeals section 6 of Act II of 1920.
It also amends section 7 of the aforesaid Act.
Effect of the repeal of section 6 and amendment of section 7 merely is that the right to.
contest vesting in the collaterals upto 5th degree has been done away with and the suit to contest alienation of ancestral property has been taken away.
Under the previous existing law an alienation of non ances tral property could not be contested.
Act I of 1920 has also not been repealed.
The limitation provided for a suit for possession i.e. 3 years is still an existing provision of the Act.
It is obvious that the legislature has retained 256 Act I of 1920 unrepealed so that the benefit of the decrees may be available to all persons under section 8 of the Act and the period of limitation may be retained as before.
The effect of the declaratory decree in that the alienation is not binding against the inheritance.
The succession never remains in abeyance.
A person entitled to succeed to the last male holder is entitled to sue for possession on the basis of right to succession to the property.
For the respondent: The principle of res judicata would be immediately attracted if the plaintiffs allege the "same cause of ac tion" and seek the exclusion of the time because the earlier suit was tried on merits by a competent court having jurisdiction and was dismissed holding that 'plaintiff failed to prove that Kishan Singh died on 15th August, 1945.
This finding would be binding between the parties in the subsequent suits as they have been given after recording the evidence and a full trial by, the competent court having jurisdiction.
Therefore, the plaintiff is barred by principles of res judicata from alleging the accrual of right to sue before the filing of the earlier suits as the same would be res judicata.
The plaintiff is estopped from alleging the accrual of same cause of action, therefore, no question of exclusion of time inasmuch as the principle of section 14 of exclusion of time arises only if the cause of action is the same.
Section 14 uses the words "the proceeding is founded upon the same cause of action".
The language of section 14 of the Limitation Act by using the words "same cause of action" makes it very clear that time can be excluded for the same cause of action only if the earlier suit is dismissed be cause of defect of jurisdiction or other cause of a like nature.
On the interpretation of section 14 also the time cannot be excluded for the reason that the earlier suit was dis missed as premature and the new suit was filed on a new cause of action, namely, Alla Singh and his line became extinct on the death of Kishan Singh on 15th of August, 1952 i.e. after the expiry of ' seven years from 15th August, 1945.
Since a new cause of action was alleged after the dismissal of previous suit, section 14 cannot be attracted.
The words "is unable to entertain it" mean that it is not able to admit the matter for consideration on merits i.e. the.
inability is of a formal nature but it does not mean inability to grant relief.
From the decisions one principle is deducible that section 14 of the Limitation Act has to be construed harmoniously with section 11 C.P.C. Section 11 C.P.C. bars the filing of a fresh suit on the same cause of action whereas section 14 of Limitation Act allows time to be.
excluded in the previous litiga tions was "founded on the same cause of action ' '.
Section 12 says that if plaintiff is barred under section 11 C.P.C. to file suit for any cause of action then plaintiff cannot file suit for a such cause of action in any court to which C.P.C. applies.
If both.
section 14 of Limitation Act and principles of res judicata are to operate then, it should be held that to apply section 14 the earlier suit had been dismissed on a technical ground of jurisdiction, or other cause of a similar nature, court is unable to entertain it without going into the merits of the case.
In the present case earlier suits were dismissed because the plaintiff failed to prove the death of Kishan Singh and the extinction of line of Alia.
The words used by the High Court at page 302 line 37 are: "The suit had been rightly dismissed as premature" do not mean that Kishan Singh was alive but it means that plaintiffs have not proved the accrual oj cause of action namely the extinction of line of Alia.
In these circumstances it is submitted that the suits were not dis missed on the ground of defect of jurisdiction or other cause of similar nature.
for which the court was unable to entertain it.
Section 14 of the Limitation Act does not apply.
Plaintiffs have failed to prove the date of death of Kishan Singh and the extinction of line of Alla within 3 years of the filing of the suit.
Suits are therefore time barred.
257 Sections 107 and 108 of the Evidence Act do not help the appellants.
Rule of evidence in section 107 is that it is for the plaintiff to prove the death of a person if he was alive within 30 years and section 108 says that burden of proving that a man was ,dive is on the person who alleges he is alive if it is proved that he has not been heard of for seven years by those who would naturally have heard of him if he had even alive.
In this case the plaintiffs appellants have alleged that Kishan Singh was last heard of on 15th August, 1915 and singe then he is not heard of.
The onus is, there fore, on the plaintiff appellant under section 107 of Evidence Act 10 prove as to when Kishan Singh died.
It is; Submit ted that Kishan Singh may have died on any date either before 15th August, 1945 or immediately theereafter.
There is no presumption that he died on the expiry of 7 years from the date he was last heard.
The date of death is thus required to prove by the plaintiff like any other fact.
The suits are, therefore, barred by time and should be dismissed plaintiffs ' failure to prove death of Kishan Singh within three years of the filing of suits.
</s>
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<s>[INST] Summarize the judgementAppeal No. 766 of 1976.
Appeal by Special Leave from the Order dated 29 11 75 of the Industrial Tribunal, Orissa in Industrial Dispute Case No. 5/75 and Special Leave Petitions (Civil) Nos. 1844A and 1845/76 L.N. Sinha, Sol.
Gen, Govind Das, (Mrs.) section Bhandare, M. section Narasimhan, A. K. Mathur and A.K. Sharma, for the Appel lant.
J. P. Goyal and Shree Pal Singh; for the Respondent.
Gobind Das, P.H. Parekh and (Miss) Manju Jatly; for the petitioner [In S.L.P. (Civil) Nos. 1844A and 1845/76].
The Judgment of the Court was delivered by GOSWAMI, J.
The Appellant, the Paradip Port Trust, is a major port governed by the provisions of the and is managed by Board of Trustees consti tuted under the provisions of the said Act.
Under section 5 of the said Act the Board of Trustees is a body corporate having perpetual succession and a common seal with power, subject to the provisions of the Act, to acquire, hold or dispose of property and may sue or be sued in the name of the Board.
An industrial dispute was raised by the Paradip Shramik Congress representing the workmen with regard to the termination of the service of one Nityananda Behera, a temporary teacher in the Paradip Port Trust High School.
The dispute was referred to the Industrial Tribunal (Cen tral) Bhubaneswar, Orissa, under section 10( 1 ) (d) of the (briefly the Act).
The respondents (hereinafter to be referred to as the Union) appeared before the Tribunal through the Adviser and General Secretary of Paradip Shramik Congress.
The appel lant sought to be represented before the Tribunal through Shri T. Misra, Advocate, who was a "Legal 539 Consultant" of the Trust.
The appellant filed their au thority in Form 'F ' under rule 36 of the Orissa Industrial Dispute Rules in his favour.
The appellant subsequently filed also a Power of Attorney executed by the Chairman of the Board of Trustees in favour of Shri T. Misra who was admittedly a practising Advocate of the Orissa High Court.
An objection was taken by the Union to the representa tion of the Paradip Port Trust (hereinafter to be described as the employer) by Shri T. Misra, Advocate, and the Union refused to give their consent to his representation as required under section 36(4) of the Act.
The Tribunal after hearing the parties upheld the objec tion of the Union.
The Tribunal examined the terms and conditions of the appointment of Shri T. Misra as Legal Consultant of the employer and held as follows : "His duties and the restrictions on his practice which have been extracted above and the terms as to his professional fees, etc. indicate that the relationship of the first party and Shri Misra is clearly that of a client and his lawyer and not that of employer and employee.
Hence, Shri Misra cannot be said to be Officer of the first party.
" The Tribunal further held: "Merely by execution of a power of attorney, the restrictions attached to a legal practitioner contained in sub section (4) of the Act cannot be circumvented.
I would accordingly bold that Shri Misra who is a legal practitioner cannot represent the first party before this Tribunal even if he holds a power of attorney executed in his favour by the first party? The appellant has obtained special leave of this Court against the above order of the Tribunal.
We have heard the Solicitor General on behalf of the appellant and Shri Goyal for the respondents.
Along with the above, appeal two Special Leave petitions Nos.
1844 A and 1845 of 1976 are also posted for hearing for admission and we have heard Mr. Gobind Das at great length.
The two Special Leave Petitions are by the management of Keonjhar Central Cooperative Bank Ltd. One application is relating to rejection by the Tribunal of the Bank 's prayer for representation before the Tribunal through its Advocate, Shri B.B. Rath, on the ground of objection by the Union under section 36(4) of the Act.
The second application relates to the, order of the Tribunal allowing Shri A.C. Mohanty, Advocate and Vice President of the Keonjhar Central Cooperative Bank Employees Union under section 36(1) of the Act notwithstanding the objection of the management.
Industrial law in India did not commence with a show of cold shoulder to lawyers as such.
There was an unimpeded entrance of legal practitioners to adjudication halls before tribunals when the Act first came into force on April 1, 1947.
Three years later when the Labour Appellate Tribu nals were constituted under the Industrial Disputes (Appel late Tribunal) Act 1950, a restriction was imposed on the parties 3 1234SCI/76 540 in engagement of legal practitioners before the Appellate Tribunal without consent of the parties and leave of the Tribunal.
When this was introduced in the appellate forum, the same restriction was imposed for the first time upon representation of parties by legal practitioners before the Industrial Tribunals as well [see Section 34 of the Indus trial Disputes (Appellate Tribunal) Act, 1950].
In view of the recent thinking in the matter of preferring legal aid to the poor and weaker sections of the people it may even be possible that the conditional embargo under section 36(4) may be lifted or its rigour considerably reduced by leaving the matter to the Tribunals permission as has been the case under the English law.
Restriction on parties in respect of legal representa tion before Industrial Courts is not a new phenomenon.
It was there in England in the Industrial Courts Act, 1919 (9 & 10 Geo 5 c 69) and.
does not appear to be altered even by the Industrial Relations Act, 1971.
Section 9 of the English Act provides that except as provided by rules, "no person shall be entitled to appear on any such proceedings by counsel or solicitor.
" However, rule 8 of the Industrial Court (Procedure) Rules 1920 allows persons to appear by counsel or solicitor with permission of the court.
The Act envisages Investigation and settlement of indus trial disputes and with that end in view has created various authorities at different levels all independent of one another.
The word adjudication occurs only with reference to labour courts, industrial tribunals and national tribu nals.
These bodies are manned by Judges of High Courts or by officers with appropriate Judicial and labour law experi ence.
The conciliation proceedings held by a Board or a Conciliation Officer are mainly concerned with mediation for promoting settlement of industrial disputes.
It is reason able to suppose that the presence of legal practitioners in conciliation may divert attention to technical pleas and will detract from the informality of the, proceedings imped ing smooth and expeditious settlement.
Legal practitioners entrusted with their briefs cannot be blamed if they bring forth their legal training and experience to the aid and benefit of their clients.
But labour law operates in a field where there are two unequal contestants.
The Act, there fore, takes care of the challenge of the situation in which the weaker party is pitted against the stronger before adjudicating authorities.
That appears to be one of the reasons for introducing consent of the parties for represen tation by legal practitioners.
Employers, with their purse, naturally, can always secure the services of eminent coun sel.
The question that arises for consideration will turn on the interpretation of section 36 of the Act which may be quoted: 36(1) A workman who is a party to a dispute shall be entitled to be represented in an proceed ing under this Act by (a) any member of the executive or other office bearer of a registered trade union of which he is a member; 541 (b) any member of the executive or other office bearer of a federation of trade unions to which the trade union referred to in clause (a) is affiliated; (c) where the worker is not a member of any trade union, by any member of the executive or other office hearer of any trade union connected with, or by any other workman employed in the industry in which the worker is employed and autho rised in such manner as may be prescribed.
(2) An employer who is a party to a dispute shall be entitled to be represented in any pro ceeding under this Act by (a) an officer of an association of employers of which he is a member; (b) an officer of a federation of associa tions of employers to which the association re ferred to clause (a) is affiliated; (c) where the employer is not a member of any association of employers by an officer of any association of employers connected with, or by any other employer engaged in, the industry in which the employer is engaged and authorised in such manner as may be prescribed.
(3)No party to a dispute shall be entitled to be represented by a legal practitioner in any concili ation proceedings under this Act or in any proceed ings before a Court.
(4) In any proceeding before a Labour Court, Tribunal or National Tribunal, a party to a dispute may be represented by a legal practitioner with the consent of the other parties to the proceeding and with the leave of the Labour Court, Tribunal or National Tribunal, as the case may be.
" Section 36 provides for representation of parties before the Tribunals and the Labour Court.
Under section 36(1) a workman who is a party to a dispute shall be entitled to be represented in any proceeding under the Act by three classes of officers mentioned m (a), (b) and (c) of that sub sec tion.
Similarly under section 36(2) an employer who is a party to a dispute shall be entitled to be represented in any proceeding under the Act by three classes of officers mentioned in (a), (b) and (c) of that sub section.
By sub section (3) a total ban is imposed on representation of a party to a dispute by a legal practitioner in any concili ation proceedings under this Act or in any proceedings before a Court of enquiry.
Then comes section 36(4) which introduces the requirement of prior consent of the opposite party and 542 leave of the Tribunals and of the Labour Court, as the case may be, for enabling a party to be represented by a legal practitioner.
Under the scheme of the Act the parties to an industrial dispute are employers and employers; employers and workmen; and workmen and workmen [section 2(K)].
The definition of "appropriate Government" under section 2(a) of the Act lays bare the coverage of industrial disputes which may be raised concerning, amongst others, several types of corporations, mentioned therein, companies, mine, oil field, cantonment board and major port.
The definition of employer under section 2(g), which is a purposive but not an exhaustive definition, shows that an industrial dispute can be raised in relation to an industry carried on even by the Government and by local authorities.
It need not be added that indus try is also carried on by private owners, private companies and partnerships.
Employers and workmen will, therefore, be drawn from numerous sources.
Leaving aside for the present industrial disputes between employers and employers and workmen and workmen, such disputes, almost, always are between employers and workmen.
Prior to the insertion of section 2A in the Act by the Amendment Act 35 of 1965 a dispute raised only by a single individual workman did not come under the category of an industrial dispute within the meaning of section 2(k).
Left to himself, no remedy was available to such an aggrieved individual workman by means of the machinery provided under the Act for adjudication of his dispute.
Such an individual dispute, for example, relating to the discharge or dismissal of a single workman, however, became an industrial dispute only if a substantial body of workmen or a union of workmen espoused his cause.
The trade union of workmen, therefore, comes to be recog nised as a live instrument under the Act and has an active role to play in collective bargaining.
Thus, so far as workmen are concerned, union is, alsmost, always involved in the dispute from the inception.
Since the dispute, itself, in a large number of cases takes the character of industri al dispute from participatory involvement of the trade union, the Act confers an unbartered right upon the workmen to be represented by a member of the executive or by an office bearer of a registered trade union.
It is, there fore, in the very scheme of things that a workman 's absolute right to be represented by an office bearer of the union is recognised under the Act.
Indeed it would have been odd in the entire perspective of an industrial dispute and the objects and purposes of the Act not to give due recognition to the union.
But for a provision like section 36(1 ) of the Act, there may have been difficulty under the general law in the way of the office bearers of the union represent ing workmen before the adjudicating authorities under the Act unless, perhaps, regulated by the procedure under sec tion 11 of the Act.
To put the matter beyond controversy an absolute right is created in favour of the workmen under section 36(1) in the matter of representation.
Having made such a provision for the workmen 's representation the employer is also placed at par with the workmen in similar terms under the Act and the employer may also be represented by an officer of the association of employers of which the employer is a member.
The 543 right is extended to representation by the office bearers of the federation of the unions and by the officers of the federation of employers.
The provisions of section 36(1) and 36(2) confer on the respective parties absolute rights of representation by persons respectively specified therein.
The rights of representation under section 36(1) and section 36(2) are unconditional and are not subject to the condi tions laid down under section 36(4) of the Act.
The said two sub sections arc independent and stand by themselves.
As stated earlier, section 36 deals with representation of the parties.
Neither the Act nor section 36 provides for appearance of the parties themselves when they are individu als or companies or corporations.
The Tribunals and the Labour Courts being quasi judicial authorities dealing with rights affecting the parties cannot adjudicate their dis putes in absence of the parties.
It is, therefore, incum bent upon the Tribunals and Labour Courts to afford reasona ble opportunity to the parties to appear before them and hear them while adjudicating industrial disputes.
This position is indisputable.
Section 36, therefore, is not exhaustive in the sense that besides the persons specified therein there cannot be any other lawful mode of appearance of the parties as such.
As indicated earlier section 36 does not appear to take count of companies and corporations as employers.
It is, however, common knowledge that industri al disputes are raised in a predominantly large number of cases where companies or corporations are involved.
Since companies and corporations have necessarily to appear through some human agency there is nothing in law to pre vent them from being represented in any lawful manner.
As Salmond says :, "Every legal person, therefore, has corresponding to it in the world of natural persons certain agents or representa tives by whom it acts . . . . "(Salmond on Jurispudence, 12th Edition, page 312.) It is not intended under the Act that companies and corporations are confined to representation of their cases only through the officers specified in section 36(2) of the Act.
They can be represented by their directors or their own officers authorised to act in that behalf in a lawful manner provided it is not contrary to any provision of the Act.
This would not, however, mean that the companies and corporations, and for the matter of that any party, are free to engage legal practitioners by means of a special power of attorney to represent their interests before the Tribunals without consent of the opposite party and leave of the Tribunal.
Again, although under section 36(2)(c) there is provi sion for the contingency of an employer not being a member of an association of employers, the device of representation provided therein would not fit in the case of a Government Department or a public corporation as an employer.
These categories of employers, known to the Act, will be put to the most unnatural exercise of enlisting the aid of an outside 544 association, albeit connected with the same type of indus try, to defend their cases before Tribunals.
Such an absurd intent cannot be attributed to the legislature in enacting section 36, which will be, if that section is the be all and end all of the types of representations envisaged under the Act.
The impossibility of the position indicated above a crucial pointer to section 36 being not exhaustive but only supplemental to any other lawful mode of represen tation of parties.
The parties, however, will have to conform to the conditions laid down in section 36(4) in the matter of representation by legal practitioners.
Both the consent of the opposite party and the leave of the Tribunal will have to be secured to enable a party to seek representation before the Tribunal through a legal practitioner qua legal practitioner.
This is a clear significance of section 36(4) of the Act.
If, however, a legal practitioner is appointed as an officer of a company or corporation and is in their pay and under their control and is not a practising advocate the fact that he was earlier a legal practitioner or has a legal degree will not stand in the way of the company or the corporation being represented by him.
Similarly if a legal practitioner is an officer of an association of employers or of a federation of such associations, there is nothing in section 36(4) to prevent him from appearing before the Tribunal under the provisions of section 36(2) of the Act.
Again, an office bearer of a trade union or a member of its executive, even though he is a legal practitioner, will be entitled to represent the workmen before the Tribunal under section 36(1) in the former capacity.
The legal practi tioner in the above two cases will appear in the capacity of an officer of the association in the case of an employer and in the capacity of an office bearer of the union in the case of workmen and not in the capacity of a legal practitioner.
The fact that a person is a legal practitioner will not affect the position if the qualifications specified in section 36(1) and section 36(2) are fulfilled by him.
It must be made clear that there is no scope for enquiry by the Tribunal into the motive for appointment of such legal practitioners as office bearers of the trade unions or as officers of the employers associations.
When law provides for a requisite qualification for exercising a right fulfilment of the qualification in a given case will entitle the party to be represented before the Tribunal by such a person with that qualification.
How and under what circumstances these qualifications have been obtained will not be relevant matters for consideration by the Tribunal in considering an application for representation under section 36(1) and section 36(2) of the Act.
Once the qualifications under section 36(1) and section 36(2) are fulfilled prior to appearance before Tribunals, there is no need under the law to pursue the matter in order to find out whether the ap pointments are in circumvention of section 36(4) of the Act.
Motive of the appointment cannot be made an issue before the Tribunal.
545 We may note here the difference in language adopted in section 36(1) and section 36(2).
While section 36(1) refers to "any member of the executive" or "other office bearer," section 36(2), instead, mentiones only "an officer." Now "executive" in relation to trade union means the body by whatever name called to which the management of the affairs of the trade union is entrusted section 2(gg).
"Office bearer" in relation to a trade union includes any member the executive thereof but does not include an auditor section 2(III).
So far as trade unions are concerned there is no difficulty in ascertaining a member of the executive or other office bearer and section 36(1) will create no difficulty in practical application.
But the word "officer" in section 36(2) is not defined in the Act and may well have been, as done under section 2(30) of the Companies Act.
This is bound to give rise to controversy when a particular person claims to be an officer of the association of employers.
No single test nor an exhaustive test can be laid down for determining as to who is an offi cer in absence of a definition in the Act.
When such a question arises the Tribunal, each individual case, will have to determine on the materials produced before it wheth er the claim is justified.
We should also observe that the officer under section 36(2) is of the association or of the federation of associations of employers and not of the company or corporation.
The matter of representation by a legal practitioner holding a power of attorney came up for consideration before the Full Bench of the Appellate Tribunal of India in the year 1951 (see Kanpur Hoisery workers ' Union vs
J.K. Hosiery Factor) ', Kanpur)(1).
The provision for representation which applied to the Appellate Tribunal was section 33 of the repealed Industrial Disputes Appeallate Tribunal) Act, 1950.
This section corresponds to section 36 of the with which are concerned.
Although the Appel late Tribunal rejected the claim of the party to be repre sented by the legal practitioner on the basis of a power of attorney, with which we agree, the reasons for its conclu sion based solely on the ground of section 36 being exhaus tive do not meet with our approval.
The Appellate Tribunal took the view that the Act intended to restrict the repre sentation of parties to the three clases of persons enumer ated in sub sections (1) and (2) of section 33.
The Appel late Tribunal was of the view that sub sections(1) and (2) of section 33 were intended to be exhaustive of the persons (other than the party himself) who might represent either of the party.
Since holding of a power of attorney is not one such mode the claim of the legal practitioner failed, ac cording to the Appellate Tribunal.
The Rajasthan High Court in Duduwala & Co. and others vs Industrial Tribunal and another(2) took the same view.
Our attention has been drawn to the decisions of the Calcutta and Bombay High Courts where in a contrary view has been taken with regard to the interpretation of section 36 as being exhaustive [see Hall & Anderson, Ltd. vs
S.K. Neogi and another(3) and Khadilkar (K. K.) General Secretary, Engineering Staff Union Bombay vs Indian Hume Pipe Company, Ltd.,Bombay, and another] (4).
For the reasons already given by us we are (1) [1952] I L.L.J. 384.
(2) A.I,R. (3) [1954] I.L.L.J. 629.
(4) [1967] I.L.L.J. 139 546 of opinon that the views of the Labour Appellate Tribunal and that of the Rajasthan High Court in this aspect of the matter are not correct and the Calcutta and Bombay High Courts are right in holding that section 36 is not exhaus tive.
The Solicitor General contends that "and" in section 36(4) should be read as "or" in which case refusal to con sent by a party would not be decisive in the matter.
The Tribunal will then be able to decide in each case by exer cising its judicial discretion whether leave, in a given case, should be given to a party to be represented by a lawyer notwithstanding the objection of the other party.
It is pointed out by the Solicitor General that great hardship will be caused to public corporations if the union is given a carte blanche to finally decide about that matter of representation by refusing to accord its consent to repre sentation of the employer through a legal practitioner.
It is pointed out that public corporations, and even Government running a transport organisation like the State transport, cannot be expected to be members of any employers ' associa tion.
In their case section 36(2) will be of no avail.
To deny them legal representation would be tantamount to denial of reasonable opportunity to represent their cases before the Tribunal.
It is submitted that since such injustice or hardship cannot be intended by law the final word with regard to representation by legal practitioners before the Tribunal should rest with the Tribunal and this will be effectively implemented if the word "and" in section 36(4) is read as "or".
This, it is said, will also achieve the object of the Act in having a fair adjudication of disputes.
We have given anxious consideration to the above submis sion.
It is true that "and" in a particular context and in view of the object and purpose of a particular legislation may be read as "or" to give effect to the intent of the Iegislature.
However, having regard to the history of the present legislation, recognition by law of the unequal strength of the parties in adjudication proceedings before a Tribunal, intention of the law being to discourage repre sentation by legal practitioners as such, and the need for expeditious disposal of cases, we are unable to hold that "and" in section 36(4) can be read as "or".
Consent of the opposite part is not an idle alternative but a ruling factor in section 36(4).
The question of hardship, pointed out by the Solicitor General, is a matter for the legislature to deal with and it is not for the courts to invoke the theory of injustice and other conse quences to choose a rather strained interpretation when the language of section 36 is clear and unambiguous.
Besides, it is also urged by the appellant that under section 30 of the , every advocate shall be entitled "as of right" to practise in all courts, and before only tribunal section 30(i) and (ii).
This right conferred upon the advocates by a later law will be properly safeguarded by reading the word "and" as "or" in section 36(4), says counsel.
We do not fail to see some difference in language in section 30(ii) from the provision in section 14(1) (b) of the , relating to the right of advocates to appear before courts and tribu nals.
For example, under section 14(1) (b) of the 547 Bar Councils Act, an advocate shall ;be entitled as of right to practise save as otherwise provided by or under any other law in any courts (other than High Court) and tribunal.
There is, however, no reference to "any other law" in sec tion 30(ii) of the .
This need not detain us.
We are informed that section 30 has not yet come into force.
Even otherwise, we are not to be trammelled by section 30 of the for more than one reason.
First, the is a special piece of legislation with the avowed aim of labour welfare and representation before adjudicatory authorities therein has been specifical ly provided for with a clear object in view.
This special Act will prevail over the which is a general piece of legislation with regard to the subject matter of appear ance of lawyers before all courts, tribunals and other au thorities.
The is concerned with.representation by legal practitioners under certain conditions only before the authorities mentioned under the Act.
Generalia Specialibus Non Derogant.
As Maxwell puts it: "Having already given its attention to the particular subject and provided for it, the legis lature is reasonably presumed not to intend to alter that special provision by a subsequent general enactment unless that intention be main fested in explicit language . or there be something in the nature of the general one making it unlikely that an exception was intended as regards the special Act.
In the absence of these conditions, the general statute is read as silently excluding from its operation the cases which have been provided for by the special one.
"(1) Second, the matter is not to be viewed from the point of view of legal practitioner but from that of the employer and workmen who are the principal contestants in an industrial dispute.
It is only when a party engages a legal practi tioner as such that the latter is enabled to enter appear ance before courts or tribunals.
Here, under the Act, the restriction is upon a party as such and the occasion to consider the right of the legal practitioner may not arise.
In the appeal before us we find that the Tribunal, after considering the materials produced before it, held that Shri T. Misra could not claim to be an officer of the corpora tion simply because he was a legal consultant of the Trust.
The Tribunal came to this conclusion after examining the terms and conditions governing the relationship of Shri Misra with the Trust.
He was neither in pay of the company nor under its control and enjoyed freedom as any other legal practitioner to accept cases from other parties.
It is significant to note that one of the conditions of Shri Misra 's retainer is that "he will not appear in any suit or appeal against the Port until he has ascertained from the Chairman that his services on behalf of the Port will not be required.
" That is to say, although on a retainer and with fixed fees for appearance in eases there is no absolute ban to appear even (1) Maxwell on lnterpretation of Statutes 11th Ed. P. 169.
548 against the Port.
This condition is not at all consistent with the position of an officer of the Trust.
We agree with the opinion of the Tribunal that Shri Misra cannot be held to be an officer of the Trust.
A lawyer, simpliciter, cannot appear before an Industri al Tribunal without the consent of the opposite party and leave of the Tribunal merely by virtue of a power of attor ney executed by a party.
A lawyer can appear before the Tribunal in the capacity of an office bearer of a registered trade union or an officer of associations of employers and no consent of the other side and leave of the Tribunal will, then, be necessary.
In the result the appeal is dismissed with costs.
Necessarily the Special Leave Petitions also fail and stand dismissed.
[/INST]Under the , it is the business of the Oil and Natural Gas Commission to plan, promote, organise and implement programmes for the development of petroleum resources and the production and sale of petroleum products produced by it and to perform such functions as the Central Government may, from time to time, assign to it.
Under section 29 of the Act, the Commission shall be deemed to be a Company, liable for any tax or fee levied by the Central or State Government.
Section 31 empowers the Central Government to make rules prescribing the conditions subject to which, and the mode in which, contracts may be entered into by or on behalf of the Commis sion.
The Commission is engaged in the business of produc ing crude oil in Assam and supplying it to the refineries of the Indian Oil Corporation at Gauhati in Assam and Barauni in Bihar.
It was decided by the Government of India and agreed to by the Commission; that the crude is deemed no tionally to be delivered only to Barauni Refinery and not to Gauhati Refinery, and that payment of Sales tax by the Commission is to be on the same principle.
The Commission however challenged, in a petition to this Court, its liability to pay any sates tax either under the Central Sales Tax Act to the State of Assam or the State Sales Tax to the .State of Bihar, on the ground, that, in supplying crude oil to the Corporation there was no contract of sale between the Commission and the Corporation, because, the supply was pursuant to.
directions and orders of the Central Government and the Commission had no volition or freedom in the matter.
The Commission also contended that assuming that they are sates they are inter state sales, under the , and the State of Bihar was not competent to levy any State sales tax.
HELD: (1) The supplies of crude oil by the Commission to the Brauni Refinery of the Corporation satisfy all the ingredients of a sale and amount to sales by the Commission to the Corporation.
[356 A] (a) Statutory orders regulating the supply and distribu tion of goods by and between the parties under Control Orders do not absolutely impinge on the freedom to enter into contract.
[357 C] (b) Directions, decisions and orders of agencies of the Government to control production and supply of commod ities, may fix the person who has to carry them out, the parties to whom the goods are to be supplied, and he price at which, and the time during which they are to be supplied.
In much cases it cannot be said that compulsive.
directions rob the transactions of the character of agreement.
There is privity of contract between the parties, he statute supplying the consensus and the modality of consensus.
[357 D E] (c) Such a transaction is a valid transfer of, property for consideration and he law presumes assent when there is transfer of goods from one to the other.
[357 F] (d) Also, a sale may not require the consensual element and there may compulsory sale of property under a statute for a price fixed against the owner 's will.
(e) Delimiting areas for transactions or denoting par ties or price for transactions are all within the area of individual freedom of contract with limited choice by reason of ensuring the greatest good for the greatest number by achieving proper supply as standard or fair price.
[357 G] .
(f) The transactions in substance represent the outgoing of the business and the price would come into computation of profits.
[357 G] Salar Jung Sugar Mills Ltd. Etc.
v, State of Mysore & Ors.
[1972] 2 S.C.R. 228 followed.
(2) The movement of crude oil from Assam to Barauni in Bihar is pursuant to and as an incident to the contract for, sale between the Commission and the Corporation.
The Sales are therefore inter state sales.
and under the Central Sales tax Act only the.
State of Assam is entitled to levy central sales tax on the Commission.
[358 G]
</s>
|
<s>[INST] Summarize the judgementiminal Appeals Nos. 41 and 77 of 1973.
Appeals under Section 19 of the from the, Judgment and Order dated the 5th February, 1973 of the Orissa High Court at Cuttack in Criminal Miscellaneous Case No. 8 of 1972.
A.K. Ser, G. L. Mukhoty and C. section section Rao, for the appellant (in Cr.A. 41./73).
G. Rath, and B. Parthasarathy, for the appellant (In Cr. A. 77/73).
F. section Nariman, Additional Solicitor General, B. M. Patnaik and Vinoo Bhagat, for respondent No. 1 (in Cr. A. 41/73) and respondent NO. 2 (in Or. A. 77/73).
G. Rath and U. P. Singh,for respondent No. 2 (in Cr. A. 41/73), A. K. Sen and C. section section Rao, for respondent No. 1 (in Cr. A. 77/73).
The judgment of the Court were delivered by PALEKAR J.
This is (Criminal Appeal No. 41 of 1973) an appeal by one Baradakanta Mishra from his conviction and sentence under the by a Full Bench of fiVe of the.
Orissa High Court.
The Judgment is reported in I.L.R. [1913] Cuttack, 134 (Registrar of the Orissa High Court vs Baradakanta Mishra and Ors.).
The appellant started his career as a Munsif in 1947.
His career as a Judicial Officer was far from satisfactory.
In 1956 he was promoted on trial basis to the rank of a sub Judge with the observation 28 7 that if he was found incompetent, suitable action would be, taken.
In due course, he, was confirmed as a Subordinate Judge.
On April, 2, 1962 he was promoted, again on trial basis, to the rank of Additional District Magistrate (Judicial) which is a post in the cadre of the orissa Superior Judicial Service (Junior Branch).
As his work was for unsatisfactory, he wag reverted to his substantive post of a Subordinate Judge on January 4, 1963.
The order of reversion was challenged by him in a Writ Petition which was dismissible by a Bench of C.J. and , J. The case is reported in [I.L.R.] 1966, Cutback, 503.
An appeal to the Supreme Court was dismissed on February 6,he 1967.
While working as a Subordinate Judge, after reversion, ' was suspended from service from 15th May, 1964 to 9th April, 1967 during the pendency of a disciplinary proceeding against him.
that proceeding ended in a light punishment of two of his increments being stopped.
From the.
above order of punishment, the appellant filed on 10 10 1967 an appeal to the State Government.
The State Government by its order dated 15 7 1970 allowed tie appeal on the ground that the Public Service Commission had not heed consulted by the High Court before imposing the punishment, and that the Charge Sheet served on the appellant having indicated the proposed punishment vitiated the disciplinary proceedings.
After the case, Was sent back to the High Court the charges which had been earlier established, were framed again and served on him on 13 2 1971 and we are informed that the proceeding is still pending.
In the meantime, it appears, he was promoted to the post of the Additional District Maggistrate in February, 1968 though the High Court was of opinion that he was unbalanced, quarrelsome, reflect and undisciplined.
The High Court specifically observed that though the appellant suffered from these defects, It was sincere and working and the other officers who had superseded him as Additional Districting Magistratres were not much better.
The promotion was made on trial basis for a period of one year with the. observation that if during that period his work was found to be unsatisfactory, he 'would be reverted to the rank of Sub Judge.
In that year the High Court had to face an abnormal situation by the retirement of many District Judges on account of the decision of the Government reducing the age of retirement from 58 to '55 years Many, vacancies occurred and the appellant was then promoted as an Additional District and Sessions Judge on trial basis for six months in July, 1968.
In January, 1969 he was allowed to continue on a temporary basis till further orders subject to further review of his work at the time of confirmation.
It is worthy of note that this decision to continue was taken on the report of the present Chief.
Justice O. K. Mishra who was at that time the Administrative Judge.
On May 12, 1969 his services were placed at the disposal of the Government in the Law Department, who appointed him as Joint Secretary.
Law, till October 12, 1969.
From October 13, 1960 to December 4, 1970 he was appointed by the Government as the Commissioner of Endowments.
The Government was thoroughly dissatisfied with his work and on December 5, 1970 his services were replaced at the disposal of the High Court.
The appellant went on leave.
288 On his return to the Judicial cadre, he functioned as Addison District and Sessions Judge, Cuttack till July 14, 1971 when he was ,posted to act as District and Sessions Judge for 12 days in the temporary leave vacancy of the permanent District Judge Mr. P. K Mohanty.
When he was thus acting as District and Sessions Judge for a short period by way of stop gap arrangement, the High Court placed several restrictions on his administrative powers,.
In the brief period that he was working as Additional District and Sessions Judge, Cuttack, the appellant showed gross indiscretion by defying a request made by the Distr ict, Judge in due course of administration.
He also committed a avejuiudicial misdemeanors.
He heard an appeal and posted it for judgment on June 22, 1971.
The judgment was delivered on that date and the, appeal was dismissed.
The Order Sheets of the judgment were signed by the appellant and the judgment was duly sealed.
Later in the day, however, the appellant scored through his signatures both in the Order Sheet and in the judgment and returned the record of the appeal to the District Judge for disposal by making a false statement that the judgment had not been delivered and that the parties being known to him it was not desirable that he should further hear the appeal, after taking additional evidence for which a petition had been filed.
This was something quite extraordinary from a Judge of the appellant 's standing.
When these matters were brought to the notice of the High Court the Registrar by Order of the High Court recommended to the Government that the appellant be reverted to the post of the Additional District Magistrate (Judicial).
There were already three departmental proceedings pending against the appellant and he had also been convicted in a contempt case.
The High Court expressly informed the Government that these four matters had not been taken into consideration in recommending his reversion and that his reversion was solely due to the fact that his work was found unsatisfactory.
The recommendation was accepted by the Government who on September 1, 1971 reverted the appellant to the post of the Additional District Magistrate.
On September 10, 1971 the appellant made a representation to the Chief Minister praying for the withdrawal of the order of reversion and, if necessary, to suspend him after drawing up a regular depart7 mental proceeding.
The representation was forwarded to the Government with the comments of the High Court.
Something unusual happened.
Without any further consultation with the High Court, the Governor cancelled the reversion order by notification dated March 21, 1972 And on the same day the Chief Minister wrote a confidential D.O. to the Chief Justice by name explaining the circumstances under which the reversion.
order was cancelled.
The Chief Minister appeared.
to rely upon a decision of the Orissa High Court which had no application to the facts of this particular case.
But any way.
it would appear that by reason of the Order dated March 21, 1972: the reversion of the appellant to the post of the Additional District Magistrate stood cancelled and he continued to act in the post of the Additional District & Sessions Judge, Cuttack.
289 The D.O. letter of the Chief Minister remained unopened till the return of the Chief Justice from New Delhi where he had gone to attend the Chief Justices Conference.
It was opened by the Chief Justice on return on March 26, 1972.
But in the meantime, the appellant, who had gone on leave, having known about the order passed on March 21, 1972 asked for his posting.
The rules required that on return from leave he should produce, a medical certificate and he was, accordingly directed to produce one.
On March 28, 1972 the Chief Justice placed the letter of the Chief Minister for consideration before the Full Court.
The Full Court took the decision to start a disciplinary proceeding against the appellant and, pending the same, to place him under suspension in exercise of their powers under Article 235 of the Constitution.
Accordingly on March 30 1972 the appellant was placed under suspension and his headquarters were fixed at Cuttack.
The present contempt proceedings arise out of events which took place after the suspension order.
On receiving the suspension order the appellant addressed by letter an appeal to the Governor of Orissal for cancelling the order of suspension and for posting him directly under the Government.
That is Annexure 8.
As the High Court was of the view that no appeal lay from an order of suspension pending disciplinary charges, it did not forward the appeal to the.
Governor.
In fact on April 28, 1972 the Registrar of the High Court intimated the State Government that the appeal filed by the appellant to the Governor had been withheld by the High Court as no such appeal lies against the order of suspension pending disciplinary proceedings.
The appellant was also intimated accordingly.
On April 29, 1972 charges in 'the disciplinary proceeding were, framed by the High Court and communicated to the appellant and the appellant was directed to file his reply to the charges by a certain date.
On May 14, 1972 the appellant wrote three letters.
One was to the Registrar and is Annexure 13.
By this letter the appellant intimated that he had moved the Governor to transfer the disciplinary proceedings to the Administrative Tribunal and that he would take all other alternative steps administrative and judicial to avoid the proceeding being dealt with by the High Court.
The second letter was addressed to the Governor and is Annexure 15.
It purports to be a representation with a prayer to direct the High Court to forward the appeal withheld by it.
There was a third letter of the same date addressed directly to the Governor purporting to be a representation.
That is Annexure 16.
The prayer was that the departmental pro .
seedings be reference to the Administrative Tribunal.
A copy of this letter was sent to the Registrar of the High Court with the following . remark "As the Honourable Court are likely to withhold such petitions, this is submitted direct with copy to the Honourable Court for information.
Honourable Court may be,, pleased to send their comments on this petition to the Governor." 29 0 On May 22, 1972 the appellant addressed a letter (Annexure 14) to the Registrar intimating him that he would not submit any explanation to the charges framed against him until his representation to the Governor was disposed of.
He also stated therein that he may file a writ application for the purpose and would take the matter to the Supreme Court, if necessary.
He also stated that he cannot wait for the permission of the High Court for leaving the Headquarters.
It is the contents of these letters on which a show cause notice for contempt was issued to the appellant under the orders of the Full Court on July 3, 1972.
On 27 7 1972 the appellant filed his preliminary objection to the show cause notice challenging its maintainability on the ground that whatever he had said had no reference to the judicial functions of any Judge of the High Court and, therefore, no contempt proceedings would lie.
He pressed for a decision on the point.
When the matter came before a Division Bench on 3 8 1972 the appellant was directed to file his full reply to the show cause notice.
Accordingly, it was filed on 7 8 1972 and the appellant again pressed for a decision on his preliminary objection.
The Division Bench refused to deal with the preliminary objection and so on 30 8 1972 the appellant filed Criminal Appeal NO. 174 of 1972 in this Court praying for cancellation of the contempt proceedings challenging therein the maintainability of the proceeding and complaining of bias and prejudice of the High Court particularly the Honourable the Chief Justice and Mr. Justice R.N. Mishra.
He said apprehended that he would not get a fair deal if the matter is disposed of by the High court On 21 11 1972 the Supreme Court appeal was withdrawn.
At the instance of the Division Bench, a PM Bench of five Judges was constituted by the Chief Justice, and the case came on for hearing before the Full Bench on 4 12 1972.
In the meantime the appeal memo filed by the appellant in the Supreme Court was available and since it contained matter which amounted to contempt, additional, charges were framed and a show cause notice was issued to the aPPellant in respect of these additional charges.
A copy of, the appeal memo containing the statements amounting to contempt is Annexure 20.
The Annexures were examined by the court with a view to consider whether the statements therein amount to a criminal contempt.
On a full and prolonged consideration the Fall Bench came to, the unanimous conclusion that Annexures 8,13,14,16, and 20 contain matters which accounted to gross contempt of court and since the appellant had not even offered an apology, this was a matter in Which serious notice ought to be taken, especially, in view of previous convictions for contempt, and, accordingly sentenced the appellant to two months simple imprisonment though in their opinion he deserved the maximum sentence of six months.
The several Annexures referred to above have been extracted by the Fall Bench in its judgment and it as not necessary to reproduce them here.
It will be sufficient to reproduce only those portions 29 1 which were regarded as grossly contemptuous and had been under lined in the judgment.
Annexure 8.
As already stated this is a letter in the, form of an appeal addressed to the Governor of Orissa complaining against the suspension and praying for stay of operation of the suspension order on the basis.
of the advance copy sent to the Governor for its cancellation and for posting the appellant directly under the Government.
it is dated 10 4 1972.
The appeal had been routed through the High Court but the High Court did not forward the same.
In this annexure reference is made to the previous appeal filed by him against the order of the High Court stopping his two increments after a departmental proceeding and how the Governor in appeal had cancelled even the very departmental proceeding in the appeal.
An interpretation was, put on that order which it did not bear and it was made out, though falsely, that the punishment had been set aside on the basis of the allegations made by the appellant that some Honourable Judges of the High Court had been biased and prejudiced against him.
The appellant also asked the Governor to appreciate that by the said departmental proceedings the High Court had put the Exchequer to a very heavy loss "all on accounts of the palpable incorrect views of the High Court.
" Then the appellant says that the present action,.
namely , the order of suspension clearly disclosed mala fides.
He suggested that there were several "embarrassing events" which he could offer for consideration of the Governor but he was content at this stage to refer to only one of them.
In this connection he referred to the fact that when he intimated to the High Court that he desired to join duties after his leave on March 20, 1972 he was informed by the High Court on March 23, 1972 that his re posting after leave would be decided after the medical board reported as to his fitness.
to join after leave.
This, according to the appellant, showed that the High Court had already taken a decision in the absence of the Chief Justice that the appellant should be re posted.
But on the return of the Chief Justice from New; Delhi there was a sudden change.
, He clearly suggested that after the Chief Justice 's return, the court took the decision to suspend him and in this connection he made the following observations : "This decision of the High Court, reached at before the Honourable the Chief Justice attended the High Court on the 27th March after his 10 days of absence, clearly indi cates that no proceeding, much less suspension, against the appellant was under contemplation till that day, but on the other hand, the appellant 's place of posting was under consideration of the High Court.
Circumstances clearly disclose that after the return of the Honourable Chief Justice, the Government 's order, disapproving the High Court 's views about the appellants demotion, was not accepted gracefully by the High Court, and so subterfuge was adopted to counteract the said decision of.
the Government by a novel step, thus to deprive the appellant of the result of the said decision.
In view of this patent mala fide alone, such an action 292 is liable to be quashed, by any competent Court of law.
" Then at a later stage the appellant says "The appellant happens to be the senior most judicial officer in the State as regards length of service, and he has already 20 more months before attaining the age of superan nuation.
Hence, he may not deserve the present unwarranted, sudden and mysterious suspension.
giving rise to speculations, touching his integrity.
" Then again he says ". . the treatment of the High Court may require that after cancellation of this order of suspension, he be brought under the direct control of the Government in a special post for the rest of his service career of hardly 20 months more.
" The High Court at para 61 of the judgment has observed as follows : "In the appeal memo (Annexure 8) the condemner attributed mala fides, bias and prejudice to the High Court.
He made false insinuations that the Governor cancelled the previous disciplinary proceeding against the condemner on the ground that the same was vitiated as the High Court had prejudged the matter and the Government set aside the punishment on the ground that three of the Honourable Judges were biased and prejudiced against him.
He alleged that the disciplinary proceeding involved the Government in heavy expenses on account of the palpably incorrect views of the High Court.
He asserted that the order of suspension as per Annexure 6 was mala fide.
He stated that he would produce more facts relating to the mala fides of the High Court before the Governor.
He alleged that the High Court did not gracefully accept the Government 's order cancelling his demotion, and the High Court resorted to a subterfuge to counter act the said decision of the Government by taking a novel step, and that the High Court 's action suffered from patent mala fide.
He stated that there was a turn of event after return of the Chief Justice from the Chief Justices ' Conference and that the High Court did not accept Government 's decision.
gracefully and that the other Judges had no independent judgment of their own, and were influenced by the Chief Justice to take a view, different from what they had already taken, to give a posting order to the contemner, and that the High Court resorted to a subterfuge.
He wanted protection of the Govern against the High Court which he insinuates as an engine of oppression.
He characterised the High Court 's order of suspension as mysterious and prayed that the Government should post him directly under it.
" We have no doubt that the Full Bench has correctly summarized the effect of Annexure 8, and we have nothing more, to add.
29 3 Annexures 13 and 14 should go together.
Annexure 13 is a letter by the appellant to the Registrar dated May 14, 1972 in which he told him that he had moved the Governor, Orissa with a prayer to refer his matter to the Tribunal under the provisions of the Disciplinary Proceedings Rules, 1951 and also that he would take all other alternative steps "administrative and judicial" to avoid this proceeding being dealt with by the High Court and for this purpose would have to consult some prominent Advocates of Calcutta and Delhi.
Annexure 14 is a further letter dated May 22, 1972 to the Registrar intimating him that he would not submit any explanation to the charges framed until his representation to the Governor was disposed of.
In this letter he further pointed out that it would not be possible for him to wait for the permission of the High Court to leave headquarters, because he may be called by his legal advisers at any moment and in those circumstances he said "I hereby inform the Honourable Court that I may be absent during the entire period mentioned in my letter dated the 14th May, 1972 and the Honourable Court may kindly approve of the same.
" The effect of Annexares 13 and 14 has been summarised by the Full Bench in these words : "Thus, in Annexures 13 and 14, the contemner exhibited a contemptuous defiance of the Court 's order, by declaring that he would not obey the order.
and would leave the station without waiting for permission from the High Court, as his first consideration was to "go out in connection with legal advice and filing applications and appeals in the Supreme Court" in matters connocted with his suspension, and to take all steps to avoid the proceeding being dealt with by the High Court.
These passages depict, in unequivocal terms, that the dispensation of justice by the Judges of the High Court on its administrative side, is most atrocious and vindictive and it is on that ground.
the contemner would not obey the Court 's order, could not submit any explana tions, and would take all possible measures before the Supreme Court, the Governor and the Chief Minister not to surrender to the jurisdiction of the High Court.
His entire attempt has been to present a lurid picture of the administration of justice, by the High Court.
" In the context, we are not prepared to say that this summary of the effect of Annexures 13 and 14 is far wrong.
Annexure 16.
That brings us to Annexure 16.
It Is dated May 14, 1972 and purports to be a representation made by the appellant direct to the Governor without routing it through the High Court.
The following passages have been underlined by the Full Bench as being grossly contemptuous. ". the High Court have already contemplated in this departmental proceedings, a very heavy punishment for the petitioner.
" 294 "If on two such allegations, bias and prejudice of the High Court was disclosed by strongly pleading for demotion of the petitioner, the multiple number of such charges may naturally make the petitioner, apprehensive of the result of the proceedings, if conducted by the High Court." ". . the High Court even without any authority or jurisdiction in this regard and on the face of the directions of the Government in Political and Servoes Department communicated in the Government 's Memo No. 3559 Gen., dated the 15th March 1958, have placed the petitioner under suspension " "The High Court have also taken unusual move in placing the petitioner under suspension in a 'contemplated proceeding ' " ".
the High Court on the administrative side, is seriously prejudiced and biased against him, and they act, as if the charges stand established, requiring extreme punish ment and as such, justice, may not be meted out to the petitioner by the High Court, if they conduct this departmental inquiry." ". . the petitioner considers it risky to submit his explanation to the High Court." ". . the High Court in the best interest of justice,should not enquire into these charges.
" A copy of the above representation was sent to the Registrar and the following endorsement appears thereon.
As the Honourable Court are likely to withhold petitions this is submitted direct with copy to the Honourable Court for information.
The Honourable Court may be pleased to send their comments on this petition to the Governor.
" The summary of the effect of Annexure 16 is given by the Full Bench in para 70 of the judgment which is as follows : "In Annexure 16 the contemner has suggested that the Court has already prejudged the matter and has taken a previous decision to impose a heavy punishment.
Bias and prejudice on the part of the Court were also alleged by the contemner.
He suggested that the Court is not in a position to weigh the evidence.
and consider the materials on record and to impose a sentence commensurate with his delinquency.
The action taken by the High Court has been branded as unusual. . ." "A copy of this Annexure 16 was sent to the High Court with a contemptuous remark that since the High Court was likely to withhold the representation it was submitted direct to the Governor.
Not being satisfied with that, he issued a further directive to the court to send their comments on his representation to the Governor.
295 The above summary of the effect of Annexure 16 is, in our view, correct.
Annexure 20.
This annexure is the memo of appeal filed by the appellant in the Supreme Court in Criminal Appeal No. 174 of 1972.
The appeal had been filed because the Division Bench had refused to consider his preliminary objection with regard to the maintainability of the present contempt proceedings.
The grievance before the Supreme Court was that the, Orissa High Court had taken.
six contempt proceedings against him and in view.
of what happened in some of those proceedings, the appellant entertained apprehension that the court may impose substantive punishment and may refuse bail or time to the appellant for getting redress from the Supreme Court if the present contempt proceedings were also to go on before the same High Court.
In the first contempt proceeding though the proceedings were dropped, Adverse comments were made against his conduct thus depriving him of an opportunity to go in appeal and have the adverse comments exnged.
in one of the other cases he says. . the appellant was brought down to the Court hall, and the Honourable Judges convicted and sentenced the appellant and without affording him an opportunity to obtain stay of the sentence from this Honourable Court, executed the sentence by administering admonition in the, open court and sounding warning that, if at any time such contumacious conduct of his was noticed, a very serious view would be taken about punishment.
" In the other contempt matter, he alleged, a Judge wanted to add a new charge.
The appellant objected to the same and went in appeal to the Suprerac, Court.
The appellant says that when the appellant filed his appeal in this Court and brought this fact to the notice of the Honourable Judges,, they dropped the additional charge.
In another proceeding, he says, the Honourable Judges while dropping the proceeding found out a very innocent and inconsequential mistake in the sworn counter affidavit of the appellant and on that account ordered the filing of a criminal complaint for an offence under section 199 of the I.P.C.
In ground (1) the appellant alleged that the appellant fears bias of the Honourable High Court against him in view of the facts and circumstances stated above.
The Full Bench in its judgment has considered each one of them allegations in the appeal memo and shows how the insinuations were false and how plain facts were distorted, They are entirely right in ,ummarising these facts of Annexure 20 in these words: "Thus in Annexure 20 the contemner has, in clearest terms, alleged bias and prejudice against the High Court and its Chief Justice.
He has taken the plea that the court itself has become disqualified to deal with the case In his view the Judges of this Court have fallen from the path of rectitude, and are vindictive, and have already decided to impose substantive sentence and refuse bail, and they are not in a position to mete out even handed justice.
, 522SCI/74 296 disrespectful fulminations of an angry insubordinate officer, there is hardly any doubt that Annexures 8, 16 and 20 contain statements which are deliberately made to grossly scandalize the High Court.
The Judges of the High Court and especially the Chief Justice are charged with mala fides, improper motives, bias and prejudice.
It is insinuated that they are oppressing the appellant, have become vindictive and are incapable of doing him justice.
It is also suggested that they do not administer justice fearlessly because in one matter affecting the appellant, they dropped a charge against him for fear of the Supreme Court.
All this, prima facie, amounts to gross scandalization of the High Court.
The law applicable to this case is the law as contained in the No. 17 of 1971.
Section 2 defines "Contempt of Court", as either "civil contempt" or "criminal contempt".
Clause (c) defines "criminal contempt" as follows : (c) "criminal contempt" means the publication (whether by words, spoken or written, or by signs, or by visible repre sentations, or otherwise) of any matter or the doing of any other act whatsoever which (i) scandalises or tends to scandalise, or lowers or tends to lower the authority of, any court; or (ii) prejudices, or interferes or tends to interfere with, the due course of any judicial proceeding; or (iii) interferes or tends to interfere with, or obstructs or tends to obstruct, the administration of justice in any other manner;" It will be seen that the terminology used in the definition is borrowed from the English law of Contempt and embodies concepts which are familiar to that law which, by and large, was applied in India.
The expressions "scandalize", "lowering the authority of the court", "interference", "obstruction" and "administration of justice" have all gone into the legal currency of our sub continent and have to be understood in the sense in which they have been so far understood by our courts with the aid of the English law, where necessary.
The first sub clause generally deals with what is known as the scandalization of the court discussed by Halsbury 3rd Edition in Volume 8, page 7 at para 9 : "Scandalous attacks upon Judges are punished by attachment or committal upon the principle that they are, as against the public, not the judge, an obstruction to public justice; and a libel on a judge, in order to constitute a contempt of court, must have been calculated to cause such an obstruction.
The punishment is inflicted, not for the purpose of protecting either the court as a whole, or the individual judges of the court from a repetition of the attack, but of protecting the public, and especially those who either voluntarily or by compulsion are subject to the jurisdiction of the court, from the mischief they will incur if the authority of the tribunal is undermined or impaired.
" Sub clause (1) embodies the above concept and takes in cases when by the publication or the fact the 29 7 administration.
of justice is held to ridicule and contempt.
This is regarded as an "obstruction" of public justice whereby the authority of the court is undermined.
Sub clause (1) refers to one species of contempt of which "obstruction" is an important element.
Sub clause (ii) speaks of, interference with due course of judicial proceedings and is directly connected with administration of justice in its common acceptance.
While clauses (i) and (ii) deal with obstruction and interference respectively in the particular way described therein, clause (iii) is a residuary Provision by which any other type of obstruction or interference with the administration of justice is regarded as a criminal contempt.
In other words, all the three sub clauses referred to above define contempt in terms of obstruction of or interference with administration of justice.
Broadly speaking our statute, accepts what was laid down by the Privy Council and other English authorities that proceedings in contempt are always with reference to the administration of justice.
It is enough for our purpose to refer to Debi Prasad Sharma vs
The Kin.g Emperor(1) in which Lord Atkin delivering the judgment of the Judicial Committee observed at page 223 as follows : "In 1899 this Board pronounced proceedings for this species of contempt (scandalization) to be obsolete in this country ' though surviving in other parts of the Empire, but they added that it is a weapon to be used sparingly and always with reference to the administration of Justice : McLeod vs St. Aubyn (1) In In,re a Special Referewe from the Bahama Islands [1893] A.C. 1 38) the test applied by the, ve strong Board which heard the reference was whether the words complain of were in the circumstances calculated to obstruct or interfere with the course of justice and the due administration of.
the law.
In Oueen vs GraY [1900](2) Q. B. 36 it was show that the offence of scandalizing the, court itself was not obsolete in this country.
A very scandal us attack had been made on a fudge for his judicial utterances while sitting in a criminalase on circuit and it was with the foregoing opinions on record that lord Russell of Killowen, C.J., adopting the expression of Wilmot, C.J. in his opinion in Rex.
vs Almon (1765 Wilmot 's Notes of Opinions, 243 ; ,which is the source of much of the present law on the subject, spoke of the article complained of as calculated to lower the authority of the judge.
It is, therefore, clear that scandalization within the meaning of subclause (1) must be in respect of the court or the Judge with reference to admims tration of justice.
The contention of Mr. Sen on behalf of the appellant is that, in the first place ', it must be remembered that the publication or acts complained of are in the course of the appellant challenging his suspension and holding of disciplinary proceedings in an appeal or representation to the Governor from the orders passed by the High Court.
In Anexure 20 he was challenging the order of the High Court before (1) 70 Indian Appeals, 216.
298 the Supreme Court.
The appellant in his submission, bona fide believed that he had a right to appeal and, in pursuance of the right he thus claimed he had given expression to his grievance or had otherwise acted, not with a view to malign the court or in defiance of it, but with the sole object of obtaining the reversal of the orders passed by the High Court against him.
In the second place, Mr. Sen contended, the passages about which the complaint was made did not amount to contempt of court since they did not purport to criticize any judicial ' acts of the judges sitting in the seat of justice.
It may be that in some places disrespectful references have been made to the Judges which Mr. Sen assures us, he should have, never done.
At the same time, in his submission, criticism of administrative acts of the High Court even in vilification terms did not amount to contempt of court.
So far as the first part of the argument is concerned, the same must be dismissed as unsubstantial because if, in fact the language used amounts to contempt.
of court it will become punishable as criminal contempt.
The right of appeal does not give the right to commit contempt of court, nor can it be used as a cover to bring the authority of the High Court into disrespect and disregard.
It has been held by this Court in Jugal Kishore vs Sitamarhi Central Co op.
Bank() that allegations of mala fides in the grounds of appeal to the Joint Registrar of Cooperative Societies from the Order of the Assistant Registrar would constitute gross contempt.
A point of some substance is in the second part of Mr. Sen 's argument and it will be necessary to decide in the present case whether contemptuous imputations made with reference to "the administrative acts" of the High Court do not amount to contempt of Court.
The answer to the point raised by Mr. Sen will depend upon whether the amputations referred to above do or do not affect administration of Justice.
That is the basis on which contempt is punished and must afford the necessary test.
We have not been referred to any comprehensive definition of the expression "administration of justice".
But historically, and in the minds of the people, administration of justice is exclusively associated with the Courts of justice constitutionally established.
Such courts have been established throughout the land by several statutes.
The Presiding Judge of a court embodies in himself the court, and when engaged in the task of administering justice is assisted by a complement of clerks and ministerial officers( Whose duty it is to protect and maintain the records, prepare the writs, serve the processes etc.
The acts in which they are engaged are acts in aid of administration of justice by the Presiding Judge.
The power of appointment of clerks and ministerial officers involves administrative control by the Presiding Judge over them and though such control is described as administrative to distinguish it from the duties of a Judge sitting in the seat of justice such control is exercised by the Judge as a Judge, in the course of judicial administration.
Judicial administration is an integrated function of the judge and cannot suffer any dissection so far as maintenance of high standards of rectitude in judicial administration is con (1) A.I.R. 1967 S.C. 14 94 299 cerned.
The whole set up of a court is for the purpose of administration of justice, and the control which the Judge, exercises over his assistants has also the object of maintaining the purity of administration of justice.
These observations apply to all courts of justice in the land whether they are regarded as superior or inferior courts of justice.
Courts of justice have, in accordance with their constitutions.
to perform multifarious functions for due administration of 'justice.
Any lapse from the strict standards of rectitude in performing these functions is bound to affect administration of justice which is a term of wider import than mere adjudication of causes from the seat of justice.
In a country which has a hierarchy of courts one above the other, it is usual to find that the one which is above is entrusted with disciplinary control over the one below it.
Such control is devised with a view to ensure that the lower court functions properly in its judicial administration.
A Judge can foul judicial administration by misdemeanors while engaged in the exercise of the functions of a Judge.
It is therefore as important for the superior court to be vigilant about the conduct and behavior of the Subordinate Judge as a Judge, as it is to administer the law, because both functions are essential for administration of justice.
The Judge of the superior court in whom this disciplinary control is vested functions as much as a Judge in such matters as when he hears and disposes of cases before him.
The procedures may be different.
The place where he sits may be different.
But the powers are exercised in both instances in due course of judicial administration.
If superior courts neglect to discipline subordinate courts, they will fail in an essential function of judicial administration and bring the whole administration of justice into contempt and disrepute.
The mere function of adjudication between parties is not the whole of administration of justice for any court.
It is important to remember that disciplinary control is vested in the court and not in a Judge as a private individual.
Control, therefore, is a function as conducive to proper administration of justice as laying down the law or doing justice between the parties.
What is commonly described as an administrative function has been, when vested in the High Court, consistently regarded by the statutes as a function in the administration ' of justice.
Take for example the Letters Patent for the High Court of Calcutta.
Bombay and Madras.
Clause 8 thereof authorises and empowers the Chief Justice from time to time as occasion may require "to appoint so many and such clerks and other ministerial officers it shall be found necessary for the administration of justice End the due execution of all the powers and authorities granted and committed to the said High Court by these Letters Patent.
" It is obvious that this authority of the Chief Justice to appoint clerks and ministerial officers for the administration of justice implies an authority to control them in the interest of administration of justice.
This Controlling function which is commonly described as an administrative function is designed with the primary object of securing administration of justice.
Therefore, 300 when the Chief Justice appoints ministerial officers and assumes disciplinary control over them, that is a function which though described a administrative is really in the course of administration of justice.
, Similarly section 9 of the High Courts Act, 1861 while conferring on the High Courts several types of jurisdictions and powers says that all such jurisdiction and powers are "for and in relation to the administration of justice in the Presidency for which it is established.
" Section 106 of the Government of India Act, 1915 similarly shows that the, several jurisdictions of the High Court and all their powers and authority are "in relation to the administration of justice including power to appoint clerks and other ministerial officers of the court.
" Section 223 of the Government of India Act, 1935 preserves the jurisdictions of the.
existing High Courts and, the respective powers of the Judges thereof in relation to the administration of justice in the court.
Section 224 of that Act declares that the High Court shall have superintendence over all courts in India for the time being subject to its appellate jurisdiction and this superintendence, it is now settled, extends both to administrative and judicial functions of the subordinate courts.
When we come to our constitution we find that whereas Articles 225 and 227 preserve and to some extent extend these powers in relation to administration of justice, Article 235 vests in the High Court the control over District Courts and Courts Subordinate thereto.
In the State of west Bengal vs Nripendra Nath Bagchi(1) this Court has pointed out that control under Article 235 is control over the conduct and discipline of the Judges.
That is a function which, as we have already seen, is undoubtedly connected with administration of justice.
The disciplinary control over the misdemeanours of the subordinate judiciary in their judicial administration is a function which the High Court must exercise in the interest of administration of justice.
It is a function which is essential for the administration of justice in the wide connotation it has received and, therefore, when the High Court functions in a disciplinary capacity, it only does so in furtherance of administration of justice.
We thus reach the conclusion that the courts of justice in a State from the highest to the lowest are by their constitution entrusted with functions directly connected with the administration of justice, and it is the expectation and confidence of all those who have or likely to have business therein that the courts perform all their functions on a high level.
of rectitude without fear or favour, affection or ill will.
And it is this traditional confidence in the courts that justice will be administered in them which is sought to be, protected by proceedings in contempt.
The object, as already stated, is not to vindicate the Judge personally but to protect the public against any undermining of their accustomed confidence in the Judges ' authority.
Wilmot C.J. in his opinoin in the case of Rex vs Almon alreadly referred to says : "The arraignment of the justice of the Judges, is arraigning the King 's justice, it is an impeachment of his wisdom and goodness in the choice of his Judges, and excites in the minds of the people a general dissatisfaction with all judicial determination, and indisposes their minds to obey them; and whenever men 's allegiance to the laws is so fundamen (1) ; 301 tally shaken, it is the most fatal and most dangerous obstruction of justice, and in my opinion, calls out for a more rapid and immediate redress than any other obstructing whatsover; not for the sake of.
the Judges, as private individuals, but because they are the channels by which the King 's justice is conveyed to the people.
To be, impartial, and to be universally thought so, are both absolutely necessary for the giving justice that free, open, and uninterrupted current, which it has, for many ages, ' found all over this kingdom. .
Further explaining what be meant by the words "authority of the court", he observed "the word "authority" is frequently used to express both the right of declaring the law, which is properly called jurisdiction, and of enforcing obedience to it, in which sense it is equivalent to the word power : but by the word "authority", I do not mean that coercive power of the Judges, but the deference and respect which is paid to them.
and their Acts, from an opinion of their justice and integrity.
" Scandalization of the court is a species of contempt and may take several forms.
A common form is the vilification of the Judge.
When proceedings in contempt are taken for such vilification the question which the court has to ask is whether the vilification is of the Judge, as a Judge.
See Queen vs Gray(1) or it is the vilification of the Judge as an individual.
If the latter, the Judge, is left to his private remedies and the court has no power to commit for contempt.
If the former, the court will proceed to exercise the jurisdiction with scrupulous care and in cases which are clear and beyond reasonable doubt.
Secondly, the court will have also to consider the degree of harm caused as affecting administration of justice and, if it is slight and beneath notice, courts will not punish for contempt.
This salutary practice, is adopted by section 13 of the .
The jurisdiction is not intended to uphold the personal dignity of the Judges.
That must rest on surer foundations.
Judges rely on their conduct itself to be its own vindication.
But if the attack on the Judge functioning as a Judge substantially affects administration of justice it becomes a public mischief punishable for contempt, and it matters not whether such an attack is based on what a judge is alleged to have, done in the exercise of his administrative responsibilities.
A Judge 's functions may be divisible, but his integrity and authority are not divisible in the context of administration of justice.
An unwarranted attack on him for corrupt administration is as potent in doing public harm as an attack on his adjudicatory function.
The Full Bench has considered a very large number of cases and come to the conclusion that there is no foundation.
for the view that an attack on the court in its exercise of administrative functions does not amount to contempt.
In Brahma prakash Sharma and others vs The State of Uttar pradesh(2) it is pointed out that the object of contempt proceedings is not to afford protection to judges personally from nations to which they may be exposed as individuals but intended,as protection to the public those interest would be very much affected, (1) [1900] (2) Queen 's 13 36 at page 40.
(2 ) 302 if by the act or by the conduct of any party the authority of the court is lowered and thee sense of confidence which the people have in the administration of justice by it is weakened.
The case is no authority to the proposition put forward by Mr. Sen.
In Gobind Ram vs 'State of Maharashtra(1) some observations of Jagannadhadas, C.J. (as he then was) in the State vs The Editors and Publishers of Eastern Times and Prajatantra(2) were quoted by this Court with approval.
These observations are : " 'A review of the cases in which a contempt committed by way of scandalization of the court has been taken notice of for punishment shows clearly that the exercise of the punitive jurisdiction is confined to cases of very grave and scurrilous attack on the court or on the Judges in their judicial capacity.
the ignoring of which could only result encouraging a repetition of the same with the sense of in unity which would thereby result in lowering the prestige and authority of the court." Mr. Sen has particularly emphasised the words "judicial capacity" and argued that this only refers to the Judge functioning in the seat of justice.
It does not appear from the report of the Orissa case that the High Court was in any way, concerned with the alleged dichotomy between the Judge 's administration functions and his ad judicatory functions.
"Judicial capacity" is an ambivalent term which means " capacity of or proper to a Judge" and is capable of taking in all functional capacities of a Judge whether administrative, adjudicatory or any other, necessary for the administration of justice.
There is no sufficient warrant to hold that the Orissa High Court used the words "judicial capacity" with a view to exclude all other capacities of the Judges except the capacity to adjudicate, nor for holding that this Court approved the use of the expression as limited to the.
Judges ' adjudicatory function.
On the other hand, there is high.
authority for the proposition that vilificatory criticism of a Judge functioning as a Judge even in purely administrative or non adjudicatory matters amounts to criminal contempt.
The case of Rex vs Almon already referred to is a case of this kind.
Almon published a pamphlet in which the Chief Justice and, impliedly, all the Judges of the court of King 's Bench Were accused of deliberately delaying or defeating the issue of the process of Habeas corpus by introducing a new rule that a petition praying for the issue of that process should be accompanied by an affidavit.
It was held that this constituted contempt of court.
The Chief Justice and the Judges were not criticized for what they were doing in a judicial proceeding from the "seat of justice" but for making a rule which, 'in the opinion of the writer was deliberately designed to delay or defeat the process of habeas corpus.
Apparently.
the rule had been made by the court under its power to regulate proceedings in court and not in any judicial proceeding between parties to a cause.
The rule Was Made Under the rule making function of the court and not in exercise of any adjudicatory function as narrowly interpreted now, and still it was held that the court was scandalized and its authority lowered.
In Mott Lal Ghose and others(3) a strong special bench of five Judges held that an imputation made against the Chief Justice of the Calcutta High Court suggesting that he was improperly motivated in constituting a packed bench (1) [1971] 1.S.C.C. 740.
(2) A I.R. 1952 orissa, 318.
(3) XLV Calcutta 169. 303 to hear a particular class of appeals was held to amount to contempt.
Sanderson, C. J. observed at page 180 : "I have no doubt that this article, read by itself, constitutes a very serious reflection upon the administration of the court, which everyone knows is in the hands of the Chief Justice.
" Woodroffe, J. at page 199 observed : "The Court, however, in such cases does not seek to vindicate any, personal interests of the Judges, but the general administration of justice, which is a public concern.
" Mookerjee, J at page, 231 observed : "it seems to me indisputably plain that the implication of the second article, whether taken along with or independently of the first, is that, at the instance of person$ interested in the Calcutta Improvement Trust, the Chief Justice has constituted a Special Bench to ensure a decision favorable to the Trust in the appeals against the judgment of Mr. Justice Greece." Proceeding further he held "an imputation of this character constitutes a contempt of court.
" It was the function of the Chief Justice as Chief Justice of the Court to administratively form, front time to time, benches for the disposal of the business of the court.
To attribute improper motives to him in the exercise of this function was held to be a contempt because that was bound to undermine the confidence of the people in the High Court and its Judges in relation to administration of justice.
Similarly, in The state of Bombay vs Mr. P.(1)" "a scurrilous attack on.
the court receiver for alleged misbehavior in his official duties and a charge against the Chief Justice and the administrative judges for deliberately conniving at it were held to constitute contempt.
The same argument as is now put forward was made in that case.
(See para 14 of the report), but was rejected in these words : "By making these foul attacks upon the Judges, the respondent has tried to create an apprehension in the mind of the public regarding the integrity of these Judges and has done a wrong to the public.
He has attempted to shake the confidence of the public in the Judges of this Court and in the justice that is being administered by these judges of this Court.
" There is no such thing as a denigration of a Judge function wise.
This is brought out clearly in the judgment of the Judicial Committee in Debi Prasad Sharma vs The King Emperor(2) referred to earlier.
In that case the appellant had suggested falsely that the Chief Justice of the Allahabad High Court had in his administrative capacity, issued a circular to the Judicial Officers under his jurisdiction enjoining on them to raise contributions to the warfares which, it was said, would lower the prestige of the court in the eyes of the people.
In holding that the imputation did not constitute contempt of court but at the most, a personal defamation of the Chief Justice in his individual capacity, Lord Atkins said at page 224, "When the comment in question in the present case is examined it is found that there is no criticism of any judiciaries of the Chief Justice, or any imputation on him for anything done or omitted to be done by him in the administration of justice.
it can hardly be said that there is any criticism of him in his administrative capacity, for, as far as their Lordships have been informed, the administrative control of the subordinate courts of the.
Province, whatever it is, is exercised, not by the Chief Justice, but by the. court over, which he presides.
" (1) A.I.R. 1959 Bombay 182.
(2) 70 Indian Appeals 216.
304 The words underlined above are important.
In holding that only ordinary remedies for defamation were open to the Chief Justice, their Lordships had to ask the substantial question, as suggested by Lord Watson during the course of the arguments in Re : Special Reference from the Bahama Islands(1) "whether the letter complained of referred to him in his official capacity.
" With that case obviously in mind and the case was referred to earlier in the judgment lord Atkin showed in the words quoted above that the criticism did not refer (i) to any judicial act, meaning thereby any adjudicatory act and (ii) to any administrative act, because the Chief Justice alone had no administrative control over the subordinate courts but only the High Court as a whole.
The plain implication is that if the circular had been alleged to have been issued by the Chief Justice under the authority of the High Court, then the imputation having the effect of lowering the prestige and authority of the High Court could conceivably have been regarded as contempt.
Their Lordships of the Privy Council are not known to waste their words over matters not relevant to the issue.
It was absolutely necessary for their Lordships to eliminate the possibility of the alleged action of the Chief Justice being connected in any manner with any adjudicatory or administrative function of the High Court by pointing out that it did not refer to any official act in the administration of justice or, as stated in Queen vs Gray already refer , red to, "the act of a Judge as a Judge", in which case alone the imputation would have amounted to scandalization of the court.
The above authorities are sufficient to show that there is no warrant for the narrow view that the offence of scandalization of the court takes place only when the imputation has reference to the adjudicatory functions, of a Judge in the seat of justice.
We are unable, therefore, to accept the submission of Mr. Sen on this aspect of the case.
We have already shown that the, imputations in Annexures 8, 16 and 20 have grossly, vilified the Hugh Court tending to affect substantially administration of justice and, therefore, the appellant was rightly convicted of the offence of criminal contempt.
As regards the sentence, it is enough to say that the Full Bench has considered the question at great length.
There were six contempt proceedings against the appellant and the court had treated him generously.
In two proceedings he was let off with a fine.
Even in the present case the Full Bench was of the opinion that the maximum sentence under the law was deserved by the appellant but imposed on him only a sentence of simple imprisonment for two months.
The appellant, throughout, took a defiant attitude and did not even think it necessary to offer an apology.
Ordinarily we would be most reluctant to interfere with the sentence imposed by the High Court, but for the fact that we notice that he has almost come to the end of his judicial career and during the last few years has been gripped by a sort of mania against the High Court which clouded his reason.
We think the object of punishment will be served by directing him to pay (1) at 14.
30 5 a fine of Rs. 1,000/ or in default to suffer simple imprisonment for 3.
months in substitution of the sentence inflicted by the High Court.
It remains now to point out that when dealing principally with the contempt of the appellant, the court also thought it fit to hear the: parties including the Advocate General on some subsidiary but important questions on the relative position of the Government of Orissa and the High Court in the matter of disciplinary control over Subordinate Judges.
It appears that the State Government.
framed what are known as the Orissa Civil Services (Classification and Control) Rules, 1962 and they appear to apply to all Government servants under the State.
The Full Bench held that some of the rules, in their application to the Subordinate judiciary of the State, contravened Articles 235 which vested control over, the Subordinate Judiciary in, the High Court.
From these findings the State of Orissa has come in appeal and that appeal is numbered Criminal Appeal No. 77/1973 In our opinion, the principal matter before the Full Bench was in, relation to the contempt committed by the appellant.
The constitutional issue between the State Government and the High Court came in only by way of a side wind.
In fact it would appear from the judgment that the learned Advocate General had requested the court not to.
express any opinion on these constitutional matters, and the court also seems to have thought that the constitutionality of the rules had ' no relation to the commission of the contempt.
However, the court thought that the issue became relevant, especially, on the question of sentence and hence applied its mind to the Constitutionality of some of the rules.
It has struck down those rules which, in the opinion of the court, contravened Article 235 in their application to the Subordinate Judiciary.
We have considered whether it is necessary for us to dear with those questions here, but are inclined to think that we should express no opinion on the constitutionality of the impugned rules.
Accordingly, appeal No. 41 is dismissed with the modification in, the sentence as suggested above and criminal appeal No. 77 of 1973 is permitted to be withdrawn without prejudice to the contentions raised by the State in regard to the constitutionality of the rules struck down by the High Court.
KRISHNA IYER, J. We have had the advantage of reading the leading opinion of our learned brother, Palekar, J., and, concurring as we do in the ultimate conclusion, to depart from the ' option of silenceneeds a word of explanation.
Graver issues bearing on free speech raised in these proceedings and the correct approach to be made to what in substance is a criminal charge, bring to the fore our diver gence in legal reasoning and constitutional perspective which we proceed to set out in a separate opinion.
The facts of the present case, fully laid bare in the judgment of Palekar, J., are in a sense peculiar.
The contest is himself a senior district judge.
The alleged multiple contempt relates partly to (i) an administrative act of the High Court preliminary to disciplinary proceedings and is stated to be contained in a representation filed 306 by him before the Governor, under a rule which apparently authorizes such appeals, against the suspension order of the High Court, and (ii) averments in a special leave petition filed by him in this Court, aggrieved by the refusal of the High Court to decide a preliminary objection in these very contempt proceedings on the judicial side.
A: full Bench of the High Court convicted the appellant for contempt, the action itself having been initiated by an administrative full court.
The questions we are called upon to decide are (a) whether criticism of an administrative act of the High Court or of any court could at all amount to contempt of court; (b) whether pejorative imputations about a court or judge, however offensive, true or honestly held even if contained in.
an appeal to a higher court or in a remedial representation to a correctional authority, constitute contempt.
The legal touchstone adopted by the High Court is that any statement which in some manner may shake the confidence of the community in a judge or in the judicial system, is straightaway contempt, regardless of context or purpose or degree of publication or absence of any clear land present danger of disaffection or its being a bona fide plea for orderly change in the judicature and its, process.
On the facts, we agree that the spirit of defiance, extenuated partly by a sense of despair, is writ large in the writings of the appellant but wish to warn ourselves that his reported past violations should not prejudice a judicial appraisal of his alleged present criminal contempt.
And the benefit of doubt, if any, belongs to the condemner in this jurisdiction.
The dilemma of the law of contempt arises because of the constitutional need to balance two great but occasionally conflicting principles freedom of expression and fair and fearless justice remembering the brooding presence of articles 19(1) (a), 19(2), 129 and 215 of the Constitution.
In a sense, the Indian approach is a little different from the English and its orientating on is more akin to American jurisprudence, although there is much,that is common to all the three.
The pronouncement of Wilmot, C.J., posthumously published, has influenced the law of contempt in the Unite d States and the Commonwealth countries, but it is a moot point whether we should still be bound to the regal moorings of th e law in Rex vs Almon(1) ".
by our constitution the King is the fountain of justice and . he delegates the power to the judges . arraignment of the justice of the judges is arraigning the King 's justice.
It is an impeachment of his wisdom in the choice of his judges. it excites dissatisfaction with judicial determination and indisposes the minds of people to obey them".
Maybe we are nearer the republican justification suggested in the American system(2) (1) Wilmot 's notes 243 (Wilmot ed.
1802 =97 ER 94.
as cited in Fox,Contempt of Court (1927).
(2) 18 U.S.C.A. 3691 (formerly , 389.
30 7 "In this country, all courts derive their authority from the people, and hold it in trust for their security and benefit.
In this state, all judges are elected by the people, and hold their authority, in a double, sense, directly from them; the power they exercise is but the authority of the people themselves, exercised through courts as their agents.
It is the authority and laws emanating from the people, which the judges sit to exercise and enforce.
Contempt against these courts, the administration of their laws, are insults offered to the authority of the people themselves, and not to the humble agents of the law, whom they employ in the conduct of their government.
" This shift in legal philosophy will broaden the base of the citizen 's right to criticize and render the judicial power more socially valid.
We are not subjects of a king but citizens of a republic and a blanket ban through the contempt power, stifling namely, Administration of justice, thus criticism of a strategic institution, forbidding the right to argue for reform of the judicial process and to comment on the performance of the judicial personnel through outspoken or marginally excessive criticism of the instrumentalities of law.
and justice, may be a tall order.
For, change through free speech is basic to our democracy, and to prevent change through criticism is to petrify the organs of democratic government.
The judicial instrument is no exception.
To cite vintage rulings of English courts and to bow to decisions of British Indian days as absolutes is to ignore the law of all laws that the rule of law must keep pace with the rule of life.
To make our point, we cannot resist quoting McWhinney(1),who wrote "The dominant theme in American philosophy of law today must be the concept of change or revolution in law.
In Mr. Justice Oliver Wendell Hoimes ' own aphorism, it is revolting to have no better reason for a rule of law than that it was laid down in the time of Henry IV.
The prestige argument, from age alone, that because a claimed legal rule has lasted a certain length of time it must automatically be valid and binding at the present day, regardless of changes in basic societal conditions and expectations, is no longer very persuasive.
According to the basic teachings of the Legal Realist and policy schools of law, society itself is in continuing state of flux at the present day '; and the positive law, therefore, if it is to continue to be useful in the resolution of contemporary major social conflicts and social problems, must change in measure with the society.
What we have, therefore, concomitantly with our conception of society in revolution is a conception of law itself, as being in a condition of flux, of movement.
On this view, law is not a frozen, static body of rules but rules in a continuous process of change and adaptation and the judge, at the final appellate level anyway, is a part determinant part of this dynamic process of legal evolution." Canadian Bar Review (Vol.
45) 1967, 582 583.
308 This approach must inform Indian law, including contempt law.
It is very necessary to remember the legal transformation in our Devalue system on the inauguration of the Constitution, and the dogmas of the quiet past must change with the challenges of the stormy present.
The great words of Justice Homles uttered in a different context bear repetition in this context : "But when men have realized that time has upset many fighting faiths, they may come to believe even more than they believe the, very foundations of their own conduct that the ultimate good desired is better reached by free trade in ideas that the best test of truth is the power of the thought to get itself accepted in the competition of the market, and that truth is the only ground upon which their wishes safely can be carried out.
That, at any rate, is the theory of our Constitution.
It is an experiment, as all life is an experiment.
Every year, if not every day, we have to wager our salvation upon some prophecy based upon imperfect knowledge.
While that experiment is part of our system I think that we should be eternally vigilant it against attempts to check the expression of opinions that we loathe and believe to be fraught with death, unless they so imminently threaten immediate interference with the lawful and pressing purposes of the law that an immediate check is required to save the country.
"(1) Before, stating the principles of law bearing on the facets of contempt of court raised in this case we would like to underscore the need to ,draw the lines clear enough to create confidence in the people that this ancient and inherent power, intended to preserve the faith of the public in public justice, will not be so used as to provoke public hostility as overtook the Star Chamber.
A vague and wandering jurisdiction with uncertain frontiers, a sensitive and suspect power to punish vested in the prosecutor, a law which makes it a crime to publish regardless of truth and public good and permits a process of brevity conviction, may unwittingly trendiness upon civil liberties and so the special jurisdiction and jurisprudence bearing on contempt power must be delineated with deliberation and operated with serious circus section by the higher judicial echelons.
So it is that as the palladium ,of our freedoms, the Supreme Court and the High Courts, must vigilantly protect free speech even against judicial umbrage a delicate but sacred duty whose discharge demands tolerance and detachment of a high order.
The present proceedings challenge, the projection of the power to punish for contempt into administrative domains of the Court and its extension to statements in remedial proceedings.
One recalls the observations of the American Supreme Court:(2) "Contempt of Court is the Proteus of the Legal World,.
assuming an almost infinite diversity of forms.
(1) The Suprem Court and Civil Liberties by 03m 3nd K. Fracknel Published for the American Civil Liberties Union in its 40th anniversaries year Pornea Publications, Inc. New York (1960)page 40, (2) Moskovitz, Contempt of Injunctions, Criminal and Civil, (1943).
309 Considerations such as we have silhouetted led to the enactment of the Contempt of Court Act, 1971, which makes some restrictive departures from the traditional law and implies some wholesome principles which serve as unspoken guidelines in this branch of law.
Section 5 protects fair comment on the merits of, cases finally decided, and section 13 absolves from sentence all contempt which do not substan tially interfere or tend substantially to interfere with the due course of justice.
Statements which disparage a subordinate judicial officer presiding over a court are not contempt if made in good faith to the High Court or any other lower Court to which the offended judge is subordinate.
The emphasis in section 2(o), section 3 and section 13 to the interference with the course of justice or obstruction of the administration of justice or scandalising or lowering the authority of the Court not the judge highlights the judicial area as entitled to inviolability.
and suggests a functional rather than a personal or 'institutional ' 'immunity.
The unique power to punish for contempt of itself inheres in a Court qua Court in its essential role of dispenser of public justice.
The phraseological image projected by the catenate of expressions like court, course of justice administration of justice, civil and criminal proceedings, judicial proceedings, merits of any case, presiding officer of the Court, judicial proceeding before a court sitting in chamber or in camera undertaking given to a court, substantial interference with the due course of justice, etc., occurring in the various sections of the Act, the very conspirator of the statutory provisions and the ethos and raison d 'etre of the jurisdiction persuade us to the conclusion that the text of the Act must take its colour from the general context and confine the, contempt power to the judicial cum para judicial areas including those administrative functions as are intimately associated with the exercise of judicial power.
What then is a Court ? It is "an agency of the sovereign created by it directly or indirectly under its authority, consisting of.
one or more officers, established and maintained for the purposes of hearing and determining issues of law and fact regarding legal rights and alleged violations thereof, and of applying the sanctions of the law, authorised to exercise its powers in due course of law at times and places previously determined by lawful authority.
Isbill vs Stovall, Rex.
App. , 1070." ".
An organised body with defined powers, meeting at certain times and places for the, hearing and decision of causes and other matters brought before it, and aided in this, its proper business, by its proper officers, viz., attorneys and counsel to present and manage the business, clerks to record and attest its acts and decisions, and ministerial officers to execute its commands, and secure due order in its proceedings.
Ex parte Gardner,, , 39 p. 570: Hertman vs Hertman , , 582."(1).
In short the accent is on the functional personality which is pivotal to securing justice to the people.
Purely administrative acts, Black 's Law Dictionary, Fourth Edu.
310 like recruitments, transfers and postings, routine disciplinary action against subordinate staff, executive acts in running the establishment and ministerial business ancillary to office keeping these are common to all departments in the public sector and merely because they relate to the judicial wing of government cannot enjoy a higher immunity from criticism.
The quintessence of the contempt power is protection of the public, not judicial personnel.
Excerpts from a few Anglo American authorities will attest our standpoint "The object of the discipline enforced by the Court in, case of contempt of Court is not to vindicate the dignity of the Court or the person of the Judge, but to prevent undue interference with the administration of justice." [Bowen, L.J.Helmore vs Smith , 455] "The law of contempt is not made for the protection of judges who may be sensitive to the winds of public opinion.
Judges are supposed to be men of fortitude, able to thrive in a hardy climate. "[Douglas, J. Craig vs Harney ; , 376 (1947)].
Judges as persons, or courts as institutions, are entitled to no greater immunity from criticism than other persons or institutions.
Just because the holders of judicial office are identified with the interests of justice they may forget their common human frailties and fallibilities.
There have sometimes been martinets upon the bench as there have also been pompous wielders of authority who have used the paraphernalia of power in support of what they called their dignity.
Therefore, judges must I be kept mindful of their limitations and their ultimate public responsibility by a vigorous stream of criticism expressed_with candor however blunt., [Frankfurter, J., Bridges vs California ; , 289 (1941)] If we accept this slant on judicialisation as a functional limitation on the contempt jurisdiction we mutt exclude from its ambit interference with purely administrative acts of courts and non judicial functions of judges.
This dichotomy is implicit in the decided cases although the twilight of the law blurs the dividing lines now and then.
To cast the net wider is unreasonable and unwarranted by precedent.
To treat, as the High Court has done, "the image and personality of the High Court as an integrated one and to hold that every shadow that darkness it is contempt is to forget life, reason and political progress.
For, if a judge has an integrated personality and his *He openly accuses him of neglect or worse, she would certainly reduce the confidence of the public in him as judge Will her accusation be personalised contempt? If a judge expresses on a platform crude views on moral lapses and is severely criticized in public for it, it will undoubtedly debunk him as a judge.
Will such censure be branded contempt? 311 As early as 1892, the Privy Council in The matter of a Special Reference from the Bahama Islands() bad to upset a sentence of indefinite imprisonment imposed by the Chief Justice of Bahmas on one Mr. Moseley for two 'letters to the editor ' fun of snub and sarcasm about Yelverton, Esq., Chief Justice.
In these there was cynical reference to the Chief Justice 's incompetence and imprudence, couched in stinging satire.
The Judicial Committee held : "(a) That the letter signed "Colonist" in The Nassau Guardian though it might have been made the subject of proceedings for libel was not, in the circumstances, calculated to obstruct or interfere with the course of justice or the due administration of the law, and therefore did not constitute a contempt of Court." The Attorney General struck a sound note when in the course of the arguments he summed up the law thus "A libel upon a judge, holding him up to contempt and ridicule in his character as a judge, so as to lower him in the estimation of the public amongst whom be exercises office is a contempt of court." (emphasis supplied) Lord Atkin, in the celebrated case of Debi Prasad Sharma vs The King Emperor(2) where the printer, publisher and editor of the: Hindustan Times were found guilty of contempt by the Allahabad High Court for criticising the Chief Justice by falsely imputing to him a circular communication to the subordinate judiciary to raise collections for the war fund, set asida the conviction holding that the proceedings in contempt were misconceived, The learned Law Lord observed "When the comment in question in the present case is examined it is found that there is no criticism of any judicial act of the Chief Justice, or any imptitation on him for any thing done or omitted to be done by him in the administration of justice.
It can hardly be said that there is any criticism of him in his administrative capacity, for, as far as their Lordships have been informed, the administrative control of the subordinate courts of ' the Province, whatever is, is exercised, not by the Chief Justice, but by the court over which he presides.
The appellants are not charged with saying anything in contempt of the subordinate courts or the administration of justice by them.
In truth, the, Chief Justice is alleged, unruly, as Is now admitted, to have committed an ill advised act in writing to his subordinate, judges asking (as the news item says), enjoining (as the comment says) them to collect fog the War Fund.
If the facts were as alleged they admitted, of criticism.
No doubt it is galling for any judicial personato be criticised publicly as having done something outsidethis judicial proceedings which was ill advised or indiscreet.
But judicial personages can afford not to be too sensitive.simple denial in public (1) ,.149.
(2) (1942) 70 I.A. 216.
8 522SCI)74 31 2 of the alleged request would at once have allayed the trouble.
If a judge is defamed in such a way as not to affect the administration of justice he has the ordinary remedies for defamation if he should feel impelled to use them.
" The whole emphasis and ratio of the decision consists in the impugned editorial not being an attack on the administration of justice and, therefore, not amounting to contempt of court.
The learned Additional Solicitor General, however, stressed the significance of the passing observation made in the judgment that the administrative control of the subordinate judiciary vested in the whole court and not only in the Chief Justice, and argued that by implication their Lordships must be deemed to have regarded animadversion on even acts of administrative control as potential prey to the contempt law.
An obscure reference to the Chief Justice not being even the exclusive administrative authority over the lower judiciary, meant perhaps to bring into bold relief the irrelevance of the criticism as reflecting even on the executive functions of the Chief Justice, cannot be considered to reach a reverse result, ignoring the setting and the thrust of the whole dictum.
A Division Bench of the Kerala High Court, in Kaviath Damodaran vs Induchoodan(1), has relied on this Privy Council ruling for the proposition that administrative acts of the court in that case the transfer of a Magistrate criticised as promoted by extraneous pressure was not a fit subject for punitive action.
(In that case, of course, the contemnor was convicted for another publication).
The deep concern of the law of contempt is to inhibit sullying essays on the administration of justice in which the public have a vital interest and not to warn off or victimise criticisms, just or unjust, of judges as citizens, administrators, non judicial authorities, etc.
K.L. Gauba 'S(2) case was naturally pressed into service at the Bar against the contemnor but such an extreme case of wild and vicious attacks on the Chief Justice rarely serves in the search for any abiding principle in an excited setting.
That ruling reminds us that, whatever the provocation, a Judge by reason of his office, has to halt at the gates of controversy but as enlightenment spreads and public opinion ripens this judicial self abbegation will ' be appreciated better.
and not "embolden the licentious to trample upon everything sacred in society and to overthrow those institutions which 'have hitherto been deemed the best guardians of civil liberty.
" Again, while Young, C.J., in that case rules out the tenability of truth as a valid defence against contempt, action, we observe, not without pertinence in the constitutional context of restrictions on free expression having to be reasonable, that in most of the reported cases courts have hastened to hold the imputations false before proceeding to punish.
Contempt is no cover for a guilty judge to get away with it but a shield against attacks on public.
justice.
Gauba 's case, on the facts, was a mud slinging episode on the judicial target as such and the conviction accords with the policy of the law we have set out.
(1) A.I.R. 1961 Kerala 321.
(2) I.L.R. , 419.
313 A Division Bench of the Allahabad High Court, in Rex.
vs D. section Nayyar,(1) had to deal with a representation by a litigant against a magistrate with reference to a case adversely decided, and Kidwai, J. cleared the confused ground right in the beginning by observing : "The first thing to be remembered is that Courts are not concerned with contempt of any authority except Courts of law in the exercise of their judicial functions.
Thus, any speech, writing or act which does not have the, effect of interfering with the exercise of their judicial functions by the Courts cannot be the subject of proceedings in contempt.
In India very often the same officers exercise executive.
as well as judicial functions.
Sometimes it becomes difficult to draw a distinction between their two capacities but nevertheless a distinction must be drawn and it is only if the criticism is of judicial acts that action by way of proceedings in contempt may be taken.
" A letter to the President of the Congress party complaining about the appointment of.
a judicial officer who was the brothirin law of the, Private Secretary of a 'Minister (belonging to that party) and of the transfer of cases to his Court where in Congressmen were involved, was sought to be punished as contempt of court.
Kidwai, J, made the following useful remarks exonerating the contemnor : "In this passage also the attack is on the appointment of the judicial officer and the transfer of, cases to him but there is no attack upon the officer himself.
Both these attacks are upon the system and not upon any Magistrate in respect of the performance by him of his judicial functions.
They wish to see, laid down a salutary principle by which Justice should not only be done but should also appear to be done.
There is no contempt of Court in this rather it is an endeavor to free Courts from all extraneous shackles and proceedings to contempt are wholly unc alled for ' The Judicial Committee in In re. section B. Sarbadhicary (2) considered the misconduct of a barrister for publishing an article where he cast reflections upon judges of the Allahabad, High Court.
The merits of the case apart, the Judicial Committee emphasized the judicial capacity of the judges which attracted the contempt jurisdiction.
Sir Andrew Seoble observed : "There is no doubt that the article in question was a libel reflecting not only upon Richards J. but other judges of the High Court in their judicial capacity and in reference to their conduct in the discharge of their public duties." (emphasis added) "The public duty" in their "judicial capacity" was obviously in contradistinction to merely personal activities or administrative function It is not as if a judge doing some non judicial public duty is protected from criticism in which case, any action by him as of Law or Vice chancellor in a University or as Acting Governor or President (1)A.I.R.1950 All. 549 ,551,555.
(2) (1906) 34 XX I A. 14.
314 or Member of the Law or Finance Commission would also be punishable, as contempt.
The basic public duty of a judge in his judicial capacity is to dispense public justice in court and anyone who obstructs or interferes in this area does so at his peril.
Likewise, personal behaviour of judicial personnel, if criticized severely or even sinisterly, cannot be countered by the weapon of contempt of court, for to use the language of Mukherjee, J. in Brahma Prakash Sharma vs State of Uttar Pradesh,(1) "the object of contempt proceedings is not to afford protection to Judges personally from imputations to which they may be exposed as individuals" (emphasis added).
Otherwise, a grocer who sues a judge for price of goods with an imputation that the defendant has falsely and maliciously refused to honour the claim, or a servant of a judge who makes personal allegations of misconduct against his master may be hauled up for contempt.
This is no amulet worn by judges for all purposes.
"The punishment is inflicted not for the, purpose of protecting either the Court as a whole or the individual judges of the Court from a repetition of the attack, but of protecting the public, and especially those who either voluntarily or by compulsion are subject to the jurisdiction of the Court, from the mischief they will incur if the authority of the Tribunal is undermined or impaired." (Vide para 9, Halsbury 's Laws of England, 3rd Edn.
Vol. VIII).
Indeed, if we peer through the mists of English Judicial history, Courts of record were not qua such courts, acting in any administrative capacities.
How then could contempt action, going by genesis, be warranted purely administrative matters of courts.
Of course, there have 'been cases sounding a different note.
In State vs
H. Nagamani, (2) one Mr. Nagamani, an impetuous I.A.S. officer, wrote a letter making critical I remarks couched in disrespectful and improper language about the inspection report of his court by a Judge of the High Court of Patna.
However, Mr. Nagamani tendered an unqualified apology and the court discharged the rule for contempt since in their view the contempt was purged by the apology.
Of course, there was no need to consider in detail whether the letter reflecting upon the Judge who held the inspection was contempt; it Was treated as such and the apology accepted.
And the High Court 's inspection of the judicial work of the sub ordinate judiciary is a judicial function or is at least para judicial.
The Allahabad High Court punished the late Shri C. Y. Chintamani and, Shri K D. Malaviya for publishing a criticism to the effect that comparatively undeserving lawyers were being frequently raised to the Bench.
The Court held them guilty of contempt holding the criticism of the judges as a vicious reflection and a case of Contempt.
[sea In the matter of an Advocate of Allahabad(3), Borderline cases draw up to the pneumbra of law and cannot light up dark comers.
The learned Additional Solicitor General, in an endeavour to expand the meaning of "administration of justice" so to rope in criticisms of executive acts of judges, drew out attention to articles '225, 227 and 235, and the provisions of earlier Government of India Acts (c.f. sec.
224(1) 1935 Act) which vest the Power to appoint the staff and do (1) (2) A.I.R. 1959 Pat. 373 (3) A.I.R. 1935 AU.
1. 315 other incidental management functions, in the High Court as part of the administration of justice.
Several High Court Acts clothe Chief Justices with administrative powers and Civil Courts Acts and Letters Patents charge judges with administrative duties the,, goal being effective administration of justice.
If the appointment of clerks is part of the administration of justice, denunciation of the judges in these acts interferes with the administration of justice, liable to be visited with punishment.
This means that if a judge in charge of appointments chooses relations or unqualified men or takes other consideration, the public must hold its tongue on pain of contempt.
The paramount but restrictive jurisdiction to protect the public against substantial interference with the stream of justice cannot be polluted or diffused into an intimidator power for the judges to strike at adverse comments on administrative, legislative (as under articles 225, 226 and 227) and extra judicial acts.
Commonsense and principle can certainly accept a valid administrative area so closely integrated with court work as to be stamped with judicial character such as constitution of benches, transfer of cases, issue of administrative directions regarding submission of findings or disposal of cases by subordinate courts, supervision of judicial work of subordinate courts and the like.
Not everything covered by article 225, 227 and 235 will be of this texture.
To overkill is to undermine in the long run.
We may now sum up.
Judges and Courts have diverse duties.
But functionally, historically and jurisprudentially, the value which is dear to the community and the function which deserves to be cordoned off from public molestation, is judicial.
Vicious criticism of 'personal and administrative acts of judges may indirectly mar their image and weaken the confidence of the public in the judiciary but the countervailing good, not merely of free speech but also of greater faith generated by exposure to the acting light of bona fide, even if marginally overzealous, criticism cannot be overlooked.
Justice is no cloistered virtue.
The first part of the present case directly raises the question whether statements made in an appeal to the Governor against an order of the High Court on the administrative side attracts the contempt law.
To our mind the answer arises from another question.
Is the suspension of the District Judge so woven into and integrally connected with the administration of justice that it can be regarded as not purely an administrative act but a para judicial function ? The answer must, on the facts here, be in the affirmative.
"he appeal was against the suspension which was a preliminary to contemplated disciplinary action.
What was that action about ? Against the appellant in his judicial capacity, for acts of judicial misconduct.
The control was.
therefore, judicial and.
hence the unbridled attack on the High Court for the step was punishable as contempt.
A large margin must be allowed for allegations in remedial representations but extravagance forfeits ' the protection of good faith.
In this case reckless excess has vitiated what otherwise could have been legitimate grievance at least in one flagrant instance, the others being less clear.
One of the 316 grounds for taking disciplinary action ' was based on the disposal of a civil appeal by the contemnor as Additional District Judge.
lie heard it, delivered judgment dismissing the appeal signed the order sheet and judgment and sealed the judgment.
Later in the day, the contemnor scored off his signatures in the order sheet and judgment, and returned the record to the principal District Judge for disposal falsely stating that the judgment had not been delivered.
The High took the view that this action was without jurisdiction and revealed utter disregard of truth and procedure deserving disciplinary action.
Obviously, the impugned conduct of the contemnor was qua judge and the evil criticism was of a supervisory act of the High Court and the critic would and should necessarily 'court contempt action.
And in his memorandum of appeal the contemnor used expressions like 'mala fides ' and 'subterfuge ' without good faith, and in such a case no shelter can be sought in the alibi of 'administrative act. ' The second part of the charge relates to objectionable statements in the special leave petition to this Court.
Ordinarily they must be out of bounds for, the contempt power; for, fearless seeking of justice will otherwise be stifled.
In State ' of Uttar Pradesh vs Shyam Sunder Lal (1) a complaint about the conduct of a judicial officer in a petition to the Prime Minister was held not to constitute contempt.
The representation was forwarded by the Prime Minister 's office to the Chief Secretary from whom it reached the District Magistrate.
Certainly there was there fore sufficient, publication in the law of libel but the Court held "A letter sent to the Prime Minister and not intended to be broadcast to the public or any section of the public cannot create an apprehension in the mind of public . regarding the integrity, ability or fairness of the judge " Similarly, in Rex. vs R. section Nayyar, "(2) the court considered a representation made to the Premier of the State about a judicial officer and also to the President of the All India Congress Committee.
The Court took the view that such complaints may be addressed to the Premier about judicial officers since Government had to consider under the then rules the conduct of judicial personnel.
"If these complaints are genuine and are made in a proper manner with the object of obtaining redress, and are not made mala fide with a view either to exert pressure upon the Court in the exercise of its judicial functions or to diminish the authority of the Court by lvilifying it, it would not be in furtherance of justice to stifle them by means of summary action for contempt, but rather the reverse" _(emphasis added).
A pregnant observation made by the Court deserves mention "It would indeed be extraordinary if the law should provide a remedy the conduct of eve ' a member of the highest Judicial Tribunal in the exercise of his judicial office may be the subject of enquiry with a view to see whether he is fit to continue to hold that office and yet no one should be able to initiate proceedings for an enquiry by a complaint (1) A.I.R. 1954 All 308.
(2) A.I.R. 1950 All.
549: 554. 317 to the appropriate authority by reason of a fear of being punished for contempt, and I can find no justification for this view.
" At this stage it must be noticed that in the State of Madhya Pradesh vs Ravi Shanker(1) this Court ruled that aspersions of a serious nature made against a Magistrate in a transfer petition could be punishable as a contempt if made without good faith.
However, in Govind Ram vs State of Maharashtra,(2) this Court reviewed the decisions on the point and ruled that if in the garb of a transfer application scurrilous attacks were made on a court imputing improper motives to the Judge there may still be contempt of court, although the court referred with approval to the ruling in Swarnamayi Panigrahi vs B. Nayak(3) that a latitudinarian approach was permissible in transfer applications.
The core of the pronouncement is that permission remedial process like a transfer application cannot be a mask to malign a judge, a certain generosity or indulgence is justified in evaluating the allegations against the judge.
Eventually, Grover J., held that the allegations made in the proceeding in question were not sufficiently serious to constitute contempt.
A liberal margin is permissible in such cases but batting within the crease and observing the rules of the game are still necessary.
Irrelevant or unvarnished imputations under the pretext of grounds of appeal amount to foul play and perversion of legal process.
Here, the author, a senior judicial officer who professionally weighs his thoughts and words, has no justification for the immoderate abuse he has resorted to.
In this sector even truth is no defence, as in the case of criminal insult in the latter because it May Produce violent breaches and is forbidden in the name of public peace, and in the former because it may demoralise, the community about courts and is forbidden in the interests of public justice as contempt of court.
Even so, if judges have frailities after all they are human they need to be corrected by independent criticism.
If the judicature has serious shortcomings which demand systemic correction through socially oriented reforms initiated through constructive criticism, the contempt power should not be an interdict.
AR this, far from undermining the confidence of the public in courts, enhances it and, in the last analysis, cannot be recessed by indiscriminate resort to contempt power.
Even bodies like the Law Commission or the ' Law Institute and researchers, legal and sociological may run risks because their professional work sometimes involves unpastoral criticism of judges, judicial processes and the system itself and thus hover perilously around the periphery of the law it widely construed.
Creative legal journalism and activist statesmanship for judicial reform cannot be jeopardised by an undefined apprehension of contempt action.
Even in England a refreshingly pro free speech approach has been latterly adopted.
Any episode in the administration of justice may be publicly or privately criti cised, provided that the criticism is fair and (1) (2) ; , (3) A.I.R. 1959 Orissa 89.
318 temperate and made in good faith.
Lord Denning, in the famous Quintin Hogg case() laid down remarkable guidelines in the matter of, actions for contempt.
The learned Law Lord said : "It is a jurisdiction which undoubtedly belongs to us but which we will most sparingly exercise; more particularly as we ourselves have an interest in the matter.
Let me say at once that we will never use this jurisdiction as a means to uphold our own dignity.
That must rest on surer foundations.
Nor will we use it to suppress those who speak against us.
We do not fear criticism, nor do we resent it.
For there is something far more important at stake.
It is no less than freedom of speech itself.
It is the right of every man, in Parliament or out of it, in the Press or over the broadcast, to make fair comment, even outspoken comment, on matters of public interest.
Those who comment can deal faithfully with all that is, done in a court of justice.
They can say that we are mistaken, and our decisions erroneous, whether they are subject to appeal or not.
All we would ask is that those who criticise us will remember that, from the nature of our office, we cannot reply to their criticisms We cannot enter into public controversy.
Still less into political controversy.
We must rely on our conduct itself to be its own vindication.
Exposed as we are to the winds of criticism, nothing which is said by this person or that, nothing which is written by this person or that, nothing which is written by this pen or that will deter us from doing what we believe is right; nor, I would add, from saying what the occasion requires, provided that it is pertinent to the matter in hand.
Silence is not an option when things are ill done." This Court has held that the law of contempt is valid notwithstanding article 19(1).
The Contention was persisted in C. K. Daphtay vs O. P. Gupta.
(2) This Court came to the conclusion that the existing law of contempt imposes reasonable restrictions within the meaning or article 19(2).
"Apart from this, the 'Constitution makes this Court a gudian of fundamental rights conferred by the Constitution and it would not desire to enforce any law which imposes unreasonable restrictions on the precious right of freedom of speech and expression guaranteed by the Constitution." (Sikri C.J.) The Court being the guardian of people 's rights, it has been held repeatedly that the contempt jurisdiction should be exercised "with, scrupulous care and only when the cage is clear and beyond reasonable doubt.
(vide R. vs Gray) (s) (1) :1206 07.
(2) All.
R. , Para 52.
(3) [1900] 2 O.B. 36. 319 The policy directive can be gleaned from the ruling in Special Reference No. 1 of 1964(1) where Gajendragadkar, C.J., speaking for the Court, observed : "We ought never to forget that the power to punish for contempt large as it is, must always be exercised cautiously wisely, and with circumspection.
Frequent or indiscriminate use of this power in anger or irritation would not help to sustain the dignity or status of the court, but may sometimes affect it adversely.
Wise Judges never forget that the best way to sustain the dignity and status of their office is to deserve respect from the public at large by the quality of their judgments, the fearlessness, fairness and objectivity of their approach, and by the restraint, dignity and decorum which they observe in their judicial conduct.
" If judges decay the contempt power will not save them and so the other side of the coin is that judges, like Caesar 's wife, must be above suspicion.
To wind up, the key word is "justice", not "judge"; the key note thought is unobstructed public justice, not the self defence of a judge; the corner stone of the contempt law is the accommodation of two constitutional values the right of free speech and the right to independent justice.
The ignition of contempt action should be substantial land mala fide interference with fearless judicial action, not fair comment or trivial reflections on the judicial process and personnel.
We have sought to set our legal sights in line with the now constitutional order and endeavoured so to draw the grey contours of the contempt law that it fulfils its high purpose but the more.
We have tried to avoid subjectivism in the law, recognising by a re statement, the truth that "the great tides and currents which engulf the rest of men do not turn aside in their course and pass the judges by.
(2) " The facts of the present case disclose that an incorrigible contemnor, who had made it almost his latter ,day professional occupation to cross the High Courts path, has come to this Court in appeal.
He has been reckless, persistent and guilty of undermining the High Court 's authority in his intemperate averments in both petitions.
But having regard to the fact that he is a senior judicial officer who has at some stage in his career displayed zeal and industry and is now in the (1) ; ; 501.
(2) Benjamin N. Cardozo The Nature of the Judicial Process New Haven : Yale University Press Page 163.
320 sombre evening of an official career, a punishment short of imprisonment would have met the ends of justice and inspired in the public mind confidence in the justice administration by showing that even delinquent judges will be punished if they play with or pervert the due course of justice, as the contemnor here has done.
A heavy hand is wasted severity where a lighter sentence may serve as well.
A fine of Rs. 1000/ with three months ' imprisonment in default of payment will meet the ends of justice and we impose this sentence in substitution of the infliction of imprisonment by the High Court.
this modification Civil Appeal No. 41 of 1973 is dismissed.
On the appeal by the State the course adopted in the leading judgment of Palekar J. has our concurrence.
Appeal No. 41 dismissed.
P.B.R. Appeal No. 77 allowed to be withdrawn.
[/INST]The appellant and his companions were charged with an offence under section 302 I.P.C. for causing the death of the deceased by pouring acid on him when he was sleeping on his cot on the night of the occurrence.
After recording the first information report the police sub inspector recorded the statement of the deceased and at the dispensary the doctor recorded the statement of the deceased, in both of which he stated that the appellant poured acid over his body and caused injuries to him.
The deceased succumbed to his injuries.
Disbelieving the prosecution evidence the trial court acquitted him.
The High Court on the other hand accepted the evidence of all the prosecution witnesses and convicted and sentenced the appellant to life imprisonment but acquitted the remaining two accused.
In appeal to this Court it was contended that the High Court should not have reversed the judgment of the trial court and the evidence relied upon by the High Court was not satisfactory.
Dismissing the appeal.
HELD : that the approach of the trial court was clearly unreasonable and the High Court was fully justified in setting.aside the acquittal of the.
appellant.
It is well settled that in an appeal under section 417 of the Code of Criminal Procedure the Court has full power to review at large the evidence on which the order of acquittal was founded and to reach the conclusion that upon the evidence the order of acquittal should be reversed.
No limitation should be placed upon that power unless it be found expressly stated in the Code, but in exercising the power conflict by the Code before reaching its conclusion upon facts the High Court should give proper weight and consideration to such matters as (1) the views of the trial judge as to the credibility of the witnesses; (2) the presumption of innocence in favour of the accused, a presumption certainly not weakened by the fact that he has been acquitted at his trial; (3) the right of the accused to the benefit of any real and reasonable doubt and (4) the slowness of an appellate court in disturbing the finding of fact arrived at by a judge who had the advantage of seeing the witnesses.
[576 D F] In the instant case there was no doubt that the deceased died as a result of acid bums.
There was no cogent reason to disbelieve the evidence of the prosecution witnesses.
The trial court was wrong in rejecting evidence of these witnesses on the ground that they were related to the deceased.! Close relatives of the deceased would normally be most reluctant to spare the real assailant and falsely mention the name of another person as the one responsible for causing injuries to the deceased.
The deceased would not spare his real assailant ' and falsely mention the name of the appellant as one who poured acid over his body.
There was no reason to discard the dying declaration made by the appellant to the police sub inspector, The trial Court was wrong in rejecting the dying declaration to the police (F.I.R.) on the ground that the deceased had stated to the doctor that he had become unconscious after the occurrence.
There was nothing in the statement recorded by the doctor to indicate that the deceased remained unconscious for.
a long time and as such was not in position to lodge the F.I.R. The fact that the language used in the dying declaration made to the doctor was rather chaste would not go to show that the said statement could not have been made by the deceased.
As to the language used in the dying declaration there is nothing abnormal or unusual in the same person using colloquial language while talking to one person and using refined language while talking to another person.
[574 E F ; 575D; 576A] 571
</s>
|
<s>[INST] Summarize the judgementivil Appeal No. 3927 of 1986.
From the Judgment and Order dated 18.6.
1986 of the Bombay High Court in Writ Petition No. 10 of 1980.
S.K. Dholakia, A.M. Khanwilkar and Mrs. V.D. Khanna for the Appellant.
V.M. Tarkunde, Karanjawala, Mrs. Karanjawala and H.S. Anand for the Respondent.
The Judgment of the Court was delivered by: K. JAGANNATHA SHETTY, J.
This appeal by leave is from a decision of the Bombay High Court which allowed the respond ent 's petition for a writ of certiorari.
In so doing the court quashed departmental proceedings initiated against the respondent and the resultant order terminating his services.
The facts are substantially undisputed and may briefly be stated as follows: Respondent Seshrao Balwant Rao Chavan was at the rele vant time the Deputy Registrar of the Marathwada University.
One Mr. Yelikar was working then as Controller of Examina tions.
In or about April 1976, Mr. Yelikar proceeded on leave and the present respondent was directed to discharge the duties of the Controller of Examinations.
Accordingly, he joined his new assignment and continued to hold 458 that post when the controversy which culminated in his dismissal took place.
It is said that one Mr. Swaminathan from Madras was entrusted with the printing works needed to conduct annual examinations of the University for the years 1974 and 1975.
Mr. Swaminathan submitted his bills amounting about Rs.6,00,000 for the work performed by him.
The bills were not cleared immediately, and Mr. Swaminathan complained to the University authorities.
He also submitted a petition to the Prime Minister of India which was forwarded to the University for immediate action.
This led to an enquiry to find out whether the bills were deliberately kept pending with any ulterior motive.
The Executive Council of the University appointed a four member committee including the Vice Chancellor to enquire into the matter.
The committee after investigation submitted a report in November 1977 making some prima facie observations against the respondent.
Thereupon, the Executive Council desired to have the matter thoroughly examined by another committee.
It appointed Mr. N.B. Chavan for the purpose.
Mr. Chavan made a detailed enquiry but found nothing against the respondent.
On Decem ber 23, 1978, he submitted a report stating inter alia that there was no delay in clearing the said bills and if there was any delay, it was justified in the circumstances.
He has stated that the University utilised the time for internal audit in which it was found that the claim of Mr. Swamina than was excessive to the extent of Rs.48,000 and odd.
The report of Mr. Chavan thus gave a clean chit to the respond ent as to his conduct in discharging the duties as Control ler of Examinations.
If the Executive Council had accepted the report and closed the matter that would have been better.
But unfortu nately, it was not done and another chapter was opened.
On March 22, 1979, the report of Mr. Chavan was placed before the Executive Council which without taking any decision entrusted the question to the Vice Chancellor.
The Vice Chancellor was present in that meeting and agreed to take a decision in about a month.
But what he did was entirely different.
Purporting to act under the powers given to him by the Executive Council, he directed departmental enquiry against the respondent.
He appointed Mr. Motale, Advocate as an Inquiry Officer who flamed three charges: First charge impeached the respondent of intentionally delaying the clearance of the bills of Mr. Swaminathan and thus tarnish ing the image of the University.
Second charge alleged that the respondent did not place before the Executive Council, the letters , addressed by the Chancellor of the University on July 23, 1976 and 459 August 19, 1976.
Third charge accused the respondent for not producing all the available papers for scrutiny by the one man committee headed by Mr. Chavan.
On October 25, 1979, Mr. Motale submitted his ' enquiry report to the Vice Chancellor holding the respondent guilty of the charges.
After a usual procedure of giving show cause notice and considering the reply thereto, the Vice Chancel lor decided to dismiss the respondent.
On January2, 1980, he accordingly made an order.
The matter did not rest there.
The respondent moved the High Court under article 226 of the Constitution challenging his dismissal.
When the writ petition first came up for hearing in November 1985, the High Court took a very curious stand.
It observed that the entire matter be placed before the Executive Council for taking an appropriate decision.
As per this observation, the matter came up before the Executive Council in the meeting held on December 26/27, 1985.
The Executive Council passed a resolution inter alia, ratifying the action taken by the Vice Chancellor and confirming the dismissal of the respondent.
This has added a new dimension to the case.
At the final disposal of the writ petition, the High Court, however, examined the merits of the matter.
The High Court held that the action taken by the Vice Chancellor was without authority of law.
As to the ratification made by the Executive Council, the High Court held: "That the acts done by the Vice Chancellor remain the acts without any authority or powers and that defects cannot be cured by the subsequent resolution." With these conclusions, the High Court quashed the departmental proceedings taken against the respondent and also the order of termination of his services.
Being aggrieved by the judgment, the Marathwada Univer sity by obtaining special leave has appealed to this Court.
Learned counsel for the appellant put his contention in two ways: First, he said that on the true construction of the relevant provisions of the Marathwada University Act, 1974, the termination of services of the respondent cannot be assailed for want of power or jurisdiction on the part of the Vice Chancellor.
Counsel next said that if the order was defective or without authority, the ratification by the Executive Council has rendered it immune from any challenge.
In order to appreciate these submissions, we must outline the 460 statutory provisions of the Marathwada University Act, 1974 (called shortly "the Act").
Section 8 specifies the officers of the University.
The Vice Chancellor is one of the offi cers.
Section 10 provides for appointment of the Vice Chan cellor.
He shall be appointed by the Chancellor and shall ordinarily hold office for a term.
of three years.
Section 11 reads, so far as material, as follows: "11(1): The Vice Chancellor shall be the principal executive and academic officer of the University, and shah in the absence of the Chancellor, preside at the meetings of the Senate and at any Convocation of the Universi ty . " "11(3): It shah be the duty of the Vice Chancellor to ensure that the provisions of this Act, the Statutes, Ordinances and Regulations are faithfully observed.
The Chancellor shall, for this purpose, have the power to issue directions to the Vice Chancel lor who shall give effect to any such direc tions.
" 11(4): If there are reasonable grounds for the Vice Chancellor to believe that there is an emergency which requires immediate action to be taken, he shall take such action as he thinks necessary and shall, at the earliest opportunity, report in writing the grounds for his belief that there was an emergency, and the action taken by him, to such authority or body as would in the ordi nary course, have dealt with the matter . ." 11(6)(a): It shall be lawful for the Vice Chancellor, as the principal executive and academic officer, to regulate the work and conduct of the officers, and of the teaching, academic and other employees of the Universi ty, in accordance with the provisions of this Act, the Statutes, Ordinances and Regulations." "11(7): The Vice Chancellor shah exercise such other powers and perform such other duties as are prescribed by the Stat utes, Ordinances and Regulations.
" Section 19 enumerates the authorities of the University.
The Executive Council is one of the authorities specified thereunder.
Section 23 to the extent necessary is in the following terms: 461 "23(1): The Executive Council shall be the principal executive authority of the University, and shall consist of the following members, namely,: (i) the Vice Chancellorex officio Chairman.
" Section 24 deals with the powers and duties of the Executive Council.
These powers and duties are wide and varied and it is sufficient if we read sub sections (1), (xxix) and (xii) of sec.
They are as follows: "24(1): Subject to such conditions as are prescribed by or under this Act, the Executive Council shall exercise the following powers and perform the following duties, namely . . " "24(1)(xxix): appoint officers and other employees of the University, prescribe their qualifications, fix their emoluments, define the terms and conditions of their service and discipline and where necessary, their duties." "24(1)(x1i): delegate, subject to the approval of the Chancellor, any of its powers (except the power to make Ordinances), to the Vice Chancellor, the Registrar or the Finance Officer, or such other officers or authority of the University or a committee appointed by it, thinks fit." Two other provisions are material, namely, secs.
37 and 84.
Section 37, omitting the unnecessary, is in these terms: Sec.
37 Subject to the conditions prescribed by or under this Act, the Senate may make the Statutes to provide for all or any of the following matters namely: (xvi): The term of office, duties and condi tions of service of officers, teachers and other employees of the University, the provi sions of pension, insurance and provident fund and the manner of termination of their service and other disciplinary action and their quali fications, except those of teachers.
" Section 34 is as follows: "Delegation of powers: Subject to the provi sions of 462 this Act and Statutes any officer or authority of the University may, by order, delegate his or its powers, except.the power to make Stat utes, Ordinances and Regulations, to any other officer or authority under his or its control, and subject to the conditions that the ulti mate responsibility for the exercise of the powers so delegated shall continue to vest in the officer or authority delegating them.
" With these provisions, we turn to consider the first question urged for the appellant.
The question is whether the Vice Chancellor was competent to direct disciplinary action against the respondent.
In this context, we may make a few general observations about the position and powers of the Vice Chancellor.
The University Education Commission in its report (Vol.
I December 1948 to August 1949) has summarised the powers and duties as fol lows (at 421): "Duties of Vice Chancellor A Vice Chancellor is the chief academic and executive officer of his university.
He presides over the Court (Senate) in the absence of the Chancellor, Syndicate (Executive Council), Academic Council, and numerous committees including the selection committees for ap pointment of staff.
It is his duty to know the senior members of the staff intimately and to be known to all members of the staff and students.
He must command their confidence both by adequate academic reputation and by strength of personality.
He must know his university well enough to be able to foster its points of strength and to foresee possible points of weakness before they become acute. ' He must be the 'keeper of the university 's conscience ', both setting the highest standard by example and dealing promptly and firmly with indiscipline and malpractice of any kind.
All this he must do and it can be done as constitutional ruler; he has not, and should not have autocratic power.
Besides, this he must be the chief liaison between his univer sity and the public, he must keep the univer sity alive to the duties it owes to the public which it serves, and he must win support for the university and understanding of its needs not merely from potential benefactors but from the general public and its elected representa tives.
Last, he must have the strength of character to resist unflinchingly the many forms of pressure to relax standards of all sorts, which are being applied to universities today.
" 463 This has been approved by the Education Commission, 1964 66.
In the report of the Education Commission, 1971 (pages 610 11 para 13.32) it was stated: "The person who is expected, above all, to embody the spirit of academic freedom and the principles of good management in a university is the Vice Chancellor.
He stands for the commitment of the university to schol arship and pursuit of truth and can ensure that the executive wing of the university is used to assist the academic community in all its activities.
His selection should, there fore, be governed by this overall considera tion.
" Dr. A.H. Homadi in his wise, little study about the role of the Vice Chancellor in the university administration in developing coun tries has this to state (at 49): The President or the Vice Chancellor: "The President must be willing to accept a definition of educational leadership that brings about change to the academic life of the institution.
He must be fired by a deep concern for education.
He should instil a spirit and keeness about growth and develop ment in such a way that the professiriate feels that their goals are interlinked with those of the University, that their success depends upon the success of the University.
The professors should be given detailed infor mation about the jobs that they have to per form and their good performance should be given due recognition by administration lead ership.
Even such small encouragement will boost theft morale to greater heights.
The President should have faith in his own abili ties as well as on the abilities of other professors and administrators and should provide guidelines about the kind of efforts he would like his professors and administra tors to make, setting an example by his own actions and exercises.
The negative force of fear, when used and no one denies that an element of hard headedness is some times required as a persuasive inducement to profes sors and administrators of university should be employed judiciously.
Under no circum stances should the apathy and belligerence of the professors and administrators be aroused.
These call for strong but sympathetic leader ship in the President.
" 464 The Vice Chancellor in every university is thus the conscious keeper of the University and constitutional ruler.
He is the principal executive and academic officer of the University.
He is entrusted with the responsibility of overall administration of academic as well as nonacademic affairs.
For these purposes, the Act confers both express and implied powers on the Vice Chancellor.
The express powers include among others, the duty to ensure that the provisions of the Act, Statutes, Ordinances and Regulations are observed by all concerned.
(Section 11(3)).
The Vice Chancellor has a right to regulate the work and conduct of officers and teaching and other employees of the University (Section 11(6)(a)).
He has also emergency powers to deal with any untoward situation (Section 11(4)).
The power conferred under sec.
11(4) is indeed significant.
If the Vice Chancellor believes that a situation calls for immedi ate action, he can take such action as he thinks necessary though in the normal course he is not competent to take that action.
He must, however, report to the concerned authority or body who would, in the ordinary course, have dealt with the matter.
That is not all.
His pivotal position as the principal executive officer also carries with him the im plied power.
It is the magisterial power which is, in our view, plainly to be inferred.
This power is essential for him to maintain domestic discipline in the academic and non academic affairs.
In a wide variety of situations in the relationship of tutor and pupil, he has to act firmly and promptly to put down indiscipline and malpractice.
It may not be illegitimate if he could call to aid his implied powers and also emergency powers to deal with all such situations.
Counsel for the appellant argued that the express power of the Vice Chancellor to regulate the work and conduct of officers of the University implies as well, the power to take disciplinary action against officers.
We are unable to agree with this contention.
Firstly, the power to regulate the work and conduct of officers cannot include the power to take disciplinary action for their removal.
Secondly, the Act confers power to appoint officers on the Executive Council and it generally includes the power to remove.
This power is located under sec.
24(1)(xxix) of the Act.
It is, therefore, futile to contend that the Vice Chancellor can exercise that power which is conferred on the Executive Council.
It is a settled principle that when the Act pre scribes a particular body to exercise a power, it must be exercised only by that body.
It cannot be exercised by others unless it is delegated.
The law must also provide for such delegation.
Halsbury 's Laws of England (Vol.14th Ed. para 32) summarises these principles as follows: 465 "32.
Sub delegation of powers.
In accordance with the maxim delegatius non potest delegare, a statutory power must be exercised only by the body or officer in whom it has been confided, unless sub delegation of the power is authorised by express words or necessary implication.
There is a strong presumption against construing a grant of legislative, judicial or disciplinary power as impliedly authorising sub delegation; and the same may be said of any power to the exercise of which the designated body should address its own mind.
" The counsel for the appellant next submit ted that the Executive Council in the instant case had delegated its disciplinary power to the Vice Chancellor and the Act provides for such delegation.
In support of the contention he relied upon the following resolution of the Executive Council: "Full power be given to the Vice Chancellor to take a decision on this question and the Vice Chancellor informed the Executive Council that he will take decision in about a month On this decision, Shri Gangadhar Pa thrikar gave his opinion that the Executive Council should take a decision on the note dated 16.1.
1979 submitted by him and other two members and since it was not accepted, he does not agree with the above decision." This resolution, in our opinion, is basically faulty at least for two reasons.
It may be recalled that the Executive Council without considering the report of Mr. Chavan, wanted the Vice Chancellor to take a decision thereon.
It may also be noted that the Vice Chancellor was present at the meeting of the Executive Council when the resolution was passed.
He was given "full power to take a decision" which in the context, was obviously on the report of Mr. Chavan, and not on any other matter or question.
He said that he would take a decision in about a month.
In our opinion, by the power delegated under the resolution, the Vice Chancellor could either accept or reject the report with intimation to the Executive Council.
He could not have taken any other action and indeed, he was not authorised to take any other action.
The other infirmity in the said resolution goes deeper than what it appears.
The resolution was not in harmony with the statutory requirement.
Section 84 of the Act provides for delegation of powers and 466 it states that any officer or authority of the University may by order, delegate his or its power (except power to make Ordinance and Regulations) to any other officer or authority subject to provisions of the Act and Statutes.
Section 24(1)(xii) provides for delegation of power by the Executive Council.
It states that the Executive Council may delegate any of its power (except power to make Ordinances) to the Vice Chancellor or to any other officer subject to the approval of the Chancellor.
(underlying is ours).
The approval of the Chancellor is mandatory.
Without such ap proval the power cannot be delegated to the Vice Chancellor.
The record does not reveal that the approval of the Chancel lor was ever obtained.
Therefore, the resolution which was not in conformity with the statutory requirement could not confer power on the Vice Chancellor to take action against the respondent.
This takes us to the second contention urged for the appellants.
The contention relates to the legal effect of ratification done by the Executive Council in its meeting held on December 26/27, 1985.
The decision taken by the Executive Council is in the form of a resolution and it reads as follows: "Considering the issues, the Execu tive Council resolved as follows: 1.
The Executive Council at its meeting held on March 22, 1979, had by a resolution given full authority to the Vice Chancellor for taking further proceedings and decision in both the cases of the defaulting officers.
In exercise of above authority, the Vice Chancellor appointed an Inquiry Officer and as suggested by the Inquiry Offi cer issued Show Cause notices, obtained re plies from the Officers and lastly issued orders for terminating their services; XXX XXX XXX XXX XXX It was further resolved that (i) There has been no inadequacy in the pro ceedings against both the officers; (ii) The punishment ordered against both the officers is commensurate with the defaults and allegations proved 467 against both the officers; and (iii) The Executive Council, therefore, whol ly, endorses the actions taken by the then Vice Chancellor against both the officers.
" By this resolution, we are told that the Executive Council has ratified the action taken by the Vice Chancellor.
Ratification is generally an act of principal with regard to a contract or an act done by his agent.
In Friedman 's Law of Agency (Fifth Edition) chapter 5 at p. 73, the/principle of ratifica tion has been explained: "What the 'agent ' does on behalf of the 'principal ' is done at a time when the relation of principal and agent does not exist: (hence the use in this sentence, but not in subsequent ones, of inverted commas).
The agent, in fact, has no authority to do what he does at the time he does it.
Subse quently, however, the principal, on whose behalf, though without whose authority, the agent has acted, accepts the agent 's act, and adopts it, just as if there had been a prior authorisation by the principal to do exactly what the agent has done.
The interesting point, which has given rise to considerable difficulty and dispute, is that ratification by the principal does not merely give validity to the agent 's unauthorised act as from the date of the ratification: it is antedated so as to take effect from the time of the agent 's act.
Hence the agent is treated as having been authorised from the outset to act as he did.
Ratification is 'equivalent to an antecedent authority ' .
" In Bowstead on Agency (14th Ed.) at p. 39) it is stated: "Every act whether lawful or unlaw ful, which is capable of being done by means of an agent (except an act which is in its inception void) is capable of ratification by the person in whose name or on whose behalf it is done . .
The words "lawful or unlawful", however, are included primarily to indicate that the doctrine can apply to torts.
From them it would follow that a principal by ratification may retrospectively turn what was previously an act wrongful against the princi ple, e.g. an unauthorised sale, or against a third party, e.g. a wrongful distress, into a legitimate one; or become liable for the tort of another by ratifying.
" 468 These principles of ratification, apparently do not have any application with regard to exercise of powers conferred under statutory provisions.
The statutory authority cannot travel beyond the power conferred and any action without power has no legal validity.
It is ab initio void and cannot be ratified.
The counsel for the appellant, however, invited our attention to the case of Parmeshwari Prasad Gupta vs The Union of India, ; It was a case of termina tion of services of the Secretary of a Company.
The Board of Directors decided to terminate the services of the Secre tary.
The Chairman of the Board of Directors in fact termi nated his services.
Subsequently, in the meeting of the Board of Directors the action taken by the Chairman was confirmed.
In the suit instituted by the Secretary challeng ing the termination of his services, the Court upheld on the principle that the action of the Chairman even though it was invalid initially, could be validated by ratification in a regularly convened meeting of the Board of Directors.
Ma thew, J. while considering this aspect of the matter, ob served [at pp.
307 and 308] "Even if it be assumed that the telegram and the letter terminating the services of the appellant by the Chairman was in pursuance to the invalid resolution of the Board of Direc tors passed on December 16, 1953 to terminate his services, it would not follow that the action of the Chairman could not be ratified in a regularly convened meeting of the BOard of Directors.
The point is that even assuming that the Chairman was not legally authorised to terminate the services of the appellant, he was acting on behalf of the Company in doing so, because, he purported to act in pursuance of the invalid resolution.
Therefore, it was open to a regularly constituted meeting of the Board of Direction to ratify that action which, though unauthorised, was done on behalf of the Company.
Ratification would always relate back to the date of the act ratified and so it must be held that the services of the appellant were validly terminated on December 17, 1953.
The appellant was not entitled to the declaration prayed for by him and the trial court as well as the High Court was right in dismissing the claim.
" These principles of ratification governing transactions of a company where the general body is the repository of all powers not be 469 extended to the present case.
We were also referred to the decision of the Court of Appeal in Barnard vs National Dock Labour Board, [1953] 1 All Eng.
Law Reports 1113 and in particular the observation of Denning L.J., (at 1118 and 1119): "While an administrative function can often be delegated, a judicial function rarely can be.
No judicial tribunal can dele gate its functions unless it is enabled to do so expressly or by necessary implication.
In Local Government Board vs Arlidge (2) the power to delegate was given by necessary implication, but there is nothing in this scheme authorising the board to delegate this function and it cannot be implied.
It was suggested that it would be impracticable for the board to sit as a board to decide all these cases, but I see nothing impracticable in that.
They have only to fix their quorum at two members and arrange for two members, one from each side, employers and workers, to be responsible for one week at a time.
"Next, it was suggested that, even if the board could not delegate their functions, at any rate they could ratify the actions of the port manager, but, if the board have no power to delegate their functions to the port manager, they can have no power to ratify what he has already done.
The effect of ratifica tion is to make it equal to a prior command, but as a prior command, in the shape of dele gation, would be useless, so also is a ratifi cation.
" These observations again are of little assistance to us since we have already held that there was no prior delega tion of power to the Vice Chancellor to take disciplinary action against the respondent.
There was no subsequent delegation either.
Therefore, neither the action taken by the Vice Chancellor, nor the ratification by the Executive Council could be sustained.
In the result, the appeal fails and is dismissed with costs.
N.V.K. Appeal dis missed.
[/INST]Appellant herein was a lessee of the Respondent in respect of a shop since 1961, at a monthly rent of Rs.25 later increased to Rs.30 and in addition to the said rent, he was to pay house tax to the municipality.
Respondent landlord filed a suit for eviction against the appellant on the ground of default in payment of rent for the period 1.2.1966 to 31.12.66.
The appellant filed an application in that suit under sec.
13(4) of the Act (as it stood prior to amendment) for determination of arrears of rent and the interest payable thereon.
The Trial Court determined the arrears of rent and the interest payable by the appellant.
Consequent upon the appellant 's depositing the same, the suit was dismissed in terms of sec.
13(7) of the Act.
The appellant continued depositing the rent in Court.
Thereafter the Respondent filed another suit on 21.5.75 alleging that the appellant has again committed default in payment of rent and should therefore be evicted.
The appellant received a notice calling upon him to appear in Court on 10.2.76.
Since he had not received a copy of the plaint, he was granted time till 30.3.76 to file his written statement.
In the written statement he refuted his liability to pay the rent and also moved an application u/s 13(3) & 13(4) of the amended Act praying that if in the course of his depositing the rent in court, there has been any omission, due to oversight the Court may determine the arrears of rent & interest payable thereon and permit him to deposit the same in court.
It may be pointed out here that before the appellant was served with the notice of the suit, the Act was amended on 29.9.75 by Amending Ordinance No. 26 of 75 whereby a new section 13 A was added to the Act.
The object of the newly added section was to provide benefit to all tenants against whom suits for eviction on the ground of default in paying the rent were pending by making a provision that the Courts shall not pass any decree in favour of landlords on that ground if the 193 tenant makes an application within a stipulated period and deposits in court the total rent due.
The Trial Court passed orders on the application u/s 13(3) & 13(4) and called upon the appellant to deposit a sum of Rs.335 towards arrears of rent and interest before 28.7.76.
The appellant complied with the order but despite that, the Trial Court passed a decree for eviction and the appellate Court confirmed the same.
In the second appeal preferred by the appellant, he contended that the Trial Court ought to have treated the application filed by him u/s 13(3) & 13(4), as one filed u/s 13 A of the Act and given the benefit thereof to him.
Even though the High Court found that the appellant having re ceived the notice of the suit late and hence was not in a position to make the application within 30 days, declined to interfere because in its view the Act has not provided for any relief to tenants placed in the situation in which the appellant was placed.
The High Court held that the Act contains a lacuna but the same can be remedied by the legis lature and not by Courts and as such the appellant cannot claim the benefit of sec.
13 A of the Act.
The suit having been filed prior to the coming into force of Amending Act, the same will be governed by the provisions of unamended Act.
On the dismissal of the second appeal by the High Court, the appellant has filed this appeal after obtaining special leave.
Before this Court two questions arose for consideration viz: (1) whether the appellant is not entitled to the bene fit of sec.
13 A because he had not filed an application within 30 days from the date of commencement of the Act, and (2) even otherwise whether by reason of the earlier default in payment of rent for the period 1.2.1966 to 31.12.1966, the appellant is disentitled under the Act to claim the benefit of sec.
13 A. Allowing the appeal, this Court, HELD: Section 13 A has been given overriding effect.
Subsection (1) of section 13 A mandates all courts not to pass any decree in favour of a landlord for eviction of a tenant on the ground of nonpayment of rent, if the tenant makes an application as per clause (b) and pays to the landlord or deposits in court within the prescribed time the total amount of rent in arrears together with interest and full costs of the suit.
[199B C] 194 The intention of the legislature to confer the benefit of section 13 A to all tenants, provided actual eviction had not taken place could further be seen by the terms of sec tion (c).
[199D E] It would be unreasonable and inequitable to hold that the legislature had intended to confer the benefit of sec.
13 A only to those tenants who had received notice of the suit filed against them before the Ordinance came into force and not to those tenants against whom proceedings were pending in the sense they had been instituted but who had no notice of the pendency of the suit.
[199F G] Even though it was found that some arrears had to be paid, the appellant cannot be denied the benefit of sec.
13 A because the section has been given overriding effect in so far as suits and other proceedings which were pending on the date of the promulgation of the ordinance and as such the proviso to sub sec.
(6) of sec.
13 of the amended Act would not disentitle the appellant to claim the benefit of sec.
13 A. [202H; 203A] B.P. Khemka Pvt.
Ltd. vs
V.B.K. Bhowmick; , , referred to.
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<s>[INST] Summarize the judgementAppeal No. 587 ,of 1963.
Appeal by special leave from the judgment and order dated November 30, 1960 of the Madhya Pradesh High Court, in Miscellaneous Civil Case No. 73 of 1960.
K.N. Rajagopal Sastri and R. N. sachthev, for the appellant.
S.K. Kapoor, section Murty and K. K. fain, for the respondent, 811 April 17, 1964.
The judgment of the Court was delivered by SIKRI, J.
The respondent, Swadeshi Cotton & Flour Mills, hereinafter referred to as the assessee, is a limited company which owns and runs a textile mill at Indore.
For, the assessment year 1950 51 (accounting year calendar year 1949), which was its first year of assessment under the Indian Income tax Act, 1922 (hereinafter referred to as the Act) it claimed that under section 10(2)(x) of the Act it was entitled to an allowance in respect of the sum of Rs. 1,08,325/ which it had paid as bonus for the year 1947 in the calendar year 1949, as a result of the award of the Industrial Tribunal, dated January 13, 1949.
The claim of the assessee was not accepted by the Income Tax authorities.
The Appellate Tribunal held that it was a liability relating to an earlier year and not the year 1949.
However, on an application by the assessee it stated a case and referred two questions.
We are concerned only with one which reads thus: "Whether on the facts and in the circumstances of the case the assessee is entitled to claim a deduction of bonus of Rs. 1,08,325/ relating to the calendar year 1947 in the assessment year 1950 51? The High Court of Madhya Pradesh answered the question in the affirmative.
The appellant, having failed to get a certificate under section 66A(2) of the Act, obtained special leave from this Court, and that is how the appeal is before us.
The facts and circumstances referred to in the question have been set out in the statement of the case.
Unfortunately, the facts are meagre, but since the appellant is content to base his case on a few facts, which will be referred to shortly, it is not necessary to call for a further statement of the case.
The facts, in brief, are as follows.
The assessee paid as bonus to its employees the sum of Rs. 1,08,325/9/3 for the calendar year 1947 in terms of an award made on January 13, 1949 under the Industrial Disputes Act.
This amount was debited by the assessee in its profit and loss account for the year 1948 and the corresponding credit was given to the bonus payable account.
The books for 1948 had not been closed till the date of order of the Industrial Tribunal, January 13, 1949.
This bonus was in fact paid to the employees in the calendar year 1949, the relevant assessment year being 1950 51.
The Appellate Assistant Commissioner had further found that upto 1946 when the order for payment of bonus used to be received before the company 's accounts for the year were finalised, the amount of bonus used to be in fact 812 debited to the profit and loss account of the respective year.
this finding is repeated by the Appellate Tribunal in its appellate order.
On these facts the learned counsel for the appellant, ,Mr. Sastri, contends that according to the mercantile system of accounting, which is followed by the assessee, and on which its profits have been computed for the accounting calendar year 1949, the year to which the liability is properly attributable is the calendar year 1947 and not 1949.
He says that it was a legal liability of the assessee which arose in 1947 and should have been estimated and put into the accounts for 1947.
In the alternative he has invited us to reopen the accounts for the year 1947, following the practice which,according to him, obtains in England.
Inour opinion, the answer to the question must depend on theproper interpretation of section 10(2)(x), read with section 10(5), of theAct.
These provisions read as follows: "section 10(2)(x) Any sum paid to an employee as bonus or commission for services rendered, where such sum would not have been payable to him as profits or dividend if it had not been paid as bonus or commission; Provided that the amount of the bonus or commission is of a reasonable amount with reference to (a)the pay of the employee and the conditions of his service , (b)the profits of the business, profession or vocation for the year in question; and (c)the general practice in similar businesses, professions or vocations.
" section 10(5) In sub section (2), "paid" means actually paid or incurred according to the method of accounting upon the basis of which the profits or gains are computed under this section;. " If we insert the definition of the word 'paid ' in sub cl.
(x), it would read as follows: any sum actually paid or incurred according to the method 'of accounting upon the basis of which the profits or gains are computed under this section, to an employee as bonus. " As the assessee 's profits and gains have been computed according to the mercantile system, the question, using for .he time being the terms of the clauses, comes to this: "Has this sum of Rs. 1,08,325/ been incurred by the assessee according to the mercantile system in the calendar year 1947 or 1949?" 813 At first sight the sentence does not read well, but the meaning of the word 'incur ' includes 'to become liable to ' Therefore, the question boils down to: "In what year did the liability of this sum of Rs. 1,08,325/ arise, according to the mercantile system ? " The mercantile system of accounting was explained in a judgment of this Court in Keshav Mills Ltd. vs Commis sioner of Income Tax, Bombay(1) thus: "That system brings into credit what is duc, immediately it becomes legally due and before it is actually received, and it brings into debit expenditure the amount for which a legal liability has been incurred before it is actually disbursed.
" These observations were quoted with approval in Calcutta ,Co. Ltd. vs Commissioner of Income Tax, West Bengal(2).
On the facts of this case, when did the legal liability arise in respect of the bonus? This depends on the facts of the case and the nature of the bonus awarded in this case.
This Court has examined the nature of profit bonus it is common round, that the bonus with which we are concerned with was a profit bonus in various cases.
It is explained in Muir Mills vs Suti Mills Mazdoor Union(3) that "there .are two conditions which have to be satisfied before a demand for bonus can be justified and they are (1) when 'wages fall short of the living standard, and (2) the industry makes huge profits part of which are due to the contribution 'Which the workmen make in increasing production.
The demand for bonus becomes an industrial claim when either or both these conditions are satisfied.
" This matter was again considered in the case of Associated Cement Co. vs Their Workmen(4).
This Court observed: "It is relevant to add that in dealing with the concept of bonus this Court ruled that bonus is neither a gratuitous payment made by the employer to his workmen nor can it be regarded as a deferred wage.
According to this decision, where wages fall short of the living standard and the industry makes profit part of which is due to the contribution of labour, a claim for bonus can be legitimately made." ; (2) ; ; (4) 814 In 1961, this Court was able to say that "the right to claim bonus which has been universally recognised by indus trial adjudication in cases of employment falling under the said Act has now attained the status of a legal right.
Bonus can be claimed as a matter of right provided of course by 'the application of the Full Bench formula it is shown that for the relevant year the employer has sufficient available surplus in hand." (Vide Gajendragadkar, J., as lie then was, in Workmen vs Hercules Insurance Co.(1).
The Indian Tea Association vs Workmen(2) this Court held that "the profit bonus can be awarded only by reference to a relevant year and a claim for such bonus has therefore to be made from year to year and has to be settled either amicably between the parties or if a reference is made, it has to be determined by Industrial adjudication.
A general claim for the introduction of profit bonus cannot be made or entertained in the form in which it has been done in the present proceedings.
" It follows from the above decisions of this Court that: (a) workmen are entitled to make a claim to profit bonus if certain conditions are satisfied; (b) the workmen have to make a claim from year to year; (c) this claim has either to be settled amicably or by industrial adjudication; and (d) if there is a loss or if no claim is made, no bonus will be permissible.
In our opinion it is only when the claim to profit bonus, if made, is settled amicably or by industrial adjudication that a liability is incurred by the employer, who follows the mercantile system of accounting, within section 10(2)(x), read with section 10(5) of the Act.
On the facts of this case, it is clear that it was only in 1940 that the claim to profit bonus was settled by an award of the Industrial Tribunal.
Therefore, the only year the liabiiity can be properly attributed to is 1949, and hence we are of the opinion that the High Court was right in answering the question in favour of the assessee.
The second contention of the learned counsel does not appeal to us.
We are of the opinion that this system of reopening accounts does not fit in with the scheme of the Indian Income Tax Act.
We have already held in Commissioner of Income Tax, Madras vs A. Gajapathy Naidu, Madras(,) that as far as receipts are concerned, there ,an be no reopening ; (2) [1962] Supp.
(1) S.C.R. 557.
(3)A.I.R. 815 of accounts.
The same would be the position in respect of expenses.
But even in En land accounts are not opened in every case.
Halsbury gives various instances in footnote (m) at p. 148.
Vol.20.
Mr. Sastri has relied on various English cases but it is unnecessary to refer to them as Lord Radcliffe explains the position in England, in Southern Railway of Peru Ltd. vs Owen(1) thus: "The courts have not found it impossible hitherto to make considerable adjustments in the actual fall of receipts or payments in order to arrive at a truer statement of the profits of successive years.
After all, that is why income and expenditure accounting is preferred to cash accounting for this purpose.
As I understand the matter, the principle that justified the attribution of something that was in fact, received in one year to the profits of an earlier year, as in such cases as Isaac Holden and Sons vs Inland Revenue Comrs.
and Newcastle Breweries Ltd. vs Inland Revenue Comrs.
was just this, that the payment had been earned by services given in earlier year and, therefore, a true statement of profit required that the year which had borne the burden of the cost should have appropriated to it the benefit of the receipt.
" The principle mentioned by Lord Radcliffe would not apply to a profit bonus.
As stated above, a profit bonus is strictly not wages, at least not for the purpose of computing liability to income tax; it is not an expense, in the ordinary sense of the term, incurred for the purpose of earning profits.
A fortiori profits have already been made.
It is more like sharing of profits on the basis of a certain formula.
One other point raised by Mr. Sastri remains.
He urged that the word "for the year in question" in the proviso to sub section 10(2)(x) mean "for the year in which allowance is claimed.
" We are unable to agree with him.
The words 'for the year in question ' mean the year in respect which bonus is paid.
In the result, the appeal fails and is dismissed with costs.
Appeal dismissed.
[/INST]The respondent company paid to its employees Rs. 1,08,325/ as bonus for the year 1947 in the calendar year 1949, as a result of the award of the Industrial Tribunal dated January 13, 1949.
This amount was debited by the company in its profit and loss account for the year 1948 and the corresponding credit was given to the bonus payable account.
The books for 1948 were not closed till the date of the award of the Industrial Tribunal.
For the relevant assessment year, 1950 51, the company claimed that under section 10(2)(x) of the Indian Income tax Act, 1922, it was entitled to an allowance in respect of the amount paid as bonus, but the claim was rejected by the Income tax authorities on the ground that according to the mercantile system of accounting which was followed by the assessee the year to which the liability was properly attributable was the calendar year 1947 and not 1949.
It was the case of the Income tax authorities that it was a legal liability of the assessee which arose in 1947 and should have been estimated and Put into the accounts for 1947, and that, if necessary, the amounts for the year 1947 should be reopened.
It was admitted that the bonus in the instant case was a profit bonus.
Held:(i) It was only when the claim to profit bonus, if made, was settled amicably or by industrial adjudication that a liability was incurred by the employer, who followed the mercantile system, within section 10(2)(x), read with section 10(5), of the Indian Income tax Act, 1922; and as it was only in 1949 that the claim to profit bonus was settled by an award of the Industrial Tribunal, the only year the liability could be properly attributed to was 1949.
(ii) The system of reopening accounts was not applicable under thescheme of the Indian Income tax Act.
(iii) The words "Year in question." in proviso (b) to s.10 (2)(x) of the Act meant "year in respect of which bonus was paid".
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<s>[INST] Summarize the judgementvil Appeal No. 2 104 of 1989.
WITH C.M.P. No. 26956 of 1988.
From the Judgment and Order dated 22.4.1988 of the Punjab and Haryana High Court in C.R. No. 2875 of 1979.
Ashok K. Sen and G.K. Bansal for the Appellant.
S.M. Ashri and C.S. Ashri for the Respondents.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J.
Special leave granted.
This appeal is from the judgment and order of the High Court of Punjab and Haryana dated 22nd April, 1988.
The dispute was between the two brothers.
Both the parties appointed one Shri Ajit Singh as the Arbitrator on 7th March, 1974 for settlement of the dispute about 2 1/2 Killas of land situated near Chandni Bagh, Panipat in the State of Haryana.
The said land stood in the name of the appellant.
According to the respondent, Ram Lal, it was benami in the name of the appellant.
That was the dispute.
The arbitrator gave his award on 22nd May, 1974 and moved an application on 23rd September, 1974 before the Court of Sub Judge IInd Class, Panipat, for making the award the rule of the Court.
The application was registered in the said Court and notice was issued to the appellant herein on 7th November, 1974.
Objections were filed by the appellant taking various grounds.
It was contended that the appellant had informed the sole arbitrator through registered notice and by a telegraphic notice that he had no faith in the said arbitra tor and had thus repudiated his authority to proceed with the arbitration proceedings.
It was also contended that the award was lop sided, perverse, and totally unjust and against all cannons of justice and fair play.
It was alleged that the arbitrator had acted in a partisan manner.
He never heard the claim of the appellant and never 254 called upon him to substantiate his claim and had acted as an agent of the respondent.
It was, therefore, prayed by the appellant that the award be set aside.
It may be mentioned that no point was raised that the award was bad and unforce able because it was not properly stamped nor any plea was taken that the award was an unregistered one as such could not be made the rule of the court.
Several issues were framed.
No issue was, however, framed on the ground that the award was bad because it was not properly stamped or that it was not registered.
The appellant, who was respondent No. 2 in the said proceedings before the learned Trial Judge, gave his version about the repudiation of the authority.
The learned Trial Judge had, however, held that the appellant had failed to prove that he had repudiated the authority of the arbitrator to enter upon the arbitration through registered notice or otherwise before the arbitrator announced his award.
It was further held that the award of the arbitrator was not liable to be set aside on the grounds taken.
The objections were treated as objections under section 33 of the and it was filed within the limitation period.
In that view of the matter, the learned Sub Judge IInd Class, Panipat by his order dated 28th July, 1977 dismissed the objections under Section 14 of the and made the said award the rule of the court.
Aggrieved thereby, the appellant went up in first appeal before the Additional District Judge, Karnal.
The learned Additional District Judge, while dealing with the conten tions of the appellant, held that the application was prop erly filed.
A point was taken before the first Appellate Court that the award was on an unstamped paper and as such could not be made the rule of the court.
The learned District Judge held that the award has not been properly stamped and as such could not be made the rule of the court.
It was also contended before the learned District Judge that the award was unregistered and as such it could not be made the rule of the court as it affected immovable property of more than Rs. 100.
The learned Dis trict Judge after analysing the provisions of section 17 of the (hereinafter referred as to 'the Act ') came to the conclusion that the award declared right in immovable property and since it was unregistered, it could not be made the rule of the court.
The learned Dis trict Judge, however, also came to the conclusion that the authority of the arbitrator had been repudiated.
This ground no longer survives.
In the aforesaid view of the matter, the learned District Judge allowed the appeal on the ground that the 255 award was unregistered and unstamped and as such could not be made the rule of the court and set aside the order of the learned Trial Judge.
There was a second appeal to the High Court.
The High Court upheld the award.
The High Court noted that the neces sary stamp was purchased on 8th August, 1974 before the award was filed on the 9th September, 1974.
And that being so, it could not be argued successfully that the award was unstamped.
In that view of the matter, the High Court held that the learned District Judge was in error in allowing the stamp objection to be taken.
As regards the registration, it was held by the High Court that the award did not create any right as such in immovable property; it only admitted the already existing rights between the parties and hence it did not require any registration.
In that view of the matter, the High Court was of the opinion that the first appellate Court was wrong.
The High Court was further of the view that no right was created in favour of Shri Ram Lal, the respondent herein when he was declared the owner.
Both Lachhman Das, the appellant and Ram Lal, the respondent, had claimed their ownership and, ac cording to the High Court, they had the existing rights.
The award only made, according to the High Court, it clear that the ownership would vest in one of the brothers, Ram Lal.
In the aforesaid view of the matter, the High Court was of the view that it did not require registration.
The High Court allowed the appeal and directed the restoration of the order of the learned trial court and the award be made the rule of the court.
Aggrieved thereby, the appellant has come up to this Court.
The question is Was the High Court right in the view it took? Mr. A.K. Sen, learned counsel for the appellant contend ed that the High Court was clearly in error in the facts and circumstances of this case to have made this award the rule of the court and to have looked upon this award which at all relevant and material time was unregistered.
It may be mentioned that when this matter came up before this Court on the 5th December, 1988, the matter was adjourned for two months and it was recorded "In the meantime, the parties may take steps".
Thereafter, it appears that the award was filed for registration on 19th December, 1988 before the Sub Registrar, Panipat and was registered actually on 3rd Febru ary, 1989.
Mr. Sen, contended that the registration of the award subsequently made in the manner indicated hereinbefore did not validate it retrospectively in 256 view of the relevant provisions of the Act.
The award being an unregistered one could not have been looked into by the High Court.
Mr. Sen tried to urge before us that the award was got registered by misrepresentation of the order of this Court dated 5th December, 1988.
This Court did not, on 5th December, 1988, direct that the registration could be made.
All that this Court observed was that the parties might take steps.
It may be mentioned that on or about 18th December, 1988, it appears at page 75 of the present paper book that an application was made for registration of award which was said to have been applied by Shri Ajit Singh, S/o Shri Beer Singh.
In the said letter, it was mentioned that Mr. justice J.V. Gupta of the Hon 'ble High Court of Punjab and Haryana had held in favour of the said writer and it was further stated that on the 5th December, 1988, this Court dismissed the case of Lachhman Singh, the appellant herein, copy whereof was enclosed.
The award was filed for registration on 18th December, 1988.
The statements contained in the letter were incorrect and misleading inasmuch as this Court did not dismiss the case of the appellant on 5th December, 1988.
On the other hand, this Court, as mentioned hereinbe fore on the 5th December, 1988, merely observed that the appellant would be at liberty to do what was needful.
Mr. Ashri, learned counsel for the respondent, submitted that the registration was done in view of provisions of sections 23 and 25 of the Act.
Mr. Sen, on the other hand, submitted before us that this was wholly irregular to have obtained registration by misleading the Sub Registrar and this was of no effect.
Furthermore, in any event, according to Mr. Sen, the registration having been beyond the period of four months as enjoined by the relevant provisions was wholly bad.
The first question that requires consideration in the instant case is whether the Court could have looked into the award for the purpose of pronouncing judgment upon the award.
In order to deal with this question, it is necessary to refer to Section 17 of the Act.
Section 17 deals with documents of which registration is compulsory.
Section 17 of the said Act mentions the documents which must be regis tered.
Section 17(1)(e), inter alia, provides: "non testamentary instruments transferring or assigning any decree or order of a Court or any order of a Court or any award when such decree or order or award purports or operates to create, declare, assign, limit or extin guish, whether in present or in future, any right, title or interest, 257 whether in present or in future, any right, title or interest,, whether vested or contin gent, of the value of one hundred rupees and upwards, to or in immovable property." Section 23 of the said Act provides as under: "Subject to the provisions contained in sec tions 24, 25 and 26, no document other than will shall be accepted for registration unless presented for that purpose to the proper officer within four months from the date of its execution: Provided that a copy of a decree or order may be presented within four months from the day on which the decree or order was made, or, where it is appealable, within four months from the day on which it becomes final." Section 25 of the said Act provides as under: "If, owing to urgent necessity or unavoidable accident, any document executed, or copy of a decree or order made, in India is not present ed for registration till after the expiration of the time hereinbefore presented in that be half, the Registrar, in cases where the delay in presentation does not exceed four months, may direct that, on payment of a fine not exceeding ten times the amount of the proper registration fee, such document shall be accepted for registration." Section 49 of the said Act provides as under: "No document required by section 17 or by any provision of the , to be registered shall (a) affect any immovable property comprised therein, or (b) confer any power to adopt, or (c) be received as evidence of any transac tion affecting such property or conferring such power, unless it has been registered." 258 The proviso to this section deals with a suit for specific performance with which we are not concerned.
Shri Ashri contended that the document in question was one which did not require registration.
He submitted that the High Court was right in the view it took.
He further submitted that the property in dispute was in the joint name of the appellant and the respondent.
The dispute was whether the half of the property held by the appellant was benami for the respondent or a declaration to that effect could be made by the arbitrator.
Mr. Ashri further submitted that it was the case of the appellant that he was the owner of the property in question.
The award in question recites that Shri Ajit Singh had been appointed as arbitrator by an agreement dated 7th March, 1974 by both the parties.
The award further recites that he was appointed arbitrator to adjudicate through arbitration "their disputes regarding property against each other".
The arbitrator thereafter recites the steps taken and the proceedings before him.
It was further stated that the appellant did not orally reply to the contentions of the respondent nor did he submit his claims in writing.
In these circumstances, the award was bad.
The award stated, inter alia, "Land of Tibbi comprising of rect.
No. 13 Kila No. 23 (3 11), 26(1 11), 16(5 15), 17(5 14), 25(4 4), 23/27 and 26/1 situated in Mauz Ugra Kheri, near Chandni Bagh, which is in the joint name of Shri Ram Lal, Party No. 1 and Shri Lachhman Dass, Party No. 2.
The half ownership of Shri Lachhman Dass shall be now owned by Shri Ram Lal in addition to his 1/2 share owned by him in these lands.
" The award gave certain other directions.
Regarding other claims, it was held that lands were allotted in the names of both the brothers and in that context Rs. 16,000 were spent by the respondent from his own sources.
The arbitrator stated that he admitted these expenses at Rs. 10,000 and awarded that an amount of Rs.5,000 equal to 1/2 share should be paid by the appellant to the respondent.
The other claims were also decided by the award with which it is not neces sary to deal in the present appeal.
The question is does this award purport or operate to create, declare or assign, limit or extinguish any right, title or interest in immova ble property? Shri Ashri submitted that as his client was the real owner and as respondent No. 1 was mere benamdar, and the arbitrator merely declared the true position and the award did not as such create, declare or assign any fight, title or interest in any immovable property by the aforesaid clause in the award.
259 The Division Bench of the Madras High Court in Ramaswamy Ayyar & Anr.
vs Thirupathi Naik, ILR XXVII Madras p. 43 has observed that the criterion for purposes of registration under the Registration Act, 1877 (III of 1877), which was in the same term as the provision of the present Act, was what was expressed on the face of the document, not what inci dents might be annexed by custom to a grant of the kind.
Therefore, we have to see not what the document intends to convey really, but what it purports to convey.
In other words, it is necessary.
to examine not so much what it intends to do but what it purports to do.
The real purpose of registration is to secure that every person dealing with the property, where such document re quires registration, may rely with confidence upon state ments contained in the register as a full and complete account of all transactions by which title may be affected.
Section 17 of the said Act being a disabling section, must be construed strictly.
Therefore, unless a document is clearly brought within the provisions of the section, its non registration would be no bar to its being admitted in evidence.
On a proper construction of the award, it does appear to us that the award did create, declare or assign a right, title and interest in the immovable property.
The award declares that 1/2 share of the ownership of Shri Lachhman Dass shall "be now owned by Shri Ram Lal, the respondent in addition to his 1/2 share owned in those lands".
Therefore, the said award declares the right of Ram Lal to the said share of the said property mentioned in that clause.
It is not in dispute that the said property is immovable property and it is not merely a declaration of the pre existing right but creation of new right of the parties.
It is significant to bear in mind that the section enjoins registration wher ever the award "purports or operates to create, declare, assign, limit or extinguish" whether in present or in future any right, title or interest of the value of Rs. 100 or upwards in immovable property.
Shri Ashri tried to submit that while reading the award reasonably and fairly, it must be construed that there was no creation or declaration of any new right in the immovable property.
What was done was only, according to Shri Ashri, a declaration of existing right, that is to say, Ram Lal 's full ownership of the property in question.
The section, however, enjoins registration in respect of any document, which purports not which intends to create a right in immov able property or declare a right in immovable property.
It is not a question of declaration of an existing right.
It is by this award that a new right was 260 being created in favour of Ram Lal, the respondent herein.
In that view of the matter, in our opinion, it cannot be contended that the award did not require registration.
This question was considered by this Court in Satish Kumar & Ors.
vs Surinder Kumar & Ors.
, There an arbi trator appointed by the appellants and the respondents partitioned their immovable property exceeding the value of Rs. 100.
The arbitrator applied under section 14 of the to the Court for making the award a rule of the Court.
On the question whether the award was admissible in evidence as it was not registered it was held that the award required registration.
It was further held by Justice Sikri, as the Chief Justice then was, and Justice Bachawat that all claims which were the subject matter of a reference to arbitration merged in the award which was pronounced in the proceedings before the arbitrator and after an award had been pronounced, the rights and liabili ties of the parties in respect of the said claims could be determined only on the basis of the said award.
After an award was pronounced, no action could be started on the original claim which had been the subject matter of the reference.
The position under the registration Act is in no way different from what it was before the Act came into force.
Therefore, the conferment of exclusive jurisdiction on a court under the did not make an award any less binding than it was under the provisions of the Second Schedule of the Code of Civil Procedure.
It was further held that the filing of an unregistered award under section 49 of the Act was not prohibited.
What was prohibit ed was that it could not be taken into evidence so as to affect immovable property falling under section 17 of the Act.
It was further reiterated that it could not be said that the registration did not in any manner add to its efficacy or give it added competence.
If an award affected immovable property above the value of Rs. 100, its registration would not rid of the disability created by section 49 of the Act.
The award in question was not a mere waste paper but had some legal effect and it plainly purported to affect or affected property within the meaning of section 17(1)(b) of the Act.
Justice Hegde gave a separate but concurring judgment.
He observed that it was one thing to say that a right was not created, it was an entirely different thing to say that the right created could not be enforced without further steps.
An award did create rights in that property but those rights could not be enforced until the award was made a decree of the Court.
For the purpose of section 17(1)(b) of the Act, all that had to be seen was whether the award in question pur ported or operated to create or declare, assign, limit or extinguish whether in present or future any right, title or interest whether vested or contingent of the value of one hundred rupees and upwards to or in immovable property.
261 It was incorrect to state that an award which could not be enforced was not an award and the same did not create any right in the property which was the subject matter of the award.
An award whether registered or unregistered, accord ing to Justice Hegde, does create rights but those rights could not be enforced until the award is made the decree of the court.
The learned Judge made it clear that for the purpose of section 17(1)(b) of the Act, all that had to be seen was whether the award in question purported or operated to create or declare, assign, limit or extinguish whether in present or future any right, title or interest whether vested or contingent of the value of Rs. 100 and upwards in the immovable property.
If it does, it is compulsorily registerable.
A document might validly create rights but those rights might not be enforced for various reasons.
The Court found that the award in that case created right in immovable property and it required registration.
This Court in Ratan Lal Sharma vs Purshottam Harit, ; had to consider the question of registra tion and the effect of non registration of an award.
The appellant and the respondent therein had set up a partner ship business in the year 1962.
The parties, however, there after fell out.
At the time the disputes arose, the running business had a factory and various movable and immovable properties.
On August 22, 1963, by agreement in writing, the parties referred "the disputes of our concern" to the arbi tration of two persons and gave "the arbirators full author ity to decide their dispute".
The arbitrators gave their award on September 10, 1963.
The award made an exclusive allotment of the partnership assets, including the factory, and liabilities to the appellant.
He was "absolutely enti tled to the same" in consideration of a sum of Rs. 17,000 plus half the amount of the realisable debts of the business to the respondent and of the appellants renouncement of the right to share in amounts already received by the respond ent.
The award, stipulated that the appellant should not run the factory unless he had paid the awarded consideration to the respondent.
The arbitrators filed the award in the High Court on November 8, 1963.
On September 10, 1964, the re spondent filed an application for determining the validity of the agreement and for setting aside the award.
On May 27, 1966, a learned Single Judge of the High Court dismissed the application as time barred.
But he declined the request of the appellant to proceed to pronounce judgment according to the award because in his view; (i) the award was void for uncertainty and (ii) the award, which created rights in favour of the appellant over immovable property worth over Rs. 100 required registration and was unregistered.
From this part of the order, the 262 appellant filed an appeal which was dismissed as not main tainable by the Division Bench of the High Court.
The appel lant preferred an appeal by special leave to this Court against the decision of the Single Judge declining to pro nounce judgment in accordance with the award.
He also filed a special leave petition against the judgment of the Divi sion Bench.
In the appeal before this Court, the appellant contended that the award was not void for uncertainty and that the award sought to assign the respondent 's share in the partnership to the appellant and so did not require registration and that under sec.
17 of the , the Court was bound to pronounce judgment in accordance with the award after it had dismissed the respondent 's applica tion for setting it aside.
It was held that the share of a partner in the assets of the partnership, which had also immovable properties, was movable property and the assign ment of the share did not require registration under section 17 of the Act.
But the award in the instant case, this Court observed, did not seek to assign the share of the respondent to the appellant, either in express words or by necessary implication.
The award expressly makes an exclusive allot ment of the partnership assets including the factory and liabilities to the appellant.
It went further and made him "absolutely entitled to the same", in consideration of a sum of Rs. 17,000 plus half of the amount of Rs. 1924.88 P. to the respondent and the appellant 's renouncement of the right to share in the amounts already received by the respondent.
In express words the award purported to create rights in immovable property worth above Rs. 100 in favour of the appellant.
It would require accordingly registration under section 17 of the Act.
As the award was unregistered, the court could not look into it.
The award being inadmissible in evidence for want of registration the Court could not pro nounce judgment in accordance with it.
Section 17 of the presupposes an award which could be validly looked into by the Court.
The appellant could not success fully invoke section 17.
The award is an inseparable tangle of several clauses and cannot be enforced as to the part not dealing with immovable property.
In the instant case also, it appears to us that the award affects immovable property over Rs. I00 and as such was required to be registered.
Shri Ashn, however, contended that the fact that the award was unregistered had not been taken before the learned trial judge.
Indeed, this was not urged within 30 days and the time for filing of application for setting aside an award under section 30 of the Arbitra tion Act, was 30 days and as such this not having been taken, the appellant was not entitled to take this point at a later stage.
1t is.
true that in the application for making the award a rule of the court before 263 the learned trial judge this point had not been taken.
Section 33 of the provides that: "Any party to an arbitration agreement or of any person claiming under him desiring to challenge the existence or validity of an arbitration agreement or an award or to have the effect of either determined shall apply to the Court and the Court shall decide the question on affidavits.
" It has been held by the majority of three learned Judges in a full Bench decision of the Calcutta High Court in the case of Saha & Co. vs Ishar Singh Kirpal Singh, AIR 1956 Cal. 321 that under the Indian , there was no distinction between an application for setting aside of an award and an application for adjudgment of the award as a nullity and all applications must be under section 30 within the time stipulated for that application.
The existence of an award and validity of the reference both have to be chal lenged in the same manner.
But the next question that arises, is, whether an unregistered award can be set aside or not.
It was submitted by Mr. Ashri that the award was otherwise invalid, under section 30(c) of the .
It is, however, not necessary for the present purpose to decide this question.
It is sufficient to emphasise that an award affecting immovable property of the value of more than Rs. 100 cannot be looked into by the Court for pronouncement upon the award on the application under section 14 of the Arbi tration Act unless the award is registered.
section 14 enjoins that when an award of an arbitrator has been filed, the Court should give notice to the parties and thereupon the court shall pronounce judgment upon the award and made it a rule of the court.
But in order to do so, the court must be competent to look into the award.
section 49 of the Act enjoins that the award cannot be received as evidence of any trans action affecting immovable property or confering power to adopt, unless it is registered.
In that view of the matter, no judgment upon the award could have been pronounced upon the unregistered award.
Mr. Ashri, however, relied on a decision of the learned Single Judge of the Calcutta High Court, in which one of us (Sabyasachi Mukharji, J) had occasion to deal with the question whether an application for determination of the validity of an award could be entertained after the lapse of 30 days time.
It was held that an application challenging an award on the ground of non registration must be by procedure under section 30 of the and the party not apply ing with in the time under section 30 was estopped from agitating the 264 question subsequently.
The relevant case law was discussed and it was held that where an adjudication was necessary as to whether registration was required or not and it was emphasised that in the instant case also an adjudication was necessary because the High Court had held that registration was not necessary, while the appellant is contending and as we are inclined to agree that registration was necessary, in such a case, it must be done by means of an application within 30 days.
It is true that where an application is made for determining the validity and effect of an award in such a case, as was the case in the application made to the Calcutta High Court for determination and admissibility of the award and for a declaration that the award was void, it is necessary that the application should be made within 30 days.
But that problem does not arise here because here under section 14 of the , a judgment is sought in favour of the award.
In order to pronounce that judgment, the award has to be looked into.
The court cannot do it when the award affects the immovable property or purports to affect the immovable property of the value of more than Rs. 100 and it is not registered and as such it cannot be looked into.
In that view of the matter, we are of the opinion that the High Court was in error in the order under appeal.
It may be appropriate in this connection to refer to the observations of Justice Vivian Bose, in the Gangaprashad vs Mt. Banaspati, AIR 1933 Nagpur 132.
In that decision Justice Bose speaking for the Nagpur High Court observed at page 134 of the report, that it was argued before him that even though it was not possible for the plaintiff to challenge the fact that there was a reference to arbitration, and an award, and that there was no misconduct, etc., he could still question its validity on the ground that it had not been registered.
But this question was barred by the rule of constructive res judicata.
He referred to Mulla that if an application was made to the court to file an unregistered award which requires registration, then the court must reject it.
It followed that this was one of the grounds which could be urged against the filing of an award.
If it was not urged, and the award was filed, then that question was as much barred in a subsequent suit as the others.
In this case, however, this point that the award is not registered and as such it could not be filed, though not taken subsequently in argument before the trial Judge, it was urged before the First Appellate Court and it was held in favour of the present respondent.
This is an appeal by special leave in subsequent decision from that decision where the filing of the award is being challenged on the ground that it 265 is unregistered.
Therefore, in our opinion, though it may not be possible to take the point that the award is bad because it is unregistered as such it could not be taken into consideration in a proceeding under section 30 or 33 of the , but can be taken in the proceedings under section 14 of the when the award is sought to be filed in the court and the court is called upon to pass a decree in accordance with the award.
As the court, as mentioned hereinbefore, could not look into the award, there is no question of the court passing a decree in accordance with the award and that point can also be taken when the award is sought to be enforced as the rule of the court.
Mr. Ashri, however, contended that the award had been subsequently registered and unless the registration was set aside the award did not suffer from any defect.
We have, however, to examine whether the High Court was fight in accepting the award and in pronouncing the judgment in terms of the award.
At the relevant time, the award was not regis tered.
If that is the position, then the subsequent regis tration of the award whether in confirmity with sections 23 and 25 of the Act or whether in breach or in violation of the same is not relevant.
It is not necessary in the view that we have taken to go into the question whether the appellant was right in getting this document registered in the manner it has been done by making certain representation, which was not correct, to the Sub Registrar.
Learned Counsel for the respondent drew our attention to certain observations of this court in Raj Kumar Dey and Others vs Tarapada Dey and Others, ; where registration was permitted by the Court after the lapse of four months as enjoined by section 23 of the Act.
But the facts and the circumstances and the grounds upon which registra tion was permitted, were entirely different from the present case.
In the premises, the observations made in the said decision are not relevant or germane for the present contro versy.
In the aforesaid view of the matter, the decision of the High Court cannot be sustained.
The appeal is, therefore, allowed.
The judgment and/or order of the High Court are set aside.
But in the facts and circumstances of the case, the parties will pay and bear their own costs.
R.P.D. Appeal allowed.
[/INST]Orissa Estates Abolition Act, 1951 was enacted to abolish all the rights in the land of intermediaries between the raiyats and the State of Orissa by whatever name known and for vesting the same in the State.
Section 3 authorises the State Government to declare by a notification any estate specified therein to have passed to and become vested in the same State, i.e., the intermediary concerned is divested of the notified interests and becomes entitled to compensation.
By an amendment section 3 A was included in the Act permitting the State Government to issue a single notification in respect of a class or classes of intermediaries in the whole or a part of the State.
By a further amendment in 1963 Chapter Il A was inserted in the Act making special provisions for public trusts.
Clause (e) of s.13 A described "trust estate".
provisions were made in Chapter II A for entertaining claims and determining the nature of the estates claimed to be trust estates and announcing the decision by notification.
The effect of such a determination was.
as mentioned in section 13 , to save the estate from vesting under a notification issued under section 3 or 3 A. A notification under section 3 of the Act was issued in respect of the estate of Lord Jagannath on 27 4 1963, and on the same date another notification under section 13 C., Chapter lI A followed declaring the estate as "trust estate".
The consequence was the diety was not divested of the estate.
In 1970 Chapter Il A was repealed.
By insertion of clause (oo) in section 2 in 1974 the said estate continued to be "trust estate." On 18.3.1974 a notification under section 3 A was issued declaring the estate of the diety to have vested in the State.
A writ petition was filed in the High Court challenging the validity of the said notification, which was dismissed.
PG NO 732 PG NO 733 In the appeal to this Court, on behalf of the appellant it was contended that as a result of the decision under chapter Il A declaring Lord Jagannath 's estate a "trust estate" the same must be deemed to have been excluded from the scope of the Act and this decision became final and continued to remain effective even after the repeal ot ' Chapter II A.
The right which was acquired under section 13 I cannot disappear on the repeal of Chapter Il A as the estate in question went completely out of the ambit of the Act.
The intention of the Legislature to include Lord Jagannath 's estate within the expression "trust estate" in cl.
(oo) in section 2 by the Amending Act 1974 was clearly to spare the said estate permanently from the mischief of the Act.
Dismissing the appeal, this Court, HELD: l.
There is no infirmity in the notification dated 18.3.1974 issue under.
3 A of the Act.[737El 2.
It is manifest from the language of section 13 l that it saves a "trust estate" so declared under section 13 G from the operation of a notification issued under section 3 or 3 A, but does not extend the benefit any further.
The provisions do not confer protection from the Act itself and cannot be interpreted to clothe it with a permanent immunity from being vested by a later notification issued under the Act.
[737A BI 3.
Sections 7 A, X A, 8 D and 8 E of the Act include special provisions for a trust estate and unmistakably indicate that "trust estates" are within the purview of the Act.
The benefit they receive from a declaration under section 13 (. is limited and referable only to a vesting notification issued earlier.
[737Dl
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<s>[INST] Summarize the judgementAppeal No. 258 of 1967.
Appeal front the judgment and order dated October 3, 1966 of the Madras High Court in Writ Petition No. 1159 of 1966.
G. Ramaswamy, R. Gopalakrishnan and K. K. Venugopal, for the appellant.
M.N. Ranghachari, M.K. Ramamurthy, Shyamala Pappu and Vineet Kumar, for respondent No.1 The Judgment of the Court was delivered by Sikri, J.
This appeal by certificate granted by the High Court of Madras is directed against its order dated October 3, 1966, 15 allowing the writ petition filed under article 226 of the Constitution by M/s Raman & Raman (P) Ltd., Kumbakonam, and quashing the order of the Regional Transport Authority, Thanjavur, dated March 28, 1966, whereby the Regional Transport Authority had granted the application for variation of the route Sirkali to, Kumbakonam of M/s Sri Ram Vilas Service Ltd. Kumbakonam, in respect of two stage carriages.
On December 9, 1965, the application of M/s Sri Ram Vilas Service Ltd., Kumbakonam for variation of the route Sirkali to, Kumbakonam was notified under section 57(3) of the .
M/s Raman & Raman (P) Ltd., among others, filed objections and after hearing the objections, by order dated March 28, 1966, the Regional Transport Authority, Thanjavur, granted the application as, according to it, the variation applied for was in the interest of the travelling public.
The distance covered by the variation extended beyond 24 kilometers.
M/s Raman & Raman (P) Ltd. filed the petition under Art 226 of the Constitution to quash the order of the Regional Transport Authority.
The question which arises in this appeal is whether the Regional Transport Authority had jurisdiction to vary the route by extending it beyond 24 kms.
The High Court, following its earlier decision in M/s Swami Motor Transport (P) Ltd. vs M/s Murugan Transports, Tiruchirapalli and Others(1) held that "any variation in excess of 24 kilometers would be ex facie illegal and violation of the intendment of the legislature enacting Act 3 of 1964.
" The answer to the question posed above depends upon the true construction of some sections of the .
as amended by the Madras Act III of 1964.
The relevant statutory provisions are as follows : "48(1).
Subject to the provisions of section 47, a Regional Transport Authority may on an application made to it under section 46, grant a stage carriage pen nit in accordance with the application or with such modification as it deems fit or refuse to grant such a permit; Provided that no such permit shall be granted in respect of any route or area not specified in the, application.
(3)The Regional Transport Authority, if it decides to grant a stage carriage permit, may grant the permit for service of stage carriages of a specified description or for one or more particular stage carriages, and may, subject to any rules that may be made under this Act, (1) Writ Petition No. 3744 of 1965, judgement dated September 7, 1966.
16 attach to the permit any one or more of the, following conditions, namely : (i)that the stage carriage or stage carriages shall be used only on a specified route or routes or in a specified area. . .
(xxi)that the Regional Transport Authority, may after giving notice of not less than one month : (a)vary, extend or curtail the route or routes or the area specified in the permit.
Provided that in the case of (i)variation, the termini shall not be altered and the distance covered by variation shall not exceed 24 kms.
(ii)extension of the distance covered by the extension shall not exceed 24 kms.
from the termini (aa) vary any other condition of the permit." "section 57(8).
An application to vary the conditions of any permit other than a temporary permit by the inclusion of a new route or routes or a new area or by the variation, extension or curtailment of the route or routes or area specified in the permit or in the case of a stage ,carriage permit, by increasing the number of services above the specified maximum, or in the case of a contract carriage permit by increasing the number of vehicles, covered by the permit shall be treated as an application for the grant of a new permit.
" "Rule 208.
(a) Upon application made in writing by the holder of any permit, the Transport Authority may, at any time, in its discretion, vary the permit or any of the conditions thereof subject to the provisions ,of sub rule (b).
(b)If the application is for the variation of the permit by the inclusion of an additional vehicle or vehicles or if the grant of variation would authorize transport facilities materially different from those authorized by the original permit the Transport Authority shall deal with the application as if it were an application for a permit.
Provided that nothing contained in this rule shall prevent the Transport Authority or its Secretary, if authorized in this behalf, from summarily rejecting an application for the variation of a stage carriage permit 17 so as to provide transport facilities on a road which has been or is certified to be unfit for motor vehicular traffic by an officer not below the rank of Divisional Engineer of the Highways Department.
(c)Every application for variation of conditions of permit under sub section (8) of section 57 of the Act in respect of a transport vehicle shall be.
in form PVA.
(d)The provisions of rules 163(b) shall, mutatis mutandis, apply to application for the variation of a permit or the variation of the counter signature, if any, thereof by the inclusion of an additional vehicle sanctioned subject to the production of the registration certificate of the additional vehicle.
" Section 5 of the Madras Act III of 1964, reads as follows " 5(1).
Notwithstanding anything contained in the principal Act, the route or routes or the area specified in every stage carriage permit granted before the commencement of this Act shall be deemed to be a condition attached to such permit under sub section (3) of section 48 of the principal Act, as if this Act were in force on the date of grant of such permit.
(2)Notwithstanding any judgment or order of any Court, all proceedings taken for the grant of, and all orders passed granting any variation, extension or curtailment of the route or routes or the area specified in a stage carriage permit before the commencement of this Act by the State Transport Authority or by a Regional Transport Authority or by an authority or person to whom the powers and functions of the State Transport Authority or a Regional Transport Authority have been delegated, or by an authority exercising the powers of appeal or revision against the orders of the State Transport Authority or a Regional Transport Authority, shall not be deemed to, be invalid merely by reason of the fact that the State Transport Authority or the Regional Transport Authortiy, as the case may be, had no power to grant such variation, extension or curtailment and all such proceedings taken or orders passed shall be deemed always to have been validly taken or passed in accordance with law notwithstanding the distance covered by the variation or extension exceeded twenty four kilometers." The learned counsel for the respondent contends that section 4 8 3 (xxi), as amended, operates whether a condition to that effect has been put in a permit or not.
But we are unable to read section 48 18 in this sense.
Section 48 (3) clearly enables the Regional Transport Authorityto attach to the permit any or one of the twenty one conditions.
It may in a particular case put one or two or more of the condition,; or it may put all the conditions.
It seems to be common ground that if any of the first twenty conditions in section 48(3) is not attached to a permit it will not have effect.
What makes condition (xxi) different is hard to appreciate.
If condi tion (xxi) as amended is not attached to a permit it is difficult to see how the Regional Transport Authority can derive any power from the existence of section 48 (3) (xxi) in the Act.
Section 5 (1) of Act If of 1964 makes the route or routes or the area specified in every stage carriage permit granted before the commencement of the Amending Act a condition attached to such permit tinder subsection (3) of section 48 of the principal Act; it does not say that section 48(3) (xxi) shall be deemed to be a condition attached to every such permit.
The learned counsel for the respondent says that this was theintention of the amendment, but if this was so, the intention has not been carried out.
It was argued before us that the history of legislation supports the interpretation placed by the High Court but, in our view, the Act as it stands amended by Act III of 1964 is quite clear and it is not necessary to go into the history of the legislation.
It seems to us that the High Court erred in holding that section 48 (3) (xxi) of the Act, as amended, by itself gave power to the Regional Transport Authority to vary the route within certain limits.
This power, in our View, Would be exercisable only if a condition to that effect is put in the permit.
In the case of the appellant we saw the permit and what it contained was a condition similar to the condition mentioned in section 48 (3) (xxi) before its amendment by Act If 1 of 1964.
Therefore, for the purpose of this appeal we must treat section 48 (3) (xxi), as amended, as nonexistent.
If section 48(3)(xxi), as amended, is treated as non existent, then there can be no difficulty in coming to the conclusion that no limitation had been placed on the powers of the Regional Transport Authority in respect of the grant of applications for variation of the route.
The order of the Regional Transport Authority cannot, therefore, be challenged as being beyond its jurisdiction.
Another question that was debated before us was whether r. 208 of the Madras Motor Vehicles Rules, extracted above, confer powers on a Transport Authority to vary permits or whether it is merely a procedural rule.
It seems to us that as the Act stands at present, r. 208 does confer power on a transport authority to vary all kinds of permits or conditions attached therein.
This power is exercised on an application made in writing by the holder of any permit.
19 It follows from the above reasoning that the Regional Trans port Authority had the authority under r. 208 to vary the permit and nothing contained in section 48 (3) (xxi) limited its power in respect of the distance covered by the variation in this, case.
We may mention that it was argued before us that section 57(8) is not merely procedural but also implies a power to receive applications and vary the conditions in a permit.
This may be so, but it is not necessary to decide in this case because in Madras r. 208 clearly confers power on the Transport Authority to vary the conditions of the permit.
In the result the appeal is allowed and the judgment of the High Court set aside.
The appellant will have the costs incurred in.
this Court.
[/INST]The appellant 's application for variation of a route extending beyond 24 kilometers was accepted by the Regional Transport Authority.
The respondent, who had unsuccessfully objected before the Authority filed a writ petition in the High Court to quash the order.
The High Court accepted the writ petition holding that any variation in excess of 24 kilometers was ex facie illegal and violation of the intendment of the legislature enacting Madras Act 3 of 1964.
which amended the Motor Vehicles Act.
In appeals this Court, HELD : The Regional Transport Authority had authority under r. 208 to vary the permit and nothing contained in section 48(3)(xxi) of the Motor Vehicles Act limited its power in respect of the distance covered by the variation in this case.
[19A] Section 5(1) of Madras Act 3 of 1964 made the route or routes or the area specified in every stage carriage permit granted before the commencement of the Amending Act a condition attached to such permit tinder sub section
(3) of section 48 of the Principal Act; it did not that section 48(3)(xxi) shall be deemed to be condition attached to every such permit.
[18c] The High Court erred in holding that section 48(3)(xxi) of the Act, is amended.
by itself gave power to the Regional Transport Authority to vary the route within certain limits.
This power Could be exercised only if a condition to that effect was put in the permit.
In the case of the appellant the permit contained a condition similar to the condition mentioned in section 48 (3) (xxi) before its amendment by Act 3 of f 964.
Therefore, for the purpose of this appeal section 48(3)(xxi).
is amendment has to be treated ,is non existent.
[18E G]
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<s>[INST] Summarize the judgementivil Appeal No. 331 of 1978.
From the Judgment and Order dated 3.9.1976 of the Cal cutta High Court in Appeal from Original decree No. 407 of 1974.
B. Sen, A.K. Verma and section Suikumaran for the Appellants.
Tapash Chandra Ray and H.K. Puri for the Respondents.
The Judgment of the Court was delivered by SHARMA, J.
This appeal by special leave arises out of a suit filed by the appellants for eviction of the respondent tenant (hereinafter referred to as the Corpora tion) from certain premises on Lalbazar Street, Calcutta, on the ground of sub letting.
The City Civil Court, Calcutta, decreed the suit, but on appeal by the tenant Corporation, the Calcutta High Court reversed the judgment and dismissed the suit.
Admittedly the defendant Corporation was inducted as a tenant under a registered deed of lease dated 23.4.1948 for a period of three years from 1.5.1948.
After expiry of the period in 1951, the Corporation continued in possession, and by holding over became a month to month tenant.
The premises consists of a big room, described as room No. 3, along with a small room for the use of a Darwan (porter), staying there as guard.
The big room was, from time to time, leased out by the tenant Corporation in portions to differ ent subtenants and in 1960 the landlord brought a suit, registered as Ejectment Suit No. 978 of 1960, for the evic tion of the Corporation on several grounds including sub letting.
In the meantime West Bengal Premises Tenancy Act, 1956 had been enacted, and the provisions of section 13(1)(a) which are in the following terms, were relied on by the parties: "section 13.
Protection of tenant against evic tion.
(1) Notwithstanding anything to the contrary in any other law, no 635 order or decree for the recovery of possession of any premises shall be made by any Court in favour of the landlord against a tenant except on one or more of the following grounds, namely: (a) where the tenant or any person residing in the premises let to the tenant without the previous consent in writing of the landlord transfers, assigns or sub lets in whole or in part the premises held by him . ; . " 3.
The tenant Corporation contended that it was permit ted to create sub leases under clause 6 of the lease docu ment which is quoted below and it cannot, therefore, be accused of sub letting without the consent of the landlords: "That the lessees shall use the demised prem ises as office in connection with their busi ness and shall be entitled to sublet the portion which may not be used by them.
" It was asserted on behalf of the tenant Corporation that all the subtenants had been inducted in the premises in question in pursuance of the aforesaid permission and before the expiry of the lease period in 1951.
The City Civil Court decided the issue ,n favour of the tenant Corporation on the ground that all the sub tenancies had been created within the period covered by the lease deed and before coming in force of the West Bengal Premises Tenancy Act, 1956.
The suit was held to be not maintainable also on the ground that a legally valid notice terminating the tenancy had not been served on the tenant.
The suit was thus dismissed on 30.8.
1962 by the judgment Ext.
B(2). 4.
The present suit was filed in 1972 alleging that the tenant Corporation has, without the consent of the land lords, created fresh sub tenancies in the premises in favour of other sub tenants after the dismissal of the earlier suit.
The case is that after the original lease exhausted itself by efflux of time, and otherwise also came to an end by the landlords ' notice terminating it, the general permis sion under clause 6 of the lease deed, mentioned above, also disappeared.
Alternatively the appellants have contended that even assuming that the term in clause 6 continues to bind the parties, it does not authorise the respondent Corporation to sub let the entire premises.
The dominant purpose of the lease was actual user by the tenant itself for the purpose of running its office and clause 6 permitted it to sub let 636 only such portion which was left unused as surplus.
The appellants have also alleged default of payment of rent, but the plea has been rejected by the trial court and has not been pressed before us.
The suit was defended by the respondent Corporation contending that as held in the earlier suit the defendant was and is entitled to grant sub tenancies, and the plain tiffs ' case is fit to be dismissed.
Reliance was placed, besides the plea of res judicata, on the language of clause 6 which according to the defendant continues to bind the parties.
The City Civil Court rejected the defendant 's case of res judicata and agreeing with the plaintiffs on the question of sub letting, decreed the suit.
It held that a number of sub tenants who were in possession of the premises at the time of the earlier suit have been substituted later by another set of sub tenants after the coming into force of the Act.
The learned Judge also agreed with the plaintiffs that the entire premises was let out to sub tenants which was not consistent with the terms of the permission as mentioned in clause 6.
The Court, holding that the tenant had violated the provisions of the 1956 Act, passed a decree for eviction in favour of the plaintiffs.
The tenant Corpo ration appealed before the Calcutta High Court.
The High Court disagreed with the City Civil Court on the interpretation of clause 6 of the lease deed, and held that by reason of the judgment in the earlier suit, the present suit was barred by the rule of res judicata.
The appeal was, accordingly, allowed and the suit dismissed.
Mr. B. Sen, the learned counsel appearing in support of the appeal contended that since large portion of the disputed property was sub let to fresh sub tenants after the institution of the earlier suit of 1960, there was no scope for applying the doctrine of res judicata to the present litigation.
He inter alia argued that having regard to the change in the law brought about by the 1956 Act and special ly in view of the provisions of sections 13, 14 and 16, the appellants are entitled to a decree.
The factual position is that there are 16 sub ten ants as mentioned in Annexure B to the plaint who are occu pying the disputed room now.
Out of them 5 had been inducted before the 1960 suit and were parties thereto (as was right ly pointed out by the respondent Corporation in its applica tion dated 17.12.1973 for amendment of the written state ment).
The other 11 sub lessees were let in after the earli er suit, when the 1956 Act was in force.
The question is whether the creation of these sub tenancies violated the provisions of the Act.
637 In the earlier suit all the sub lesses were inducted during the period the lease was operative, i.e., much before the present Act was passed.
The question of violation of the provisions of the present Act, therefore, did not arise there.
It follows that so far this issue is concerned the earlier judgment can not operate by way of res judicata.
The main question which remains to be decided is whether in the circumstances, the plaintiffs ' case, based on alleged violation of the Act can be accepted.
section 14 enjoins that after the commencement of the Act no tenant shall, without the previous consent in writing of the landlord, sub let the whole or any part of the premises held by him as a tenant; or transfer or assign his rights in the tenancy or in any part thereof.
According to Mr. Tapas Ray, the learned counsel of the respondent Corporation, clause 6 of the lease deed, which continued to bind the parties by reason of the Corporation holding over, must be treated to contain the necessary consent of the appellants.
As has been seen earli er, this clause granted a general permission to the tenant to induct a sub tenant.
Can such a provision in general terms satisfy the requirements of the Act? Or, as has been suggested on behalf of the appellant, the consent contem plated by the Act has to be specific in regard to each sub lease? 10.
section 13 protects a tenant from eviction except on the grounds, enumerated therein and one of the grounds in clause (a) of sub section
(1) is in the following terms: "(a) where the tenant or any person residing in the premises let to the tenant without the previous consent in writing of the landlord transfers, assigns or sub lets in whole or in part the premises held by him;" The language of Ss. 13 and 14 by itself does not resolve the issue.
However, the provisions of section 16 which is quoted below clearly indicate that permission to the tenant to sub let in general terms can not be deemed to be consent for the purposes of Ss. 13 and 14: "section 16 Creation and termination of sub tenan cies to be notified (1) Where after the commencement of this Act, any premises are sub let either in whole or in part by the tenant with the previous consent in writing of the landlord, the tenant and every sub tenant to whom the premises are sub let shall give notice to the landlord in the prescribed manner of the creation of the sub tenancy within one 638 month from the date of such sub letting and shall in the prescribed manner notify the termination of such subtenancy within one month of such termination (2) Where before the commencement of this Act, the tenant with or without the consent of the landlord, has sub let any premises either in whole or in part, the tenant and every sub tenant to whom the premises have been sub let shall give notice to the landlord of such sub letting in the prescribed manner (within six months) of the commencement of this Act and shall in the prescribed manner notify the termination of such sub tenancy within one month of such termination (3) Where in any case mentioned in sub section (2) there is no consent in writing of the landlord and the landlord denies that he gave oral consent, the Controller shall, on an application made to him in this behalf either by the landlord or the sub tenant within two months of the date of the receipt of the notice of sub letting by the landlord or the issue of the notice by the sub tenant, as the case may be, by order declare that the ten ant 's interest in so much of the premises as has been sub let shall cease and that the subtenant shall become a tenant directly under the landlord from the date of the order.
The Controller shall also fix the rents payable by the tenant and such sub tenant to the landlord from the date of the order.
Rents so fixed shall be deemed to be fair rent for purposes of this Act.
" It is plain from the above that the Act contemplates that while one sub tenant may be evicted another may continue in the premises as a tenant directly under him, depending on the circumstances.
We are, therefore, of the view that previous consent in writing of the landlord with respect to each sub letting separately is essential and a general authority to the tenant in this regard will not be suffi cient in law.
Our view is supported by the observations in M/s Shalimar Tar Products Ltd. vs H.C. Sharma and Others, ; ; a case arising under the Delhi Rent Control Act.
An examination of Ss. 14(1)(b), 16, 17 and 18 of the Delhi Rent Control Act would show that the two Acts (West Bengal Act and the Delhi Act) are similar so far the present question is concerned.
In the present case, since it is not suggested on behalf of the respondent that consent of the appellants was obtained specifically for each of the sub tenancies, the respondent Corporation 639 must be held to have violated section 14.
The appellants have thus, established the ground mentioned in section 13(1)(a) and are entitled to succeed.
None of the sub tenants has been impleaded in the present suit, but as it is not the case of the tenant Corpo ration that any of them had sent any notice to the plain tiffs, the suit, so far the present respondent is concerned, can not fail on the ground of their non impleading.
However, the sub tenants can not be bound by the finding in this suit that they have failed to serve a notice as prescribed by the Act on the plaintiffs and will be entitled to be heard if and when the plaintiffs seek their eviction.
So far the sub tenants who had been inducted in the premises earlier and were parties to the 1960 suit may have still a better claim on the strength of the decree in their favour and may insist that they would be entitled to continue in possession as tenants directly under the plaintiffs.
For the reasons mentioned above, the decision of the High Court is set aside and the decree of eviction passed by the City Civil Court against the respondent Corporation is restored.
The appeal is accordingly allowed with costs throughout.
P.S.S. Appeal allowed.
[/INST]Section 13(1)(a) of the West Bengal Premises Tenancy Act, 1956 provides for recovery of possession where the tenant or any person residing in the premises let to the tenant without the previous consent in writing of the land lord transfers, assigns or subsets in whole or in part the premises held by him.
Section 14 forbids the tenant from sub letting the premises without the previous consent in writing of the landlord.
Sub section (1) of section 16 requires the tenant and every sub tenant to whom the premises are sub.let to give notice to the landlord of the creation of the sub tenancy within one month from the date of such sub letting and also to notify the termination of such sub tenancy within one month of such termination.
Sub section (2) prescribes such a notice in respect of sub tenancies created with or without the consent of the landlord before the commencement of the Act, within the time specified therein.
Where there is no such consent in writing from the landlord, sub section (3) provides for cessation of tenant 's interest in the portion sub let and the sub tenant becoming a tenant directly under the landlord in certain circum stances.
Clause 6 of the lease deed creating tenancy for a period of 'three years from 1st May 1948 permitted the respondent tenant to sub.let any portion of the demised premises which was left unused or surplus.
After expiry of the lease period in 1951, the said tenant continued in possession, and by holding over became a month to month tenant.
It had, howev er, created certain sub tenancies within the period covered by the lease and before the Act came into force.
A suit for its eviction brought by the landlord in 1960 was dismissed by the trial court.
The landlord filed a fresh suit in 1972 on the Found that the tenant had created sub.tenancies in the premises after the dismissal of the earlier suit.
The tenant advanced the plea of res judicata and con 632 633 tended that it was and is entitled to grant sub tenancies under cl. 6 of the lease deed which continues to bind the parties.
Rejecting the case of res judicata, the trial court held that a number of sub tenants who were in possession of the premises at the time of the earlier suit had been sub stituted later by another set of sub tenants after the coming into force of the Act, and that the entire premises was let out to sub tenants which was not consistent with the terms of the permission as mentioned in cl. 6.
Allowing the appeal, the High Court, however, held that the suit was barred by the rule of res judicata.
In this appeal by special leave, it was contended for the appellants that since a large portion of the disputed property was sublet to fresh sub tenants after the institu tion of the earlier suit of 1960 there was no scope for applying the doctrine of res judicata, and that the consent contemplated by the 1956 Act has to be specific in regard to each sublease, which requirement was not satisfied by the general permission granted by cl. 6 of the lease deed.
Allowing the appeal, HELD: 1.
In the earlier suit all the sub lessees were inducted during the period the lease was operative, i.e., much before the Tenancy Act was passed.
The question of violation of the provisions of the said Act, therefore, did not arise there.
The earlier judgment cannot thus operate by way of res judicata.
[637A] 2.1 The provisions of section 16 of the Act clearly indicate that permission to the tenant to sub let in general terms cannot be deemed to be consent for the purposes of sections 13 and 14.
[637F] 2.2.
The Act contemplates that while one sub tenant may be evicted another may continue in the premises as a tenant directly under the landlord, depending on the circumstances.
Therefore, previous consent in writing of the landlord with respect to each sub letting separately is essential.
Since in the instant case consent of the appellant landlord was not obtained specifically for each of the sub tenancies, the respondent tenant must be held to have violated section 14.
The appellants are thus entitled to succeed under section 13(1)(a).
[638F, H] M/s Shalimar Tar Products Ltd. vs H.C. Sharma & Ors., ; , referred to.
It was not the case of the respondent that any of the sub 634 tenants had sent any notice to the landlord as prescribed by the Act.
Therefore, the eviction suit cannot fail on the ground of non impleading of the sub tenants.
However, the sub tenants cannot be bound by that finding in the suit.
They will be entitled to be heard if and when the landlord seeks their eviction.
[639B]
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<s>[INST] Summarize the judgementCivil Appeal No. 2040 of 1974.
Appeal by special leave from the Judgment and order dated the 13th June, 1974 of the Andhra Pradesh High Court in W.P. No. 2145 of 1972.
Niren De, Attorney General of India and P. P. Rao, for the appellant.
r A. Subba Rao for the respondent.
The Judgment of the Court was delivered by RAY, C.J.
This appeal is by special leave from the judgment dated 13 June, 19?4 of the Andhra Pradesh High Court quashing an order of dismissal.
The principal question canvassed by the Attorney General is that the High Court should not have interfered with the findings of the Tribunal.
The State Government in the year 1964 received certain complaints alleging misconduct against the respondent.
The Director of Anti Corruption Bureau was asked to inquire and make a report.
The Government in the light of advice tendered by the Vigilance Commission referred the matter to the Tribunal constituted under Andhra Pradesh Civil Services (Disciplinary Proceedings Tribunal) Act, 1960.
Three charges were framed against the respondent.
Broadly stated the charges were that the respondent claimed false travelling allowance on certain days in the months of January, April and September, 1964.
The respondent denied the charges and submitted a written statement on 4 November, 1968.
The Tribunal made inquiries and on 9 December, 1968 recommended dismissal of the respondent from the service.
The Government thereafter gave a notice to the respondent on 22 February, 1969 to show cause why the penalty of dismissal from service should not be imposed on him.
On 20 March, 1969 the respondent submitted his written explanation.
The Government after considering the explanation of the respondent, by an order dated 24 May, 1969 dismissed the respondent from service.
523 The respondent challenged the order of dismissal in the Andhra Pradesh High Court.
The High Court by judgment dated 27 July, 1970 set aside the order of dismissal on the ground that the recommendations of the tribunal were not communicated to the respondent alongwith the notice regarding the proposed punishment of dismissal.
The High Court observed that it was open to the punishing authority to issue a fresh show cause notice regarding the proposed punishment after communicating the enquiry report and the recommendations of the Tribunal The Government thereafter complied with the directions of the High Court.
The Government cancelled the order of dismissal dated 24 May, 1969.
The Government, however, ordered that the respondent shall be deemed to have been under suspension from service from 21 May, 1969 until further orders.
The order of suspension was challenged by the respondent and set aside by the Andhra Pradesh High Court on 22 March, 1970.
The Government then issued fresh notices dated 16 September, 1970 and 25 September, 1970 to the resplendent and communicated the report of the Tribunal and the recommendations of the Tribunal and the Vigilance Commission regarding the proposed penalty.
The respondent submitted his explanation on 6 and 23 October, 1970.
The Government considered the same.
The Commerce Department thereafter by an order dated S May, 1972 dismissed the respondent from service.
The charges against the respondent were that he made three false claims for travelling allowance for three journeys.
The first journey was on 3 January, 1969 from Rajahmundry to Hyderabad The second journey was on 19 April, 1964 from Rajamundry to Hyderabad and Hyderabad to Rajahmundry on 24 April, 1964.
The third journey was from Rajahmundry to Guntur on 13 September, 1964 and Guntur to Rajahmundry on 16 September, ]964.
The respondent in his written statement filed before the Tribunal denied the charges and maintained that he travelled by first class on the days mentioned in the claim for travelling allowance.
He stated that he travelled by first class from Rajahmundry to Hyderabad on 3 January, 1964 in accordance with his tour programme and claimed the travelling allowance.
He also said that he travelled by first class from Rajahmundry to Hyderabad on 19 April, 1964 and from Hyderabad to Rajahmundry on 24 April, 1964 and claimed travelling allowance.
In Exhibit P 45 which was his signed statement dated 8 January, 1967, he stated that on 3 January, 1964 he went with his Joint Director from Vijayorgram from Rajahmundry in a car.
In that statement he said that he went from Hyderabad to Waltair on 7 January, 1964 and he claimed travelling allowance from Vijayawada to Hyderabad.
In Exhibit P 45 he said that on 19 April, 1964 he travelled from Rajahmundry to Vijayawada by first class and he went to Hyderabad by first class on 19 April, 1964.
In Exhibit P 45 he said that he did not 524 travel on 24 April, 1964 from Hyderabad to Rajahmundry because.
A there was no accommodation.
He waited at Hyderabad.
On 28 April, 1964 he got reservation and travelled to Rajahmundry.
The Tribunal on enquiry found the respondent guilty of charges 1 and 2.
In the Enquiry Report dated 9 December, 1968, the Tribunal recommended dismissal of the respondent.
The respondent in the High Court challenged the order of dismissal.
The High Court set aside the order of dismissal on the grounds that the prosecution did not adduce every material and essential evidence to make out the charges and that the conclusion reached by the Tribunal was not based on evidence.
The High Court held that Exhibit P 45 was not admissible in evidence according to the Evidence Act and it was not safe to rely on such a statement as a matter of prudence.
The High Court said that corruption or misconduct under rule 2(b) of the Andhra Pradesh Civil Service (Disciplinary Proceedings Tribunal) Rules, has the same meaning as criminal misconduct in the discharge of official duties in section 5(1) of the Prevention of Corruption Act, 1947.
The High Court in that background discussed the evidence and findings of the Tribunal as to whether the prosecution placed evidence in respect of the ingredients of the charge under section 5(1)(d) of the Prevention of Corruption Act, 1947 The High Court referred to these features in regard to the finding of the Tribunal.
Four years elapsed between the journeys forming subject matter of the charge and the framing of the charge.
The respondent in his evidence said that he secured accommodation through the Conductor incharge of the first class compartment after the arrival of the train.
It was possible that the respondent might have converted his ticket to first class one once he found that first class accommodation was available on the train even though he had purchased a ticket of lower denomination.
The conductor 's chart is the only basis for showing whether a particular person travelled by first class by a particular train and not by a copy of the reservation chart kept at the starting station.
Though the prosecution produced evidence to show that the respondent did not purchase or reserve first class accommodation in advance, the prosecution failed to produce the Conductor 's charts relating to the trains in question.
According to the High Court "The prosecution utterly failed to adduce any evidence to exclude these possibilities".
The High Court said that it was doubtful whether Exhibit P 45 was admissible in evidence.
It was said to be taken during the course of investigation.
The High Court said that even if the statement is accepted, it only shows that the respondent did not actually travel on the days mentioned in the tour programme according to which travelling allowance was paid.
The respondent made the statement marked Exhibit P 45 on 8 January, 1967.
The charge sheet was framed on 17 November, 525 1967.
The respondent filed the written statement on 2 August, 1968.
He filed an additional written statement on 4 November, 1968.
It is apparent that the charge sheets were framed after investigation.
It transpired on evidence before the Tribunal that one first class ticket bearing No.03834 was collected at Hyderabad on 4 January" 1964.
The further evidence about ticket No. 03834 was that it was issued to one P. Ramachandra Raju who travelled from Rajahmundry to Hyderabad on the night of 3 January, 1964.
The further evidence before the Tribunal was that one first class ticket bearing No. 04049 for the journey from Rajahmundry to Hyderabad was sold to one A. section Murty for the journey an 19 April, 1964.
The Tribunal examined the respondent.
The respondent was given full opportunity to deal with Exhibit P 45.
The High Court was not correct in holding that the domestic enquiry before the Tribunal was the same as prosecution in a criminal case.
The High Court was also in error in holding that Conductor 's chart would show whether the respondent travelled or not.
The High Court accepted the explanation that Conductor 's charts were burnt and, therefore, they could not be produced.
Further, Conductor 'section chart could not show the name of the persons paying the money.
There was positive evidence before the Tribunal of tickets being purchased by persons other than respondent on 3 January, 1964 and 19 April, 1964.
These features figured prominently before the Tribunal.
The High Court all throughout treated the enquiry before the Tribunal as a criminal prosecution.
The scope of Article 226 in dealing with departmental inquiries has come up before this Court.
Two propositions were laid down by this Court in State of Andhra Pradesh vs section Sree Rama Rao(1).
First, there is no warrant for the view that in considering whether a public officer is guilty of misconduct charged against him,.
the rule followed in criminal trials that an offence is not established unless proved by evidence beyond reasonable doubt to the satisfaction of the Court must be applied.
If that rule be not applied by a domestic Tribunal o Inquiry the High Court in a petition under Article 226 of the Constitution is not competent to declare the order of the authorities holding a departmental inquiry invalid.
The High Court is not a Court of Appeal under Article 226 over the decision of the authorities holding a departmental enquiry against a public servant.
The Court is concern ed to determine whether the enquiry is held by an authority competent in that behalf and according to the procedure prescribed in that behalf, and whether the rules of natural justice are not violated.
Second, where there is some evidence which the authorities entrusted with the duty to hold the enquiry has accepted and which evidence may reason ably support the conclusion that the delinquent officer is guilty of the charge, it is not the function of the High Court to review the evidence (1) 526 and to arrive at an independent finding on the evidence.
The High A Court may interfere where the departmental authorities have held the proceedings against the delinquent in a manner inconsistent with the rules of natural justice or in violation of the statutory rules prescribing the mode of enquiry or where the authorities have disabled themselves from reaching a fair decision by some considerations extraneous to the evidence and the merits of the case or by allowing themselves to be influenced by irrelevant considerations or where the conclusion on the very face of it is so wholly arbitrary and capricious that no reasonable person could ever have arrived at that conclusion.
The departmental authorities are, if the enquiry is otherwise properly held, the sole judges of facts and if there is some legal evidence on which their findings can be based, the adequacy or reliability of that evidence is not a matter which can be permitted to be canvassed before the High Court in a proceeding for a writ under Article 226.
Again, this Court in Railway Board, representing the Union of India, New Delhi & Anr vs Niranjan Singh(1) said that the High Court does not interfere with the conclusion of the disciplinary authority unless the finding is not supported by any evidence or it can be said that no reasonable person could have reached such a finding.
In Niranjan Singh 's case (supra) this Court held that the High Court exceeded its powers in interfering with the findings of the disciplinary authority on the charge that the respondent was instrumental in compelling the shut down of an air compressor at about 8.15 a.m.
On 31 May, 1956.
This Court said that the Enquiry Committee felt that the evidence of two persons that the respondent led a group of strikers and compelled them to close down their compressor could not be accepted at its face value.
The General Manager did not agree with the Enquiry Committee on that point.
The General Manager accepted the evidence.
This Court said that it was open to the General Manager to do so and he was not bound by the conclusion reached by the Committee.
This Court held that the conclusion reached by the disciplinary authority should prevail and the High Court should not have interfered with the conclusion.
The jurisdiction to issue a writ of certiorari under Article 226 is a supervisory jurisdiction.
The Court exercises it not as an Appellate Court.
The findings of fact reached by an inferior court or Tribunal as a result of the.
appreciation of evidence are not reopened or questioned in writ proceedings.
An error of law which is apparent on the face of the record can be corrected by a writ, but not an error of facts however grave it may appear to be.
In regard to a finding of fact recorded by a Tribunal, a writ can be issued if it is shown that in recording the said finding, the Tribunal had erroneously refused to admit admissible and material evidence, or had erroneously admitted inadmissible evidence which has influenced the impugned finding.
Again if a finding of fact is based on no evidence, that would be regarded as an error of law which can be corrected by a writ of certiorary.
A finding of fact recorded by the Tribunal cannot be chal (1) ; 527 lenged on the ground that the relevant and material evidence adduced before the Tribunal is insufficient or inadequate to sustain a finding.
The adequacy or sufficiency of evidence led on a point and the inference of fact to be drawn from the said finding are within the exclusive jurisdiction of the Tribunal.
See Syed Yakoob vs K. section Radhakrishnan & ors(1).
The High Court in the present case assessed the entire evidence and came to its own conclusion.
The High Court was not justified to do so.
Apart from the aspect that the High Court does not correct a finding of fact on the ground that the evidence is not sufficient or adequate, the evidence in the present case which was considered by the Tribunal cannot be scanned by the High Court to justify the conclusion that there is no evidence which would justify the finding of the Tribunal that the respondent did not make the journey.
The Tribunal gave reasons for its conclusions.
It is not possible for the High Court to say that no reasonable person could have arrived at these conclusions.
The High Court reviewed the evidence, re assessed the evidence and then rejected the evidence as no evidence.
That is precisely what the High Court in exercising jurisdiction to issue a writ of certiorari should not do.
The respondent raised another contention that the State did not give the respondent a document described as 'B ' Report and Investigation Report of the Anti Corruption Bureau.
The ground advanced by the respondent in the petition before the High Court was that 'B ' Report and Investigation Report to which the reference is made by the Tribunal in its report and which are relied on to support the charges, were not made available to the respondent.
The High Court did not express any opinion on this question because the High Court set aside the dismissal in the ground that there was no evidence for the Tribunal to come to that conclusion.
The State in the affidavit filed in the High Court in answer to the respondent 's petition said that 'B ' Report and Investigation Report are secret reports which are intended for the reference of the Tribunal of Disciplinary Proceedings and the Government and, therefore, these reports are not supplied, to the officers.
We need not express any opinion on that answer of the State in the affidavit.
The respondent in answer to the affidavit of the State said that the Tribunal used the 'B ' Report and the Investigation Report against the respondent and did not supply copies.
It is because the respondent alleged in the writ petition that the Tribunal relied on 'B ' Report and Investigation Report, we looked into the Inquiry Report of the Tribunal to find out whether that was a correct statement.
We find that there is a reference to 'B ' Report by the Tribunal only because the respondent challenged the genuineness and authenticity of Exhibit P 45.
The respondent 's case was that if he made a statement like Exhibit P 45, the Investigating Officer would have sent it along with his report.
The Inquiry Officer says that the Investigating officer recorded the statement of the respondent.
The Tribunal has not relied on 'B ' Report or Investigation Report.
The (1) ; 528 respondent never demanded 'B ' Report and Investigation Report.
The A respondent was interested before the Tribunal to displace Exhibit P 45 by doubting its genuineness.
The Tribunal found that Exhibit P 45 was genuine and was a statement made and signed by the respondent in the presence of the Investigating Officer.
It does not appear that the Tribunal based its finding only on Exhibit P 45.
For these reasons we are of opinion that the High Court was wrong in setting aside the dismissal order by reviewing and re assessing the evidence.
The appeal is accepted.
The judgment of the High Court is set aside.
Parties will pay and bear their own costs.
V.P.S Appeal allowed.
[/INST](1) The jurisdiction of the High Court to issue a writ of certiorari under article 226 is a supervisory jurisdiction, and not as an appellate court.
The findings of fact reached by an inferior court or tribunal as result of the appreciation of evidence are not reopened or questioned in these proceedings.
An error of law which is apparent on the face of record can be corrected but not an error of fact, however grave it may be.
In regard to a finding of fact recorded by a tribunal a writ can be issued if it is shown that the tribunal had erroneously refuged to admit admissible and material evidence or had erroneously admitted inadmissible evidence which has influenced the impugned finding.
Again, if a finding of fact is based on the evidence, that would be regarded as an error of law which can be corrected be a writ of ' certiorari, but if there is some evidence which may reasonably support the conclusion, its adequacy or sufficiency and the inference of ' fact drawn, are within the exclusive jurisdiction of the tribunal.
The Court is concerned to determine whether the inquiry is held by an authority competent in that behalf, and according to the procedure prescribed in that behalf, and whether the rules of natural justice are not violated.
Therefore, in departmental enquires relating to the guilt of delinquent officers, the High Court may interfere only where the departmental authorities have held tax proceedings against the delinquent officer in a manner inconsistent with the rules of natural justice or in violation of the statutory rules prescribing the mode of inquiry or where the authorities have disabled themselves from reaching a fair decision by some considerations extraneous to the evidence and the merits of the case, or by allowing themselves to be influenced by irrelevant considerations or where the conclusion, on the very face of it, is so wholly arbitrary and capricious that no reasonable person could ever have arrived at that conclusion.
[525 E 527B] State of Andhra Pradesh vs section Sree Rama Rao ; Railway Board, representing the Union of India New Delhi & Anr.
vs Niranjan Singh ; and Syed Yakoob vs K. section Radhakrishnan & Ors.
[1964] 5 S.C.R. 64, referred to.
(2) There is no warrant for the view that in considering whether a public officer is guilty of misconduct charged against him the rule followed in criminal trials, namely, that an offence is not established unless proved beyond reason able doubt, must be applied.
[525F G] In the present case, charges that the respondent fraudulently claimed travelling allowance were inquired into by the Disciplinary Proceedings Tribunal.
The Tribunal found him guilty and recommended dismissal.
The Government accept ed the recommendation and dismissed the respondent.
In a writ petition challenging the order of dismissal, the High Court equated the charge of mis conduct to a charge under s.5(1)(d) of the Prevention of Corruption Act, 1947 discussed the evidence and findings of the Tribunal on that basis and held that the prosecution did not adduce material and essential evidence namely; the conductor 's chart which would show whether the respondent travelled on a particular day, that a statement made by the respondent during investigation was not admissible in evidence, that it was not safe to rely on it and set aside the order of dismissal.
Allowing the appeal to this Court.
^ HELD .
(a) The High Court was not correct in holding that the domestic inquiry before the Tribunal was the same as prosecution is a criminal case.
[525C D] 3 L925SupCI/75 522 (b) The respondent was given full opportunity to explain the statement A made by him during investigation.
Further, the Tribunal did not base its findings only on that statement.
It had given its reasons for its conclusion and it is not possible for the High Court to say that no reasonable person could have arrived at that conclusion.
The High Court had accepted the explanation that the conductors ' charts were destroyed and therefore could not be Produced.
Moreover, the conductor 's chart would not show the names of the persons paying the money.
The High Court reviewed and re assessed the evidence and then rejected evidence as no evidence, and this is precisely what the High Court, in exercising jurisdiction under Art 226, should not do.
[525SC; 527B D] (c) The respondent 's contention that the Tribunal relied upon certain reports which were not available to the respondent is not correct.
A reference to the inquiry report of the Tribunal shows that the Tribunal had not relied upon those documents for finding the respondent guilty.
[527G 528B]
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<s>[INST] Summarize the judgementiminal Appeal No. 5 of 1963.
Appeal by special leave from the judgment and order dated June 21, 1962 of the Gujarat High Court in Criminal Appeal No. 383 of 1961.
D. R. Prem and B. R. G. K. Achar, for the appellant.
M. V. Goswami, for the respondent.
April 7, 1962.
The Judgment of the Court was delivered by HIDAYATULLAH, J.
On June 21, 1960 at 5 50 A.M. the Hi Inspector of Factories, Bhavnagar, visited Saurashtra Metal and Mechanical Works, Wadhwan City, which is a factory within the meaning of section 2(m)(1) of the .
He found even workmen working on a machine and on examining the notice of period of work for adult workers and the register of workers he found that three of the workmen belonged to a group which was expected to begin work from 7 A.M. He commenced proceedings under section 63 of the against the respondent Mr. Kansara Manilal Bhikhalal as the occupier/manager of the factory, after issuing notice to him to show cause.
He asked for enhanced penalty under section 94 of the because the said Mr. Manilal Bhikhalal was convicted on a previous occasion in three cases.
As three workmen were concerned three separate complaints were filed in the Court of the Judicial Magistrate, First Class, Wadhwan City.
The defence of the respondent was that he was not the occupier and manager of the factory.
It may be pointed out that one Mr. Dangi and the respondent are partners.
They have another factory at Dharangadhra and the defence was that Mr. Bhikhalal was manager at the Dharangadhra factory 658 and Mr. Dangi was manager at Wadhwan.
Another defence.
was that a machine had gone out of order the previous day and after it was repaired work was started a little earlier the: next day, because production had suffered and goods were required.
The Inspector, it was stated, was informed by a letter (Ext.11) written on the 20th about the change of timing though the letter, unfortunately, did not reach the Inspector till the 22nd.
It was admitted that this change in the hours of work was not notified and displayed as required by section 61(1).
It was urged that section 61(10) permitted a change to be made in the system of work in a factory and as this provision was fully complied with, there was no offence.
The Judicial Magistrate did not accept these defences.
According to him, Mr. Dangi 's letter (Ext. 15) showed that the respondent was the occupier and the manager of the factory at Wadhwan.
On the second defence the Magistrate was of the opinion that the hours of work could not be changed without the permission of the Inspector of Factories under sub section
(10) of section 61.
The contention on behalf of the respondent that this being the first change it was not necessary to wait for one week before making another change, was not accepted because it was held that the factory manager must always wait for one week before introducing a change.
The respondent was, therefore, convicted under section 63 of the in respect of three offences and under section 94, enhanced punishment was imposed upon him by ordering him to pay a fine of Rs. 100 in respect of each offence.
On appeal the Sessions Judge of Surendranagar ordered the acquittal of the respondent.
The learned Sessions Judge held that the second part of section 61(10) applied to a case of second or subsequent change and this being the first change it did not fall within the second part.
According to the Sessions Judge, it fell in the first part of the sub section and the change could not be said to have been effected in breach of that part since the Inspector of Factories was informed about the change.
The learned Sessions Judge was also of the opinion that section 117 of the protected the action because it was bonafide.
The conviction and sentence were accordingly set aside.
The State of Gujarat appealed against the acquittal but was unsuccessful.
A Division Bench of the High Court which heard the appeal agreed with the Sessions Judge in his interpretation of section 61 (10) and did not express any opinion on section 117 of the Act.
In this appeal filed by special leave of this Court these two points have again arisen for our consideration.
The scheme of the bearing upon the present matter may now be examined.
It is convenient to do so 659 in the reverse order.
Section 92 is a section providing generally for penalties and section 94 provides for enhanced penalty after previous conviction.
These sections prescribe penalties for contravention of any of the provisions of the Act or of any rule made or of any order in writing given thereunder.
The breach here is stated to be of section 63 of the Act which lays down that the hours of work must correspond with notice required to be displayed under section 61 and the register directed to be maintained under section 62.
It provides: "section 63.
Hours of work to correspond with notice under section 61 and register under section 62 No adult worker shall be required or allowed to work in any factory otherwise than in accordance with the notice of periods of work for adults displayed in the factory and the entries made beforehand against his name in the register of adult workers of the factory.
" Section 61 deals with the notice of periods of work for adults.
It is divided into 10 sub sections of which sub sections
(1), (2) and (10) alone are relevant here.
They are as fol lows: "61.
Notice of periods of work for adults. (1) There shall be displayed and correctly maintained in every factory in accordance with the provisions of sub section (2) of section 108, a notice of periods of work for adults showing clearly for every day the periods during which adult workers may be required to work.
(2) The periods shown in the notice required by subsection (1) shall be fixed beforehand in accordance with the following provisions of this section, and shall be such that workers working for those periods would not be working in contravention of any of the provisions of sections 51, 52, 54, 55, 56 and 58.
(10) Any proposed change in the system of work in any factory which will necessitate a change in the notice referred to in sub section (1) shall be notified to the Inspector in duplicate before the change is made, and except with the previous sanction of the Inspector, no such change shall be made until one week has elapsed since the last change." 660 Section 62 next provides that a register of adult workers shall be maintained in which will be shown (a) name of each adult workers in the factory; (b) the nature of his work; (c) the group, if any, in which he is included; (d) where his group works on shifts, the relay to which he is allotted and (e) such be prescribed.
Section 51 to which second sub section of section 61, already hours week; section 52 refers to weekly fixes a maximum of 9 hours a day interval for rest and prescribes that exceed 5 hours at one stretch; section 56 fixes generally that the period of work and rest should be spread over 10 1/2 hours and section 58 prohibits the overlapping of shifts.
The Sessions Judge and the High Court concurred in holding that the provisions of sub section
(10) were complied with and there was thus no offence under section 63.
They treated this as a change in the system of work in the factory necessitating a change in the notice referred to in sub G. (1) and held that as the change was notified to the Inspector before it was made there was nothing illegal in employing the three workers before their shift commenced.
They also held that as this was the first change there was no need to wait for a week or to obtain the previous sanction of the Inspector as required by the latter part of the tenth sub section.
With due respect to the High Court, we do not agree that this sort of case is contemplated by the tenth :sub section.
That sub section speaks of "change in the system of work in any factory which will necessitate a change in the notice" and these words refer not to a departure from the notice but to a change in the system, a change which would require the notice to be recast.
The notice shows "the periods during which adult workers may be required to work" and these words are descriptive of the scheme of the employment of labour in the factory but are not apt to contemplate the time of employment for each individual worker.
That can only be found by referring to the register which goes with the notice.
Sub section
(1) makes no mention of the change in the register but of the change in the notice and thereby indicates that the change which is contemplated is an overall change affecting a whole group and not an individual worker.
The latter part of the sub section also points in the same direction because it implies that such changes should not be frequent and if the change is for the second time it should not be made until one week has elapsed since the last change.
This cannot possibly refer to a casual change in the hours of work of an individual worker.
661 The learned counsel sought to justify the action by referring to section 59 which provides that extra wages for over time shall be paid.
No such claim was made earlier in this case and justification was sought only from the provisions of sub section
(10) of section 61 and section 117 of the Act.
Section 59 cannot be considered in isolation: It has to be read with section 64, where the State Government has been given the power to make exempting rules '.
Under those rules a departure from the provisions of sections 51, 52, 55 and 56 can be made but only in accordance with the rules so framed; as for example, overtime work may be taken from workers engaged on urgent repairs in spite of the provisions of sections 51, 54, 55 and 56, but must be in accordance with rule 91 and the urgency which is referred to in this section and the rule is 'an urgency relating to the factory and not an urgency felt by the constituents of the factory '.
A departure from the hours of work as laid down in section 61(2) can only be made in those cases in which the exempting provisions of the rules cover the case and not otherwise.
It would, therefore, appear that the offence which was committed in the case was the employment of workers contrary to the notice displayed under section 61(1) without any justi fication by reason of any exempting provision.
The respon dent was not saved from the operation of section 63, which is peremptory, by reason of anything contained in sub section
(10) and the sending of the letter to the Inspector of Factories was therefore mis conceived.
It was contended before us that the respondent was not the occupier/manager of the factory and, in any event, section 117 of the Act protected him because he was not present there and his action was bonafide.
A: , to the first part of this argument it is sufficient to say that the Magistrate found that he was the occupier and manager.
The letter of Mr. Dangi (Ext. 15) quite clearly establishes this.
The argument under, section 117 of the Act requires a more detailed consideration.
That section reads as follows: "17.
Protection to persons acting under this Act.
No suit, prosecution or other legal proceeding.
shall lie against any person for anything which is in good faith done or intended to be done under this Act.
" It is argued by Mr. M. V. Goswami on the authority of cases about to be mentioned that this section gives protection against prosecution in respect of anything which is done in good faith under the Act.
He referred us to two decisions of 662 Thomas, C. J. in Ranjit Singh vs Emperor(1) and Ranjit Singh vs Emperor,(2) in which the learned Chief Justice observes that the language of section 117 is not limited to the inspecting staff but is wide enough to include occupiers, managers, foremen, workers etc.
Mr. Goswami also refers to two decisions of the Andhra Pradesh High Court in Public Prosecutor vs Mangaldas Thakker(3) and In re.
P. Lakshmaiah Naidu(1) in which the same view has been expressed.
Mr. D. R. Prem on behalf of the State of Gujarat relies on The Public Prosecutor vs Vattem Venkatramayya(5) and Provincial Government, C.P. and Berar vs Seth Chapsi Dhanji Oswal Bhate and Anr(6).
Reference was also made to Superinte dent and Remembrancer of Legal Affairs, Bengal vs H. E. Watson(7).
It is not necessary to refer to the lines of reasoning adopted in these cases.
The language of this protecting clause is not limited to officers but is made wide to include "any person".
It thus gives protection not only to an officer doing or intending to do something in pursuance or execution of this Act but also to "any person".
But the critical words are "any thing * * * done or intended to be done" under the Act.
The protection conferred can only be claimed by a person who can plead that he was required to do or omit to do something under the Act or that he intended to comply with any of its provisions.
It cannot confer immunity in respect of actions which are not done under the Act but are done contrary to it.
Even assuming that an act includes an omission as stated in the General Clauses Act, the omission also must be one which is enjoined by the Act.
It is not sufficient to ,say that the act was honest.
That would bring it only within the words "good faith".
It is necessary further to establish that what is complained of is something which the Act requires should be done or should be omitted to be done.
There must be a compliance or an intended compliance with a provision of the Act, before the protection can be claimed.
The section cannot cover a case of a breach or an intended breach of the Act however honest the conduct otherwise.
In this connection it is necessary to point out, as was done in the Nagpur case above referred to, that the occupier and manager are exempted from liability in certain cases men tioned in section 101.
Where an occupier or a manager is charged (1) A.I.R. (1943) Oudh 308.
(2) A.I.R. (1943) Oudh 311.
(3) A.I.R. (1958) Andh.
Pra. 79.
(4) I.L.R. (5) A.I.R. (1963) Andh.
Pra. 106).
(6) I.L.R. (1938) Nag. 408.
(7) 663 with an offence he is entitled to make a complaint in his own turn against any person who was the actual offender and on proof of the commission of the offence by such person the occupier or the manager is absolved from liability.
This shows that compliance with the peremptory provisions of the Act is essential and unless the occupier or the manager brings the real offender to book he must bear the responsibility.
Such a provision largely excludes the operation of section 117 in respect of persons guilty of a breach of the provisions of the Act.
It is not necessary that means rea must always be established as has been said in some of the cases above referred to.
The responsibility exists without a guilty mind.
An adequate safeguard, however, exists in section 101 analysed above and the occupier and manager can save themselves if they prove that they are not the real offenders but who, in fact, No such defence was offered here.
For these reasons we are of the opinion that the respondent is not saved by section 117.
We, accordingly, set aside his, acquittal and convict him under section 63 read with section 94 of the .
He is ,sentenced to pay a fine of Rs. 501/ in respect of each of the offences, or in default to undergo 15 days ' simple imprisonment.
[/INST]The appellant held shares in a company the Board of Directors of which by a resolution dated August 30, 1950 declared interim dividends.
The appellant received a dividend warrant dated December 28, 1950 for a certain amount being the interim dividend in respect of its share holdings in the company.
The appellant 's year of accounting had ended on September 30, 1950.
The revenue authorities brought to tax the amount so received with other income of the appellant in the assessment year 1952 53 after rejecting the objection of the appellant that it represented income for the assessment year 1951 52.
In a reference made under section 66(1) of the Indian Income tax Act, 1922, the High Court agreed with the Revenue authority that the dividend was in view of article 95 of the First Schedule to Indian Companies Act, 1913, liable to be included in the assessment year 1952 53.
Held: A declaration of dividend by a company in a general meeting gives rise to a debt.
In re Severn and Wile and Severn Bridge Railway Co. , referred to.
But a mere resolution of the Directors resolving to pay a certain amount as interim dividend does not create a debt enforceable against the company for it is always open to the Directors to rescind the resolution before payment of the dividend.
The Lagunas Nitrate Company (Ltd.) vs J. Henry Schroeder and Company, 17 Times Law Reports 625, referred to.
Commissioner of Income tax, Bombay vs Laxmidas Mutraj Khatau, , distinguished.
(ii) The test applied by Chagla C. J. (in C.I.T., Bombay vs Laxmidas Mulraj Khatau, that because the ,dividend becomes due to the assessee who has the right to deal with or dispose of the same in any manner he likes, it is taxable in the year in which it is declared cannot be regarded as correct.
(iii) Dividend may he said to be paid within the meaning of section 16(2) of the Indian Income tax Act, 1922 when the company discharges its liability and makes the amount thereof unconditionally available to the member entitled thereto.
Purshottamdas Thakurdas vs C.I.T., Bombay, , referred to.
I P(1)) 1 S.C.I 17 (a) 580 (iv) The declaration of interim dividend capable of being rescinded by the directors does not operate as a payment under section 16(2) of the Income tax Act before the company has parted 'with the amount of dividend or discharged its obligation by some other act.
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<s>[INST] Summarize the judgementON: Civil Appeal No. 4297 of 1983.
From the Judgment and Order dated 26.10.1979 of the Allahabad High Court in C.M.W. No. 7168 of 1972.
Raja Ram Agarwal and A.K. Srivastava for the Appellants.
K.K. Venugopal, Rajinder Sachher, Satish Chandra, K.C. Dua, and J.P. Misra for the Respondents.
The Judgment of the Court was delivered by K.N. SAIKIA, J.
The State of U.P. by special leave appeals from the Judgment of the High Court of Allahabad dated 26.10.1979, allowing the respondents ' writ petition and holding that the State of U.P. and the Excise authori ties were not entitled to levy excise duty on the wastage of liquor in transit.
The respondents are manufacturers of high strength spirit classified as other sorts of spirit not otherwise specified ' under Section 28 of the United Prov inces Excise Act, 19 10, hereinafter referred to as 'the Act '.
After manufacture they transport those spirit in big containers from the distilleries to their warehouses, trans porting them on passes issued under section 16 of the Act.
In the bonded warehouses the same are sometimes diluted, separately bottled and sold.
They also used to manufacture and bottle military rum under a licence and supply the same to the defence personnel inside and outside the State of U.P.
The Officer Commanding Rail Head Depot A.S.C., Pathan kot having obtained permits from the State of Punjab for the import of military rum, against those permits the respond ents exported military rum from their distillery, under different passes.
The excise duty on military rum for export was Rs.7 per L.P. Litre while the rate for consumption within the State was 171 Rs.21 per L.P. Litre.
If the exported military rum was under bond thereupon duty was realised by the importing State from the importer thereof.
The respondents bottled the rum ac cording to rules and supplied the same to the consignees at the distillery premises and the consignments were taken by the consignees under the seal of the railway authorities to their respective destinations.
It appears by Notification dated March 26, 1979 in exercise of the powers under Sections 28 and 29 of the Act, read with section 21 of the U.P. General Clauses Act, 1904, and in supersession of the earlier Government Notification the Governor was pleased to direct that with effect from April 1, 1979 duty shall be imposed on country spirit at the rates specified in the schedule thereto and the duty was payable "before the issue from the distillery or bonded warehouse concerned save in the case of issued under bond".
By order dated 13.10.1970 notice was issued to the respond ents demanding Rs.4,295.55p.
on the wastage which was termed as "excess transit wastage" of rum calculated at the maximum rate of Rs.21 per L.P. Litre.
A representation of the re spondents dated November 9, 1970 was rejected by order dated 15.1.1972.
Another representation through the All India Distillers Association was also rejected by order dated August 28, 1972.
Several writ petitions challenging similar orders were filed by others before the Allahabad High Court for quashing the orders.
The respondents also filed Civil Miscellaneous Writ No. 7168 of 1972 under Article 226 of the constitution of India praying for appropriate writ, order or direction quashing the impugned orders dated 13.10.1970, 9.11.1970, 15.1.1972 and 28.8.1972 and for a mandamus commanding the State of U.P. not to realise or adjust any amount of duty towards wastage from the respondents ' advance duty account otherwise than in accordance with law and restraining them from giving effect to the impugned orders.
The High Court by the impugned judgment dated 26.10.1979 relying on an earlier Division Bench decision of the same High Court in M/s. Mohan Meakin Breweries Ltd. and Anr.
vs State of Uttar Pradesh and Ors.
, (Writ Petition No. 2604 of 1973, decided on 11.9.1979) allowed the writ petition and quashed the impugned orders thereby holding that no excise duty could legally be levied on the excess wastage the occurred during the transport of liquor in course of export, that is, taking out of U.P. otherwise than across a customs frontier as defined by the Central Government.
Mr. Raja Ram Agarwal, the learned counsel for the appel lants, submits that the duty has been levied keeping in mind the fact that in 172 U.P. excise duty is levied at two different rates at a higher rate when the liquor is sold inside the State, and at a lower rate when it is exported outside the State.
Counter vailing duty is paid by the importer on the quantity actual ly received in the importing State.
If there is excess wastage on transit the result is that the quantity actually received by the destination State is less than the quantity on which the State of U .P. charged the lower rate and, therefore, on the quantity shown as wastage the State of U.P. ought to recoup its differential duty by charging excise duty at the higher rate; and that this is clearly envisaged by the Act and the United Provinces Excise Manual Rules, hereinafter referred to as 'the Rules '.
Counsel further submits that it has a wholesome purpose, namely, to discourage evasion of duty and that there is no question of levying excise duty twice on the same article inasmuch as the amount of export duty actually paid is always deducted from the demand; and that it is a duty of regulatory charac ter meant to guard against perpetration of fraud or decep tion on excise revenue which the State is entitled to re ceive.
It is said to be a realisation of escaped duty justi fied by the implied presumption.
Mr. K.K. Venugopal, the learned counsel for the respond ents, submits that in this case while the exporting State, that is, U.P., levied export duty at a concessional rate the importing State levied countervailing duty on the quantity of rum imported; and the quantity exported and subjected to excise duty by the exporting State being the same as the quantity whereupon countervailing duty was imposed by the importing State, there could be no question of collecting differential duty on the excess wastage by the exporting State and if that was done it would amount to double taxa tion.
Explaining the procedure for export from U.P. counsel states that after export duty is paid, the exporter gets the alcohol released and transport it to the importing States in bottles or casks.
In the importing State countervailing duty is paid on full consignment at its destination and the seals of the bottles transported are intact.
So the entire con signment is taxed less the wastage.
The impugned demand notices have, submits counsel, rightly been quashed by the High Court and the appellants have rightly been restrained from levying such differential duty on excess wastage on transit in course of export.
The only question to be decided, therefore, is whether the differential duty is leviable under the Act and the Rules.
For answering the question we may refer to the Act and the Rules.
Included in Chapter V of the Act, which deals with duties and fees, Section 28 of the Act provides that an excise duty or a countervailing duty, as the 173 case may be, at such rate or rates as the State Government shall direct may be imposed either generally or for any specified local area on any excisable article stated in that section.
"Excise duty" and "countervailing duty" as defined in Section 3(3a) of the Act means any such excise duty or countervailing duty, as the case may be, as is mentioned in entry 51 of List II in the Seventh Schedule to the Constitu tion.
That entry reads as follows: "51.
Duties of excise on the following goods manufactured or produced in the State and countervailing duties at the same or lower rates on similar goods manufactured or produced elsewhere in India: (a) alcoholic liquors for human consumption; (b) opium, Indian hemp and other narcotic drugs and narcot ics; but not including medicinal and toilet preparations containing alcohol or any substance included in subparagraph (b) of this entry.
" The original Section 28 of the Act now re numbered as subsection (1) thereof, and sub sections 2 and 3 inserted by section 2 of the U.P. Act 7 of 1970 clearly covers Indian made foreign liquors.
There could be no dispute as to mili tary rum being one of the Indian made foreign liquors ex cisable under the Act.
A duty of excise under Section 28 is primarily levied upon a manufacturer or producer in respect of the excisable commodity manufactured or produced irre spective of its sale.
Firstly, it is a duty upon excisable goods, not upon sale or proceeds of sale of the goods.
It is related to production or manufacture of excisable goods.
The taxable event is the production or manufacture of the liq uor.
Secondly, as was held in A.B. Abdulkadir vs The State of Kerala.
reported in ; , an excise duty imposed on the manufacture and produc tion of excisable goods does not cease to be so merely because the duty is levied at a stage subsequent to manufac ture or production.
That was a case on Central Excise, but the principle is equally applicable here.
It does not cease to be excise duty because it is collected at the stage of issue of the liquor out of the distillery or at the subse quent stage of declaration of excess wastage.
Legislative competence under entry 51 of list II on levy of excise duty relates only to goods manufactured or produced in the State as was held in Bimal Chandra Banerjee vs State of Madhya Pradesh, ; In the instant case there is no 174 dispute that the military rum exported was produced in the State of U.P.
In State of Mysore & Ors.
vs M/s. D. Cawasji & Co., 10, which was on Mysore Excise Act, it was held that the excise duty must be closely related to production or manufacture of excisable goods and it did not matter if the levy was made not at the moment of production or manufacture but at a later stage and even if it was collected from retailer.
The differential duty in the in stant case, therefore, did not cease to be an excise duty even it was levied on the exporter after declaration of excess wastage.
The taxable event was still the production or manufacture.
It is settled law as was held in Bimal Chandra Banerjee vs State of Madhya Pradesh (supra), a case under the Madhya Pradesh Excise Act, that no tax can be levied by the State Government in the absence of specific authorisation by statute.
In that case the levy of duty on liquor which the contractor failed to lift was held to have been an attempt to exercise a power which the State Government did not possess.
Mr. Agarwal refers us to Rule 636 of the Rules which at the relevant time said: "636.
A distiller holding licences for bottling Indianmade foreign liquor of his own manufacture and for selling it by wholesale may export such foreign liquor bottled on his wholesale premises, to any other State or Union Territory in India subject to the following condi tions: (1) The exporter shall obtain from the importer a permit authorizing the import signed by the Chief Revenue Authority of the importing State or Union Territory or by an officer duly authorized in this behalf.
(2) The permit shall specify: (a) the name and address of the person of firm authorized to import; (b) the description and quantity of the foreign liquor to be imported; (c) the rate of duty chargeable in the importing State or Union Territory in case the Indian made foreign 175 liquor is imported in State or Union territory with which the state of Uttar Pradesh has entered into reciprocal arrangements for the adjustment of the excise duty by book transfer.
(d) the rate of duty charged in the importing State or Union Territory and the fact that it has been realized in advance in cases of import other than those covered by clause (c).
(3) On receipt of the permit the exporter shall deposit into the treasury; (a) Export duty on the total quantity of liquor to be ex ported; and (b) Where the export is made to a State or Union Territory with which the State of Uttar Pradesh has entered into a reciprocal arrangement for the adjustment of the excise duty by book transfer, and the rate higher than that enforced in the State of Uttar Pradesh, and that payable in the importing State or Union Territory on the total quantity of liquor to be exported.
(4) On receipt of the permit and the treasury receipt the wholesale vendor shall prepare a pass in form F.L. 23 in quadruplicate and submit it to the Excise Inspector, in charge of the distillery.
The Excise Inspector shall after satisfying himself that duty has been correctly realized, affix his signature to the pass.
The exporter shall then send one copy of the pass to the Collector of the district of export, one copy to the Chief Revenue Authority of the place of import or such other officer as may be authorised in this behalf.
One copy to the consignee and shall retain the fourth copy.
The treasury receipt shall always accompany the copy of the pass sent to the Collector of the exporting districts.
(5) The pass in form F.L. 23 shall state clearly: (a) the name and address of the consignor; 176 (b) the name and address of the consignee; (c) the exact description and quantity of each kind of foreign liquor despatched under the pass; (d) the route by which it is despatched; (e) the date of despatch; and (f) in case of export against duty paid permit, the fact that the duty has been prepaid in the State of import.
(6) A separate pass in form F.L. 23 shall be issued in respect of each consignment.
The Chief Revenue Authority or other officer of the place of import should send the copy of the pass received by him, duly countersigned, to the Excise Commissioner, Uttar Pradesh, in support of the claim for ' refund of duty annually after the close of the excise year.
(7) Should the rate of duty in the importing State be lower than that in force in Uttar Pradesh, exporter shall be entitled to a refund of the difference in duty.
If the duty has been prepaid in the State of import at the rate in force at the time of issuing import permit, the exporter shall be entitled to a refund of duty deposited by him in the State of export on verification of the claim by the Excise Inspector incharge of the distillery on the basis of export passes in form F.L. 23 duly countersigned by the Chief Revenue Authority of the State or Union Territory of import or the officer appointed in this behalf in token of receipt of the consignment of Indian made foreign liquor" Rule 637 provided than the duty, other that export duty, on foreign liquor manufactured at any distillery in Uttar Pradesh and exported therefrom on prepayment of duty to any State or Union Territory of India shall be credited by book transfer to the Government of the importing State or Union Territory after the close of the excise year.
Rule 637 A provided for registration of claims for refund or export of Indian made foreign liquor and provided that every distiller making exports of Indian made foreign liquor to other States, shall submit a statement showing all such exports made during the proceeding quarter, in form P.D. 31 to the Excise Commissioner, duly 177 verified by the officer incharge, distillery, despatching simultaneously a copy thereof to the Assistant Excise Com missioner of the charge.
Rule 37 B provided for maintenance of register of refunds against exports of Indian made for eign liquor and said that the Excise Inspector incharge of the distillery shall enter all the details given by the distillers in the statement in form P.D. 31, in a register to be maintained by him in form P.D. 31 A. As and when refunds are allowed by the Excise Commissioner, he shall make entries about refund in this register in relevant columns under his signature.
Similar entries shall also be made by the office of the Assistant Excise Commissioner concerned, on the copies of P.D. 31 statement received from the exporters, and be initialled by the Assistant Excise Commissioner after verification.
Thus it is seen that though not specifically mentioning charging up of differential export duty on excess wastage, the above rules definitely envisaged refund of excise duty of countervailing or equalising nature.
Mr. Agarwal also brings to our notice R.ale 8 14 which substituted the old Rule by the Excise Commissioner 's Noti fication No. 10909/IX.
241 A, dated February 8, 1978.
It provided as under: "Allowance for loss in transit.
An allowance upto 0.5 per cent will be made for the actual loss in transit by leakage, evaporation or other unavoidable cause, or spirit transport ed or exported under bond in wooden casks or metal vessels.
The allowance to be made under this rule will be determined by deducting from the quantity of spirit despatched from the distillery, the quantity received at the place of destina tion, both quantities being stated in terms of alcohol.
The allowance will be calculated on the quantity contained in each wooden cask metal vessels comprised in a consignment.
If the report of the officer by whom the consign ment of spirit has been gauged and proved at its destination shows that the wastage has occurred above the limit allowa ble the person executing the bond shall be liable to pay duty on so much of the deficiency as in excess of the allow ance.
The rate of duty leviable shall be the highest rate of duty leviable on such spirit in this State.
178 When the wastage does not exceed the prescribed limit, no action need be taken by the Officer in charge of the Distillery or bonded warehouse, as the case may be, but when the wastage exceeds the allowable limit, the Officer in charge of the Distillery shall obtain the expla nation of the Distillers or the person executing the bond and forward the same together with a full report of the circumstances to the Assistant Excise Commissioner or the Deputy Excise Commissioner of the charge in which the Dis tillery is situated.
The Assistant Excise Commissioner or the Deputy Excise Commissioner shall charge duty on excess wastage provided that when the total wastage in a consign ment is within the allowable limit.
Deputy/Assistant Excise Commissioner of the charge may write off the excess wastage in any particular wooden cask or metal vessel: Provided further that the Deputy Excise Commis sioner may write off the duty upto Rs.500, if he is satis fied that the excess wastage in a consignment was on account of an accident or other unavoidable cause but in other cases, the matter shall be referred to the Excise Commis sioner for orders.
Cases in which the Deputy Excise Commis sioner writes off duty shall be reported by him to the Excise Commissioner.
" It is emphasised by Mr. Agarwal that this provision is meant to discourage evasion of duty.
If any part of the lower export duty charged liquor is not in fact exported it should be made to pay the higher excise duty as payable on home consumed liquor.
It does not impose any new duty.
We are inclined to agree.
This rule does not authorise imposition of any new tax but only authorises charging up excise duty on the excess wastage of liquor in course of export which was charged at concessional rate.
The old Rule 814 of the Rules was made by B.O. No. 423/V 284 B, dated September 6, 1910 and No. 20/8 V E 980B, dated May 28, 1918 providing for allowance for Joss in transit.
It said: "An allowance will be made for the actual loss in transit, by leakage, evaporation or other unavoidable cause, of spirit transported or exported under bond.
The allowance is subject to the following maximum limits.
" Limits were prescribed differently for wooden casks and metal vessels, keeping in mind the duration of transport.
179 Thus, we find that the minimum limits of wastage in transit was prescribed even under the old rule.
This by implication enjoined that the excess wastage would be taxed as if not wasted.
The question may arise as to the date of the new Rule 814, to decide whether the impugned notices would be covered by it or by the old Rule.
Section 77 of the Act provides the answer.
It says: "77.
Publication of rules and notifications.
All rules made and notifications issued under the Act shall be published in the Official Gazette, and shall, have effect as if enacted in this Act from the date of such publication or from such other date as may be specified in that behalf." (The two provisos are not relevant for the purpose of this case) Both the old and the new Rule 8 14 must, therefore, have effect from the date of publication in the Official gazette or from such other date as may be specified in that behalf as if enacted in the Act.
The object of this ancient formu la, namely, "as if enacted in this Act" was to emphasise the fact that the notifications were to be as effective as the Act itself.
Its validity could be questioned in the same way as the validity of the Act could be questioned.
It is an ancient form of rule making still to be found in the Act.
Thus the Act having provided for fixed wastage allowance also in effect provided that the excess above the allowable wastage will be taxed.
It can not, therefore, be said that no such charging up of excise duty on the excess wastage in transit could be validly made.
The validity of Rule 814 had not been questioned before the High Court.
Absolute equality and justice is not attainable in taxing laws.
Legislature must be left to decide the State policy within Constitution al limitations.
In M/s. Mohan Meakin Breweries Ltd. vs Excise & Taxation Commissioner, Chandigarh, reported in 10: ; 1, the appellant company carried on the busi ness of manufacture, storage and sale of liquors.
Between June, 1967 and April 1969,.
it transported various quanti ties of liquor from its distilleries in U.P. to its bonded warehouse at Chandigarh.
On arrival, the consignments were examined by the Officer in Charge of the warehouse, and a shortage was found, exceeding the wastage allowance permis sible under rule 8 of the Punjab Bonded Warehouse Rules, 1957.
The Excise and Taxation Commissioner, exercising the powers of the .
Financial Commissioner. issued a show cause notice and then ordered 180 the appellant to pay duty on the wastage in excess.
The show cause notice required the appellant to pay duty on excess wastage in course of import of liquor from U.P. and the rules governing the appellant 's licence provided for a wastage allowance not exceeding 1% of the actual loss in transit by leakage or breakage of vessels or bottles con taining liquor, and if the wastage exceeded the prescribed limit the licensee should be liable to pay duty at the prescribed rate as if the wastage in excess of the pre scribed limit had actually been removed from the Warehouse, and it was also provided that the Financial Commissioner could in his discretion on goods cause being shown remit the whole or a part of the duty leviable on such wastage, and these provisions were challenged.
This Court held that the impugned rules did not impose any new duty or create any liability and that they were in essence and substance of a regulatory character meant to guard against perpetration of fraud or deception on the revenue.
"They provide for and regulate the storage and subsequently the removal of liquor from the bonded warehouse, on payment or otherwise of the duty which is chargeable under the Fiscal Rules of 1937.
" We agree with Mr. Agarwal that the instant Rules 636 and 814 are also a regulatory character and they are precautionary against perpetration of fraud on the excise revenue of the exporting State.
If out of the quantity of military rum in a consignment, a part or portion is claimed to have been wastage in transit and to that extent did not result in export, the State would, in the absence of reasonable expla nation, have reason to presume that the same have been disposed of otherwise than by export and impose on it the differential excise duty.
A statute has to be construed in light of the mischief it was designed to remedy.
There is no dispute that excise duty is a single point duty and may be levied at one of the points mentioned in Section 28.
The submission of the respondents that they paid duty on the entire quantity of rum to be exported under excise passes issued to the importer and that after payment of the export duty the rum bottled under the conditions enumerated in the Rules was supplied to the consignee at the distillery premises and the consignments were taken by the consignees under their seals and under the seal of the Railway authori ties and the consignments reached their destination with seals intact would not go to support the contention that the State Government was not competent to levy any duty on the excess wastage that is shown to have occurred during transit inasmuch as only a concessional rate of duty was levied on the liquor which was supposed to be exported out side the State of U.P. and if the entire quantity on which such concessional duty was paid did not reach its destination, and the 181 shortage is shown as wastage in transit, it surely meant that the short delivery was not exported.
The reason of the wastage would not be material so far as this conclusion is concerned.
Had this quantity been not exported but consumed locally the State would have derived higher duty of which it has been deprived.
The argument that countervailing duty is paid by the importers in the importing State on the quantity actually received, would also be immaterial for this conclusion though that may be of some importance for the purpose of revenue of the importing State as well as the consignee.
In case countervailing duty has been paid on the entire quanti ty of the consignment in the importing State there may be room for adjustment in accordance with the provisions of Rules 636, 637, 637 A and 637 B of the Rules.
The only material question may be whether the wastages was caused while the bottles were on transit but still within the territory of the exporting State or in transit inside the importing State.
If as a matter of fact it is found that the exported liquor actually crossed the territory of the ex porting State intact there may not be any justification for demanding differential duty.
That will of course be a ques tion of fact in no way affecting the right to demand the differential duty.
The decision in M/s. Ajudhia Distillery Rajaka, Sahaspur vs State of Uttar Pradesh and Anr., report ed in 1980 Taxation Law Reports 2262, quashing such a demand and holding that the exporting State had no jurisdiction to charge duty on the liquor wastage in transit cannot be said to have been correctly decided and the impugned judgment in the instant case suffers from the same infirmity, and has to be set aside.
Rule 814 envisages the levy of such differen tial duty.
There is no question of double charging or multi ple point charging in this case.
It is only a question of recovery of the difference on proof of the purposes for which lower duty was earlier levied having failed to be achieved entailing liability to make good the difference.
The Rules 636, 637 A and 637 are also relevant to this extent.
It was reiterated in M/s. Mc Dowell and Co. Ltd. vs Commercial Tax Officer, VH Circle, Hyderabad; , 14: ; , following Abdul Kadir (supra) that excise duty is a duty on the production or manufacture of goods produced or manufactured within the country though laws are to be found which impose a duty of excise at stages subsequent to the manufacture or production.
Similarly what was stated in Kalyani Stores vs The State of Orissa and Ors., ; , was reiterated in M/s Mohan Meakin Breweries Ltd. (supra) that a countervailing duty is meant "to counter balance; to avail 182 against with equal force or virtue; to compensate for some thing or serve as equivalent or substitute for".
A counter vailing duty is "meant to equalise the burden on alcoholic liquors manufactured or produced in the State.
" They may be imposed at the same rate as excise duty or at a lower rate so as to equalise the burden after taking into account the cost of transport from the place of manufacturing to the taxing State.
Countervailing duties are meant to equalise burden on alcoholic liquors imported from outside the State and the burden placed by excise duties on alcoholic liquors manufactured or produced in the State.
Countervailing duties can only be levied if similar goods are actually produced or manufactured in the State on which excise duties are being levied.
Thus, countervailing duty paid in the importing State does not ipso facto affect the excise revenue of the exporting State.
The fact that the importer is required to pay counter vailing duty on the imported military rum could, therefore, ipso facto be no ground for opposing the levy of differen tial duty on the excess wastage of exported rum that duty being levied with a view to safeguard the excise revenue of the exporting State.
If the excess wastage was actually lost to consumers while in the importing State no justification of such a duty may arise, that, however, would be an entire ly different question without in any way affecting the competence of the legislature of the exporting State to impose such a duty.
The fact that the exported rum was on payment of export duty or on bond would not again be materi al inasmuch as when the rum meant for export failed to be exported, there may be a presumption, may be rebuttable one, that what is shown as the excess has merged in mass of rum consumed within the State and was not separated from such a mass.
The imposition of differential duty was only deferred to this moment and it still continued to be a duty on pro duction or manufacture of rum.
It could not be regarded as a duty not connected with the taxable event of manufacture or production.
There is also no similarity with the excise duty sought to be levied only on the unlifted quantity of liquor by contractors which was held to be impermissible under Sec tions 28 and 29 of the Act in Excise Commissioner, U.P. vs Ram Kumar, and State of Madhya Pradesh vs Firm Gappulal; , In the instant case the military rum was obtained for the purpose of export and the lower export duty was paid and only when the rum did not result in export the question of imposing the differential duty arose.
The notion of the excise duty being changed or cancelled on account of what transpires later is not foreign to excise law.
Generally speaking 183 the imposing of the differential duty i.e. charging up the duty on the report of the excess wastage is the opposite of the system of drawback prevalent in some systems.
Drawback means the repayment of duties or taxes previously charged on commodities, from which they are relieved on exportation.
For example, in the customs laws of some countries an allow ance is made by the Government upon the duties due on im ported merchandise when the importer, instead of selling it within the country re exports it, and then the difference of duty is refunded, if already paid.
Similarly, in England there is a provision of refund of duties on British wine when the wine incidentally is spoilt or otherwise unfit for use or when delivered to another person has been returned to the maker as so spoilt or unfit.
The system of charging up the duty on the subsequent event of non export can not, therefore, be said to be irrespective of production or manufacture.
In the instant case if it is proved to the satisfaction of the appropriate authorities that countervailing duty had been paid on the entire consignment irrespective of the wastage then the question would arise as to whether the wastage could be ignored altogether by the exporting State as was done by the importing State.
Counsel for the parties had no objection to the idea that if the explanation for wastage was satisfactory and the countervailing duty was paid in the importing State on the entire consignment irre spective of the wastage, there would be room for adjustment by reducing the duty to similar extent.
For the foregoing reasons, the impugned Judgment is set aside and the appeal is allowed, but under the facts and circumstances of the case, without any order as to costs.
Y. Lal Appeal allowed.
[/INST]The first appellant and the first respondent were married at Tirupati on 27.2.1975 according to Hindu Law.
They separated in July 1978.
The appellant husband filed a petition for dissolution of the marriage in the Sub Court of Tirupati stating that he was a resident of South Claiborn Avenue, New Orleans, Louisiana, and that he was a citizen of India and that he and his wife last resided together at New Orleans, Louisiana.
Subsequently he filed another petition for dissolution of marriage in the Circuit Court St. Louis Country, Missouri, USA alleging that he has been a resident of the State of Missouri for 90 days or more immediately preceding th filing of the petition by refusing to continue to live with the appellant in the US and particularly in the State of Missouri.
But from the averments made by him in the petition before the Sub Judge, Tirupati it was obvious that he and his wife had last resided together at New Orleans, Louisiana and never within the jurisdiction of th Circuit Court of St. Louis Country in the State of Missouri.
The respondent wife filed her reply raising her objections to the maintainability of the petition.
She also clearly stated that her reply was without prejudice to her contention that she was not submitting to the jurisdiction of the foreign court.
The Circuit Court Missouri assumed jurisdiction on the ground that the 1st Appellant had been a resident of the State of Missouri for 90 days next preceding the commencement of the action in the Court.
In the absence of the respondent wife the Circuit Court, Missouri passed a decree for dissolution of marriage on the only ground that the marriage has irretrievably down.
Subsequent to the passing of the decree by the Circuit Court, Missouri, the appellant filed an application for dismissal of his earlier petition before the Sub Court of Tirupati and the same was dismissed.
823 On 2nd November 1981 the last appellant married appellant No. 2.
Thereafter, the 1st respondent filed a criminal complaint against the appellants for the offence of bigamy.
The appellants filed an application for their discharge in view of the decree for dissolution of marriage passed by the Circuit Court, Missouri.
The Magistrate discharged the appellants by holding that the complainant wife had failed to make out a prima facie case against the appellants.
The respondent preferred a Criminal Revision Petition before the High Court which set aside the order of the Magistrate by holding (i) that a photostat copy of the judgment of Missouri Court was not admissible in evidence; (ii) since the Learned Magistrate acted on the photostat copy of the judgment, he was in error in discharging the accused.
Accordingly the High Court directed the Magistrate to dispose of the petition filed by the appellants for their discharge afresh in accordance with law.
Aggrieved by the decision of the High Court the appellants filed appeal in this Court.
Dismissing the appeal, this Court, HELD: 1.
The decree dissolving the marriage passed by the foreign court is without jurisdiction according to the as neither the marriage was celebrated nor the parties last resided together nor the respondent resided within the jurisdiction of that Court.
Further, irretrievable breakdown of marriage is not one of the grounds recognised by the Act of dissolution of marriage.
Hence, the decree of the divorce passed by the foreign court was on a ground unavailable under the Act which is applicable to the marriage.
Since with regard to the jurisdiction of the forum as well as the ground on which it is passed the foreign decree in the present case is not in accordance with the Act under which the parties were married, and the respondent had not submitted to the jurisdiction of the court or consented to its passing, it cannot be recognised by the courts in this country and is therefore, unenforceable.
[828H, 829A, 828E, 834H, 835A] 2.
Residence does not mean a temporary residence for the purpose of obtaining a divorce but habitual residence or residence which is intended to be permanent for future as well.
[829E] Smt.
Satya vs Teja Singh, , referred to.
The rules of Private International Law in this country are not codified and are scattered in different enactments such as the Civil Procedure Code, the Contract ACt, the Indian Succession Act, the Indian Divorce Act, the Special Marriage Act etc.
In addition, some 824 rules have also been evolved by judicial decisions.
In matters of status or legal capacity of natural persons, matrimonial disputes, custody of children, adoption, testamentary and intestate succession etc.
the problem in this country is complicated by the fact that there exist different personal laws and no uniform rule can be laid down for all citizens.
Today more than ever in the past, the need for definitive rules for recognition of foreign judgments in personal and family matters, and particularly in matrimonial disputes has surged to the surface.
A large number of foreign decrees in matrimonial matters is becoming the order of the day.
A time has, therefore, come to ensure certainty in the recognition of the foreign judgments in these matters.
The minimum rules of guidance for securing the certainty need not await legislative initiative.
This Court can accomplish the modest job within the frame work of the present statutory provisions if they are rationally interpreted and extended to achieve the purpose.
Though the proposed rules of guidance in this area may prove inadequate or miss some aspects which may not be present to us at this juncture, yet a begining has to be made as best as one can, the lacunae and the errors being left to be filled in and corrected by future judgments.
[829H, 830A, 831C, F H] 4.
The relevant provisions of Section 13 of the CPC are capable of being interpreted to secure the required certainty in the sphere of this branch of law in conformity with public policy, justice, equity and good conscience, and the rules so evolved will protect the sanctity of the institution of marriage and the unity of family which are the corner stones of our social life.
[832A] 4.1 On an analysis and interpretation of Section 13 of CPC the following rule can be deduced for recognising a foreign matrimonial judgment in this country.
The jurisdiction assumed by the foreign court as well as the grounds on which the relief is granted must be in accordance with the matrimonial law under which the parties are married.
The exceptions to this rule may be as follows; (i) where the matrimonial action is filed in the forum where the respondent is domiciled or habitually and permanently resides and the relief is granted on a ground available in the matrimonial law under which the parties are married; (ii) where the respondent voluntarily and effectively submits to the jurisdiction of the forum and contests the claim which is based on a ground available under the matrimonial law under which the parties are married; (iii) where the respondent consents to the grant of the relief although the jurisdiction of the forum is not in accordance with the provisions of the matrimonial law of the parties.
[834B D] 825 5.
The High Court erred in setting aside the order of the learned Magistrate only on the ground that the photostat copy of the decree was not admissible in evidence.
In the instant case photostat copies of the judicial record of the Court of St. Louis is certified for th Circuit Clerk by the Deputy clerk who is a public officer having the custody of the document within the meaning of Section 76 of the also in the manner required by the provisions of the said section.
Hence the photostat copy per se is not inadmissible in evidence.
It is inadmissible because it has not further been certified by the representative of our Central Government in the United States as required by Section 86 of the Act.
Therefore the document is not admissible in evidence for want of the certificate under Section 86 of the Act and not because it is a photostat copy of the original as held by the High Court.
[835B, E, F G] 6.
The Magistrate is directed to proceed with th matter pending before him according to law as expeditiously as possible, preferably within four months.
[835G]
</s>
|
<s>[INST] Summarize the judgementvil Appeal Nos.
2044 45 of 1990.
From the Judgment and Order dated 18.8.1989 of the Madras High Court in C.R.P. Nos.
4797 and 4798 of 1984.
C.S. Vaidyanathan, K.V. Vishwanathan, K.V. Mohan, S.R. Bhat and S.R. Setia for the Appellant.
785 K. Parsaran and V. Balachandran for the Respondents.
The Judgment of the Court was delivered by RANGANATHAN, J.
Special leave to appeal is granted and the appeals are disposed of by a common order.
On 9.6.1936, Ramaswamy Gounder (the predecessor in interest of the respondents) executed a lease deed in favour of Gopal Sait (the predecessor in interest of the appellant).
Certain passages from an English translation of the lease deed (which was in vernacular) are relevant for the purposes of the present case and they read thus: "Whereas the property viz. vacant land well and Kaichalai etc.
belongs to the party of the First part as his ancestral property; Whereas the said property was leased out to party of the Second Part on a monthly rental of Rs.12 8 0 for 15 years and taken possession by the party of the second part from party of the First part on 3.12.1935 . . and the party of the Second part for his convenience and at his own ex penses and costs (was) permitted to construct in the said vacant land and install petrol selling business . .
After the expiry of lease period of 15 years i.e. on 12.2. 1950 the lessee shall at his own expense remove the struc ture put up by him and deliver possession of the vacant land together with well and kaichalai in the present state . SCHEDULE . vacant land situated in this bounded on the North by vacant land leased out for Burmah Oil Co. by the said Ramas wamy Gounder Gopalji Ratnaswami . . all these vacant lands together with in the fourth plot measuring East to west 84 and North to South 16 together with half share in well therein together with tiled Kaichalai . together with door, doorways etc.
There is no number for Kaichalai.
It is common ground that the total vacant area covered by the 786 lease was 3600 sq.
and that the kaichalai, referred to therein, was thirty seven and a half by sixteen and a half feet i.e. of the extent of about 600 sq.
It also appears that even though there was initially no door number for the Kaichalai, it was eventually given door No. 82 and the suit premises we are concerned with bear door Nos. 80, 81 and 82.
The lease was extended for a period of two years from 1.1.51 by a fresh deed dated 15.1.51 at an enhanced rent.
This lease deed recited: "On the expiry of two years, i.e. on 31.12.52, the lessor has no objection for the removal of the structure put up by Burmah Shell petrol pump etc except the extent of structure of thirty seven and a half feet by sixteen and a half feet put up by the lessor . " There was a fresh lease deed, again, executed on 2.1.53 for a further period of three years at a higher rent.
This deed also required the lessee, when delivering possession back to the lessor on the expiry of the lease, to remove the struc tures put up by him or the Burmah Shell Co. Ltd. "except the structure measuring thirty seven and a half ft. by sixteen and a half ft.".
The lessee appears to have continued to occupy the property even beyond 31.12.55 at a further enhanced rent.
In 1962, we are told, the lessor flied a petition to evict the lessee under section 10(3)(a)(i) and 14(1)(b) of the Madras Buildings (Lease and Rent Control) Act 1960, alleging that he required the premises for personal occupation and for bona fide immediate demolition.
"The lessee defended the petition saying that the premises do not require any immedi ate demolition, that the premises are used for non residen tial purposes and kept in good condition and that the peti tioner 's requirement for personal occupation is not bona fide." The petition was dismissed by the Rent Controller observing that the premises did not need demolition and further that, as the premises had been leased out for non residential purposes and the landlord could not seek its conversion into residential use without the controller 's application, the petitioner 's allegation that he required it for personal use was neither tenable nor bona fide.
Ramaswamy Gounder filed a petition again in 1979 for the eviction of the respondent but he died in February 1979 and the petition filed by him was dismissed for default.
There after his legal representatives (the present respondents) instituted a petition for eviction 787 (R.C.O.P. 19/79 out of which the present proceedings have arisen) of the respondents on the grounds of demolition and re construction and of wilful denial of title within the meaning of Ss. 14(1)(b) and 10(2)(vii) of the Tamil Nadu Buildings (Lease and Rent Control) Act.
In the meantime, the provisions of the Madras City Tenants ' Protection Act, 1922 (Later renamed the Tamil Nadu City Tenants ' Protection Act) were extended to the municipal limits of Udumalpettai within which the premises in question were located.
Taking advantage of this, the respondent filed O.P. 1/79 (in the same court of District Munsif cum Rent Controller) claiming the benefit of compulsory purchase conferred on tenants of land under the said Act.
The Dis trict Munsif cum Rent Controller allowed the lessor 's peti tion for eviction and dismissed the lessee 's petition.
The sub judge, on appeal, dismissed the appeals with a slight modification.
He was of the view that, except for the kai chalai, the other buildings had been put up by the respond ents with the permission of the lessor and that, hence, he was entitled to obtain compensation therefore by institution of separate appropriate proceedings.
The respondent filed two revision petitions before the High Court which declined to interfere.
The learned Judge held: "I do not see any reason to interfere with the orders of the courts below negativing the claim of the revision petition er.
In as much as admittedly the property situated in door No. 82 belonged to the landlord, this is a case to which section 14(1)(b) of the Tamil Nadu Buildings (Lease and Rent Control) Act 1960 will apply.
However, the property bearing door Nos. 80 and 81 belonged to the petitioner is the find ing.
On that all that the tenant could ask for will be for removal of the superstructure.
Beyond that his claim for compensation also could not be ordered since there was no prayer for the same.
The decision in M/s. Larsen & Toubro Ltd. vs The Trustees of Dharmamoorthy Rao Bahadur, Calvala Cunnan Chetty 's Charities by its Trustees, [1988] 2 LW 380 is distinguishable because this is a case of only one and a half grounds wherein there is a kaichalai of 600 sq.
The removal shall take place within a period of three months from today.
The Civil revision petitions are dismissed.
" Hence these two appeals.
788 Though there have been claims made under the Rent Con trol Act by the lessor and under the City Tenants ' Protec tion Act by the lessee, the claim under the latter has not been pressed before us by the learned counsel for the appel lant who has confined his arguments before us to the only question whether the demised premises constitute a "build ing" within the meaning of section 2(2) of the Rent Control Act.
Sri C.S. Vaidyanathan, learned counsel for the appel lants submitted that the first appellate court has found, modifying the trial court 's findings in this regard, that the original lease comprised only of the vacant site, well and kaichalai and that all the other superstructures found in the demised premises had been put up by the appellant.
He contended that the 'kaichalai ' was merely in the nature of a shed put up for the tethering of cattle and that it was not a 'building ' within the meaning of the Rent Control Act.
Alternatively, he contended, even if the Kaichalai could be considered to be a building this was not a case of the lease of a building or hut with its appurtenant land: it was really a case of the lease of a vacant site to the petition er on which was situated a small hut in one corner.
The lease deed itself recites that the appellant had taken the premises for putting up a petrol pump.
In fact he did put in an underground storage tank, a petrol pump and other struc tures and carried on a petrol and kerosene business thereon.
Though the small Kaichalai was situate in a corner of the site, the lease intended by the parties was only that of the site.
The Kaichalai was no doubt not demolished and, per haps, the appellant also made use of it for the purposes of his business but, says Sri Vaidyanathan, this made no dif ference to the obvious and clear and dominant intention of both parties that it was the site that was leased out for a petrol pump business.
Sri Vaidyanathan contended that the issue is directly governed by the decision in the Larsen & Toubro case ; , to which one of us was a party.
He submitted that, where a lease is a composite one of land and buildings, the court has to address itself to the primary or dominant intention of the parties.
If this is to lease a building the lease of land being adjunct or incidental as in the Larsen & Toubro, case (supra), the Rent Control Act would apply.
On the other hand, if the dominant intention is to lease a site the presence of a building thereon not being considered material by either party the lease would not be one of a 'building ' covered by the Rent Control Act, whether or not it can be considered as a lease only of a vacant site governed by the City Tenant 's Protection Act.
Counsel contended that it is possible that there may be a grey area of leases which might fall under neither Act and proceedings in respect of which 789 may continue to be governed by the Transfer of Property Act, unaffected by these special laws.
The Rent Control Act contains a definition of the ex pression 'building ' which reads as follows: "2(2) 'building ' means any building or hut or part of a building or a hut, let or to be let separately for residen tial or non residential purposes and includes (a) the gardens, grounds and out houses, if any, appurtenant to such building, hut or part of such building or hut and let or to be let along with such building or hut, (b) any furniture supplied by the landlord for use in such building or hut or part of a building or hut, but does not include a room in a hotel or boarding house.
" We have not been able to get at the exact meaning of the Tamil word 'kaichalai '.
It, however, seems to denote a structure or a roof put up by hand.
Whatever may be the precise meaning of the term, we think that the definition in section 2(2) clearly includes the kaichalai in the present case.
Since the Act applies to residential and non residential buildings alike, the expression 'hut ' cannot be restricted only to huts or cottages intended to be lived in.
It will also take in any shed, hut or other crude or third class construction consisting of an enclosure made of mud or by poles supporting a tin or asbestos roof that can be put to use for any purpose, residential or non residential, in the same manner as any other first class construction.
The kaichalat is a structure which falls within the purview of the definition.
Counsel for the appellant is perhaps under stating its utility by describing it as a mere cattle shed.
The area of the shed is quite substantial and, as will be explained later, the parties also appear to have attached some importance to its existence on the site.
It is very difficult to hold, in view of the above definition, that the kaichalai is not a 'building ' within the meaning of section 2(2).
On behalf of the respondents, it is contended that, in a composite lease, the existence of a building or hut on the land (however small, insignificant or useless it may be) is sufficient per se to bring the lease within the scope of the Rent Control Act.
It is suggested for the respondent that it would be inarguable, once it is admitted or held 790 that the Kaichalai is a building and that the same has been let out, that still there is no letting out of a building within the meaning of the Act.
In support of his contention, Sri Parasaran, for the respondent, placed considerable reliance on Irani vs Chidarnbaram Chettiar, AIR 1953 Mad. 650.
He pointed out that, in that case there was a vast vacant land with only some stalls in one corner and a com pound wall but it was nevertheless held to be a case of lease of a building.
According to him, this case was not disapproved, but indeed indirectly approved, by this Court in Salay Md. Sait vs
J.M.S. Charity, [1969] 1 MLJ SC 16 though certain other cases (where leases of vacant sites with only the lessees ' buildings thereon were held to be leases of buildings) were overruled in that decision.
This case, according to him, decides that, once there is a build ing on the land, however insignificant, and it is let out, the case will be governed by the Rent Control Act.
We do not think this case is an authority for such an extreme posi tion.
It rather seems that the case was one decided on its own special facts.
At the time of the original lease by the landlord there was only a vacant site and a few small stalls.
But, by the time the relevant lease deed (which came up for consideration) was executed, it had become the site of a theatre.
No doubt the theatre did not belong to the lessor; nevertheless for several years the leased property had been sued as a theatre and the purpose of the parties was clearly that the leased premises should continue be used as a cinema theatre.
It was in this special situation that the Court came to the conclusion that it was plausible to hold the lease to be one of a building though if the struc tures not belonging to the landlord were left out of ac count, there was only a vacant site and a few stalls.
We think it would not be correct to draw support from this decision for the extreme proposition contended for on behalf of the respondent.
In our opinion, we have to travel beyond this solitary fact, go further to look at the, terms of the lease and the surrounding circumstances to find out what it is that the parties really intended.
There is no difficulty in determining the scope of the lease where a building and a piece of land are separately let out.
But in the case of composite lease of land and building, a question may well arise whether the lease is one of land although there is a small building or hut on it (which does not really figure in the transaction) or one of a lease of the building (in which the lease of land is incidental) or a lease of both regardless of their respec tive dimensions.
In determining whether a particular lease is of the one kind of another, difficulties are always bound to arise and it will be necessary to examine whether the parties intended to let out the building along with the lands or vice 791 versa.
The decisions in Sivarajan vs Official Receiver, AIR 1953 Trav.
Co. 105; Nagamony vs Tiruchittambalam, AIR 1953 Trav.
Co. 369; Official Trustee vs United Commercial Syndi cate, and Raj Narain vs Shiv Raj Saran, AIR , relied upon by Sri Vaidyanathan, were in stances where what the parties had in mind was only the lease of land, although there were certain petty structures thereon which were not demolished or kept out of the lease but were also let out.
They were clearly cases in which, we think, the applicability of the Rent Act was rightly ruled out.
On the other hand, Larsen & Toubro, ; is a case where there was the lease of a building although a vast extent of land was also included in the lease.
That was not a case which arose under the Rent Control Act but it illustrates the converse situation.
Sri Vaidyanathan wants to derive, from the case referred to above and certain cases which deal with other aspects which become relevant while considering a composite letting, a proposition that the dominant purpose of the letting should govern.
For instance, there are cases where factories, mills or cinema theatres are leased out and cases have held that the dominant object is to lease a factory, mill or theatre and that, even though in all these cases, the letting out of a building would be involved, the provisions of the Rent Control Act would not apply vide Venkayya vs Subba Rao, AIR 1957 A.P. 619; Uttam Chand vs Lalwani.
AIR 1965 SC 716 and Dwarka Prasad vs Dwarkadas; , But we think that this approach also seeks to over simplify the problem.
When we come down to consider the terms of a particular lease and the inten tion of the parties, there are bound to be a large variety of cases.
If the transaction clearly brings out a dominant intention and purpose as in the cases cited above, there may be on difficulty in drawing a conclusion one way or the other.
But it is not always necessary that there should be a dominant intention swaying the parties.
There may be cases where all that is intended is a joint lease of both the land and the building without there being any considerations 'suf ficient to justify spelling out an intention to give primacy to the land or the building.
For instance, where a person owns a building surrounded by a vast extent of vacant lands (which may not all be capable of being described appurtenant thereto, in the sense of being necessary for its use and enjoyment) and a party comes to him and desires to take a lease thereof, he may do so because he is interested either in the building or the land (as the case may be).
But the owner may very well say: "I am not interested in your need or purpose.
You may do what you like with the land (or building).
1 have got a compact property consisting of both and I want to let it out as such.
You may take it or leave it.
" The fact in such cases is that the owner has a building and land and he lets them 792 out together.
He is not bothered about the purpose for which the lease is being taken by the other party.
In such cases, it is very difficult to say that there is no lease of build ing at all unless there is some contra indication in the terms of the lease such as, for example, that the lessee could demolish the structure.
The test of dominant intention or purpose may not be very helpful in such cases in the context of this legislation.
Sri Vaidyanathan sought to contend that the words of section 2(2) "any building . . and gardens, grounds . . let or to be let along with it", import the concept that the dominant purpose should be a letting of the building.
We do not think that this is necessarily so.
The decision of this Court in Sultan Bros. P. Ltd. vs C.I.T., [ ; is of some relevance in this context.
There the Supreme Court was concerned with the interpretation of section 12(4) of the Indian Income tax Act, 1922 which read: "(4) Where an assessee lets on hire machinery plant or furniture belonging to him and also buildings, and the letting of the buildings inseparable from the letting of the said machinery, plant or furniture, he shall be entitled to allowances in accordance with the provisions of the clauses (iv), (v) and (vii) of sub section (2) of section 10 in respect of such buildings.
" The High Court took the view that the plant and machinery and buildings should not only be inseparably let out but also that "the primary letting must be of the machinery, plant or furniture and that together with such letting or along with such letting there (should be) letting of build ings." 1n that case, the High Court held, the primary let ting was of the building and so section 12(4) would not apply.
The Supreme Court did not approve of this reasoning.
It said: "Now the difficulty that we feel in accepting the view which appealed to the High Court and the Tribunal is that we find nothing in the language of sub section
(4) of section 12 to support it.
No doubt the sub section first mentions the letting of the machinery, plant or furniture and then refers to the letting of the building and further uses the word 'also ' in connection with the letting of the building.
We, however, think that this is too slender a foundation for the conclu sion that the intention was that the primary letting must be of the machinery, plant or furnitures.
In the absence of a much 793 stronger indication in the language used, there is no war rant for saying that the sub section contemplated that the letting of the building had to be incidental to the letting of the plant, machinery or furniture.
It is pertinent to ask that if the intention was that the letting of the plant, machinery or furniture should be primary, why did not the section say so? Furthermore, we find it practically impossi ble to imagine how the letting of a building could be in cidental to the letting of furniture, though we can see that the letting of a factory building may be incidental to the letting of the machinery or plant in it for the object there may be really to work the machinery.
If we are right in our view, as we think we are, that the letting of a building can never be incidental to the letting of furniture contained in it, then it must be held that no consideration of primary or secondary lettings arises inconstruing the section for what must apply when furniture is let and also buildings must equally apply when plant and machinery are let and also buildings.
We think all that sub section
(4) of section 12 contem plates is that the letting of machinery, plant or furniture should be inseparable from the letting of the buildings." The Court proceeded then to consider the concept of 'insepa rable letting ' and observed: "It seems to us that the inseparability referred to in sub section (4) is an inseparability arising from the intention of the parties.
That intention may be ascertained by flaming the following questions: Was it the intention in making the lease and it matters not whether there is one lease or two, that is, separate leases in respect of the furniture and the building that the two should be enjoyed together? Was it the intention to make the letting of the two practically one letting? Would one have been let alone or a lease of it accepted without the other? If the answers to the first two questions are in the affirmative, and the last in the nega tive then, in our view, it has to be held that it was in tended that the lettings would be inseparable.
This view also provides a justification for taking the case of the income from the lease of a building out of section 9 and putting it under section 12 as a residuary head of income.
It then be comes a new kind of income, not covered by section 9, that is, income not from the ownership of the building alone but an income which 794 though arising from a building would not have arisen if the plant, machinery and furniture had not also been let along with it.
" Though the context was somewhat different, the observations in that case are of great assistance.
We think that, in the context here also, we should be guided not by any theory of dominant purpose but by the consideration as to whether the parties intended that that the building and land should go together or whether the lessor could have intended to let out the land without the building.
The latter inference can perhaps be generally drawn in certain cases where only the lease of land dominated the thoughts of the parties but the mere fact that the building is small or that the land is vast or that the lessee had in mind a particular purpose cannot be conclusive.
Let us now turn, in the above background, to a consider ation of the lease deed in the present case.
As already mentioned, counsel for the appellant strongly relies on the purpose of the lease and seeks to make out that the building (kaichalai) was not really a significant part of the lease.
This contention is stoutly refuted on behalf of the respond ents.
It is pointed out that the kaichalai was of substan tial dimensions and that counsel for the appellant is not fight in characterising it as a mere cattle shed.
It is pointed out that the shed was also admittedly used by the appellants for the purposes of its business and there is nothing to show that this was also not in contemplation at the time of the lease.
Again it is pointed out that, in some parts of the lease deeds, the vernacular version gives first place to the kaichalai rather than to the vacant site.
Also, every one of the lease deeds attaches special emphasis that the kaichalai should not be removed but should be returned to the lessor without any damage.
We may also advert to one more circumstance which shows beyond doubt that the kaicha lai was not an insignificant structure.
We have earlier referred to the fact that Ramaswamy Gounder had filed an earlier eviction petition on the ground that he needed the premises for personal occupation and immediate demolition.
The lessee 's defence to this was not that the kaichalai was a cattle shed unfit for personal occupation, The defence was that it had been let out for a non residential purpose and could not be converted to residential use without permis sion.
This certainly demonstrates that the kaichalai was capable of use both for residential and non residential purposes.
Counsel for the respondent, in fact, wanted to go a little further and hold it against the appellant that he had not taken in those proceedings the plea, now put for ward, that the Rent Control Act could not at all be invoked.
We will not, however, 795 hold this against the appellant 'as, at that time, the benefits of the Tenants ' Protection Act had not been extend ed to Udumalpettai and the tenant would not have gained anything by raising any such point.
But the pleadings in those proceedings as well as the order of the Rent Control ler therein leave no doubt that the kaichalai was a material structure let out as such to the lessee for non residential purposes and which, with necessary permission, could also have been used for residential purposes.
Having regard to all these circumstances, the correct inference appears to be that what the lessor intended was a lease of both the land and the building.
The land was to be put to use for a petrol pump; so far as the building was concerned, the lessee was at liberty to use it as he liked but he had to maintain it in good condition and return it at the end of the lease.
This was a composite lease with a composite purpose.
It is difficult to break up the integrity of the lease as one of land alone or of building alone.
In these circumstances, we think this letting would come in within the scope of the Rent Control Act, for the reasons already explained.
Before concluding, we may touch upon two more relevant aspects.
The first is the use of the word "separately" in section 2(2).
This, however, does not affect our above construction of the section.
That word is intended to emphasise that, for purposes of the Act, a building means any unit comprising the whole or part of a building that is separately let out.
It does not mean it cannot mean that composite leases of land and building would not be covered by it.
That would be clearly contrary to the language of the whole clause which specifically talks of joint letting of land and building.
The second is the restriction of the applicability of section 2(2) to cases of letting of building and appurtenant lands only.
It may be suggested that the lands here are not "appurtenant" except perhaps to the extent required for providing access to the Kaichalai.
This argument is not very helpful to the appellants.
At best, it can mean that the Kaichalai and only a part of land needed for its enjoyment or use would be governed by the Rent Control Act.
But this was not the contention of the appellant and no attempt has been made to ascertain what the extent of such "appurtenant" land could be.
That apart, we are inclined to think that the word "appurtenant" has, in the context, a much wider mean ing.
It is not just restricted to land which, on a consider ation of the circumstances, a court may consider necessary or imperative for its enjoyment.
It should be construed as comprehending the land which the parties considered appro priate to let along with the building.
To hold to the con trary may give rise to practical difficulties.
Suppose there is, in the middle of a metropolis, a bungalow with a vast extent of land sur 796 rounding it such as for e.g. in the Larsen & Toubro case and this is let out to a tenant.
If a very strict and narrow interpretation is given to the word "appurtenant", it is arguable that a considerable part of the surrounding land is surplus to the requirements of the lessee of the building.
But, we think, no argument is needed to say that such a lease would be a lease of building for the purposes of the Rent Control Act.
Where a person leases a building together with land, it seems impermissible in the absence of clear intention spelt out in the deed, to dissect the lease as (a) of building and appurtenant land covered by the Rent Control Act and (b) of land alone governed by other relevant statu tory provisions.
What the parties have joined, one would think, the court cannot tear as under.
In fact, we may point out that a wider meaning for this word was convassed in Irani vs Chidambaram Chettiar, AIR 1953 Madras 650 which the court had no necessity to go into in the view taken by it on the interpretation of the lease deed.
In this case also no contention has been raised in regard to this aspect and so we shall also leave open the precise connotation of the word except to say that it may warrant a wide meaning in the context.
For the reasons discussed above, we see no grounds to interfere with the judgments of the courts below.
The appeal is dismissed but we make no order as to costs.
R.S.S. Appeal dis missed.
[/INST]In the South Eastern Railway the cadre initially com prised of Assistant Station Masters at the bottom and the Station Masters at the top.
Initial appointment of ASM was made in the scale of Rs.360 540.
The promotional ladder bifurcated into: (i) ASM to SM, and (ii) ASM to SM, both in the scale of Rs.425 640 (non selection), and then Rs.455700 (selection); before becoming one common source for promotion to Deputy Station Superintendent/SM Rs.550 750 (non selec tion) Rs.700800 Station Superintendent (selection), and Rs.840 1010 Station Superintendent (non selection).
For moving up the promotional ladder every ASM was required to opt if he would proceed on the channel of ASM to ASM, or ASM to SM.
Later, re structuring was done in 'C ' and 'D ' cadres in the scales, designation and percentage; in selection and non selection posts.
Two alternatives were framed described as alternative 'I ' for the combined cadre, and alternative 'II ' for the separate cadres; which were to be adopted by the respective zones depending on the prevailing cadre pattern.
For ASM/SM two alternatives were provided to be adopted by the respective zones depending on whether the existing cadre was separate or combined.
In alternative 'I ' meant for the combined cadre SMs in the scale of Rs.425 640 and Rs.455 700 were designated as Deputy Station Superin tendents and Station Superintendents in the scale of Rs.540 750 and Rs.700 900 respectively.
Pursuant to the re structuring, the Chief Personal Officer issued a letter to the Divisional Manager, South Eastern Railway that it has been decided that alternative 'I ' enunciated by the Board shall be followed on the said railway, and the existing system of calling for options from ASMs for the post of SMs/ASMs in the higher grade was being dispensed with seniority of staff in each grade shall be determined on 814 the basis of non fortutious service rendered in such grade.
Since the aforesaid direction of the Chief Personnel Officer worked to the prejudice of numerous persons who had exercised their options to the promotional channel of Sta tion Master, they approached the High Court/Tribunal by way of writ petitions/claim petitions but without any success.
Some of these disputes came up in appeal before this Court which were disposed of on July 30, 1987 by directing the Railway Board to consider if the Chief Personnel Officer while implementing its scheme deviated from its terms, and implemented it to the prejudice of those appellants.
The appellants Station Masters of South/Eastern Railway aggrieved by the implementation of the scheme of re struc turing by the Chief Personnel Officer approached the Central Administrative Tribunal, which rejected their claim, as the implementation was beneficial to the majority, and further found that the alternative 'I ' of the scheme meant for the combined cadre was rightly adopted as the cadre of Assistant Station Masters and Station Masters in the South Eastern Zone was combined before 1983.
The appellants in their appeal to this Court challenged the correctness of the aforesaid findings and also claimed that the implementation of the scheme was highly unjust and inequitable.
It was claimed that if alternative 'I ' was adopted then it should have been given full play and the SMs should have been placed en bloc in the re designated posts without any further process of selection.
Disposing of the appeal by directing that the respond ents shall grant promotional benefit to those 204 SMs who have exercised option before 1983, this Court, HELD: 1.
It is not disputed that in the South Eastern Zone the practice of obtaining option by ASM for promotional channel was in vogue before 1983.
The dispute was about the time when it was exercised.
According to the appellant it was at the time of recruitment and appointment even on pain of disciplinary action whereas according to the officials it used to be offered when vacancy arose according to seniori ty.
Unfortunately, it was accepted by the Tribunal as well without any foundation in the record by shutting its eyes to the letters dated 14th May, 1965 and 20th May, 1970, issued by the Divisional 815 Superintendent which shows that options were required to be exercised by ASMs irrespective of availability of vacancy before the target date, and if it was not exercised then they were liable to disciplinary action.
[818F H; 819A] 2.
Even the claim of the Administration that cadre of ASM/SM was combined cadre in South East Railway was not substantiated by any document, letter or order.
On the other hand, the letter dated 10th May, 1984 issued by Additional District Pay Commissioner to the General Manager recognises existence of separate cadre.
[819F] 3.
Existence of separate cadres prior to 1983 and chang ing over to a combined system is not the same thing as claiming that the cadre which existed prior to 1983 was a combined cadre.
[820C] 4.
Since the cadre in South Eastern Railway was a sepa rate one, the Chief Personnel Officer deviated from the scheme by applying alternative 'I ' which was to be adopted by a zone where combined cadre existed and if alternative 'I ' was adopted then the SMs should have been automatically designated as Deputy Station Superintendents and they should not have been subjected to the selection procedure.
In alternative 'I ' SM in scale of Rs.425 640 automatically stood redesignated as Deputy Station Superintendents.
But the scale does not find place in alternative II.
But both the employees unions have accepted the implementation of the letter of the Chief Personnel Officer as h is beneficial to a majority of the employees.
Therefore, it may not be dis turbed.
At the same time all those 204 employees who had opted before 1983 must be entitled to the benefit which would have been available to them on their options.
[820F H]
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<s>[INST] Summarize the judgementminal Appeal No. 129 of 1960.
Appeal by special leave from the judgment and order dated March 9, 1960, of the Allahabad High Court in Criminal Revision No. 697 of 1959.
Naunit Lal, for the appellant.
G. C. Mathur and C. P. Lal, for the respondent.
April 5.
The Judgment of the Court was delivered by SARKAR, J.
The appellant who had earlier left India, returned on a passport granted by the Government of Pakistan on May 16, 1953.
He had a visa endorsed on his passport by the Indian authorities permitting him to stay in India for three months and this permission was later extended upto November 15, 1953.
He did not, however, return to Pakistan within that date upon which he was convicted under section 14 of 777 the , by a Sub Divisional Magistrate on March 14, 1959, and sentenced to rigorous imprisonment for one year.
His appeal to a Sessions Judge was dismissed and the High Court at Allahabad, on being moved in revision, refused to interfere with the order of the Sessions Judge.
This appeal is against the judgment of the High Court.
The appellant had been convicted for breach of paragraph 7 of the Foreigners Order of 1948, issued under section 3 of the .
That paragraph requires that every foreigner entering India on the authority of a visa issued in pursuance of the Indian Passport Act, 1920, shall obtain from the appropriate authority a permit indicating the period during which he is authorised to remain in India and shall, unless that period is extended, depart from India before its expiry.
As earlier stated, the visa on the appellant 's passport showed that he had permission to stay in India till November 15, 1953 but he stayed on after that date.
Hence the prosecution.
It is contended on behalf of the appellant that he could not be convicted of a breach of paragraph 7 of the Foreigners Order for that paragraph applies to a "foreigner" entering India on the authority of a visa issued in pursuance of the Indian Passport Act and overstaying the period for which he is permitted to stay in India.
It is contended that the foreigner contemplated in this paragraph is a person who was a foreigner on the date of his entry into India.
The appellant says that on that date he was not a foreigner and, therefore, the provisions of the paragraph do not apply to him.
This contention of the appellant is plainly correct.
The paragraph contemplates a foreigner entering India, and therefore, a person who at the date of the entry was a foreigner.
Now, the word "foreigner" in paragraph 7 has the same meaning as that word has in the .
The word "foreigner" is defined in that Act in section 2(a).
That definition has changed from time to time, but we are concerned with the definition as it stood in 778 1953 when the appellant entered India, which was in these terms: "foreigner" means a person who. . (1) is not a natural born British subject as defined in sub sections (1) and (2) of Section I of the British Nationality and Status of Aliens Act, 1914, or (2) has not been granted a certificate of naturalisation as a British subject under any law for the time being in force in British India, or (3) is not a citizen of India.
The appellants contention is that he was not a foreigner because he came within el.
(1) of the definition as he was a natural born British subject within section l(l), (a) of the British Nationality and Status of Aliens Act, 1914.
Now that provision is in these terms: section 1.
(1) The following persons shall be deemed to be natural born British subjects, namely, (a) any person born within His Majesty 's Dominion and allegiance.
That the appellant was born at Allahabad at a time when it was within his Britannic Majesty 's Dominion is not in dispute.
That being so, we think that it must be held that the date of his entry into India the appellant was a natural born British subject and, therefore, not a foreigner.
He could not have committed a breach of paragraph 7 of the Foreigners Order.
In the result we allow the appeal and set aside the conviction of the appellant and sentence passed on him.
Before leaving this case we think it right to make a few more observations.
The definition of a foreigner in the was amended with effect from January 19, '1957, by Act 11 of 1957.
The definition since that date is as follows: " "foreigner" means a person who is not a citizen of India".
Under section 3(2), (e) of the , the Central Government has power to provide by order made by it that a foreigner shall not remain in India.
We wish to make it clear that we have said nothing as to the effect of the amended definition of a "foreigner" on the status of the 779 appellant.
No question as to the effect of the amended definition on the appellant 's status fell for our decision in this case for we were only concerned with his status in 1953.
We would also point out that no order appears to have been made concerning the appellant under section 3(2)(c) and we are not to be understood as deciding any question as to whether such an order could or could not have been made against the appellant.
Appeal allowed.
[/INST]The only question that a civil court is precluded from determining under section 9(2) of the , read with r. 30 Of the Rules framed under the Act is the question as to whether, when or how any person has acquired the citizenship of another country.
They are not prevented from determining other questions concerning the nationality of a person.
Where, therefore, a suit brought for a declaration that the appellants were Indian Citizens, where they themselves had raised the question of acquisition of foreign citizenship, was resisted on the ground that they had never been Indian Citizens, and the courts below dismissed the suit in its entirety, Held, that the courts below were in error in holding that the suit was barred in its entirety by section 9(2) Of the Act.
They should have decided the question as to whether the appellants had ever been citizens of India and, if the finding was in their favour, should have stayed the suit till the Central Government had decided whether such citizenship was renounced and if the finding was against the appellants dismissed the suit.
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<s>[INST] Summarize the judgementCivil Appeal No. 1108 of 1976.
Appeal by special leave from the judgment and order dated the 17th April 1976 of the Madhya Pradesh High Court in Second Appeal No. 113 of 1969.
S.K. Mehta, P.N. Puri and E.M.S. Anam for the Appellants.
P.P. Juneja for the Respondent.
The following Judgments were delivered DESAI, J. A tenant under a decree of eviction is the appellant in this appeal by special leave.
609 Respondent landlord filed a suit for recovery of possession of premises being a small shop admeasuring 7 'X 22 ' forming part of a big non residential building situated in Sadar Bazar, Bilaspur town in Madhya Pradesh on two grounds, to wit: (i) that he (landlord) intended to open a medicine shop and he had no other reasonably suitable accommodation for the same in the town; and (ii) that he (landlord) required the suit building for the purpose of reconstruction and repairs which could not be carried out unless it was vacated by the defendant.
The tenant resisted the suit pointing out that the landlord on his own admission as set out in plaint para 4 was in possession of a major portion of a non residential building of which he acquired possession from the firm of Goraldas Parmanand which accommodation was sufficient for starting the business of Chemists and Druggists shop.
It was also contended that the building was not in a dilapidated condition and did not need reconstruction and repairs.
The trial court recorded a finding that the building was in a dilapidated condition and reconstruction of it was essential and the landlord had sufficient funds to undertake reconstruction.
On the question of personal requirement of plaintiff to start a medicine shop, the trial court recorded a finding that in the front portion of building landlord would start his business as Chemists and Druggists and the rear of the building would be utilized by him for his residence.
It was further held that as the landlord 's requirement was a composite one in that he wanted to reconstruct the building and then use the whole of it for himself, therefore, the tenant was not entitled to be inducted in the reconstructed building which he would have been entitled to claim under section 18 of the Madhya Pradesh Accommodation Control Act, 1961 ( 'Act ' for short).
An appeal by the tenant to the District Court elicited in para 20 a finding that though the landlord was studying he might choose his career for business after he completed his education and he had got Rs. 8,000 in a fixed deposit account in a bank and even though he obtained a decree against the firm of M/s. Goral Parmanand he had not got actual possession as the litigation was still pending and, therefore, the plaintiff 's requirement of the whole building was established.
The finding that the house was in dilapidated condition and required reconstruction was affirmed.
When the matter reached the High Court in second appeal by the tenant an application under Order VI, rule 17, Code of Civil 610 Procedure, was made praying for an amendment to the written statement alleging that the firm Goraldas Parmanand has vacated the whole of the remaining portion of the building excluding the premises in possession of the tenant measuring 7 ' X 22 ' and that the plaintiff has obtained actual possession of the same and if this aspect was taken into consideration the plaintiff landlord would not be entitled to a decree for eviction under section 12(1)(f) of the Act.
The High Court rejected the application observing that the adjoining portion occupied by firm Goraldas Parmanand was vacated by the firm as far back as in the year 1972 and therefore the application for amendment filed 3 1/2 years after the filing of the appeal must be rejected on the ground of delay and laches.
Further, despite the judgment of this Court in Pasupuleti Venkateswarlu vs The Motor and General Traders, the High Court felt considerable hesitation in taking note of this event subsequent to the passing of the decree for eviction by the trial court because of its earlier decision in Taramal vs Laxaman Sewak and Ors in which it was held that the definition of 'tenant ' in the Act would not enable a tenant, though in possession but against whom a decree or order for eviction has been made, to invite the Court to take notice of events subsequent to the passing of the decree for eviction by the trial court.
The decision of this Court was distinguished on the ground that the definition of the expression 'tenant ' in Andhra Pradesh Building (Lease Rent and Eviction) Control Act, 1960, was somewhat different and was wide enough to include such persons.
The High Court accordingly rejected the application and dismissed the second appeal confirming the decree for eviction.
Section 12(1)(f) under which eviction of the tenant is sought by the landlord reads as under: "that the accommodation let for non residential purposes is required bona fide by the landlord for the purpose of continuing or starting his business or that of any of his major sons or unmarried daughters if he is the owner thereof or for any person for whose benefit the accommodation is held and that the landlord or such person has no other reasonably suitable non residential accommodation of his own in his occupation in the city or town concerned.
" In order to be able to seek eviction of a tenant under section 12(1)(f) the landlord has not only to establish that he bona fide requires the 611 accommodation let to the tenant for non residential purposes for the purpose of continuing or starting his business but he must further show that the landlord has no other reasonably suitable nonresidential accommodation of his own in his occupation in the city or the town concerned.
The landlord in this case seeks eviction of the tenant from a building let for non residential purpose.
He can obtain possession either for continuing or starting his business.
He was a student at the relevant time.
He appeared to have completed his education thereafter.
It is stated in the plaint unambiguously that he wanted to start business by opening a medicine shop.
In other words, he wanted to start a Chemist and Druggist shop.
He must, therefore, show that he has not got in his possession a reasonably suitable non residential accommodation of his own in his occupation in the town of Bilaspur.
The suit building, as earlier observed, is in the city of Bilaspur and situated in Sadar Bazar, obviously a business locality.
Respondent landlord claims to be the owner of the whole building.
The suit premises in possession of the tenant in which he is carrying on a small kirana shop admittedly admeasures 7 frontage on the main road and 22 in depth.
In other words it is 7 'X 22 '.
The whole building of which demised premises form a small part appears to be having a frontage of 28.
3 passage has to be excluded.
The premises in possession of the tenant has a frontage of 7.
The length of the building or what is styled as depth was given out to us as 90 by learned counsel for respondent landlord.
18 ' frontage with 90 ' depth was thus in possession of firm Goraldas Parmanand.
Respondent landlord had also initiated proceedings for obtaining possession of the premises occupied by firm Goraldas Parmanand on the same ground, namely, that he wanted to start his business of Chemists and Druggists in the building.
The question is whether the premises occupied by firm Goraldas Parmanand has been vacated by the firm.
If the answer is in affirmative, the respondent landlord has thus obtained vacant possession of the whole of the premises occupied by firm Goraldas Parmanand.
Looking to the map annexed to the plaint and the evidence led in the case and the dimensions of the premises stated at the hearing of this appeal the area vacated by the previous tenant would be 18 'X90 ' plus portion at the back of the premises occupied by the present appellant which would be 7 'X 68 ' and it 612 has come in possession of the respondent.
The last question would be if landlord obtained vacant possession subsequent to the decree passed against the present appellant tenant by the Trial Court, whether the subsequent event could be noticed by the court for moulding the decree against the present appellant tenant.
Section 12 starts with a non obstante clause thereby curtailing the right of the landlord to seek eviction of the tenant which he might have under any other law and the right of eviction is made subject to the overriding provision of section 12.
It is thus an enabling section.
In order to avail of the benefit conferred by section 12 to seek eviction of the tenant the landlord must satisfy the essential ingredients of the section.
The landlord in this case seeks eviction of the tenant under section 12(1)(f).
He must, therefore, establish (i) that he requires bona fide possession of a building let for non residential purpose for continuing or starting his business; and (ii) that he has no other reasonably suitable non residential accommodation of his own in his occupation in the city or town concerned.
The burden to establish both the requirements of section 12(1)(f) is squarely on the landlord.
And before an allegation of fact to obtain the relief required is permitted to be proved, the law of pleadings require that such facts have to be alleged and must be put in issue.
Ordinarily, therefore, when a landlord seeks eviction under section 12(1)(f) the court after satisfying itself that there are proper pleadings must frame two issues namely (i) whether the plaintiff landlord proves that he bona fide requires possession of a building let to the tenant for non residential purpose for continuing or starting his business, and (ii) whether he proves that he has no other reasonably suitable non residential accommodation of his own in the city or town concerned.
Without elaborating we must notice a well established proposition that any amount of proof offered without pleadings is generally of no relevance.
Turning to the pleadings in this case the plaintiff in para 6 of the plaint has stated as under: "The plaintiff intends to start his own business in the said building after the said reconstruction.
He intends to open a medicine shop therein.
The plaintiff bona fide requires the suit house for the above purpose.
He has no other suitable accommodation for the same in the town.
" The cryptic averment is that the plaintiff has not got any other reasonably suitable accommodation in the same town.
However, 613 in para 4 of the plaint it is stated 'that the major portion of the building is in occupation of the firm Goraldas Parmanand and the plaintiff has already obtained a decree for its eviction therefrom '.
The defendant in his written statement has in term stated that the defendant is in possession of a small portion of the building, the remaining portion of which was in possession of firm M/s. Goraldas Parmanand.
In para 6 of the written statement it is further stated that on his own admission, the plaintiff has got a suitable alternative accommodation being the premises for which a decree of eviction is obtained for doing business and which is more than sufficient for his requirement.
The learned Trial Judge framed Issue No. 2(a) on the question whether the plaintiff landlord had no other reasonably suitable accommodation of his own in his occupation in the city.
While recording finding on this issue the cryptic observation in para 19 of the judgment is that the plaintiff is a student and he has no other accommodation for starting his own business.
There is not the slightest reference to the decree admittedly obtained by the plaintiff against firm M/s. Goraldas Parmanand which firm was carrying on business in a portion of the building which the plaintiff himself has described as the major portion of the building, the suit premises being a small portion of the whole building.
In the first appeal this contention is disposed of by observing that the alternative accommodation which the defendant has pleaded in his written statement is under litigation and therefore it cannot be treated as available to the plaintiff. ' In the second appeal in the High Court the defendant appellant moved an application under Order VI Rule 17 for amendment of the written statement for elaborating what was already stated that not only the decree obtained by the plaintiff against the adjoining tenant of the same building namely firm of M/s. Goraldas Parmanand has become final but the plaintiff in execution of the decree way back in 1972 obtained actual possession of the whole of area occupied by that firm and that forms major portion of the whole building.
This application, though, in our opinion, to be wholly superfluous in view of the pleadings hereinbefore set out and in view of the fact that the burden of proof of establishing that the landlord was not in possession of a reasonably suitable accommodation in the same town was on the plaintiff was rejected on untenable ground that the defendant appellant was guilty of delay and laches.
This application for amendent deserves to be granted, and we grant the same.
What is its impact ? Even while rejecting the application the High Court in terms observed in para 4 of its judgment as under: 614 'Adjoining portion was vacated by firm Goraldas Parmanand as far back as in the year 1972 '.
The High Court thus had before it a fact beyond dispute and beyond controversy that the major portion of the building was vacated by the adjoining tenant way back in 1972.
This was an uncontroverted fact.
Therefore remand on this point is an exercise in futility because the fact alleged in the application for amendment is admitted.
After rejecting the application on wholly untenable ground the High Court in 1976 affirmed the finding wholly contrary to record as available at that stage that the plaintiff landlord had no other reasonably suitable non residential accommodation of his own in his occupation in the city even though on landlord 's own admission he had acquired vacant possession of a major portion of the building let for non residential purpose as far back as 1972.
In the course of hearing we were repeatedly told that the finding of facts are sacrosanct.
The finding of fact ignoring incontrovertible admitted position which would non suit the plaintiff if upheld would be travesty of justice.
The burden being on the plaintiff to show that he had no other reasonably suitable accommodation for carrying on the business which he wanted to start in the suit premises, it was for the plaintiff to show that he had not acquired possession from firm Goraldas Parmanand.
Alternatively the plaintiff should have shown that the said adjacent accommodation was not reasonably suitable for the business he wanted to start.
He has done neither.
On the contrary plaintiff has admittedly adopted a position in the plaint that he not only wanted suit premises but also the adjoining premises of which he had obtained possession for starting his business.
In such a situation if the High Court had kept in view that the plaintiff had already with him viz. possession of a building having 18 frontage on the main road and 90 depth plus portion at the back of the suit premises in his possession it would have to come to an affirmative conclusion that the plaintiff had sufficient accommodation for starting his business as a Chemists and Druggists.
It was no where pointed out by the plaintiff that the shop of Chemists and Druggists or a medicine shop would require frontage of more than 18 '.
18 ' frontage on a main road in a city like Bilaspur is sufficiently attractive and accommodating.
The depth of the shop as given out to us being 90 '; therefore landlord has now in his possession shop admeasuring 18 ' x 90 ' plus the area of 7 ' x 90 ' at the back of the suit premises being part of the same building.
Would this not provide more than ample accommodation to the plaintiff to start his business as a Chemists and Druggists ? Not one 615 word has been said that the accommodation which is already in possession of the plaintiff is neither suitable nor reasonably suitable nor sufficient for starting his business.
In fact the very stand of plaintiff landlord as accepted by the High Court that some portion at the back would be utilised by landlord for residence would affirmatively establish that landlord has more than enough vacant accommodation in possession for starting his business.
The difficulty which the High Court experienced was whether a tenant under a decree of eviction could invite the Court to take into consideration the events subsequent to passing of the decree which if noticed would non suit the landlord.
The definition of expression 'tenant ' in the Act excludes from its operation a person in possession against whom any order or decree for eviction has been made.
The High Court referred to its earlier judgment in Taramal 's case wherein it was held that the protection to a statutory tenant lapsed with the passing of a decree and such a person had no right to bring on record new circumstances which were not in existence at the date of the passing of the decree.
This approach wholly overlooks the scheme of the Rent Restriction Act.
The M.P. Act enables a landlord to seek eviction of a tenant and obtain possession under various circumstances set out in section 12.
If a landlord bona fide requires possession of a premises let for residential purpose for his own use, he can sue and obtain possession.
He is equally entitled to obtain possession of the premises let for non residential purposes if he wants to continue or start his business.
If he commences the proceedings for eviction on the ground of personal requirement he must be able to allege and show the requirement on the date of initiation of action in the Court which would be his cause of action.
But that is not sufficient.
This requirement must continue throughout the progress of the litigation and must exist on the date of the decree and when we say decree we mean the decree of the final court.
Any other view would defeat the beneficial provisions of a welfare legislation like the Rent Registration Act.
If the landlord is able to show his requirement when the action is commenced and the requirement continued till the date of the decree of the Trial Court and thereafter during the pendency of the appeal by the tenant if the landlord comes in possession of the premises sufficient to satisfy his requirement, on the view taken by the High Court, the tenant should be able to show that the subsequent events disentitled the plaintiff, on the only ground that here is tenant against whom a decree or order for 616 eviction has been passed and no additional evidence was admissible to take note of subsequent events.
When a statutory right of appeal is conferred against the decree or the order and once in exercise of the right an appeal is preferred the decree or order ceases to be final.
What the definition of 'tenant ' excludes from its operation is the person against whom the decree or order for eviction is made and the decree or order has become final in the sense that it is not open to further adjudication by a court or heirarachy of courts.
An appeal is a continuation of suit.
Therefore a tenant against whom a decree for eviction is passed by Trial Court does not lose protection if he files the appeal because if appeal is allowed the umbrella of statutory protection shields him.
Therefore it is indisputable that the decree or order for eviction referred to in the definition of tenant must mean final decree or final order of eviction.
Once an appeal against decree or order of eviction is preferred the appeal being a continuation of suit, landlord 's need must be shown to continue to exist at appellate stage.
If the tenant is in a position to show that the need or requirement no more exists because of subsequent events, it would be open to him to point out such events and the Court including the appellate court has to examine, evaluate and adjudicate the same.
Otherwise the landlord would derive an unfair advantage.
An illustration would clarify what we want to convey.
A landlord was in a position to show he needed possession of demised premises on the date of the suit as well as on the date of the decree of the trial court.
When the matter was pending in appeal at the instance of the tenant, the landlord built a house or bungalow which would fully satisfy his requirement.
If this subsequent event is taken into consideration, the landlord would have to be non suited.
Can the court shut its eyes and evict the tenant ? Such is neither the spirit nor intendment of Rent Restriction Act which was enacted to fetter the unfettered right of re entry.
Therefore when an action is brought by the landlord under Rent Restriction Act for eviction on the ground of personal requirement, his need must not only be shown to exist at the date of the suit, but must exist on the date of the appellate decree, or the date when a higher court deals with the matter.
During the progress and passage of proceeding from court to court if subsequent events occur which if noticed would non suit the plaintiff, the court has to examine and evaluate the same and mould the decree accordingly.
This position is no more in controversy in view of a decision of this Court in Pasupuleti Venkateswarlu (supra) where Justice Krishna Iyer speaking for the Court observed as under: "We affirm the proposition that for making the right or remedy claimed by the party just and meaningfully as 617 also legally and factually in accord with the current realities, the court can, and in many cases must, take cautions cognisance of events and development subsequent to the institution of the proceeding provided the rules of fairness to both sides are scrupulously observed.
" In order to fully evaluate the law laid down in the aforementioned extracted passage it is worthwhile to give the background of facts in which it was made.
The appellant landlord in that case was the owner of a large building which was leased out in separate portions to several tenants.
One of such tenants was the respondent.
The landlord wanted to start a business in automobile spares and claimed eviction of the respondent under the Rent Restriction Act being Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Act, 1960.
The petition was resisted and the Rent Controller dismissed the petition.
The appeal of the landlord failed.
But in revision the High Court chose to remand the case to the appellate authority and the appellate authority in turn remitted the case to the Trial Court for fresh disposal in accordance with certain directions.
The landlord preferred a revision petition against the order of remand by the first appellate court.
The High Court dismissed the action of the landlord taking cognisance of a subsequent event namely that the landlord acquired possession of a reasonable suitable non residential building in the same town.
In appeal to this Court it was seriously contended that it was improper for the High Court to take into consideration the subsequent events and this contention was negatived inter alia on the ground in the passage extracted above.
Therefore, it is now incontrovertible that where possession is sought for personal requirement it would be correct to say that the requirement pleaded by the landlord must not only exist on the date of the action but must subsist till the final decree or an order for eviction is made.
If in the meantime events have cropped up which would show that the landlord 's requirement is wholly satisfied then in that case his action must fail and in such a situation it is incorrect to say that as decree or order for eviction is passed against the tenant he cannot invite the court to take into consideration subsequent events.
He can be precluded from so contending when the decree or order for eviction has become final.
In view of the decision in Pasupuleti 's case (supra) the decision of the Madhya Pradesh High Court in Taramal 's case must be taken to have been overruled and it could not be distinguished only on the ground that the definition of 'tenant ' in the Madhya Pradesh Act is different from the one in Andhra Pradesh 618 Act.
Therefore, the High Court was in error in declining to take this subsequent event which was admittedly put forth in the plaint itself into consideration.
The landlord wants to start his business as Chemists and Druggists.
On his own admission he has in his possession a shop admeasuring 18 ' X 90 ' plus 7 ' X 68 ' forming part of the same building the remaining small portion of 7 ' X 22 is occupied by the tenant.
The landlord has not stated that so much space with 18 ' frontage is not reasonably suitable for starting his business as Chemist and Druggist.
In that view of the matter the plaintiff 's suit for eviction on the ground mentioned in section 12(1)(f) must fail and this is being done by not disturbing any finding of fact but relying upon the admission of the plaintiff himself.
There is an error apparent on the face of the record inasmuch as when the High Court was faced with a dilemma whether the landlord required the whole of the building including demised premises now in possession of the appellant tenant for starting his business of Chemists and Druggists and when the High Court had before it an indisputable fact that the respondent landlord has obtained vacant possession of a major portion of the building which was in possession of firm M/s. Goraldas Parmanand, was it necessary for him to have any additional accommodation ? The High Court got over this dilemma by observing and by affirming the finding of the subordinate courts that the remaining portion of the premises would be used by the landlord for his residence and even though the portion utilised for the purpose of running the business would be smaller compared to the one to be utilized for the residence it would still not be violative of sub section (7) of sec.
12 because such a composite user would not radically change the purpose for which the accommodation was let.
This finding is contrary to record and pleadings.
Minutely scanning the plaint presented by the landlord there is not the slightest suggestion that he needs any accommodation for his residence.
He has not even stated whether at present he is residing in some place of his own though he claimed to be residing in the same town.
He does not say whether he is under any obligation to surrender that premises.
Section 12(1)(e) specifically provides for a landlord obtaining possession of a building let for residential purposes if he bona fide requires the same for his own use and occupation.
But there is an additional condition he must fulfil namely he must further show that he has no other reasonably suitable residential accommodation of his own in his 619 occupation in the city or town concerned.
Utter silence of the landlord on this point would be a compelling circumstance for the court not to go in search for some imaginary requirement of the landlord of accommodation for his residence.
In the context of these facts the Trial Court and the first Appellate Court committed a manifest error apparent on the record by upholding the plaintiff 's case by awarding possession also on the ground neither pleaded nor suggested.
The landlord must have been quite aware that he cannot obtain possession of any accommodation for his residence.
There fore, the finding of the High Court and courts subordinate to it that the respondent landlord requires possession of the whole of the building including the one occupied by the tenant for starting his business as Chemists and Druggists as also for his residence is vitiated beyond repair.
Once impermissible approach to the facts of the case on hand is avoided although facts found by the Courts are accepted as sacrosanct yet in view of the incontrovertible position that emerges from the evidence itself that the landlord has acquired major portion of the building in which he can start his business as Chemists and Druggists he is not entitled to an inch of an extra space under section 12(1)(f) of the Act.
Respondent landlord also sought possession on the ground set out in section 12(1)(h) which reads as under: "that the accommodation is required bona fide by the landlord for the purpose of building or rebuilding or making thereto any substantial additions or alternations and that such building or re building or alterations cannot be carried out without the accommodation being vacated." In order to obtain possession under section 12(1)(h) the landlord again has to establish his bona fide requirement of the accommodation in possession of the tenant for the purpose of building or rebuilding or making thereto any substantial additions or alterations and must further show that such building or re building or alterations cannot be carried out without the accommodation being vacated.
The case of the landlord on this point is that he wants possession of the whole of the building including the suit premises and he has Rs. 8,000 in a fixed deposit account and that as the building is in a dilapidated condition, he would reconstruct the same and use it for himself both for residence and starting his business.
If landlord acquires possession under section 12(1)(h), section 620 18 imposes corresponding obligation which reads as under: "18.
Recovery of possession for repairs and rebuilding and re entry. (1) In making any order on the grounds specified in clause (g) or clause (h) of sub section (1) of Sec. 12, the Court shall ascertain from the tenant whether he elects to be placed in occupation of the accommodation or part thereof from which he is to be evicted and, if the tenant so elects, shall record the fact of the before election in the order and specify therein the date on or which he shall deliver possession so as to enable the landlord to commence the work of repairs or building or re building, as the case may be." The courts declined to grant any relief to the tenant under section 18 on the ground that as the landlord 's requirement is a composite one, the tenant is not entitled to be re inducted in the building that may be reconstructed by the landlord after obtaining possession of the same.
Now once it is held that the landlord is not entitled to possession for his residence and he has more than enough accommodation in his possession for carrying on his business, the composite requirement disappears.
Landlord 's case will, therefore, have to be exclusively examined in the context of section 12(1)(h).
Two contentions were urged on behalf of the appellant to negative the case of the landlord in this behalf; one that the building is not in a dilapidated condition and secondly it can be repaired without vacating the premises.
As all the courts have concurrently found that the building is in a dilapidated condition, this finding is entitled to respect and it is not proper for us to interfere with the same.
The question would however be whether the landlord wants to reconstruct the demised portion of the premises even though he is not entitled to acquire possession of the same for his use and that he would be under an obligation to re induct the tenant after its construction.
The further question is whether the landlord is interested in reconstructing the whole building.
It was alternatively contended that no attempt is made to find out whether the landlord would be in a position to reconstruct that part of the building which has come in his possession once he is not in a position to acquire possession of the demised premises for his own use.
This situation calls for a fresh examination of the case of the landlord under section 12(1)(h).
If landlord is to be awarded possession under section 12(1)(h) on the footing that, that is the only ground on which he can seek possession, it will have to be found out after giving oppor 621 tunity to the landlord to prove whether he is interested in re building that portion of the building which is occupied by the appellant and further the court should give necessary direction under section 18.
In that event the court will have also to ascertain whether the portion which is now in possession of the landlord and which he may be interested in reconstructing can be reconstructed without the tenant vacating the demised premises.
As the whole foundation of the landlord 's case of composite requirement disappears the matter has to be examined afresh on the footing that the landlord has come to the court for possession under section 12(1)(h) only and if he succeeds in his prayer for possession on the ground mentioned in section 12(1)(h) it would be necessary for the court to give appropriate direction under section 18 of the Act.
As the matter has not been examined from this angle by any Court it has become inevitable, even though the litigation is pending for a long time, to remit the case for examination of this aspect.
The question is whether the remand should be to the first appellate court or to the trial court.
As the first appellate court is the fact finding court, in our opinion it would be appropriate for us to remit the case, after setting aside the decree of the first appellate court as well as the High Court, to the first appellate court to ascertain : (i) Whether the landlord is interested in reconstructing that portion of the building which is in possession of the tenant as demised premises; (ii) Whether the landlord would be in a position to reconstruct the building in his possession without the tenant being required to vacate the demised premises; and (iii)if the first two queries are answered in favour of the landlord, what should be the appropriate directions to be given in favour of the tenant as enjoined by section 18 ? Accordingly, this appeal is allowed and the decree of eviction made by the trial court and confirmed by the 1st appellate court and also by the High Court is set aside.
The prayer of the landlord for possession under section 12(1)(f) is negatived as he is not entitled to recover possession on the ground mentioned in section 12(1)(f).
The matter is remanded to the 1st Appellate Court for the limited purposes set out in the just preceding paragraph.
In the circumstances of the case there will be no order as to costs.
622 PATHAK J. This is tenant 's appeal by special leave against the judgment of the High Court of Madhya Pradesh arising out of a suit for ejectment.
The suit was filed by the respondent, Raghunath Prasad.
He claimed to be the owner of a building in Sadar Bazar, Bilaspur.
One portion of the building was occupied by a firm Goraldas Permanand.
According to the plaint, the entire building was in a dilapidated condition and the plaintiff intended to reconstruct the front portion of the building and to effect major repairs in the rear portion.
In order to do so it was said to be necessary that the defendants should vacate the accommodation.
In regard to the other portion, the plaintiff stated that he had obtained a decree for ejectment against Goraldas Parmanand.
The plaintiff also alleged that he intended to start the business of a medicine shop and for that purpose he required the accommodation occupied by the defendants as it faced the main road in Sadar Bazar, and that he had no other suitable accommodation in the town for such business.
The suit was resisted by the defendants, and a number of pleas were taken.
In particular it was denied that the accommodation occupied by them was dilapidated and that it was bona fide required by the plaintiff.
It was claimed that in view of the decree for ejectment against Goraldas Parmanand the plaintiff had suitable alternative accommodation for his proposed business.
The trial court found that the entire building, including the accommodation occupied by the defendants, needed reconstruction and repairs, and that for the purpose of his projected business the plaintiff had bona fide need of the accommodation held by the defendants.
It was observed that the accommodation occupied by Goraldas Parmanand was still under litigation as an appeal was pending in the case.
Holding that the grounds under section 12(1) (f) and 12(1)(h) of the Madhya Pradesh Accommodation Control Act were made out, the suit was decreed for ejectment.
The defendants preferred an appeal, and the first appellate court while dismissing the appeal maintained the findings of the trial court and upheld the order of ejectment.
A second appeal by the defendants was dismissed by the High Court on 17th April, 1976.
During the pendency of the appeal the defendants moved an application under Order VI, Rule 17 of the Code of Civil Procedure for leave to amend their written statement 623 by adding the plea that the plaintiff had secured vacant possession of the adjoining portion of the building from Goraldas Parmanand in the year 1972, and that the case should be remanded for deciding whether the accommodation acquired was reasonably suitable for starting a medicine shop, the purpose for which the plaintiff said he required the accommodation held by the defendants.
The High Court rejected the application observing that it had been moved three and a half years after the event had taken place, that it was not made bona fide but was intended merely to gain time and would result in grave injustice to the plaintiff.
The High Court also observed that even if the amendment was allowed it would not affect the decision of the case, because as the plaintiff 's need extended to entire building his securing vacant possession of one part would not conclude the matter.
It was pointed out that the plaintiff intended to reconstruct the entire portion of the building including the accommodation occupied by the defendants, as well as effect major repairs to the rear portion of the building.
In place of the shop of the defendants with a frontage of 7 and a depth of 22 and the adjoining shop with a frontage of 10 and a depth of 90, the plaintiff intended to demolish the front portion of both the shops and to reconstruct the building with a new shop having a wide frontage of 22 ' and a depth of 7 ', and to reside in the rear portion of the building.
The High Court added that residence in the rear portion of the accommodation would not alter the nature of the accommodation as the residence would be incidental to the main purpose of carrying on the medicine business in the front portion of the building.
The defendants having obtained special leave from this Court this appeal is now before us.
As analysis of the plaint shows that the ejectment of the appellants was sought on two grounds.
The respondent intended to reconstruct the front portion of the dilapidated building and to repair the rear portion and according to him this required the appellants to vacate the accommodation occupied by them.
That clearly is the ground envisaged by section 12(1)(h), Madhya Pradesh Accommodation Control Act.
That ground stood on its own.
The respondent also intended to open a medicine shop in the front portion of the building, and he pleaded that he had no other accommodation for the purpose.
That brings into play section 12(1)(f) of the Act.
The plea shows that as the dilapidated building required reconstruction and repairs, the respondent indended to avail of the opportunity to so effect the structural alterations as to accommodate a medicine 624 shop which he planned to start as a business in the premises.
This latter ground arose as a sequel to the first.
If the first ground was made out, the appellants would have to vacate the portion held by them, and if that had been the only ground the court would automatically be called upon to consider section 18 of the Act, which entitles the tenant at his option to be reinstated in a portion of the reconstructed building.
There was the further ground that the respondent proposed to start his own business in the front portion of the building, and the finding of the High Court that the respondent wanted the rear portion of the building for his personal residence.
The subordinate courts were influenced by the consideration that although the respondent had obtained a decree for ejectment against Goraldas Parmanand, the case continued to be the subject of litigation and therefore it could not be said that the respondent was in possession of alternative accommodation.
However, while the second appeal was pending in the High Court the appellants applied for amendment of their written statement to include the plea that the respondent had meanwhile obtained possession from Goraldas Parmanand.
The High Court declined to permit the amendment.
In doing so, it seems to me that the High Court erred.
It was an essential part of the appellants ' defence from the outset that the portion let out to Goraldas Permanand constituted suitable alternative accommodation, and therefore they should not be ejected.
It is immaterial that the amendment was sought more than three years after possession of the portion had passed to the respondent.
The High Court was bound to take the fact into consideration because, as is well settled now, in a proceeding for the ejectment of a tenant on the ground of personal requirement under a statute controlling the eviction of tenants, unless the statute prescribes to the contrary the requirement must continue to exist on the date when the proceeding is finally disposed of either in appeal or revision, by the relevant authority.
That position, to my mind, is indisputable.
The High Court should have allowed the amendment.
The High Court, alternatively observed that the respondent wanted to accommodate his shop in the front portion of the building and therefore, of necessity, he would require the portion occupied by the appellants.
That conclusion is based on the findings rendered by the courts below, which findings the High Court respected as findings of fact.
But the High Court failed to note that both the courts below had proceeded on the assumption that the adjoining portion occupied by Goraldas Parmanand was not immediately available on account of litigation.
It is for that reason that permitting the amendment sought by the 625 appellants became relevant and, indeed, imperative.
If the respondent has obtained possession of that portion, and that does not seem to be disputed, it becomes a serious question for decision whether the respondent needs the front portion of the building for his medicine shop and, if so, according to dimensions proposed by him.
In the consideration of that question the element of the respondent 's need for the rear portion of the building for his personal residence must be ignored.
That need was never pleaded in the plaint and, as will be seen from section 12(1)(e) of the Act, several considerations need to be satisfied before the need can be held proved.
This aspect of the matter was apparently not brought to the notice of the High Court and therefore it fell into the error of taking this element into account.
My brother Desai has in his judgment held that the respondent can accommodate his medicine shop in the portion vacated by Goraldas Parmanand and he has indicated the dimensions of the shop which appear reasonable to him.
With great respect I am unable to concur with what he has said.
Whether or not the shop should be located in the front portion of the building and what should be its dimensions will turn on the evidence adduced by the parties in that behalf.
The original record of the suit is not before us, and without knowledge of the state of the evidence I would refrain from a finding on the point.
Indeed, it seems to me in the circumstances of this case to be pre eminently a task to be entrusted to a subordinate court.
The position which then emerges is this.
The respondent has made out his case under section 12(1)(h) of the Act that he requires the building, including the portion occupied by the appellants, for reconstruction of the front portion and repairs to the rear portion, and that necessitates that the appellants vacate their accommodation.
This matter is concluded by the concurrent findings of fact rendered by the trial court and the first appellate court.
It is also concluded by concurrent findings of fact that the respondent needs a portion of the building for starting the business of a medicine shop.
What should be the location of the shop and what its dimensions is a matter which remains for decision.
And there is the further question of considering the availability of section 18 of the Act to the appellants.
Both these questions, I think, should be left to the first appellate court.
Accordingly, I allow the appeal, set aside the judgment and decree of the High Court and of the first appellate court and remand 626 the case to the latter court for permitting the appellants to amend their written statement and allowing the parties to lead such evidence as is consequentially called for, and thereafter to decide the case afresh in the light of the observations made above.
I would leave the parties to bear their costs.
S.R. Appeal allowed.
[/INST]In February 1965, Bungalow No. 16 D, Beli Road (now 26 B.K. Banerjee Road), Allahabad was allotted to the appellant.
On an application made in April 1975 the prescribed authority allowed, on 24th May, 1976, the application directing the release of the bungalow to the landlord.
On appeal the appellate authority by its order dated 25th March, 1977 modified the order by releasing only a portion of the building and by permitting the appellant to continue in the remaining portion with a direction to the prescribed authority to divide the bungalow accordingly.
The said order dated 25th March, 1977 became final, since the writ petition challenging the said order was dismissed.
On the death of the landlord the appellant filed a fresh application before the prescribed authority not to proceed with the partition scheme.
Since the prescribed authority refused to take note of this subsequent event, the issue has come up before this Court by way of special leave.
Dismissing the appeal, the Court ^ HELD: 1.
The order dated 25th March, 1977 of the appellate authority releasing a portion of the premises in favour of the third respondent and leaving the remaining portion in the tenancy of the appellant acquired finality when the proceedings taken against it by the appellant failed.
The prescribed authority was bound to give effect to that final order and was not acting outside its jurisdiction or contrary to law.
[79 C D] 2.
It is true that subsequent events must be taken into account by a statutory authority or court when considering proceeding arising out of a landlord 's petition for ejectment of a tenant on the ground of the landlord 's personal need.
But in the present case the order for release of a portion of the accommodation acquired finality before the death of the landlord and the controversy concluded by it could not be reopened now.
[79 E F] 3.
The present appeal being limited to the question which arose before the prescribed authority on the application of the appellant after the proceedings for release had acquired finality, it is not open even to the Supreme Court, to reopen the proceeding for release.
[79 G H] 78
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<s>[INST] Summarize the judgementminal Appeal No. 134 of 1965.
Appeal by special leave from the judgment and order dated May 14, 1965 of the Patna High Court in Government Appeal No. 25 of 1962.
Nur ud din Ahmed and A. K. Nag, for the appellant.
D. P. Singh, Anil Kumar and Shivpujan Singh, for the respondent.
The Judgment of the Court was delivered by Sikri, J.
This appeal by special leave is directed against the judgment of the Patna High Court allowing the appeal filed by the State Government, and convicting the appellant, Mohd. Usman, under section 5 (3) (a) of the Indian (IV of 1884) hereinafter referred to as the Act and sentencing him to undergo rigorous imprisonment for two years and also to pay a fine of Rs. 2,000, in default to undergo rigorous 429 imprisonment for a further period, of six months.
The High Court, however, agreed with the Magistrate that the appellant could not be held guilty under section 304A, IPC.
The High Court did not find the two other accused persons, Abdul.
Rahinan and Abdul Aziz, guilty, and State appeals against them were dismissed.
The prosecution case, in brief, is that an explosion occurred in appellant 's factory at Matkuria, PS Dhanbad, on April 28, 1960.
As a result of the explosion Kashi Bhokta, Gobardhan Bhokta and Mohan Bour died.
On that day, the appellant, who manufactures fireworks, had allowed minors (under 16 years of age), viz., Kashi Bhokta, Guhi Bhokta Gobardhan and Subhas Chamar to work in the manufacture of fireworks, thus contravening r. 16 of the Explosives Rules, 1940 hereinafter referred to as the Rules made under the Act, and had thereby committed an offence punishable under section 5 (3) (a) of the Act.
The High Court, disagreeing with the Magistrate who tried the case, held that "the three minor boys, Kashi, Guhi and Subhas, were employed and Gobardhan, in any event, was allowed to enter the premises licensed under the Rules for manufacture of explosives" in contravention of r. 16, and convicted the appellant as already stated.
Section 5(3) of the Act reads thus: "Any person contravening the rules made under this section shall be punishable (a) if he imports or manufactures any explosive in such contravention, with imprisonment for a term which may extend to three years, or with fine which may extend to five thousand rupees, or with both; (b) if he possesses, uses, sells or transports any explosive in such contravention with imprisonment for a term which may extend to two years, or with fine which may extend to three thousand rupees, or with both; and (c) in any other case, with fine which may extend.
to one thousand rupees.
" Rule 16 of the Explosives Rules provides: "16.
Children and intoxicated persons, No child under 16 years of age and no Person who is in a state of intoxication shall be employed on the loading, unloading or transport of explosives, or be employed in or allowed to enter any premises licensed under these rules.
" 430 The first question which arises is whether every breach of r. I6 falls under section 5 (3) (a), of the Act.
In our opinion, the answer is in the negative.
It will be noticed that cl.
(a) of section 5 (3) deals with a person who imports or manufactures in contravention of the; Rule, cl.
(b) deals with a person who posses uses, sells or transports any explosive in contravention of the Rules and cl.
(c) deals with contraventions of the Rules in other.
It seems to us that the scheme of this sub section is to divide the contravention of the Rules into three categories.
In the first category fall rules which person must observe while he imports or manufactures.
In other words, rules relatable to the import or manufacture.
of explosives would fall in the first category.
For example, clause 11 ' of the licence issued to the "Not more than four persons shall be allowed at any one time in any one building or tent in which the explosive is being manufactured and only persons actually employed in manufacturing or superintending manufacture shall be allowed inside the place of manufacture.
" Clause 12 of the Licence provides: "No iron or steel implements shall be used in the manufacture.
only copper gun metal or wooden tools are permissible.
" Now, if the appellant had infringed the provisions of the clauses it could be said that the contravention would fall under cl.
(a) of section 5(3).
We may mention that r. 81 provides that "no explosive shall be manufactured, possessed used or sold except under and in accordance with the conditions of a licence granted under these rules", and a breach of the, conditions would be contravention of r. 81.
But suppose the appellant had contravened clause 2 of the licence his licence is for the manufacture, possession and sale of 25 pounds of fireworks which prescribes the modes in which the explosives shall be kept in the premises, i.e. "(a) in a building, substantially constructed of brick stone or concrete or in a securely I constructed fire proof safe; or (b) in an excavation formed in solid rock or earth. he would be guilty under cl.
(b) 'of section 5(3) and not cl.
(a) of section 5(3).
Similarly, a contravention of clause 18, which provides that "all sales of explosives under this licence must be effected on the premises described on the face of the licence, and an explosive shall not be sold to 'any person under the age of 16 years" would fall under cl.
(b) of section 5 (3).
The learned counsel for the appellant contends that on the facts found by the High Court the conviction of the appellant 431 under cl.
(a) of section 5(3) cannot be sustained.
He says that there is no finding or evidence that the four minors were engaged to manufacture or were taking part in the manufacture of fireworks.
We have gone through the evidence and we find that no witness states that these minor boys were employed by the appellant to manufacture fireworks.
Subhas Chamar, P.W. 1, says that he "was working in the workshop of explosives at Matkuria owned by Usman .
We were working in the normal manner and in the same place at the time of occurrence.
" Puran Bhokta, P.W. 2, father of Kashi and Gobardhan, says that all his sons "worked in the explosive workshop of Matkuria owned by Usman.
" He does not enlighten us about the nature of work done by his sons.
Guhi Bhokta, P.W. 8, only states that "about 18 months ago, on a Thursday, I was working in the explosive shop in village Matkuria under the supervision of Rahman accused.
There is no other evidence bearing on this point.
From this evidence it cannot be definitely inferred that the four minors were actually employed in the manufacture of explosives on April 28, 1960.
In fact, there is no evidence at all that any fireworks were being manufactured that day.
It was for the prosecution to prove all the ingredients of the offence, and section 106 of the Evidence Act does not, as contended by the learned counsel for the State, absolve the prosecution from proving its case.
There is no doubt that there has been a contravention of r. 16, inasmuch as the four minors were employed in or allowed to enter the premises licensed under the Rules.
But r. 16 is, a comprehensive rule and applies to employment of minors in the premises for various purposes manufacture and sale of explosives it would also apply to employment of a minor to sweep floors and keep the premises clean.
If a minor is employed to keep clean the premises, would this contravention fall under cl.
(a) cl.
(b) or cl.
(c) of section 5(3)? It seems to us that if cl.
(a) and cl.
(b) are read widely so as to cover every activity which might take place on the premise cl.
(c) would be rendered redundant.
This is not a permissible way of reading statutes.
If will be noticed that the legislature regards an offence under cl.
(a) of section 5(3) to be more serious than one under cl.
(b) and an offence under cl.
(b) to be more serious than one under cl.
Further, the rules are many; some regulate minor matters, and if would be absurd to treat the breach of every rule to be a breach of cl.
(a) or cl.
In our opinion, if there is a breach of a rule, it has to be ascertained in each case whether the rule or part of it relates to activities mentioned in cl.
(a) of section 5(3) or cl.
(b) of section 5(3).
If it does not relate to any of the activities mentioned in cl.
(a) 432 or cl.
(b) of section 5 (3), the breach of the rule would fall under cl.
(c) of section 5 (3).
In this case the prosecution has not proved that the four minors were employed in any of the activities mentioned in cl.
(a) or cl.
(b) of section 5 (3).
Nor has it proved that any manufacture of fireworks was done on April 28, 1960.
It follows that the contravention of r. 16, on the facts found, can only come under cl.
(c) of section 5 (3).
We may mention that the learned counsel for the appellant challenged the findings of fact made by the High Court, but, in our opinion, they are not vitiated in any manner.
In the result, the appeal is partly :allowed.
The conviction is altered to one under cl.
(c) of section 5 (3) of the Act, and the.
appellant is sentenced to pay a fine of Rs. 1,000 and in default to undergo rigorous imprisonment for a period of three months.
Fine, if paid in excess, shall , be refunded.
Y.P. Appeal partly allowed.
[/INST]The appellant, a manufacturer of fireworks was convicted under section 5 (3) of the Indian as he had allowed minors to work in the manufacture of fireworks thus contravening r. 16 of the Explosives Rules.
HELD: Clause (a) of section 5(3) deals with a person who imports or manufactures in contravention of the Rules; el.
(b) deals with a person who possesses, uses, sells or transports any explosive in contravention of the Rules; and el.
(c) deals with the contravention of the Rules in other cases.
If there is a breach of a rule, it has to be ascertained in each case whether the rule or part of it relates to activities mentioned in el.
(a) of section 5(3) or el.
(b) of section 5(3).
If it does not relate to any of the activities mentioned in el.
(a) or cl(3)(b) of section 5(3) the breach of the rule would fall under cl.
(c) of section 5(3) .
[430 A B; 431 H] In this case, though it was established that the minors were employed in or allowed to enter the premises, it was not proved that the minors were employed in any of the activities mentioned in el.
(a) or el.
(b) of section 5(3).
Nor it has been proved that any manufacture of fireworks was done on that day.
So the contravention of r. 16 on the facts found, could only be punishable under el.
(e) of section 5(3).
[432 B]
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<s>[INST] Summarize the judgementvil Appeal No. 1204 (NT) of 1979.
From the Judgment and Order dated 3.2.1978 of the Madras High Court in Tax Case Petition No. 271 of 1977.
WITH Civil Appeal No. 4371 (NIT) of 1991.
Ms. A. Subhashini for the Appellant.
Ms. Janaki Ramchandran and A.T.M. Sampath for the Respondents.
The Judgment of the Court was delivered by RANGANATHAN, J.
Both these matters raise the same ques tion viz. whether the act of a member of a joint family by which he impresses his individual property with the charac ter of joint family property or "throws" it into the hotch potch of the joint family or "blends" it with the joint family property is a "disposition" within the meaning of the ( 'the ', for short).
Civil Appeal No. 1204/79 is an appeal from an order of the High Court declining to call upon the Income tax Appel late Tribunal to refer the above question for the decision of the High Court in view of certain earlier decisions of the Court.
The Madras High Court also declined to direct a reference on the above issue in T.C.P. No. 478 of 1977 and that is the subject matter of SLP (C) No. 335 of 1979.
In view of the pendency of Civil Appeal No. 1204/79, we grant special leave in SLP (C) No. 335/79 also.
Before discussing the correctness of the above conclu sion, it may be convenient to set out the background of facts in Civil Appeal No. 1204/79.
170 That appeal arises out of the estate duty assessment conse quent on the death of one Natesan Chetty, who died on 1.3.72.
He was the Karta of a Hindu Undivided Family (HUF) consisting of himself and his four sons.
He was also the owner, in his individual capacity, of five house properties in Madras.
On 18.6.1970 and 16.9.1970 he made declarations by which he impressed the above mentioned properties with the character of joint family properties and declared that they would thereafter belong to HUF of which he was the karta.
Subsequently, a partition was effected in the family in March 1971 in which two of the above mentioned properties came to the share of the deceased.
Sri Natesan Chetty had also borrowed a sum of Rs. 46,800 from the HUF out of the rental income from the above mentioned properties for being invested in the business earned on by him.
These borrowings were made between March 1970 and April 1971 and they were repaid in April 1971.
In completing the assessment to estate duty of the estate passing on the death of Natesan Chetty, the Assistant Controller of Estate Duty held that the declarations made by the deceased on 18.6.1970 and 16.9.1970 were "dispositions" within the meaning of the said expression as defined in the second explanation to section 2(15) of the .
These dispo sitions having been made for no consideration within the meaning of section 27 (1), amounted, according to him, to gifts and since the gift had been made within two years of the date of death, the subject matter of the gift was liable to be assessed as pan of the estate passing on death under section 9 of the .
As already mentioned, two of the properties had been allotted to the share of the deceased in the partition of 1971 and it is common ground that they passed on the death of the deceased as they belonged to him on the date of his death.
The question, however, was whether the other three properties which went to the other members of the family as a result of the declarations and partition were also liable to be included as pan of the estate deemed to pass on the death of the deceased by the application of section 9 read with S.27 (1) and section 2(15) of the .
The Assistant Controller answered this question in the affirmative and included their value, taken at Rs. 1,22,500, in the princi pal value of the estate.
As a consequence of his conclusion that the properties were liable to be included in the es tate, the officer ,,I so took the view that the sum of Rs. 46,800 being the loan taken by the deceased from the HUF and discharged within two years prior to the death should be added hack in computing the principal value of the estate by reason of the provisions of section 46 (2) of the .
It is not in dispute before us that though two points were thus involved in the assessment one regarding the inclusion of the value of 171 three items of property as part of the estate of the de ceased passing on his death and the other regarding the addition or disallowance of the debt of Rs. 46,800 they are inter connected and that, if the first question is answered in favour of the assessees, the second question will also stand answered likewise.
Dissatisfied with the conclusion of the Assistant Con troller, the accountable person preferred an appeal to the Appellate Controller of Estate Duty which was successful.
Thereupon the Department preferred an appeal to the Tribunal which, following a decision of the Madras High Court in Rajamani Ammal vs Controller of Estate Duty.
held that the sum of Rs. 1,22,500 could not be included in the value of the estate passing on the death and, consequentially, that the add back of Rs. 46,800 was also not justified.
Thereupon the Controller of Estate Duty applied, under section 64 (1) of the , for a reference to the Madras High Court, for its decision, of the following two questions: "1 Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the trans action by which a Hindu impressed his separate properties [as] with joint family character could not be considered as a disposition under the second explanation to section 2(15) and section 27 of the ? 2.
Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the addition of Rs. 1,22,500 made under section 9 and Rs. 46,800 made under section 46(2) could not be sus tained in the case of the deceased ?" The Madras High Court was of the opinion that the basic question at issue was covered by the earlier decisions of the Court in Rajamani Ammal vs Controller of Estate Duty, as well as a subsequent decision in Con troller of Estate Duty vs Smt.
Mookammal, The Court found no substance in the attempt, on behalf of the Revenue, to distinguish the above decisions on the strength of a decision of the Court in Ranganayaki Ammal vs CED, which had been confirmed by the Supreme Court in CED vs Kantilal Trikamlal, In this view of the matter the High Court de clined to call for a reference on the two questions above mentioned and dismissed the application for reference.
Hence the present Civil Appeal.
It is not necessary to set out the facts in SLP No. 335 of 1979 where the question involved is the same except that there was no subsequent partition after the blending and that no question regarding the deductibili ty of debts also arose in this case.
172 It will be seen that both these appeals are directed against the orders of the High Court declining to call for a reference.
It is fairly clear that the questions whether Rajamani Ammal was rightly decided and whether, if so, it needed reconsideration in the light of Kantilal Trikamlal are questions of law.
But, in view of the long lapse of time, we have considered the issues on merits and since we are satisfied that the High Court 's conclusion was correct, we dispose of the appeals straightaway without going through the formality of asking the Tribunal to make a reference to the High Court and then awaiting the High Court 's decision on the question of law referred.
The has ceased to be enforceable since 16.3.1985.
In the circumstances we need not elaborate ly set out the provisions of the and the principles behind them.
An outline of the provisions necessary for the determination of the issue before us will suffice.
The levies a duty on the aggregate market value of the proper ties passing on the death of any person (statutorily termed the 'principle value of the estate ').
It is manifest that the statute could be easily circumvented if duty were re stricted only to properties which actually pass on a death, for, various of devices could be thought of by which the property of such person could ostensibly be transferred to others sometime before the death, although it continues to be really under the domain and control of the deceased till the time of his death.
The statute therefore contains elabo rate provisions deeming certain properties to pass on death even though their beneficial enjoyment may not actually change hands at the time of his death.
One such item of properties which are deemed to pass on the death of a person are those which formed the subject matter of a gift made by him within a specified period preceding his death.
S.9 of the , which contains this deeming provision reads thus: "9.Gifts within a certain period before death (1) Property taken under a disposition made by the deceased purporting to operate as an immediate gift inter vivos whether by way of transfer, delivery, declaration of trust, settlement upon persons in succession, or otherwise, which shall not have been bona fide made two years or more before the death of the deceased shall be deemed to pass on the death".
In short, the provision enabled the Revenue to ignore any gift of property made by the deceased within two years of his death by creating a statutory fiction that properties so gifted passed on the death of the deceased, 173 although, in fact and in law, they ceased to be his a short time before his death.
This is the first fiction.
The legislature next proceeded to enact a second fic tion.
This was in order to bring into the net of taxation transactions which may not be comprehended within the legal concept of a gift because they are ostensibly made for some consideration.
It provided in section 27 that: "27.
(1) Dispositions in favour of relatives Any disposition made by the de ceased in favour of a relative of his shall be treated for the purposes of this as a gift unless (a) the disposition was made on the part of the deceased for full consideration in money or money 's worth paid to him for his own use or benefit; or (b) . . ; and references to a gift in this shall be construed accordingly: . . " Resort to this provision in the present case is needed for a purpose.
Admittedly, the deceased received no consideration for impressing the property with the character of joint family property.
If this amounted to a transfer, then S.9 alone would be sufficient to bring the properties within the net of taxation.
But it could be argued that a gift involves a 'transfer ' without consideration but the act of blending does not constitute a 'transfer ' [vide: Stremann vs CI.T., and a host of other cases under the Income tax ].
Section 27 helps the Department in the present case only in that it uses a much wider word, 'dispo sition ', and treats dispositions in favour of relatives as gifts.
The statute had to make provision for a third fiction as well as it could still be contended that the word 'disposi tion ' would not be sufficient to comprehend certain types of transactions.
To be on the safe side, therefore, the statute proceeded to enact a special definition of the word 'dispo sition ' in section 2(15) of the wide enough to rope in various kinds of acts in respect of property.
This provi sion, insofar as it is material for our present purposes, reads as follows: "2(15) 'Property ' includes any interest in property, movable or immovable, the proceeds of sale thereof and any money or investment for the time being representing the proceeds of sale and also includes any property con verted from one species into another by any method; Explanation I The creation by a person or with his consent 174 of a debt or other right enforceable against him personally or against property which he was or might become competent to dispose of, or to charge burden for his own benefit, shall be deemed to have been a disposition made by that person, and in rela tion to such a disposition expression 'proper ty ' shall include the debt or right created.
Explanation 2 The extinguishment at the expense of the deceased of a debt or other right shall be deemed to have been a disposi tion made by the deceased in favour of the person for whose benefit the debt or right was extinguished, and in relation to such a dispo sition the expression 'property ' shall include the benefit conferred by the extinguishment of the debt or right; The short case of the department now is this; the de ceased in these cases was the full and exclusive owner of the immovable properties in question.
By the act of blending he has convened them into HUF propertieS.
The properties no longer belong to him as an individual; they belong to the family thereafter with certain rights qua them in the other members of the HUF.
In other words, there 'has been an extinguishment, at the expense of the deceased, of a part, at least, of his rights in the properties with a correspond ing benefit to the others.
There has also been the creation, by the deceased, of a right in the others enforceable against the deceased and the properties e.g. the right to demand a partition.
The deceased, therefore, has made a disposition in favour of his relatives for no consideration within two years of his death.
The value of the properties, in respect of which he made the disposition in favour of the family, are, therefore, liable to be included in the principal value of the estate passing on his death under section 9 read with section 27 read with the Explanations to section 2(15).
This is quite apart from the fact that the value of the two properties, which subse quently fell to the share of the deceased at the partition in March 1971, are liable to be included as his own property actually passing on his death.
The question that we have to consider is, therefore, whether the legal incidence of the act of blending an be brought within the four corners of the two Explanations to section (15) of the .
It was precisely this question which had been considered by the Madras High Court earlier in Rajamani Ammal vs Controller of Estate Duty in deciding the issue, The High Court had the benefit of two earlier decisions of this Court in Goli Eswariah vs C G.T., and CG.T, vs Getti Chettiar., , 175 where this Court had held, in the context of the Gift Tax , that the act of blending and the act of a coparcener receiving, on partition of a HUF, less than the share he was entitled to receive would not constitute gifts.
The details of this decision need to be set out at some length.
Three contentions had been urged in Rajamani: (a) The first was that the act of blending constituted a 'disposi tion ' within the general meaning of that word.
Repelling this contention, the Court observed: "The learned counsel for the revenue placed strong reliance on the word "disposition" in section 27 (1) of the and contended that even an act of throwing of the self acquired property into the common stock of a joint Hindu family is included in that expression.
In a case arising under the Gift tax , the word "disposition" came up for consideration in the decision in Goli Eswariah vs Commis sioner of Gift tax, The Supreme Court held that the word "disposition" refers to a bilateral or a multilateral act and it does not refer to a unilateral act.
This decision of the Supreme Court approves the decision of this court in Commissioner of Gift tax vs
P. RangasamiNaidu, (F.B).
It is true that these decisions are under the Gift tax .
It is also true that the word "disposi tion" was considered in these decisions, with particular reference to the definition of "transfer of property" under that .
We are of the view that the word "disposition" in section 27(1) of the also refers to a bilateral or multilateral act.
The section refers to a disposition by the de ceased in favour of a relative and also speaks of partial failure of consideration.
Section 9 also refers to property "taken under a dispo sition".
Therefore, in our opinion the word "disposition" in section 27(1), however wide its ambit may be, would not include the uni lateral act of a person by which he throws his self acquired property into the common stock of the joint family.
" (b) It had been next contended, on behalf of the Revenue that, by throwing the self acquired properties into the common stock of the joint family, the deceased had created a right enforceable against him in favour of the sons or the other coparceners viz. the right to demand partition of the properties in question which they could not have exercised earlier.
This contention was rejected by the learned judges by applying the principle enunciated in an earlier Full Bench decision of the Court in CIT vs Rangasami Naidu, , where a similar contention had been repelled in the context of the Gift Tax .
The Court had there observed: 176 "With the father having absolute power of disposition inter vivos or testamentary in respect of his self acquisition and with no power in the son to interdict any alienation or disposition or call for partition, the son 's interest is next to nothing.
But the right is real.
It lies dormant.
It is this dormant right which the undivided sons have in their father 's property that entitles them to take the self acquired property of the father as coparceners to the exclusion of a divided son.
Juridically, it must be this dormant birth right that enables the father at his pleasure, without formalities, to deny to himself his independent power or predominant interest and look upon the property as the property of the family.
In our view, it is this birth right imperfect and subordinate to the special power and predominant interest of the father that comes into play and makes the interest of the son real and an interest in praesenti, when the father chooses to waive his rights.
At his pleasure and without reference to his son, if the father abandons or determines once for all not to exercise his independent power over the property, the son 's interest therein becomes a real and full fledged coparcenary right.
There is no vesting of rights here by the father on the son, but what is dormant springs to life but irrevocably at the pleasue of the father.
" (c) A third contention raised on behalf of the Revenue was that throwing the self acquired property into the common stock of the joint family would amount to "extinguishment at the expense of the deceased of a debt or other right" within the meaning of Explanation 2 to section 2 (15).
This conten tion was also repelled by the learned Judges.
They observe: "We are also of the opinion that throwing the self acquired property into the common stock of the joint family will not amount to "extin guishment at the expense of the deceased of a debt or other right" within the meaning of Explanation 2 to section 2 (15).
As seen from the judgments cited above, after the act of throwing into the common stock, it is the joint family or the coparcenary that owns the property.
The person who converted his indi vidual property into joint family property is a member of the Hindu joint family or the coparcenary and contines to be a member of the joint family.
His interest in 177 the erstwhile separate property would extend to the whole of the property even as of the other coparceners, for the interest of every coparceners extends over the whole of the joint family property.
There is community of interest and unity of possession between all the coparceners.
On the death of any one of the coparceners the others take the proper ty by survivorship.
It may be, the ultimate survivor is the person who threw the self acquired property into the common stock.
It, therefore, follows that there was no extinguishment of the right of the deceased and creation of a right in favour of another, in these of throw ing the self acquired properties into the common stock.
The decision in Valliammal Achi vs Controller of Estate Duty, relied on by the learned counsel for the revenue, and the decision in Kantilal Trikamlalv.
Controller of Estate Duty, , relied on by the learned counsel for the accountable person,related to what we may term as "unequal partitions".
They do not deal with cases of throwing the self acquired properties into the common stock.
We are not concerned with the case as to whether an unequal partition would amount to an extinguishment of a right and creation of a benefit within the meaning of Explanation 2 to section 2(15), which was the point that was considered in those cases.
" The above decision is clearly against the Revenue.
The Revenue, however, strongly relies upon a later decision of the same High Court in Ranganayaki Ammal & Ors.
vs Controller of Estate Duty, It is sub mitted that Ranganayaki Ammal has been af firmed by this Court in CED vs Kantilal Tri kamlal, a common judgment reversing Kantilal Trikamlal vs CE.D., and affirming Ranganayaki Ammal (Mad) and, therefore, Rajmani is no longer good law.
It is therefore, necessary to refer to these cases though the question involved there was somewhat different.
In Ranganayaki Ammal, the deceased Bheema Naidu and his widow and children constituted a Hindu undivided family.
A little within the period of two years prior to the death of the deceased, a partition was effected of the joint family properties and in that partition he took a smaller share instead of his legal half benefiting the other to the extent of the difference.
The same thing had happened in the case of Kantilal Trikamlal also.
Trikamlal Vadilal and his son Kantilal constituted a Hindu undivided family.
On 16th November, 1953, and instrument styled a "release deed" was executed between the two persons.
Under this instrument, a sum of rupees one lakh out of the joint family properties was taken by 178 the deceased m lieu of his share in the joint family properties and he relinquished his interest in the remaining properties of the joint family which were declared to belong to Kantilal as his sole and absolute properties and Kantilal also relinquished his interest in the amount of rupees one lakh given to the deceased and declared that the deceased was the sole and absolute owner of the said amount.
Trikamlal Vadilal died on 3rd June, 1955, that is within two years of the release deed.
The Assistant Controller found that, as on November 16, 1953, the deceased was enti tled to a one half share in the joint family properties, the value of which was Rs. 3,44,058, but had relinquished his interest in the joint family properties by receiving only a sum of rupees one lakh.
The officer, there fore, held that the difference between Rs.3,44,058 and Rs, 1,06,724 (being the amount received by the deceased together with inter est) was includible in the principal value of the estate of the deceased, being the value of a disposition by the deceased in favour of a relative for partial consideration.
This assessment was upheld eventually by the Su preme Court.
Both these decisions, thus, raised the question whether there was "gift" within the meaning of S.9 read with S.27 read with the Explanations to S.2(15) of the where a coparcener in a HUF, at the family parti tion, voluntarily agrees to accept properties of a value less than what he is entitled to claim, as a matter of right, at such partition.
This Court as did the Madras High Court in Ranganayaki Ammal, the Andhra Pradesh decision in Cherukuru Eswaramma vs C.ED., and the Punjab & Haryana High Court judgment in C.E.D.v.
Jai Gopal Mehra, answered the question in the affirmative.
This Court distinguished Go[i Eswariah, , S.C. and Getti Chettiar, , S.C. on the ground that the defi nition of 'disposition ' in Explanation 2 Sec tion 2(15) of the is much wider than the scope of that expression used in the Gift Tax Act.
We do not consider it necessary to set out here the full and de tailed reasoning of this Court in Kantilal Trikamlal 's case.
Before proceeding further, we may refer to a few later decisions of High Court relevant to the issue before ns.
The Allahabad High Court, in C.E.D.v.
Laxmi Bai, , a decision rendered after Kantilal Trikamlal, thought that the act of blending would not be a 'disposition ' within fie mean ing of:the .
In C.E.D vs Babub hai T. Panchal, (1982) 133 I.T.R.455, the Gujarat High Court had occasion to consider the question whether a transaction of release by a member of a Hindu Undivided family, within a period of two years of his death, of his interest in the family properties would amount to a 'disposition ' within the ' meaning of Explanation 2 to Section 2(15) of the .
The 179 question was answered in the negative.
In CE.D vs Satyanarayan Babulal Chaurasia, , the Bombay High Court, without touching the issue in detail, merely held, applying Goli Eswarian vs C G.T., (1970)76 I.T.R. 675 S.C, that the act of blending does not involve a transfer.
The question that falls for our considera tion now is whether, despite the extended definition in S.2(15) of the , as explained in Kantilal Trikamlal, the act of blending, unlike the voluntary acceptance of an unequal partition, fails outside the purview of the deeming part of the definition contained in the explanations.
We think the answer to this question has to be in the affirmative, Revert ing once again to the contentions of the Revenue in Rajamani (which are also the con tentions reiterated before us for the Revenue), it will be remembered that Rajamani specifically dealt with the language of the two explanations 10 S.2(15) and that its decision rested on three grounds: (i) a 'disposition ', as held on Goli Eswariah, S.C., has to be a 'bilateral ' or 'multilateral ' act or trans action, not a unilateral act; (ii) the act of blending does not create any right enforceable against the blender or his property but only brings to the surface rights already latent and inherent in the others; and (iii) the act of blending does not result in the extinguishment of any right of the blender with a correlative conferral of benefit on others.
our view.
Kantilal Trikamlal does not affect the validity of any of the three grounds set out above.
So far as the first ground is concerned, it does not touch upon the reasoning of Goli Eswariah, not to say doubt or dissent from it.
It refers to C.E.D. vs Kancherla Kesava Rao, , S.C. hinting at possible distinction and to Getti Chettiar (but without any hint of dis sent) and points out that the conventional construction of disposition ' has to submit to the larger sweep of hypothetical extension by definition" and that, unlike under the Gift Tax , "there is no limitation, environmen tal or by the society of words, warranting the whittling down of the unusually wide range of Explanation 2 to S.2 (15)".
In other words, the cumulative effect of Goli Eswariah, Getti Chettiar and Kantilal Trikamlal is that 'blending ' or 'partition ' will not be a 'disposition ' within the ordinary connotation of the expression but will be one if either of the Explanations to S.2(15) are attracted.
This takes us to the other two contentions dealt with in Rajamani as to the scope of the two explanations.
On this aspect, Rajamani has held that, unlike an 180 equal partition, the act of blending will not amount to a 'disposition ' attracting Ss.9 and 27 of the .
It distinguishes cases of unequal partition dealt 'with in Valliammal Achi, vs
C.E.D., and the High Court 's decision in Kantilal Trikam lal cited before it which have now received the imprimatur of this Court in Kantilal Trikamlal.
We are inclined to think that the distinction has been made on sound lines.
We do not consider it necessary to repeat or elaborate the rea soning in Rajamani on these two points as it succinctly epitomises well settled principles of Hindu Law.
Suffice it to say that we en dorse this reasoning and think that the High Court was right in holding, in the present cases, that the acts of blending did not result in the 'gift ' of immovable properties within the meaning of the statute and that Rajamani required no reconsideration because of Ranganayaki Ammal/Trikamlal.
This disposes of the question sought to be referred in these cases.
We should however like to advert to another aspect which may arise for consideration at some future date.
It may, perhaps, be possible to contend that, though a declaration of blending does not amount to a 'gift ', where the act of blending is followed up by a subsequent partition, the two transactions taken together do result in the extinguishment, at the expense of the deceased, of his rights in the properties which go to the share of other coparceners at the subsequent partition and that, if the two can be treated as parts of the same transac tion, Explanation 2 to S.2(15) may be attract ed.
But this, apart from being a totally new question of law not raised at any stage and not debated before us, would also require not only a closer look from the legal angle but also investigation into facts, particularly as to whether the act of blending and the subse quent partition can be treated, in law and on facts, as parts of a single transaction.
We, therefore, express no opinion on this issue.
For the reasons discussed above, these appeals fail and are dismissed.
But we make no order regarding costs.
Y.L. Appeals dismissed.
[/INST]A common question of law that arises for determination in these appeals by special leave is whether the act of a member of a joint family by which he impresses his individu al property with the character of joint family property or "throws" it into the hotch potch of the joint family or "blends" it with the joint family property is a 'disposi tion ' within the meaning of the .
In Civil Appeal No. 1204 of 1979 the facts are: One Natesan Chetty who died on 1.3.1972, was the Karta of a Hindu Undi vided Family, consisting of himself and his four sons.
He owned five house properties in Madras, On 18.6.70 and 16.9.1970, he made declarations by which he impressed the properties with the character of joint family properties and further declared that they would thereafter belong to HUF of which he was the Karta.
Thereafter a partition was effected in the family in March 1971 in which two of the properties came to his share.
Sri Chetty had also borrowed Rs. 46,800 from HUF out of the rental income from the properties for his business purposes.
These borrowings were duly repaid in April, 1971.
In completing the assessment to estate duty of the estate passing on the death of Natesan Chetty, the Assistant Controller of Estate Duty held that the declarations made by the deceased on 18.6.70 and 16.9.70 were "dispositions" within the meaning of the said expression as defined in the second explanation to section 2(15) of the .
He further held that since the declarations were made with out consideration, they amounted to gift which had been made within two years of the date of death and hence liable to be assessed as part of the estate passing on death under sec tion 9 of the Act.
The two properties which had fallen to the share of the deceased passed on the death of the de ceased.
He accordingly included Rs. 1,22,500 the value of the other three properties also in 168 the principal value of the estate.
The Asstt.
Controller further held that a sum of Rs. 46,800 being the loan taken and discharged by the deceased should also be added back in computing the principal value of the estate by virtue of section 46(2) of the Act.
Dissatisfied with the conclusion of the Asstt.
Control ler, the accountable person preferred an appeal to the Appellate Controller of Estate Duty which was successful.
Thereupon the Department preferred an appeal to the Tribunal which, following the decision of the Madras High Court in Rajamani Ammal vs Controller of Estate Duty, held that the sum of Rs. 1,22,500 could not be included in the value of the estate passing on the death and consequently, that the add back of Rs. 46,800 was also not justified.
Thereupon the Controller of Estate Duty applied under Section 64 (1) of the Act for a reference to the Madras High Court for its opinion on the two questions.
The Madras High Court was of the opinion that the basic question at issue was covered by the earlier decisions of the Court in Rajamani Ammal vs Controller of Estate Duty and Control ler of Estate Duty vs Smt.
Mookammal, The High Court declined to call for a reference and dis missed the application for reference.
Hence the appeals by the Department.
Dismissing the appeals, this Court, HELD: "Blending" or "partition" will not be a 'disposi tion ' within the ordinary connotation of the expression but will be one if either of the Explanations to Section 2(15) are attracted.
[179 G] Unlike an unequal partition, the act of blending will not amount to a 'disposition ' attracting Ss. 9 and 27 of the Act.
[179 H 180 A] The High Court was right in holding that the acts of blending did not result in the 'gift ' of immovable proper ties within the meaning of the statute.
[180 C] Though a declaration of blending does not amount to a 'gift ' where the act of blending is followed up by a subse quent partition, the two transactions taken together do result in the extinguishment, at the expense of the de ceased, of his rights in the properties which go to the share of other coparceners at the subsequent partition and, if the two can be treated as parts of the same transaction the Explanation to Section 2 (15) may be attracted.
[180 D E] 169 Rajamani Ammal vs Controller of Estate Duty, ; Controller of Estate Duty vs Smt.
Mookammal, ; Rangabayaki Ammal vs CED, ; CED vs Kantilal Trikamlal, ; Stremann vs CIT, SC; Goli Eswariah vs CGT, ; C.G.T.v.
Getti Chettiar, ; Cherukuru Eswaramma vs
C.E.D, ; CED vs Jai Gopal Mehta, ; C.E.D., vs Laxmi Bai, ; C.E.D.v.
Babubhai T. Panchal, ; and C.E.D.v.
Satyanaravan Babulal Chaurasia, , referred to.
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<s>[INST] Summarize the judgementAppeals Nos. 575 and 576 of 1966.
Appeals by special leave from the judgment and order dated October 5, 1963 of the Patna High Court in Misc.
Judicial Cases Nos. 1274 and 1275 of 1960.
D.Narasaraju, section K. Aiyar, R. N. Sachthey and B. D. Sharma, for the appellants (in both the appeals).
M.C. Chagla and U. P. Singh, for the respondent (in, both the appeals).
The Judgment of the Court was delivered by Shah, J.
The respondent Ramniklal Kothari carried on busi ness in diverse lines as a partner in four different firms.
He received from time to time income from the different registered firms as his share of profits.
For the assessment year 1955 56 the respondent declared his share of profits from the four firms at Rs. 77,027/ and he claimed an allowance of Rs. 13,283/ being payment of salary and bonus to staff, expenses for maintenance and depreciation of motor car, travelling expenses and interest.
The Income tax Officer, Hazaribagh, allowed the claim for interest as a permissible deduction and disallowed the rest.
In the view of the Income tax Officer since the respondent did not carry on any independent business, the amount, except interest, were not claimable by the respondent on his own account; if at all, the amounts should have been claimed as business ex incurred in the accounts of the four firms.
For the assessment year 1956 57 the respondent declared Rs. 53,540 as his share of the profits 'in the four firms and claimed an aggregate amount of Rs. 19,380 as admissible deduction on various grounds including Rs. 1,956 as interest paid by him.
The Income tax Officer allowed the claim for interest and disallowed the rest of the claim.
The Appellate Assistant Commissioner confirmed the orders of the Income tax Officer.
But the Income tax Appellate Tribunal set aside the orders passed by the Income tax Officer and remanded the cases for examination of the nature of expenditure claimed to have been incurred by the respondent.
In the view of the Tribunal share of the profits received by the respondent from the firms was taxable as business income, and appropriate deductions admissible under section 10(2) of the Income tax Act, 1922, were allowable in commuting the taxable income of the respondent, 862 The Tribunal then referred the following question in the two cases to the High Court of Patna for opinion under section 66(1) of the Indian Income tax Act, 1922: "Whether the expenses incurred by the assessee (who was not carrying on any independent business of his own), in earning income from various firms in which he was a partner, are allowable in law as deductions ?" The High Court of Patna answered the reference in favour of the respondent.
With special leave granted by this Court, these two appeals have been preferred by the Commissioner of Incometax.
Where a person carries on business by himself or in partner ship with others, profits and gains earned by him are income liable to be taxed under section 10 of the Indian Income tax Act, 1922.
Share in the profits of a partnership received by a partner is " profits and gains of business" carried on by him and is on that account liable to be computed under section 10, and it is a matter of no moment that the total profits of the partnership were computed in the manner provided by section 1 0 of the Income tax Act and allowances admissible to the partnership in the computation of the profits and gains were taken into account.
Income of the partnership carrying on business is computed as business income.
The share of the partner in the taxable profits of the registered firms liable to be included under section 23(5)(a)(ii) in his total income is still received as income from business carried on by him.
Counsel for the Commissioner accepted, and in our judgment counsel was right in so doing, that the share of the respondent from the profits of the firm was income from business carried on by the partner.
Business carried on by a firm is business carried on by the partners.
Profits of the firm are profits earned by all the partners in carrying on the business.
In the individual assessment of the partner, his share from the firm 's business is liable to be taken into account under section 10(1).
Being income from business, allowances appropriate under section 10(2) are admissible before the taxable income is determined.
Section 23(5)(a)(ii) provides that the share of the partner in the profits and gains of a registered firm shall be included in the total income of the partner; and section 16(1)(b) requires that salary, interest, commission or other remuneration payable by the firm beside the share in the balance of profits is to be taken into account in determining the total income.
But it is not thereby implied that expenditure Properly allowable in earning the profits, salary, interest, commission or other remuneration is not to be allowed in determining the taxable total income of the partner.
The receipt by the partner is business income for the, purpose of 863 s.10(1), and being business income, expenditure necessary for the purpose of earning that income and appropriate allowances are deductible therefrom in determining the taxable income of the partner.
The legal principles which we have endeavoured to set out are well settled by several decisions.
In Shantikumar Narottam Morarji vs Commissioner of Income tax, Bombay City(1) the High ' Court of Bombay held that it is not correct as a general legal proposition that a, partner in a registered firm is not entitled to claim any deduction against the share of the profits included in his total income, the share having been arrived at on the assessment of the firm with regard to its profits.
It would be open to the partner to claim a deduction provided he satisfies the taxing authority that such deduction represents necessary expenditure, the expenditure being incurred in order to enable him to earn the profits which are being subjected to tax.
In Basantlal Gupta vs Commissioner of Income tax, Madras(2) the High Court of Madras held that in determining the income of an assessee who is a partner, deduction under section 10(2) of the Income tax Act may be made from his share of income in the firm even after the share has been ascertained.
An allowance under section 10(2) will be permissible in proper cases even after the share has been ascertained if the expenditure sought to be deducted was incurred by the partner solely and exclusively for the purpose of earning his share in the income of the firm.
In a case decided by the High Court of Patna in Jitmal Bhu ramal vs Commissioner of Income tax, Bihar & Orissa(3) a Hindu undivided family which was a partner in a firm claimed that the salary paid to its members for attending to the business of the firm was incurred as a matter of commercial expediency and for the purpose of earning profits from the partnership business.
The Court held that in the assessment of the Hindu undivided family the expenditure would be properly claimed as an allowance under section 10(2) (xv) of the Indian Income tax Act, 1922.
Jitmal Bhuramars case(4) was brought in appeal to this Court : see Jitmal Bhuramal vs Commissioner of Income tax, Bihar & Orissa(4).
It was observed by this Court that a Hindu undivided family will be allowed to deduct salary paid to members of the family, if the payment is made as a matter of commercial or business expediency, but the service rendered must be to the family in relation to the business of the family.
Counsel for the Commissioner relied upon an unreported judgment of the High Court of Calcutta in Messrs. Iswardas Subh (1) (2) (3) (4) (sc.) 864 karan vs Commissioner of Income tax, West Bengal(1).
In that case a Hindu undivided family entered into a partnership agreement with third parties for the purpose of carrying on a rice mill business.
It was not possible for any of the members of the family to attend personally to that business and, therefore, the family employed a Munim to look after its interest.
Salary paid to the Munim was claimed as an allowance in determining the taxable income out of the share of the partnership income.
Chakravartti, C.J., delivering the judgment of the Court was of the opinion that since the Munim did not look after the interest of the assessee in the firm 's business, but only as a servant of the assessee, the amount paid to the Munim was not an allowance admissible in determining the taxable income.
In any event, observed the learned Chief Justice, the profits which have come to the assessee from the partnership have come as net profits, and after they have so come, there cannot be any further deduction on account of expenditure incurred not by the partnership but by the partner who received the share or incurred on any account whatsoever.
We are unable to agree with the view expressed by the learn ed Chief Justice.
The case was apparently not fully argued and counsel for the assessee conceded that the amount paid to the Munim was not a permissible deduction in assessing the taxable income of the family out of the share of the profits received from the firm.
The appeals fail and are dismissed with costs.
One hearing fee.
V.P.S. Appeals dismissed.
[/INST]The provisions of the Travancore Code of Civil Procedure are similar in terms to Order 47, rule 1, of the Code of Civil Procedure 1908 and an application for review is circumscribed by the definitive limits fixed by the language used therein.
The words "any other sufficient reason" mean a reason sufficient on grounds at least analogous to those specified in the rule.
It is well settled that in an ejectment suit the plaintiff must succeed on the strength of his own title and not on the weakness of the defendant 's case.
It is an error apparent on the face of the record if the judgment does not deal effectively and determine an important issue in the case on which depends the title of the plaintiff and the maintainability of the suit.
To decide against a party on matters,which do not come with in the issues on which parties went to trial clearly amounts to an error apparent on the face of the record.
Where the error complained of is that the Court assumed that a concession had been made when in fact none had been made or that the Court misconceived the terms of the concession or the scope and extent of it or the attitude taken, up by the party and has been misled by a misconception of such alleged concession, such error must be regarded as a sufficient reason analogous to an error on the face of the record within the meaning of Order 47, rule I of the Code of Civil Procedure.
Such error will not generally appear on the record and will have to be brought before the Court by means of an affidavit.
A suit filed in 1938 in the Court of the District Judge at Kottayam (Travancore) was dismissed, The plaintiff 's appeal 521 against the decree was allowed by a Full Bench of the High Court of Travancore.
A review application filed by the defendants against the judgment on the ground that it contained several mistakes or errors apparent on the face of the record was dismissed by the High Court.
The High Court declined to grant a certificate under article 133.
The defendants were granted special leave to appeal by the Supreme Court.
Consequent upon political changes in India culminating in the adoption of the new Constitution of India, there were changes in the judicial administration in the State of Travancore.
Up to the end of June, 1949, the Travancore High Court Act (Regulation IV of 1099) was in force in the State of Travancore.
Section 11 of the Regulation provided that the judgments of a Full Bench from the decrees of District Courts involving certain amount or value of subject matter in suits as well as in appeals shall be submitted to the Maharaja for confirmation by his Sign Manual.
Section 12 of the Regulation applied as far as may be the provisions of section 11 to the judgments after review.
In May, 1949, came the Covenant of Merger between the rulers of Travancore and Cochin which, inter alia, provided for a Rajpramukh.
In July, 1949, came Ordinance II of 1124 repealing Regulation IV of 1099.
Clause 25 of the Ordinance provided that a Full Bench shall hear and decide the appeals, inter alia, from the decrees of the District Courts etc.
involving certain amount or value of subject matter.
Clause 26 related to a review of the judgment by a Full Bench.
The provisions relating to the jurisdiction and powers of High Court were substantially reproduced in a later Act (V of 11 25) and were Continued by articles 214 and 225 of the Constitution of India.
The advocate for the respondents contended in the Supreme Court that the review application, in view of the changes referred to above, had become infructuous and should have been dismissed in limine, because even if the review application were allowed there would be no authority with jurisdiction and power to pronounce an effective judgment after hearing the appeal.
Again, this case was not decided by a Full Bench under section 25 of the Act, and therefore Do review was maintainable under section 26.
And even if the appeal be considered to have been filed under section 1 1 of Regulation IV of 1099, the application for review must be dealt with under section 12 of the Regulation and a fresh judgment after the review would have to be submitted under section 11 to the Maharaja for confirmation by his Sign Manual; and the present Maharaja of Travancore did not possess the power to consider and to confirm or reject the same.
Hold, (repelling the contention) that in view of the change of the laws if the appeal were revived after the admission of review, it must be disposed of under section 25 of Act V of 1125 and that section did not require any confirmation of the judgment passed on the rehearing of the appeal by the Maharaja or Rajpramukh or Any other authority.
Assuming that the appeal, if restored, 67 522 would be governed by section 12 of Regulation IV of 1099, even then section 11 would have to be applied only "as far as may be" and the portion of the section 11 requiring confirmation by the Maharaja, would be inapplicable in view of the events that had happened.
Chhajju Ram vs Neki (49 I.A. 144), Bisheshwar Pratap Sahi vs Parath Nath (61 I. A. 3 78), Hari Shankar Pal vs Anath Nath Mitter ([1949] F.C.R. 36), Sha Mulchand & Co. Ltd. vs Tawahar Mills Ltd. ([1953] S.C.R. 351)), Beg vs Pestan ji Dingha and Another , Madhu Sudan Chowdhri vs Musammat Chandrabati Chowdhraizi ( ), Bekhanti Chinna Govinda Chettiyar vs section Varadappa Chettiyar , and Rex vs Northumberland Compensation Appeal Tribunal, Ex Parte Shaw ( ) referred to.
The facts leading up to the appeal, as summarized from the Judgment, are as follows.
There were two rival sections of the Malankara Jacobite Syrian Christian community in Malabar, who came to be represented by the appellants and respondents respectively.
Certain disputes had arisen between the two sections ; and each claimed the right to possess and administer the Church properties to the exclusion of the other.
In 1938, a suit was filed in the District Court of Kottayam by the first and second respondents against the first and second appellants.
The plaintiff s contended that the defendants had committed acts of heresy and became ipso facto alien to the Malankara Jacobite Syrian Church.
They were, therefore, " 'disqualified and unfit to be the trustees of or to hold any other position in, or enjoy any benefit from, the Jacobite Syrian Church" (para 26 of the plaint).
The District Judge, who heard the suit, held, by his judgment delivered on the 18th January, 1943, amongst other things, that the acts and conduct imputed to the defendants did not amount to heresy or schism, or to voluntary separation from the Church, and that in any event, according to Canon Law, there could be no ipso facto going out of the Church in the absence of a decision of an ecclesiastical authority properly arrived at.
The conclusion arrived at by the District Judge was that the plaintiffs were not entitled to maintain the suit, which was, therefore, dismissed.
Being aggrieved by the trial Court 's dismissal of the suit, the plaintiffs appealed to the High Court of Travancore.
The appeal was heard by a Full Bench of the High Court, consisting of three Judges, one of whom expressed a dissenting view.
On the 8th of August, 1946, the High Court held, by a majority that the defendants had repudiated the fundamental principles and tenets of the Malankara Jacobite Syrian Church and had established a new Church and had thereby voluntarily separated from, and ceased to be members of, the Malankara Jacobite Syrian Church.
The majority hold that the plaintiffs and been validly elected as trustees and as such were entitled to possession of the Church 523 properties.
The appeal *as accordingly allowed and a decree was passed for possession and other reliefs in favour of the plaintiffs.
On the 22nd August, 1946, the defendants filed a petition for review of the High Court 's judgment on the ground that it contained several mistakes or errors apparent on the face of the record and that in any event there were sufficient reasons for the rehearing of the appeal.
The application for review was ultimately dealt with by the High Court on merits on the 21st of December, 1951.
The Court hearing the review rejected all the points urged in favour of review and dismissed the application, holding that there was no error apparent on the face of the record and that there were not sufficient reasons for the rehearing of the appeal.
The High Court declined to grant leave to appeal to the Supreme Court under article 133 of the Constitution; whereupon the defendants applied for, and on the 14th April, 1952, obtained, special leave of the Supreme Court to prefer an appeal against the High Court 's decision.
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<s>[INST] Summarize the judgementCivil Appeal No. 95 of 1964.
Appeal from the judgment and order dated April 14, 1961 of the Punjab High Court in Income tax Reference No. 23 of 1958.
section T. Desai, R. Ganapathy Iyer, Gopal Singh, B.R.G.K. Achar and R. N. Sachthey, for the appellant.
A. V. Viswanatha Sastri, T. A. Ramachandran, O. C. Mathur for the respondent.
The Judgment of the Court was delivered by Shah, J.
Hakam Mal Tani Mal a Hindu undivided family was assessed to tax under the Indian Income tax Act, 1918, in respect of income from business, inter alia, in timber at Abdullapur.
In 1934 there was a partition of the Hindu undivided family, and five members of that family entered into a partnership to carry on in the name of M/s Hakam Mal Tani Mal the business which was originally carried on by the undivided family.
Accounts of this firm were settled till March 31, 1939, and the firm was dissolved.
The timber business of the firm was taken over by two partners of the firm Gajjan Mal and Jodha Mal, who entered into an agreement of partnership to carry on the business in the name of R. B. Jodha Mal Kuthiala hereinafter called 'assessee '.
An instrument of partnership recording the terms of the partnership and reciting the dissolution of the earlier partnership was executed on June 29, 1939.
The assessee was dissolved in March 1943.
In assessment proceedings for 1943 44 the assessee contended that the firm Messrs Hakam Mal Tani Mal was dissolved on March 31, 1939, before the Income tax (Amendment) Act 7 of 1939 had come into force and the first succession to the business after April 1, 1939 was in March 1943, when the assessee was dissolved and on that account the assessee was entitled to relief under section 25(3), or in the alternative under section 25(4) of the Indian Income tax Act, 1922.
The Income tax Officer completed the assessment without giving to the assessee the benefit of sub sections
(3) or (4) of section 25 of the Indian Income tax Act, 1922.
The Appel 647 late Assistant Commissioner confirmed the order holding that succession to the family firm Messrs. Hakam Mal Tani Mal took place on April 1, 1939, and that firm alone was entitled to relief under section 25(4) and to the second succession which took place on April 1, 1943, after Act 7 of 1939 was brought into force relief under section 25(4) was not admissible.
The Income tax Appellate Tribunal agreed with the view of the Appellate Assistant Commissioner.
Thereafter as directed by the High Court of Punjab under section 66(2) of the Indian Income tax Act, 1922, the Tribunal drew up a statement of the case and submitted the following ques tion of law for the opinion of the High Court : "Whether in the facts and the circumstances of the case, the Tribunal is correct in law in holding that the assessee firm (R. B. Jodha Mal Kuthiala, Abdullapur Depot, Simla) was not entitled to the benefit provided in Section 25 (3) or 25 (4) of the Income tax Act, in relation to the assessment in question ?" The High Court held that the assessee was carrying on business when Act 7 of 1939 was brought into operation and was on that account entitled to the benefit of section 25 (4) of the Act.
With certificate granted by the High Court, this appeal has been preferred.
Sub section (4) was inserted in section 25 of the Indian Incometax Act, 1922, by the Income tax (Amendment) Act 7 of 1939.
It provides : "Where the person who was at the commencement of the Indian Income tax (Amendment) Act, 1939 (VII of 1939), carrying on any business, profession or vocation on which tax was at any time charged under the provisions of the Indian Income tax Act, 1918, is succeeded in such capacity by another person, the change not being merely a change "in the constitution of a partnership, no tax shall be payable by the first mentioned person in respect of the income, profits and gains of the period between the end of the previous year and the date of such succession, and such person may further claim that the income, profits and gains of the previous year shall be deemed to have been the in come, profits and gains of the said period.
Where any such claim is made, an assessment shall be made on the basis of the income, profits and gains of the said 648 period, and, if an amount of tax has already been paid in respect of the income, profits and gains of the previous year exceeding the amount payable on the basis of such assessment, a refund shall be given of the difference : Provided. . .
There is no dispute that the Hindu undivided family of Hakam Mal Tani Mal was taxed under the Indian Income tax Act, 1918, in respect of the, timber business and Messrs. Hakam Mal, Tani Mal succeeded to that business in 1934.
Accounts of Messrs. Hakam Mal Tani Mal were settled on March 31, 1939, and the business in timber which was carried on by that firm was taken over by the assessee.
The departmental authorities held that the assessee was at the commencement of the Indian Incometax (Amendment) Act 7 of 1939 not carrying on business, and that it succeeded to the business on April 1, 1943.
The High Court disagreed with that view and opined that the assessee was at the commencement of Act 7 of 1939 carrying on business, and correctness of that opinion is challenged in this appeal.
The Indian Income tax (Amendment) Act 7 of 1939 was brought into force on April 1, 1939.
Section 5 (3) of the General Clauses Act 10 of 1897 provides that unless the contrary is expressed, a Central Act or Regulation shall be construed as coming into operation immediately on the expiration of the day preceding its commencement.
Act 7 of 1939 must therefore be deemed to have come into operation at a point of time immediately on the expiration of March 31, 1939.
The assessee contends, and the contention has found favour with the High Court, that the assessee was carrying on business at the commencement of the Indian Income tax (Amendment) Act 7 of 1939.
In support of the plea of the assessee reliance was placed only upon the instrument of partnership which was executed on June 29, 1939.
The question in dispute must, therefore, be determined on a true interpretation of the terms of the instrument of partnership.
Insofar as it is material, the instrument recites : "We, R. B. Jodha Mal Kuthiala son of Lala Gopi Mal Sahib Sud of the one part and Gajjan Mal Kuthiala son of Lala Hakam Mal Sahib Sud Kuthiala of the other part, residents of Haroli, District Hoshiarpur.
and presently of Simla.
649 Whereas we, the deponents, were partners and shareholders in the firm of Lala Hakam Mal Tani Mal Simla and all the partners of firm Lala Hakam Mal Tani Mal understood and settled their accounts upto the 31st of March 1939, on the 31st of March, 1939, and all the partners have become separate from the 1st of April, 1939, and the business at Abdullapur in the name of firm Hakam Mal Tani Mal and R. B. Jodha Mal Kuthiala has fallen to our share to run which we have by means of an oral agreement constituted a separate partnership styled R. B. Jodha Mal Kuthiala,, Abdullapur from the 1st of April, 1939.
Now the said oral (agreement) is being reduced to writing and we agree that :" The instrument of partnership in the first instance recites that the accounts of Messrs. Hakam Mal Tani Mal were settled on March 31, 1939 and upto March 31, 1939.
It is then recited that all the partners had become separate from April 1, 1939.
This is an ambiguous recital : it may mean that the dissolution had taken place on April 1, 1939 i.e., the business had continued for the whole or a part of the day on April 1, 1939, or it may mean that from the end of March 31, 1939, there had been separation.
When a deed recites that a transaction is effective from a particular date it has to be determined in the context in which that expression occurs, whether the date mentioned has to be excluded or to be included.
The recitals in the instrument that the accounts were settled upto March 31, 1939, and that the partners had become separate, would imply that the firm of Messrs Hakam Mal Tani Mal did not do business after March 31, 1939.
no date of the oral agreement constituting a separate partnership of the assessee is not set out in the instrument, and there is no other evidence in that behalf.
But the assessee was constituted to carry on the timber business allotted to it at the time of dissolution from April 1, 1939.
The timber business was an old and a running business, and an intention to maintain continuity of the business and its transactions may reasonably be attributed to the assessee.
It must therefore be held that the assessee commenced doing business immediately after the dissolution of the firm Messrs Hakam Mal Tani Mal become effective.
In the absence of other evidence, it may be held that the business of Messrs. Hakam Mal Tani Mal continued till the midnight of March 31, 1939, and immediately thereafter the business of the assessee commenced.
650 The partnership therefore came into being at the precise point of time at which the Indian Income tax (Amendment) Act 7 of 1939 came into force and it could not be said that the assessee was not carrying on business at the commencement of the Indian Income tax (Amendment) Act 7 of 1939.
The High Court was, therefore, in our judgment, right in holding that the assessee was entitled on the dissolution of that firm in March 1943 to the benefit of section 25(4) of the Indian Income tax Act.
The appeal fails and is dismissed with costs.
Appeal dismissed.
[/INST]A Hindu undivided family was assessed to tax under the Indian Income tax Art 1918 in respect of its business, inter alia, in timber.
In 1934 there was dissolution of the family and five of its members entered into a partnership to carry on the business.
Ibis firm was dissolved on March 31, 1939 and its accounts were settled on and up to that date.
The timber business of the dissolved firm was taken over by the assessee firm.
An instrument of partnerhip for the new firm was drawn up on June 29, 1939 in which the facts relating to the dissolution of the earlier firm were also recited.
The new firm the assessee was also dissolved in March 1943.
In assessment proceedings for 1943 44 the assessee claimed benefit under section 25(3) or in the alternative section 25(4) of the Indian Income tax Act, 1922.
The claim was rejected by the assessing and appellate authorities but in reference, the High Court allowed the claim under section 25(4).
The Commissioner of Income tax, with certificate, appealed to the Supreme Court.
The material question for determination was whether the assessee was carrying on business at the commencement of Act 7 of 1939 so as to be entitled to the benefit under section 25(4).
HELD: The Indian Income tax (Amendment) Act 7 of 1939 was brought into force on April 1. 1939.
Section 5(3) of the General Clauses Act (10 of 1897) provides that unless the contrary is expressed, a Central Act or Regulation shall be construed as coming into being on the expiration of the day preceding its commencement.
Act 7 of 1939 must therefore be deemed to have come into operation at a point of time immediately on the expiration of March 31, 1939.
[648 D E] Whether the assessee was carrying on business at the point of time which Act 7 of 1939 came into force had to be decided from the recitals in the partnership deed executed by the respondents on June 29, 1939.
The recitals in the instrument that the accounts were settled up to March 31, 1939 and that the erstwhile partners had become separate would imply that the firm formed in 1934 did not do business after March 31, 1939, the assessee was constituted to carry on the timber business allotted to it at the time of dissolution from April 1, 1939.
The timber business was an old and running business and an intention to maintain continuity of the business and its transactions may reasonably be attributed to the assessee.
It must therefore be held that the assessee commenced doing business immediately after the dissolution of the firm of 1934 become effective.
The business of that firm continued up to the midnight of March 31, 1939, and immediately thereafter the business of the assessee commenced.
[649 E H; 650 A] 646 The new partnership therefore came into being at the precise period of time at which Act 7 of 1939 came into force and it could not be said that the assessee was not carrying on business at the commencement of the Act.
The High Court was therefore right in holding that the assessee was entitled on the dissolution of the firm in March 1943 to the benefit of section 25(4) of the Indian Income tax Act, 1922.
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<s>[INST] Summarize the judgementAppeal No. 2034 of 1969.
Appeal from the judgment and order dated May 7, 1969 of the Punjab and Haryana High Court in Civil Writ No. 850 of 1969.
K. L. Gosain N. N. Goswamy, section K. Mehta, K. L. Mehta and K. R. Nagaraja, for the appellant.
Harbans Singh and R. N. Sachthey, for respondents Nos. 1 and 2.
section V. Gupte and section K. Gambhir, for respondent No. 18.
The Judgment of the Court was delivered by Hegde, J.
This appeal by certificate arises from the decision of a Division Bench of the Punjab and Haryana High Court in a writ petition wherein the appellants challenged the validity of proceedings under sections 4, 6, 9 and 17 (2) (c) of the Land Acquisition Act, 1894 as amended by the Punjab Legislature.
For convenience sake we shall refer to that amended Act as 'the Act '.
The High Court dismissed the writ petition.
It appears that several contentions were sought to be advan ced before the High Court but in this Court only three con tentions have been pressed for our consideration i.e. (1) the acquisition in question being one for a company proceedings should have been taken under sections 38 to 44(B) of the Act, the same having not been taken, the Proceedings taken are void; (2) there was no urgency and hence recourse should not have been had to section 17 of the Act and (3) Section 17(2) (c) is inapplicable to the facts of the case.
Now we may state the facts,relevant for the purpose of deciding the questions in dispute.
873 On 14/17 March, 1969, Government of Haryana issued a notification under section 4 of the Act notifying for acquisition the land concerned in this case.
The notification further directed that action under section 17 (2) (c) of the Act shall be taken on the ground of urgency and the provisions of section 5 A shall not apply in regard to the said acquisition.
The preamble to the said notification says that "whereas it appears to the Governor of Haryana that land is likely to be required to be taken by Government, at public expenses, for a public purpose, namely for the setting up a factory for the manufacture of Chine ware and Porcelain ware including Wall Glazed Tiles etc.
at village Kasser.
Tehsil Jhajjar, District Rohtak, it is here by notified that the land in the locality described in the specification below is likely to be required for the above purpose".
On March 18, 1969 the Government isued a notification under section 6 of the Act acquiring the land for a public purpose On March 28, 1969 notices under section 9 of the Act were served on the appellants.
On April 8, 1969, the appellants filed the writ petition giving rise to this appeal.
The allegations in the writ petition include the assertion that there was no urgency in the matter of acquiring the land in question and therefore there was no justification for having recourse to section 17 and thus deprive the appellants of the benefit of, section 5 A of the Act.
It was further alleged therein that the acquisition in question was made for the benefit of a company and hence proceedings should have been taken under sections 38 to 44(B) of the Act and that there was no public purpose involved in the case.
It was further pleaded that the land acquired was not waste and parable land and that section 2 (c) of the Act did not confer power on the Government to dispense with the proceedings under section 5 A.
In the counter affidavit filed by the Deputy Director of Industries (Administration), Government of Haryana On behalf of the State of Haryana, the above allegations were all denied.
Therein it is stated that at the instance of the State of Haryana, Government of India had issued a letter of intent to a company for setting up a factory for the manufacture of Glazed Tiles etc.
in village Kasser.
That project was to be started with the collaboration of a foreign company, known as Pilkington Tiles Ltd. The scheme for setting up the project had been finalised and approved by the concerned authorities.
on November 26, 1968, the Government wrote to one of the pro moters of the project, Shri H. L. Somany asking him to com plete the "arrangements for the import of capital equipment and acquisition of land in Haryana State for setting up of the proPosed factory".
It was further stated in that communication the Government was pleased to extend the time for compleing the Project upto April 30, 1969.
Under those circumstances it 8 74 had become necessary for the State of Haryana to take imme diate steps to acquire the required land.
It was under those circumstances the Government was constrained to have recourse to section 17 of the Act.
The Government denied the allegation that the facts of this case did not come within the scope of section 17 (2) (c).
It was also denied that the acquisition in question was not made for a public purpose.
We have earlier seen that in the notification issued under section 4, it had been stated that the acquisition was made "at public expenses, for a public purpose" namely for the setting up a factory for the manufacture of China ware and Porcelain ware including Wall Glazed Tiles etc.
In the writ petition it was not denied that the acquisition in question was made at "public expenses".
All that was challenged in the writ petition was that the purpose for which the acquisition was made not a public purpose.
There is no denying the fact that starting of a new industry is in public interest.
It is stated in the affidavit filed on behalf of the State Government that the now State of Haryana was lacking in industries and consequently it was become difficult to tackle the problem of unemployment.
There is also no denying the fact that the industrialization of an area is in public interest.
That apart, the question whether the starting of an industry is in public interest or not is essentially a question that has to be decided by the Government.
That is a socioeconomic question.
This Court is not in a position to go into that question.
So long as it is not established that the acquisition is sought to be made for some collateral purpose, the declaration of the Govern.
men+ it is made for a public purpose is 'not open to challenge, Section 6(3) says that the declaration of the Government that the acquisition made is for public purpose shall be conclusive evidence that the land is needed for a public purpose.
Unless it is shown that there was a colorable exercise of power, it is not open to this Court to go behind that declaration and find out whether in a particular case the purpose for which the land was needed was a public purpose or not see Smt.
Somavanti and ors.
vs The State of Punjab(1) and Raja Anand Brahma Shah vs State of U.p.(2).
On the facts of this case there can be hardly any doubt that the purpose for which the land was acquired is a public purpose.
In view of the pleadings referred to earlier it is not open to the appellant to contend that the State Government had not contributed any Amount towards the cost of acquisition, We were informed at the bar that the State Government had contributed (1) (2) ; 875 a sum of Rs. 100/ towards the cost of the land which fact is also mentioned in the award of Land Acquisition Officer.
That being so it was not necessary for the Government to proceed with the acquisition under Part VII of the Act see Somavanti 's case(1).
Now coming to the question of urgency, it is clear from the facts set out earlier that there was urgency, The Government of India was pleased to extend time for the completion of the of project upto April 30, 1969.
Therefore urgent steps had to be taken for pushing through the project.
The fact that the St ate Government or the party concerned was lethargic at an earlier stage is not very relevant for deciding the question whether on the date on which the notification was issued, there was urgency or not the conclusion of the Government in a given case that there was urgency entitled to weight, if not conclusive.
This takes us to the question of applicability of section 17 (2) (c) to the facts of the case.
The appellant had denied in the affidavit that the entire land acquired is either waste or arable Iand That contention of his has not been examined by the High Court.
Therefore we have to proceed on the basis that the case does not come within the scope of section 17(1).
The State has also not purported to act under section 17 (1).
It has purported to act under section 17 (2) (c).
Therefore we have to see whether the State could have proceeded on the facts of this case under section 17 (1) (c).
Section 17 as amended by the Punjab Act 2 of 1954, Punjab Act 17 of 1956 and Punjab Act 47 of 1956 to the extent necessary for our present purpose reads thus : "17 (1) In cases of urgency whenever, the appropriate Government so directs, the Collector, though no such award has been made, may, on the expiration of fifteen days from the publication of the notice mentioned in section 9, sub section (1) take possession of any waste or arable land needed for public purposes or for a Company.
Such land shall there upon,vest absolutely in the Government free from all encumbrances.
Explanation (2) In the following cases, that is to say (a) Whenever owing to any sudden change in the channel of any navigable river or other unforeseen emergency, it becomes necessary for any Railway Administration to acquire the 'immediate possession of any land for the maintenance of their traffic or for the purpose of making thereon a river side or ghat, station or of (1) 876 providing convenient connection with or access to any such station; (b) Whenever in the opinion of the Collector it becomes necessary to acquire the immediate possession of any land for the purpose of any library or educational institution or for the construction, extension or improvement of any building or other structure in any village for the common use of the inhabitants of such village, or any godown for, any society registered under the (Act 11 of 1912), or any dwelling house for the poor, or the construction of labour colonies or houses for any other class of people under a Govermnent sponsored 'Housing Scheme or any irrigation tank, irrigation or drainage channel, or any well, or any public road; (c) Whenever land is required for a public purpose which in the opinion of the appropriate Government is of urgent importance, the Collector may, immediately after the, publication of the notice mentioned in sub section (1) and with the previous sanction of the appropriate Government enter upon and take possession of such land, which shall thereupon vest absolutely in the Government free from all encumbrances.
Provided that the Collector shall not take possession of any building or part of a build ing under this sub section Without giving to the occupier thereof at least ' forty eight hour 's notice of his intention so to do .
(3) In every case under either of the preceding subsections the Collector shall at the time of taking possession offer to the persons interested compensation for the standing crop and three (if any) on such land and for any other damage sustained by them caused by sudden dispossession . (4) In the case of any land to which in the, opinion of the appropriate Government, the provisions of subsection (1) or sub section (2) are applicable, the appropriate Government may direct that the provisions of section 5 A shall not apply. 877 Herein we are only concerned with the scope of section 17 (2) (c) as the vires of section 17(2) is not challenged.
Section 17(2)(c) if read by itself is plain.
It seems to permit the appropriate Government to direct that the provisions of Section 5 A shall not apply whenever land is required for public purpose which in the opinion of the appropriate Government is of urgent importance.
The conditions precedent for the application of section 17 (2) (c) are ( 1 ) that the land must be required for a public purpose and (2) the appropriate Government must be of the ,opinion that the purpose in question is of urgent importance.
But it was urged on behalf of the appellants that we should apply ejusdem generie rule in interpreting section 17 (2) (c).
The contention on behalf of the appellants was that though section 17 (2) (c) read by itself covers a very large field, that provision should be given a narrower meaning because of the provisions in section 17(2) (a) and (b).
It was urged that as the general words contained in section 17 (2) (c) follow the specific words of the same nature, in section 17 (2) (a) and (b), those general words must be understood as applying to cases similar to those mentioned in section 17 (2) (a) and (b).
The ejusdem generis rule is not a rule of law but is merely a rule of construction to aid the courts to find out the true intention of the legislature.
If a given I provision is plain and unambiguous and the legislative intent is clear, there is no occasion to call into aid that rule ejusdem generis rule is explained in Halsbury 's Laws of England (3rd Edn.).
36 p. 397 paragraph 599 thus "As a rule, Where in a statute there are general words following particular and specific words,, the general words must be confined to things of the same kind as those specified, although this, ' as a rule of construction, must be applied with caution, subject to the primary rule that statutes are to be construed in accordance with the intention of Parliament.
For the ejusdem rule to apply, the specific words must constitute a category, class or genus; if they do constitute such a category, class or genus, then only things which belongs to that category, class or genus fall within the general words.
It is observed in Craies on Statute Law (6th Edn.) p. 181 that : "The ejusdem generis rule is one to be applied With caution and not pushed too far, as in the case of many decisions, which treat it as automatically appli 878 cable, and not as being, what it is, a mere presumption in the absence of other indications of the intention of the legislature.
The modem tendency of the law, it was said, is "to attenuate the application of the rule of ejusdem generis".
To invoke the application of the ejusdem generis rule there must be a distinct genus or category.
The specific words must apply not to different objects of a widely differing character but to something which can be, called a class or kind of objects.
According to Sutherland Statutory Construction (3rd Edn.) Vol.
II p. 395, for the application of the doctrine of ejusdem generis, the following conditions must exist.
(i) The statute contains an enumeration by specific words; (ii) The members of the enumeration constitute a class; (iii) The class is not exhausted by the enumeration; (iv) A general term follows the enumeration and (v) There is not clearly manifested an intent that the general term be given a broader meaning than the doctrine requires.
The scope of the ejusdem generis rule has been considered by this Court in several decisions.
In State of Bombay vs Ali Gulshan(1); it was observed: "Apart from the fact that the rule must be confined within narrow limits, and general or comprehensive words should recive their full and natural meaning unless they are clearly restrictive in their intendment, it is requisite that there must be a distinct genus, which must comprise more than one species, before the rule can be applied.".
In Lilavati Bai vs The State of Bombay,(2) it was observed "The rule of ejusdem generis is intended to be applied where general words have been used following particular and specific words of the same nature on the established rule of construction that the legislature presumed to use the general words in a restricted sense,; that is to say, as belonging to the same genus ' as the particular and specific words.
Such a restricted mean (1) ; (2) ; 879 ing has to be given to words of general import only where the context of the whole scheme of legislation requires it.
But where the content and the object and mischief of the enactment do not require such restricted meaning to be attached to words of general import, it becomes the duty of the courts to give those words their plain and ordinary meaning," The same view was reiterated by this Court in K. K. Kochini vs State of Madras and Kerala(1).
Bearing in mind the principles set out earlier, we shall now consider whether the general import of the words, in section 17 (2) (e) should be cut down in view of section 17 (2) (a) and (b).
Under cl.
(a) of section 17(2), the acquisition is to be made by the Railway Administration when owing to any sudden change 'in the, channel of any navigable river or other unforeseen emergency it becomes necessary for the administration to acquire the immediate possession of any land for the maintenance of the traffic or for the purpose of making thereon a river side or ghat station or for providing convenient connection with or access to any such station.
We would like to emphasize that under this provision, the acquisition can only be made by the Railway Administration and that when it considers that immediate possession (of any land is necessary for the purposes mentioned therein, Under el.
(b) of sub section
(2) of section 17, before an acquisition can be made, the Collector must form an opinion that it has become necessary to acquire the immiediate possession of the land concerned for the ' purposes mentioned therein.
Under cl.
(c) of section 17(2), the acquisition can be made only when the appropriate Government forms the opinion that because of urgent importance, the concerned land has to be acquired for the purposes mentioned in that provision.
Under el.
(a) the derision to acquire has to be made by the Railway Administration.
Under el.
(b), the acquisition can be made only on the formation of the required opinion by the Collector.
Under el.
(c) the acquisition can be made only when the requisite opinion is formed by the appropriate Government.
Further under el.
(a) the acquisition has to be made to meet certain unforeseen emergency as a result of which the immediate possession of the land is necessary.
Under el.
(b) the Collector must form an opinion that it has become necessary to acquire the immediate possession of land but under el.
(c) the requirement is that the appropriate Government must form the opinion that the acquisition is of urgent importance.
Under cls.
(a), (b) and (c) of sub section
(2) of section 17, the decision to acquire land has, not to be made by the (1) A.I.R. 1960 S.C. 105.0.
(1) A.I.R. 1960 s.c. 1050 880 same authority but by different authorities.
Further the conditions under which the acquisition has to be, made differ from clause to clause.
Therefore there is no basis to say that the general words in cl.
(c) follow the particular and specific words in cls.
(b) and (c).
Nor can it be said that the specific words contained in cls.
(a) and (b) constitute a category, 'class or genus.
Hence we are unable to accept the contention that in interpreting cl.
(c) of section 17(2), we should apply the rule of ejusdem generis.
As none of the contentions taken by the appellants are ac ceptable, thise appeal fails and is dismissed.
But in the circumstances of the case we make no order as to costs.
K.B.N. Appeal dismissed.
[/INST]In a suit for possession of land court fee was held to be payable, under section 6(1) (v) of the Bombay Court Fees Act, 1959, on the value of the land.
On appeal, HELD : Under section 6(i)(v) in a suit for possession of land the court fee has to be calculated according to what has been provided in subclauses (a) (b) and (c) with regard to different categories of land.
It may be that in cl.
(v) the land which has not been assessed to land revenue is not covered by clause (a), (b) and (c) but then the court fee will have to be calculated under some other provision of the Act but not on the basis of the value of the land.
[606 A]
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<s>[INST] Summarize the judgementAppeals Nos. 223 & 224 of 1961.
Appeals from the judgment and decree dated April 25, 1956.
of the Punjab High Court in Civil Regular Second Appeals Nos. 158 and 159 of 1949 respectively.
N. section Bindra and K. L. Mehta, for the appellants.
Gurbachan Singh, Harbans Singh and M. L. Kapur, for the respondents (in C. A. No. 224/61).
February 12.
The judgment of the court was delivered by SHAH J.
These appeal arise out of two suits relating to certian agricultural lands situate in village Umri Ana, tehsil Zira District Ferozepore in the Punjab.
The dispute relates to the right to inherit the estate of one Hamam Singh who was the last male holder.
The disputing parties are descended from Sahib Singh ' as disclosed by the following genealogy 21 Sahib Singh | | | | Hamir Singh Wazir Singh | Attar Singh | | | | Chuhar Singh Ghuda Singh Kahan Singh | | | | Mangal Singh | | | Daughter | | | | | Mst.
Bishno Ramji Singh Dasau | Tehl Singh Arjan Singh (married) | ndha | (Defdt.2) (Defdt.1) Singh | Singh | again) | | Narain Singh | | (Pltff.) | | | | | Bakhshish Ajaib Mukhtar | Singh Singh Singh | (Pltff.) (Pltff.) (Pltff.) | | | | | Roor Singh Bhola Singh | | Harman Singh | | | | | | Mst.
Tejo Mst.
Gejo (Died without issue) (died without issue) 22 Harnam Singh grandson of Kahan Singh died leaving him surviving two daughters Mst.
Tejo and Mst.
Gejo and no male lineal descendant.
The property of Harnam Singh devolved upon his two daughters in equal shares.
On the death of Mst.
Tejo without issue the entire estate was entered in the name of Mst.
Gejo by the revenue authorities.
Gejo also died in 1942 without leaving any issue surviving her.
By order dated September 6, 1945 the Assistant Collector directed that the entire estate be entered in the name of Narain Singh s/o Dasaundha Singh and Bakshish Singh, Ajaib Singh and Mukhtar Singh sons of Ramji Singh who will hereinafter be referred to collectively as 'the plaintiffs. ' In appeal to the Collector of Ferozepore the order of the Assistant Collector was set aside and the estate was directed to be entered in the names of Tehl Singh and Arjan Singh sons of Mangal Singh who will hereinafter be referred to collecti vely as 'the defendants. ' The Commissioner of the Division confirmed the order of the Collector.
The plaintiffs who are the descendants of Ghuda Singh then instituted suit No. 9/1947 in the Court of the Subordinate judge, Zira for a decree for possession of the estate of Harnam Singh, barring a small area of 8 Kanals and 11 MarlasKhasra No. 325 which was in their possession.
The defendants who are the descendants of Wazir Singh in their turn commenced an action (Suit No. 13/1947) for possession of Khasra No. 325 against the plaintiffs.
Each side claimed title to the estate of Harnam Singh according to the customary law applicable to the Jats residing in tehsil Zira, District Ferozepore.
It was the case of the plaintiffs that notwithstanding the adoption of Ghuda Singh by his maternal uncle Bhan Singh, Ghuda Singh 's descendants were not excluded from inheritance to the estate of a member in the natural family of Ghuda Singh It was submitted by the plaintiffs 23 that the family of the plaintiffs and Harnam Singh was governed by Zamindara Riwaj i am (general custom obtaining amongst the Zamindars) by virtue of which a son adopted in another family and his descendants do not lose their right to inherit in their natural family, because by the adoption according to the custom of the community the adopted son does not completely sever his connections with his natural family.
The defendants, on the other hand, claimed that in the District of Ferozepore every adoption in a Hindu family is 'formal ' and according to the Riwaj i am of the District an adopted son is excluded from the right to inherit in his natural family.
Consequently Ghuda Singh, who was adopted by Bhan Singh, could not inherit the estate of Hamir Singh, his adoption operating as a complete severance from the natural family.
The sole dispute between the parties was, therefore, as to the customary law applicable to the rights of a son adopted in a jat family residing in tehsil Zira, District Ferozepore.
The two suits were consolidated for trial.
The Subordinate judge held that all ceremonies relating to adoption were performed and Ghuda Singh ceased to be a member of the family of his natural father according to the custom prevailing in the District and the plaintiffs who were the descendants of Ghuda Singh could not inherit the estate of Hamir Singh.
In so holding he relied upon the manual of Riwaji i am of Ferozepore District prepared in 1914, which, in his view, recorded that when any adoption in the District takes effect the adopted on adoption son stand transplanted to the family of the adopter.
In appeal the District Court, Ferozepore held that in the case of Jats of Ferozepore District by special custom prevailing in the District, the adopted son bad the right to inherit collaterally in the family of his adoptive father only and could not inherit collaterally in his natural father 's family.
In second appeal the High Court of Punjab set aside the decree passed 24 by the District Court.
In the view of the High Court the record disclosed no evidence that the adoption of Ghuda Singh made by his maternal uncle Bhan Singh was formal and in the absence of any such evidence it must be presumed that the adoption was a customary appointment of an heir and not a formal adoption under the Hindu Law and that there was overwhelming authority in favour of the proposition that by reason of a customary adoption the adopted son and his descendants were not excluded from the right to inherit to collaterals in the natural family.
The High Court accordingly held that the plaintiffs, as grandsons in the male line of Ghuda Singh, were entitled to inherit the estate of Hamir Singh.
With certificate of fitness granted by the High Court, these two appeals are preferred by the defendants.
It is common ground that Ghuda Singh was adopted some time before 1856 by Bhan Singh, his maternal uncle.
The dispute between the parties has to be resolved by applying the customary law applicable to the parties, because section 5 of the which governs the parties provides that : "In questions regarding succession, special property of females, betrothal and marriage, divorce, dower, adoption, guardianship, minority, bastardy, family relations, wills, legacies, gifts, partition, or any religious usage or insti tution, the rule of decision shall be (a) any custom applicable to the parties concerned, which is not contrary to justice, equity or good conscience, and has not been by this or any other enactment altered or abolished, and has not been declared to be void by any competent authority 25 (b) The Muhammadan Law in cases where the parties are Muhammadans, and the Hindu Law, in cases where the parties are Hindus, except in so far as such "law has been altered or abolished by legislative enactment, or is opposed to the provisions of this Act, or has been modified by any such custom as is above referred to.
" In Daya Ram vs Sohel Singh (1), Rober son, J., (at P. 410) in dealing with the true effect of section 5 observed : "In all cases it appears to me under this Act, it lies upon the person asserting that he is ruled in regard to a particular matter by custom, to prove that he is so governed, and not by personal law, and further, to prove what the particular custom is.
There is no presumption created by the clause in favour of custom; on the contrary, it is only when the custom is established that it is to be the rule of decision.
The Legislature did not show itself enamoured of custom rather than law, nor does it show any tendency to extend the "Principles ' of custom to any matter to which a rule of custom is not clearly proved to apply.
It is not the spirit of customary law, nor any theory of custom or deductions from other customs which is to be a rule of decisions, but only 'any custom applicable to the parties concerned which is not. . and it "therefore ' appears to me clear that when either party to a suit sets up 'custom ' as a rule of decision, it lies upon him to prove the custom which he seeks to apply; if he fails to do so clause (b) of section 5 of the applies, and the rule of decision must be the personal law of the parties subject to the other provisions of the clause.
" This view was affirmed by the judicial Committee (1) (1906) P.R. No. 110 (F.B.).
26 of the Privy Council in Abdul Hussein Khan vs Bibi Sona Dero (1).
In Vaishno Ditti vs Rameshri (2), the ,Judicial Committee observed : "x x x x their Lordships are of opinion that in putting custom in the forefront, as the rule of succession, whilst leaving the particular custom to be established, as it nece ssarily must be, the Legislature intended to recognize the fact that in this part of India inheritance and the other matters mentioned in the section are largely regulated by a variety of customs which depart from the ordinary rules of Hindu and Mohamedan law." The pleadings also disclose an unanimity that the rights of the parties have to be adjudged in the light of the customary law applicable and not by the rules of Hindu Law.
The relevant general custom which is applicable in the matter of adoption is to be found in Rattigan 's Digest of Civil law for the Punjab, 13.
p. 572 Article 48 "An heir appointed in the manner above described ordinarily does not thereby lose his right to succeed to property in his natural family, as against collaterals, but does not succeed in the presence of his natural brothers.
" Article 49 : "Nor, on the other hand, does the heir acquire a right to succeed to the collateral relatives of the person who appoints him, where no formal adoption has taken place, inasmuch as the relationship established between him and the appointer is a purely personal one.
" This adoption, according to Rattigan is irrevocable and an adopted son cannot relinquish his status.
(1) (1917) L.R. 45.
I.A. 10. 2) (1928) LR, 55 I.A. 107, 421.
27 Article 52 sets out the rights of the adopted son.
It states : "The appointed heir succeeds to all the rights and interests held or enjoyed by the appointer and, semble, would succeed equally with a natural son subsequently born.
" There is a long course of decisions in the High Court of Lahore and the High Court of Punjab in which it has been held that the relationship between the appointed heir and the appointer which is called adoption is purely a personal one and resembles the Kritrima form of adoption of Hindu Law: Mela Singh vs Gurdas (1), Sir Shadi Lal, C.J. observed in dealing with the effect of a customary adoption in the Punjab : "The tie of kinship with the natural family is not dissolved and the fiction of blood relationship with the members of the new family has no application to the appointed heir.
The relationship established between the appointer and the appointee, is a purely personal one and does not extend beyond the contracting parties on either side." Similarly in Jagat Singh vs Ishar Singh (2), it was held that the reservation as to the adopted son not succeeding in the presence of his brothers refers only to his succession to his natural father but does not apply to cases of collateral succession in his natural family A similar view was expressed in Kanshi Ram V. Situ (3), and Rahmat vs Ziledar (4).
In the last mentioned case it was stated : "Under the general custom of the province a person who is appointed as an heir to a third person does not thereby lose his right to succeed to the property of his natural father.
But (1)(1922)I.L.R.3 Lah.362(F.B.) (2)(1930)1.L.R.II Lah.615.
(3) (4) Lab.
28 the appointed heir and his lineal descendants have no right to succeed to the property of the appointed heir 's natural father against the other sons of the natural father and their descendants.
The appointed heir can succeed to the property of his natural father when the only other claimant is the collateral heir of the latter.
" But it is urged on behalf of the defendants that the general custom applicable to the Punjab as recorded by Rattigan is shown to be superseded by proof of a special custom of the District recorded in the Riwaj i am of Ferozepore District prepared by Mr. Currie at the settlement of 1914, and reliance is placed upon answers to Questions 76 and 77 which deal with the effect of adoption.
The Questions and the Answers recorded are : "Question 76 Does an adopted son retain his right to inherit from his natural father ? Can he inherit from his natural father if the natural father dies without other sons ? Answer All agree that the adopted son cannot inherit from his natural father, except as for as regards such share of the property as would come to his adoptive father as a collateral.
Sodhis 'however ' say that he can inherit his natural father 's estate if the latter has no male descendants, while the Nipale say the adopted son inherits from both fathers.
Question 77 Describe the rights of an adopted son to inherit from his adoptive father.
What is the effect of the subsequent birth of legitimate sons to the adoptive father ? Will the adopted son take equal shares with them ? If natural legitimate sons be born subsequently to the adoption where the chundawand system 29 of inheritance prevails, how will the share of the adopted son, whose tribe differs from that of the adoptive father, ' inherit from him ? Does an adopted son retain his own got or take that of his adoptive father ? Answer An adopted son has exactly the same rights of inheritance from his adoptive father as a natural legitimate son.
The inheritance would only be by chundawand, if that was the prevalent rule of the family.
The Nipals, Rajputs, Arains, Moghals, Sayyads, Gujjars and Muhammadan Jats state that if the adopted son is of a different got he takes the got of his adoptive father ; while if he is of a different tribe, he cannot inherit.
As it is, as a rule aged men without hope of sons who adopt, cases of the birth of legitimate sons after adoption has taken place must be rare.
" When there is conflict between the general custom stated in Rattigan 's Digest of Customary Law and the Riwaj i am which applies to a particular area it has been held by this Court that the latter prevails.
In Jai Kapur vs Sher Singh (1), it was observed "There is, therefore, an initial presumption of correctness as regards the entries in the Riwaj i am and when the custom as recorded in the Riwaj i am is in conflict with the general custom as recorded in Rattigan 's Digest or ascertained otherwise, the entries in the Riwaj i am should ordinarily prevail except that as was pointed out by the Judicial Committee in Mt. Subhani vs Nawab [A.I.R. 1941 (1) 979. 30 (P. C.) 21], "that where, as in the present case, the Riwaj i am affects adversely the rights of females who had no opportunity whatever of appearing before the revenue authorities, the presumption would be weak, and only a few instances would suffice to rebut it.
" Therefore when there is a conflict between the record of custom made in Rattigan 's Digest of Customary Law and the local Riwaj i am, prima facie, the latter would prevail to the extent of the inconsistency, and it would be for the person pleading a 'custom or incident thereof different from the custom recorded in the Rewaj i am to prove such custom or incident.
Attention must, therefore, be directed to the question whether there is in fact Any inconsistency between ' the custom recorded in Rattigan 's Digest of Customary Law and the relevant entries in the Riwaj i am.
The general custom recorded in Rattigan 's Digest is apparently this : a person adopted according to the custom of the community i.e. who is appointed as an heir to ' inherit the property of a person outside the family does not, by virtue of such appointment, lose his right to inherit the property in his natural family except the right to inherit the property of his natural father when there are natural brothers.
The natural brothers would take the property to the exclusion of such an adopted son and his descendants.
Question 76 in the Riwaj i am primarily refers to the right of an adopted son to retain his right to inherit the property of his natural father and the answer recorded is that the adopted son cannot inherit the property of the natural father, except such property as would devolve upon his adoptive father as a collateral (of the adopted son 's natural father).
It is to be noticed that the question was directed to ascertain the right of the adopted son to inherit the estate of his natural father : it did not seek elucidation on the right of the adopted son to inherit the estate of any collaterals of the natural 31 father, and the fact that in the answer it was recorded that to the estate which would devolve upon his adoptive father as a collateral of his natural father he has a right of inheritance, strongly supports the view that the village elders in replying to the question were only concerned with the right of an adopted son to inherit the property of his natural father and were not concerned to dilate upon any right to collateral succession in the natural family.
The answer to question 77 also supports this view.
When asked to describe the rights of an adopted 'on to inherit the estate of his adoptive father, they replied that the adopted son had exactly the same rights of inheritance from his adoptive father as a natural legitimate son.
Mr. Bindra appearing on behalf of the defendants submitted that questions 76 and 77 were in tended to ascertain the custom of the District relating to the rights of the adopted son in his natural family and the family of his adoptive father and the answers must be read in that light.
We are unable to accept this suggested interpretation of Questions 76 and 77 and the information elicited thereby.
The Riwaj i am appears to have been carefully compiled by officers of standing and experience and it is clear that they made a limited enquiry about the rights of an adopted son to inherit the property of his natural father and of his adoptive father.
There is undoubtedly some conflict between the custom recorded in Rattigan 's Digest and the custom in the Riwaj i am.
Whereas in Rattigan 's Digest it is recorded that an heir appointed in another family does not succeed to his natural father in the presence of his natural brothers, in the Riwaj i am it is recorded that the adopted son does not directly inherit the estate of his natural father in any event, But we are not concerned with that ' inconsistency in this case.
It is sufficient to observe that in article 48 of Rattigan 's Digest, it is 32 recorded that an heir appointed in the manner described (an adopted son) does not thereby lose his right to succeed to property in his natural family : and nothing inconsistent therewith is shown to be recorded in the Riwaj i am of the District.
Mr. Bindra contended that in any event there is clear evidence of instances of devolution of property in the family of the parties indicating that a son adopted in another family was totally excluded from inheritance in the natural family.
Counsel relied upon Ext.
D 5 an extract from the register of mutations relating to certain agricultural lands in village Umri Ana.
It appears from that extract that on the death of Hamir Singh the estate was in the first instance entered in the names of his three sons.
But Salig Ram, Patwari of the village, made a report on May 28, 1884 that Kahan Singh and Chuhar Singh (two of the sons of Hamir Singh) claimed that Ghuda Singh had never been in possession of the 1/3rd share of the Khata entered in his name and that Ghuda Singh himself had admitted that he had no concern with the Khata in question and that his name should be removed.
On that report the Assistant Collector ordered that the lands be entered in the names of Kahan Singh and Chuhar Singh and that the name of Ghuda Singh be removed from the mutation entry and that the Jamabandi papers be altered accordingly.
But this instance of exclusion of Ghuda Singh from the right to participate in the estate of his father is consistent with the statement of custom recorded in Rattigan 's Digest.
It is expressly recorded in article 48 that an appointed heir does not thereby lose his right to succeed to property in his natural family, as against collaterals, but he does not succeed in the presence of his natural brothers.
Kahan Singh and Chuhar Singh were brothers of Ghuda Singh and Ghuda Singh having been adopted could not, according to the custom recorded in 33 Rattigan 's Digest, inherit his fathers estate in the "presence of his brothers.
" The other instance relied upon by counsel is about the devolution of the estate of Chuhar Singh on the remarriage of his daughter Bishno.
On the death of Chuhar Singh it appears that his property was entered in the name of his daughter Bishno, and when Bishno contracted a Karewa marriage according to the custom prevalent in the community, the estate held by her was entered in the name of Rura Singh and Bhola Singh sons of Kahan Singh.
In the register of mutations Ext.
R D 1 it is recorded that Ghuda Singh who was the Lambardar appeared before the Tehsildar and identified Mst.
Bishno and stated that she had contracted Karewa marriage with jawala Singh and further admitted that Rura Singh and Bhola Singh were entitled to take her property, and pursuant to this statement the Tehsildar directed that mutation regarding succession be sanctioned in favour of Rura Singh and Bhola Singh in equal shares.
This instance also, in our judgment, does not support any case of departure from the custom recorded in Rattigan 's Digest.
It is clear from the genealogy and the extract of the register of mutations Ext.
D 1 that the occasion for making an entry of mutation was the remarriage of Bishno.
Mr. Bindra submitted that according to the custom of the community a daughter inheriting property, from her father would on marriage be divested of the property, which would devolve upon the collaterals of her father, and according to that custom when on the remarriage of Bishno the succession opened, Ghuda Singh was on his own admission excluded.
This, counsel submitted, was a stronginstance supporting a departure from the custom recorded in Rattigan 's Digest.
But if by virtue of the custom prevalent in the community, as asserted by Mr. Bindra, on her marriage Bishno would lose her interest in the property of her father, it is 34 difficult to appreciate how she acquired title or continued contrary to that custom, to remain owner of the property of her father after her first marriage.
It is clear that it was not because of her marriage, but on re marriage, that the property was alleged to have devolved upon Rura Singh and Bhola Singh.
Why Bishno did not forfeit her right to the property on her marriage and forfeited her right thereto on remarriage has been left in obscurity.
The learned judges of the High Court held that the mere circumstance that Ghuda Singh permitted the estate to go to the descendants of Kahan Singh was not by itself sufficient to establish the custom set up by the defendants and uncontested instances were of little value in establishing a custom.
They observed that the instance might have received considerable reinforcement if it had been shown that Ghuda Singh or any of his descendants had inherited collaterally in the family of Bhan Singh but except succession of Ghuda Singh to the estate of Bhan Singh which is in accordance with the general custom no proof of collateral succession was established, and the single instance of Chuhar Singh 's estate devolving upon the descendants of Kahan Singh with the consent of Ghuda Singh does not establish any custom contrary to what is stated in Rattigan 's Digest.
We are unable to disagree with the view so expressed.
On that view of the case, these appeals fail and are dismissed with costs.
Appeal dismissed.
[/INST]Harnam Singh died leaving behind two daughters.
They also died without leaving any issue surviving them.
The Revenue authorities ordered that the entire estate of Harnam Singh be entered in the revenue records in the names of the defendants.
The plaintiffs filed a suit for possession of the estate of Harnam Singh.
Their contention was that notwithstanding the adoption of Ghuda Singh, their predecessor, by his maternal uncle, they as descendants of Ghuda Singh were not excluded from inheritance to the estate of a member in the natural family of Ghuda Singh.
It was also contended that the family of the plaintiffs and Harnam Singh was governed by Zamindara Riwaj i am by virtue of which a son adopted in another family and his decendants did not lose their right to inherit in the natural family because by the adoption according to the custom of the community, the adopted son did not completely sever his connection with his natural family.
The contention of defendants appellants was that in the District of Ferozeporc, every adoption in a Hindu family was formal and according to the Riwaj i am of the District, an adopted son was excluded from the right to inherit in his natural family.
Consequently, Ghuda Singh, who was adopted by Bhan Singh, could not inherit the estate because his adoption operated as complete severance from the natural family.
The suit was dismissed by the Subordinate judge and his order was confirmed by the District judge.
However, the High Court set aside the order of the District judge and held that the record disclosed no evidence that the adoption of Ghuda Singh was formal and hence it must be presumed that the adoption was a customary appointment of an heir and not a formal adoption under the Hindu Law.
It was also held that there was overwhelming authority in favour of the proposition that by reason of a customary adoption, the adopted 20 son and his descendants were not excluded from the right to inherit to collaterals in the natural family.
The plaintiffs as grandsons in the male line of Ghuda Singh were entitled to inherit the estate.
The appellants came to this Court by a certificate of fitness granted by High Court.
Held, that the view of the High Court was correct.
A person adopted according to the customs of the community, i.e. who is appointed as a heir to inherit the property of a person outside the family, does not.
by virtue of such appointment, lose his right to inherit in his natural family except the right to inherit the property of his natural father when there are natural brothers.
The natural brothers would take the property to the exclusion of such an adopted son and his defendants.
Daya Ram vs Sohel Singh (1906) P. R. No. 110 (F.B.), Abdul Hussain Khan vs Bibi Sona Dero 1917) L.R. 45 I .A. 10, Vaishno Ditti vs Rameshri (1928) L. R. 55 I. A. 407, Mela Singh vs Gurdas, (1922) 1.
L. R. , Jagat Singh vs Ishar Singh Lah.
615, Kanshi Ram vs Situ (1934) I. L. R.16 Lah. 214, Rahmat vs Ziledar (1945) 1.
L. R.26 Lah.
504 and Jai Kapur vs Sher Singh, [1960] 3 section C. R.975, referred to.
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<s>[INST] Summarize the judgementivil Appeal No. 783 (NM) of 1987.
From the Judgment and Order dated 9.3.87 of the High Court of Patna in C.W.J.C. No. 608 of 1983.
Soli J. Sorabjee, Ravinder Narain, section Ganesh, Laxmi Kumaran, P.K. Ram and D.N. Mishra for the Appellant.
Govind Das, C.V.S. Rao and A. Subba Rao for the Respondents.
The Judgment of the Court was delivered by KANIA, J.
This is an appeal by the Tata Iron and Steel Co. Ltd. (referred to hereinafter "the Tisco") against the judgment of a Division Bench of the Patna High Court in Writ Petition filed by the Tisco.
The Writ Petition was filed by the Tisco for quashing an order passed by the Collector, Central Excise, Patna on 24th September, 1982.
The Division Bench of the Patna High Court in the impugned judgment only granted partial relief to the Tisco and the appeal in respect of the relief refused.
The relevant facts are follows: The appellant manufactures inter alia wheels, tyres and axles of rail ays.
The buyers of these products are the Indian Railways.
Apart from this, the appellant also makes and supplies to the Indian Railways wheel and exles as composite units.
These are forged products.
Before the said goods are supplied to the railways the said goods after being forged are machined and polished by the appellant and as a result of this machining and polishing the excess layer of steel which is commonly referred as "excess skin" 'is removed; and one of the disputes is as to whether for the purpose of Item 26AA(ia) of the Central Excise 1027 Tariff set out in the First Schedule to the (referred to hereinafter as "the Central Excises Act") the weight of the steel should be calculated as at the time when the forging was complete or after machining and polishing to remove the excess skin of steel.
Certain other incidental work on the said goods might have been done by the appellant, but that is not material for our purposes.
The stand of the appellant was that these items were dutiable in their hands only once and under Tariff Item No. 26AA(ia).
The contention of the revenue was that in the hands of the appellant they were liable to duties at two stages, namely, under Tariff Item No. 26AA(ia) when they were forged and under Tariff Item No. 68 of the Excise Tariff after they were machined and polished for being supplied to the railways.
Right from 1962, the appellant was filing classification lists showing these goods as liable to excise duty only under Tariff Item No. 26AA(ia) and this classification list submitted by the appellant was accepted and approved by the excise authorities.
In 1981, the Asstt.
Collector, Central Excise, Jamshedpur who is one of the respondents before us by a show cause notice dated 16.5.1981 called upon the appellant to show cause why it should not be proceeded against for contravention of Rule 173 B, 9(i) read with rule 173(G)(i) and rule 173(i)(a).
The ground was that the goods supplied by the appellant to the railways were not forged items as such, but the said goods after they had undergone machining and polishing after being forged and had been turned into distinct commercial commodities by the process of machining and polishing which amounted to manufacture and hence the goods were also liable to the payment of excise duty as set out in Item 68.
The notice also called upon the appellant to show cause as to why duty on the forged goods under Tariff Item No. 26AA(ia) should not be payable on the footing of the weight of the goods as forged and before the removal of the excess skin by the machining.
The appellant by their letter dated 27th May, 1982 replied to the said notice taking up the stand that the process of forging of the goods could be said to be completed only after machining and polishing and that this was required to be done in order to bring the goods in line with the specifications of the Indian Railways.
The said letter addressed to the Collector inter alia pointed out that all the wheels, tyres and axles had to be rolled and machined by the appellant to make them conform to the Indian Railways standard denominations.
However, all wheels, tyres and axles supplied by the appellant were further precision machined and fine polished at the railway workshop 1028 that this further machining at the railway workshop, is a must before the said articles could be put to use by the railways and hence the machining by the appellant did not amount to manufacture.
A copy of the letter is not on record, but there is a clear reference to it in the order passed by the Collector imposing excise duties as aforesaid.
The Collector rejected the stand of the appellant and held that the apellant was liable to pay differential duty under item 26AA(ia) on the difference between weight of the said goods when forged and the weight after machining to remove the excess skin as well as the duty under Tariff Item No. 68 as set out earlier.
The Collector further held that the appellant was liable to penalty of Rs.1 lac under Rule 173Q of the Central Excise Rules, 1944 for suppression of facts or giving misleading particulars.
The Collector took the view that the appellant was guilty of mis statement of suppression of facts and hence the period of limitation for making the demand was 5 years prior to the service of the show cause notice.
The Division Bench of the Patna High Court accepted the conclusions of the Collector save and except that they took the view that there was no suppression or mis statement of facts on the part of the appellant and hence the period of limitation would be only 6 months prior to the service of the show cause notice.
Before proceeding further, we would like to set out the relevant items from the Central Excise Tariff.
The relevant portion of Item 26AA of the Central Excise Tariff, at the relevant time read as follows (with emphasis supplied): "26AA.
Iron or steel products, the following, namely,: (ia) Bars, rods, coils wires, joists, girders, angles, other than slotted angles, channels, other than slotted channels, tees, beams, zeds, trough, piling and all other rolled, forged or extruded shapes and sections, not otherwise specified.
" Item 68 of the Excise Tariff is the residury item and it ran as follows: "68.
All other goods, not elsewhere specified, but excluding: (a) alcohol, all sorts, including alcoholic liquors for human consumption; 1029 (b) opium, Indian hemp and other narcotic drugs and narcotics; and (c) dutiable goods as defined in section 2(c) of the Medicinal and Toilet Preparations (Excise Duties) Act 1955 (16 of 1955).
" There is an explanation to Item 68, but the same is not relevant for our purpose.
A perusal of these items makes it clear that forged steel products are liable to duty in terms of Tariff Item No. 26AA.
It is also beyond dispute that forged steel goods with which we are concerned would be covered by Tariff Item No. 26AA(ia) which includes forged or extruded shapes and sections, not otherwise specified.
It is common ground that the appellant is liable to pay excise duty on the said goods under Tariff Item No. 26AA(ia).
The dispute in this connection is what is the stage at which the said goods could be said to be forged iron and steel products as contemplated in the said item; whether they could be regarded as such as soon as they are forged or after machining and polishing to remove the excess skin before being supplied to the Indian Railways.
The stand of the appellant is that this machining and polishing which is done in its workshop, is not significant character and extensive precision machining and polishing has to be done by the railway at their workshop before the wheels, tyres and axles supplied by the appellant can be attached to the rolling stock.
The machining and polishing done in the workshop of the appellant was only in the nature of shaping by removing the superficial material to bring the forged items upto with the Railways ' specifications.
A perusal of Item 26AA would show the excise duty on forged goods covered under the said entry, is according to the weight of the goods.
It was contended by the appellant that the weight should be measured only after the polishing and machining at the appellant 's workshop was completed.
It is obvious that as a result of such machining and polishing there would be some loss weight on account of excess skin removal.
It was on the other hand contended on behalf of the Revenue, the respondent herein, that the forging of the goods was complete before the machining and polishing was done to remove the excess surface or excess skin.
It appears to us that the aforesaid contention of the appellant deserves to be accepted.
Even to prepare forged goods for supplying to the Railways, it was essential that the goods should comply with the Railways ' specifications and the excess steel on the surface or the excess skin as it is called, would have to be removed for that purpose.
1030 Moreover, as pointed out by learned single judge of the Delhi High Court, in Metal Forgings Pvt. Ltd. & Anr.
vs Union of India & Ors.
, [1985] 20 E.L.T. p.280 at paragraph 12: "The process of manufacture of forged products consists of cutting of steel, pre heating of material, heating and beating of steel material till final shaping is achieved.
The steel forging process involves open forging process where the quantity small and drop/close die forging and/or upset forging process under which the product is made with the help of dies.
Thereafter, the extra/unwanted material is removed by either trimming or by gas cutting or by skin cutting to achieve the shape and section nearest to the forged steel product required and also the forging clearances specified in the standards by I.S.I./or International.
It is conceded by the Government that forging would not cease to be forging by processes like removal of superfluous extra skin of cast iron.
" The learned judge has further pointed out in the next paragraph of the said judgment that the removal of extra/unwanted surface steel by either trimming or by gas cutting or by skin cutting of the forged products must be regarded as incidental or ancillary to the process of manufacture.
This view is also consistent with the definition given to the term "manufacture" contained in Sub section (f) of section 2 of the .
This definition shows that the manufacture includes any process incidental or ancillary to the completion of a manufactured product.
We are, therefore, of the view that in respect of the said goods the weight for the purpose of levy of excise duty under Item 26AA(ia) should be taken after the machining and polishing is done to remove the excess surface skin and the contention of the appellant in this regard must be accepted.
The next question is, whether, as a result of the polishing and machining done by the appellant on the said goods before supplying them to the railways the same were transformed into new commercial commodities, namely, finished axles, wheels, tyres and so on or whether these finished or manufactured goods which could be regarded as distinct commercial products came into existence only after precision machining done at workshops of the Indian Railways to enable the Railway to put these goods to use to meet the actual requirments of the Railways.
It is not the case of the respondent that there were three distinct sets of goods, namely, one the forged steel pro 1031 ducts, two the manufactured goods supplied by the appellant to the Railways and three, the finished goods as turned out from the Indian Railways ' workshops for being used by the Railways.
It must be regarded as common ground that duty under Item No.26AA was payable on the forged products and duty under Tariff Item No. 68 was payable only at the stage of the completion of the manufacture of the finished goods, namely, axles, wheels, tyres and so on.
The certificate issued by A.K. Malhotra, Additonal Director, Railways (Stores) clearly states that the goods supplied by the appellant to the Indian Railways and manufactured at its plant at Jamshedpur are manufactured according to specifications and drawings agreed to between the parties.
Axles are supplied to the railways in rough machined condition and wheels, tyres and blanks are supplied in as "rolled/as forged" condition.
These wheels/tyres, axles and blanks have to be sometimes rough machined partially to remove excess steel or manufacturing defects.
These products are subsequently precision machined by the Railways at their workshops before being put to use to meet the actual requirements of the Railways.
There is no challenge to the correctness of this certificate either before the Collector or before the Trial Court and there is no reason as to why it should not be taken as correct.
The certificate clearly shows that axles supplied by the appellant to the Railways were in rough machined condition and wheels, tyres and blanks were supplied in rough or forged condition.
Sometimes wheels, tyres, axles and blanks had to be even rough machined partially at the Railways workshop to remove excess steel or manufacturing defects.
All these products had to be subsequently precision machined by the Railways before being put to use.
In these state of affairs, it is quite clear that the finished goods, namely, finished wheels, tyres, axles and blanks could be said to have come into existence only after the precision machining and other processing at the Railways ' workshops was completed and the appellant is not liable to pay any duty on these goods as under Item No. 68 of the said Central Excise Tariff.
We may make it clear that what we have said in the foregoing paragraphs is applicable to all the goods with which we are concerned save and except wheels, tyres and axles manufactured by the appellant and supplied as composite units.
In respect of these composite units, it is beyond dispute, and it is conceded by the appellant, that it is liable to pay duty on the same under Tariff Item No. 26AA(ia) as well as under Tariff Item No. 68.
The only contention in this connection is as regards the question of limitation to which we shall presently come.
1032 Regarding the question of limitation, the dispute is whether, assuming that the demand made by the Collector was valid, what is the period to which it could relate, it being common ground that as far as composite units comprising wheels, tyres and axles supplied by the appellant to the Indian Railways are concerned the demand under Item No. 68 of the Central Excise Tariff was justified.
The question here is as to whether that demand could extend only to six months prior to the service of the show cause notice as contended by the appellant or upto a period of five years prior to that notice as contended by the respondent.
In this regard, Section 11 A is the relevant provision.
The said Section has been amended in 1978, but we are not concerned with that amendment.
A perusal of Sub section (1) of that Section shows that where any duty of excise has not been levied or short levied or short paid or erroneously refunded, the Central Excise Officer concerned may, within six months from the relevant date, serve notice on the person chargeable with that duty.
This provision would clearly show that the period for which the demand could be made was only six months prior to the service of the notice.
Now, in the present case, it has been found by the High Court and, in our opinion, rightly that there was no suppression or mis statement of facts or fraud by the appellant to which the alleged short levy or non levy could be attributed.
In fact, it is common ground that right from 1962 the appellant was filing classification lists containing the description of the items and showing them as liable to the payment of excise duty only under Item No. 26AA(ia) and these lists were accepted and approved by the excise authorities.
In these circumstances, we fail to see how it could be said that the appellant was guilty of any suppression or mis statement of facts or collusion or violation of the provisions of Central Excises Act as contemplated under the proviso to Section 11 A of the said Act.
In view of this, the period of limitation would clearly be only six months prior to the service of the show cause notice.
The demand for excise duty against the appellant on the said composite units under Item No. 68 of the Excise Tariff, to the extent that it exceeds the period of six months prior to the service of the show cause notice must, therefore, be struck down.
In our view, the learned judges who delivered the impugned judgment were in error in taking the view which they took on the questions discussed aforesaid, except regarding limitation.
The learned judges have placed considerable reliance on the new classification of the Tariff Items in 1985 in considering the true scope of Item No. 26AA and Item No. 68 as they stood in 1981.
In our opinion, this reliance was misplaced.
1033 In the result, the appeal is allowed.
The appellant is liable to pay duty on the goods referred to in the petition other than the composite units only under Item No. 26AA(ia) of the First Schedule to the Central Excises Act and the duty will be based on the weight after the machining carried out in the factory of the appellant to remove the excess skin or excess surface steel.
Secondly, in respect of the composite sets, the appellant is liable to pay duty both under Items Nos. 26AA(ia) and 68, but only for a period of six months prior to the service of the show cause notice.
Looking to all the facts and circumstances of the case, there will be no order as to costs.
R.S.S. Appeal allowed.
[/INST]The appellant is an Advocate.
Gautam Chand was one of his old clients.
The complainant Respondent No. l engaged the appellant on being introduced by Gautam Chand to file a Suit against Shri section Anantaraju for recovery of a sum of Rs.30,098 with Court costs and interest in the Court of City Civil Judge at Bangalore.
The appellant passed on the papers to his junior advocate to file the Suit which he did.
The complainant 's allegation is that the matter in dispute in the suit had not been settled at all and the appellant without the knowledge and without his instructions filed a memo in the Court to the effect that the matter has been settled out of Court and accordingly got the suit dismis sed and also received half of the institution court fee; about which the complainant was not aware, nor was he informed by the appellant.
The complainant 's allegation is that he was not informed about the dates of hearing of the suit; when inquired he was simply told that the case is posted for filing written statement where his presence was not neces sary.
When nothing was heard by the complainant from the appellant about the progress of his suit, he personally made inquiries and came to learn to his great surprise that the suit in question had in fact been withdrawn as settled out of Court.
The version of the appellant Advocate is that Gautam Chand, his old client, had business dealings with the plaintiffs, Haradara (Complainant) and the defendant Anantaraju.
Anantaraju had also executed an agreement on 9.8.80 to sell his house property to Gautam Chand.
He received earnest money amounting to Rs.35,000 from Gautam Chand.
Anantaraju however did not execute the sale deed within the specified time.
Gautam Chand approached the appellant for legal advice.
The appellant caused the issue of notice to Anantaraju calling upon him to execute the sale deed.
A notice was also issued on behalf of the complainant calling upon the defendant Anantaraju demanding certain amounts due on 3 self bearer cheques amounting to PG NO 362 Rs. 30,098 issued by him in course of their mutual transactions.
Gautam Chand and the complainant were friends having no conflict of interests Gautam Chand instructed the appellant and his junior Ashok that he was in possession of the said cheques issued by Anantaraju and that no amount was actually due from Anantaraju to Haradara Complainant.
Gautam Chand desired Anantaraju to execute the sale deed.
Anantaraju executed the sale deed on 27.11.81 in favour of Gautam Chand, even though an order of attachment before judg ment in respect of the said property was in existence.
Consequent on the execution of the sale deed, the object of the suit was achieved.
The complainant did not at any time object.
In this back ground, the appellant had reasons to believe the information re: settlement of dispute conveyed by the three together on 9.12.81.
Acting on the said informa tion, the appellant asked Ashok his erstwhile junior to take steps to withdraw the suit, which he did on 10.12.8l as per instructions received from the appellant noted on the docket of the brief.
The state Bar Council, called for the comments of the appellant relating to the complaint.
No charge was framed specifying the nature and content of the professional misconduct attributed to the appellant.
Nor were any issues framed or prints for determination formulated.
Instead thereof the Bar Council proceeded to record evidence.
As the case could not be concluded within the time limit, the matter came to be transferred to the Bar Council of India.
The Bar Council off India addressed itself to the three questions, viz. (i) Whether the complainant was the person who entrusted the brief to the appellant and whether the brief was entrusted by the complainant to the appellant.
(ii) Whether report of settlement was made without instructions or knowledge of the complainant? (iii) Who was responsible for reporting settlement and instructions of the complainant ? The Disciplinary Committee of the Bar Council of India after considering the matter found appellant guilty of professional misconduct and suspended him for practising his profession for 3 years on the charge of having withdrawn a suit (not settled) without the instruction of the clients.
PG NO 363 The appellant has filed the appeal u,s 38 of the Advocates Act.
The following questions arose for consideration by this Court.
(i) Whether a specific charge should have been framed apprising the appellant of the true nature and content of the professional misconduct ascribed to him: (ii) Whether the doctrine of benefit of doubt and the need of establishing the basic allegations were present in the mind of the Disciplinary Authority in recording the finding of guilt or in determining the nature and extent of the punishment inflicted on him; (iii) Whether in the absence of the charge and finding of dishonesty against him the appellant could be held guilty of professional misconduct even on the assumption that he had acted on the instructions of a person not authorised to act on behalf of his client if he was acting in good faith and in a bona fide manner.
Would it amount to lack of prudence or non culpable negligence or would it constitute professional misconduct.
Disposing of the appeal, the Court, HELD: That the appellant was not afforded reasonable and fair Opportunity of showing cause inasmuch as he was not apprised of the exact content of the professional misconduct attributed to him and was not made aware of the precise charge he was required to rebut.
[376E F] That in recording the finding of facts on the three questions.
referred to above.
the applicability of the doctrine of benefit of doubt and the need for established the facts beyond reasonable doubt were not realized.
Nor did the Disciplinary Committee consider the question as to whether the facts established that the appellant was acting with bona fides or mala fides whether the appellant was acting with any oblique and dishonest motive.
whether there was any mens rea; whether the facts constituted negligence and if so whether it constituted culpable negligence.
Nor has the Disciplinary Committee considered the question as regards the quantum of punishment in the light of the aforesaid considerations and the exact nature of the professional misconduct established against the appellant.
[376F H; 377A] The Court, in view of the fact that "the matter is one of the ethics of the profession which the law has entrusted to the Bar Council of India" and it is in their opinion, "a case which must receive due weight" did not consider it PG NO 364 appropriate to examine the matter on merits without first having the opinion of the Bar Council of India.
[377D] Remanding the matter to the Bar Council of India the Court directed it to consider whether it would constitute an imprudent act, an unwise act, a negligent act or whether it constituted negligence and if so a culpable negligence, or whether it constituted a professional misconduct deserving severe punishment, even when it was not established or at least not established beyond reasonable doubt that the concerned Advocate was acting with any oblique or dishonest motive or with mala fides.
[377H; 378A] L.D. Jaisinghani vs Naraindas N. Punjabi, and Re: M. vs Distt.
Judge Delhi, [1956] S.C.R. P. 811(814), referred to.
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<s>[INST] Summarize the judgementminal Appeal No. 341 of 1960.
Appeal by special leave from the judgment and order dated July 20, 1960, of the Bombay High Court in Criminal Appeals Nos. 488, 426 of 1960 with Review Application.
555 and 641 of 1960.
G. C. Mathur, for the appellant.
B.R.L. Iyengar and D. Gupta, for the respondent.
May 4.
The Judgment of Kapur, Subba Rao and Shah, JJ. was delivered by Kapur, J., and the judgment of Hidayatullah and Dayal JJ., was delivered by Dayal, J. KAPUR, J. This is an appeal against the judgment and order of the High Court of Bombay imposing the sentence of death in appeal by the State against the order passed by the Sessions Judge, Dhulia.
The facts of the appeal are these: The appellant, in about 1950, married Sindhubai the daughter of Chandrabhagabai.
Sindhubai who is the deceased had read up to the 7th Standard.
The appellant and Sindhubai were residing in a one room tenement in a house belonging to one Tavar pleader in which there 'are in all 12 to 15 tenements.
The tenement of the appellant was not very far from ' that of the appellant 's cousin Shantabai who was residing with her husband Pandu Genda and the house of 777 Cliandrabhagabai was about a furlong away from that of the appellant.
The relations between the appellant and the deceased were normal for sometime but about two years before the occurrence differences had arisen and there were frequent quarrels between them.
A child of the marriage was born about 1 1/2 years before the occurrence.
The deceased was a frequent visitor to her mother 's house to which the appellant took objection.
The appellant bad stopped giving her the necessities of life including foodgrains etc.
About a week before Diwali the appellant gave her a beating.
The deceased used to have her meals with her mother and the appellant with his cousin Shantabai and the daughter of the marriage Urmila stayed with the mother of the deceased during the day time.
The occurrence was on the Bhaubij day i.e. November 2, 1959 between 1.30 and 3.30 in the afternoon.
After having her meals at her mother 's house the deceased returned to her husband 's house and went to sleep in the afternoon.
It is stated that while she was sleeping the appellant gave her a beating and after sprinkling Kerosene oil on her clothes, set fire to them.
The deceased with her clothes burning went in the direction of the house of Shantabai but fell down in front of it and was almost naked when some body covered her body with a dhoti.
Chandrabhagabai received information, it is stated, from her nice Suman about this fact and Chandrabhagabai ran to the spot, and found her body burnt.
The cousin, Shantabai and her husband Pandu Genda also arrived and on enquiry by Chandrabhagabai the deceased told her that her husband had set fire to her clothes after sprinkling kerosene oil on her.
By this time a police constable informed the Police Station which was nearby and an ambulance car was sent and the deceased was taken to the Civil Hospital, Dhulia at about 4 15 P.m.
She was examined by Dr. Javeri who 778 treated her and on his enquiry the deceased told him that her husband had set fire to her clothes after sprinkling kerosene oil on her clothes.
Dr. Javeri then informed the police and advised that a dying declaration be recorded.
At about 5 30 P.m. a Magistrate Mr. Mhatre recorded the statement of the deceased but she died at 8 15 P. M. on the same day in the hospital.
The defence of the appellant was that of alibi, in that he was at work on the house of Mulchand Rajmal at Nehru Nagar which was being built and that he was entirely innocent of the offence.
The trial court found that it was the appellant who had set fire to the clothes of the deceased after sprinkling kerosene oil; that the appellant had the intention of causing such bodily injury to the deceased as was likely to cause death and it therefore convicted the appellant of an offence under section 304 Part 1 and sentenced him to three years ' rigorous imprisonment and a fine of Rs. 100/ .
The learned judge accepted the testimony of the mother Chandrabhagabai as to the dying declaration and also that of Dr. Javeri and finally he accepted the dying declaration recorded by the Magistrate which was in the form of questions and answers.
In all her dying declarations the deceased had accused the appellant of setting fire to her clothes and thus causing her severe bums.
The State took an appeal to the High Court which convicted the appellant of an offence under section 302, Indian Penal Code and sentenced him to death.
Against that judgment and order the appellant applied for certificate to appeal to this Court under article 134 (1) (a) but the certificate was refused and this Court gave special leave under article 136 of the Constitution.
The first question for decision is whether the appellant had a right of appeal to this Court under article 134 (1) (a) and the decision of that must depend 779 upon the construction to be put on the language used in that Article the relevant portion of which is as follows: 134 (1) ""An appeal shall lie to the Supreme Court from any judgment, final order or sentence in a criminal proceeding of a High Court in the territory of India if the High Court. (a) has on appeal reversed an order of acquittal of an accused person and sentenced him to death.
" If the High Court reverses an order of acquittal of an accused person and sentences him to death an appeal shall lie as of right to this Court under the Article.
The argument raised on behalf of the appellant was that as the appellant was acquitted of the offence of section 302 and was convicted under section 304 Part 1 it was a case of reversing an order of acquittal.
The argument on behalf of the State was that the word acquittal meant complete acquittal.
The decision of this must depend upon the construction of the word "acquittal".
If a person is acquitted of the offence charged and is convicted of a lesser offence, as in the present case, can it be said that he was acquitted and the High Court had on appeal reversed the order of acquittal.
" In our opinion the word "acquittal ? does not mean that the trial must have ended in a complete acquittal of the charge but acquittal of the offence charged and conviction for a minor offence (than that for which the accused was tried) is included in the word ", 'acquittal".
This view has the support of a judgment of the judicial Committee of the Privy Council in Kishan Singh vs The King Bmperor (1).
In that case an accused person was tried by the Sessions Judge under section 302 of the Indian Penal Code on a charge of murder but was convicted under section 304 for culpable homicide not amounting to murder, the Court having power to do that under section 238 (2) of the Criminal Procedure Code.
He was sentenced to (1) (1928) L.R. 55 I.A. 390.
780 five years ' rigorous imprisonment.
No acquittal of the charge under section 302 was recorded.
There was no appeal to the High Court by the then local Government but, it applied for revision under section 439 on the grounds that the appellant should have been convicted of murder and the sentence was inadequate.
The High Court convicted the appellant of murder and sentenced him to death.
On appeal to the Privy Council it was held that the finding of the trial court was to be regarded as an acquittal on the charge of murder and that under section 439 (4) Criminal Procedure Code the word "acquittal" did not mean complete acquittal.
At page 397 Sir Lancelot Sanderson observed: "Their Lordships, however, do think it necessary to shy that if the learned Judges of the High Court of Madras intended to hold that the prohibition in section 439 sub section 4 refers ' only to a case where the trial has ended in a complete acquittal of the accused in respect of all charges or offences, and not to case such as the present, where the accused has been acquitted of the charge of murder, but convicted of the minor offence of culpable homicide not amounting to murder, ' their Lordships are unable to agree with that part of their decision.
The words of the sub sec tion are clear and there can be no doubt as to their meaning.
There is no justification for the qualification which the learned Judges in the cited case attached.
to the sub section.
" We are in respectful agreement with the interpretation put on the word "acquittal" by the Judicial Committee of the Privy Council and the word "acquittal" therefore does not mean that the trial must have ended in a complete acquittal but would also include the case where an accused has been acquitted of the charge of murder and has been convicted of a lesser offence.
In that view of the matter the appellant was entitled, to a certificate 781 under article 134 (1) (a) as a matter of right and this appeal must be treated as if it is under that provision of the Constitution.
The facts of this appeal have been set out above.
In support of the prosecution the evidence mainly, if not solely, consists of the dying declarations.
The first dying declaration was made to the mother Chandrabhagabai as soon as she came to the place where the deceased was lying and in answer to her question "as to who had done it," the reply was that "it was done by her husband., also that the husband had set fire to her clothes.
" In cross examination she stated that at the time when this statement was made by the deceased Shantabai and her husband Pandu Gonda were present.
A suggestion was made to her that the deceased implicated the appellant at the instance of Chandrabhagabai but she repudiated this suggestion and both the trial court and the.
High Court have accepted the correctness of this dying declaration and also that it was not prompted by the mother Cbandrabhagabai.
Beyond a mere suggestion in the cross examination there is no material to support the contention of prompting by the mother.
A similar statement accusing the appellant of setting fire to her was made by the deceased to the Doctor (Dr. Javeri) who asked the deceased as to how she got the burns and her reply was that her husband had sprinkled kerosene oil on her and bad applied a match stick to her clothes.
This statement was also accepted by the High Court and we find no reason to differ from that conclusion.
The third dying declaration was made in the presence of and was recorded by Mr. Mhatre, a Magistrate at about 5 30 P.M. in the presence of Dr. Javeri who certified that the deceased was in a fit state of mind to make the statement.
The Magistrate asked her certain questions which are set out in detail and he took down the answers and his evidence is that the deceased understood the questions and replied to them.
He 782 made a record of the questions and answers but that record was not signed by her nor her thumb impression taken on it because her hands were badly burnt.
This examination took about an hour.
This dying declaration was held by the trial Court to have been made without the help or prompting 'of anybody and according to Chandrabhagabai she was not present at the time.
The learned Trial Judge held that the dying declaration was "freely given without the influence of anybody.
It was not made under influence of any personal feelings.
" The High Court Also accepted the correctness of this dying declaration and there is no evidence on the record which would in any way detract from the finding of the trial Court or of the High Court,.in regard to the correctness or the propriety of this dying declaration.
The argument raised before us was two fold: (1) that the appellant was not present at the place of occurrence at all and (2) that it was a case of suicide.
There are no cogent grounds which would lead to the, conclusion that the deceased wanted to commit suicide nor have any circumstances been shower to us which would lead to any such conclusion.
Even though it may be true that the relations between the husband and the wife, were strained so much so that the husband had almost refused to maintain the deceased and was not prepared to give her even food there is no indication that the deceased was so worked up as to have lost her self control so as to commit suicide.
Certain other circumstances as to the absence of any kerosene oil on the clothes of the appellant or the absence of kerosene oil on the bedding have been pointed out but in the circumstances of this case those circumstances are of no significance.
Both the trial court and the High Court have found that the deceased had died as a result, of burns 'caused by the fire set to her clothes by the appellant who had sprinkled kerosene oil on her, 783 This is supported by the dying declarations against the correctness of which no cogent reasons have been given or suggested and a conviction based on such evidence has been held to be sustainable by this Court in khushal Rao vs The State of Bombay (2).
The plea of alibi was sought to be supported by the evidence of Gangaram Sitaram a co worker of the appellant but his testimony was rejected by both the trial Court and the High Court and having gone through it we find no reason to differ from that opinion.
In the result this appeal fails and is dismissed.
RAGHUBAR DAYAL, J. We agree that the appellant had a right of appeal under article 134 (1) (a) of the Constitution, but regret our inability to agree with the view that the conviction of the appellant under s.302, I. P. C., be maintained.
In appeals preferred under article 134 (1) (a) of the Constitution , we are to assess afresh the value of the evidence of record, and do not follow the practice of this Court in appeals, by special leave, under article 136 of the Constitution, that the concurrent findings of the Courts below be not interfered with, ordinarily, but be interfered with only when special circumstances exist.
We are of opinion that it is not safe in this case to base the conviction of the appellant solely on the dying declarations made by the deceased, even though in law a conviction can lawfully be based on dying declaration alone if the Court feels fully satisfied about its giving a true version of the incident.
The first dying declaration was made to her mother, by the deceased.
It was certainly natural for the mother to question her daughter as to how she got burnt.
But that does not really mean that (2) ; 784 the daughter did state all what the mother deposes.
Two points arise there, and they are : (a) Did the mother speak the truth ? and (b) Did the daughter ,speak the truth ? The mother, P.W. 1, admittedly, has not good relations with her son in law.
She made discrepant statements.
The Sessions Judge has remarked, in paragraph 12 of his judgment, that there were lot of discrepancies in the statements of this witness.
Reference may be made to her stating at one place that when she used to request the accused not to beat the daughter, the result was adverse and denying the correctness of this statement when questioned in cross examination.
According to her, only she was sent away from the room when the Magistrate recorded the dying declaration of the deceased in the hospitals indicating that the accused and some others continued to remain in the room.
This statement is not borne out by Dr. Javeri or by the Magistrate.
She expressed ignorance about the deceased making a statement.
to the police.
The Sub Inspector and Dr. Javeri deposed about her making such a statement.
She could not have been ignorant about it.
She deposes that the accused came to the spot where Sindhubai, the deceased, lay injured, about five minutes after her arrival, She knew that he had set fire to Sindhubai 's clothes after pouring kerosene oil on her.
She did not question him about it.
She did not reprimand him.
She did not abuse him.
She did nothing which could have, been normally expected of a mother knowing that the, accused bad burnt her daughter The explanation that she was sorrow strike, lacks the ring of truth.
Grief striken she must be, but that would not have made her mute.
According to her Sindbubai made this dying declaration when Shantabai, cousin of the accused, and her husband Pandu Genda were present.
These witnesses have not been examined by the prosecution to corroborate her statement.
785 The other dying declaration relied on by the Courts below was made by the deceased to Dr. Javeri, on his casually questioning the deceased as to how she got injured.
It may be natural, but we have our doubts, for the Doctor to put such questions to the patient in agony, which had no real connection with his duties as a medical man, and such questioning cannot be said to have any comforting effect on the patient.
Such questioning can be nothing but idle curiosity which a Doctor in that position should not evince.
Any way, it would not be a good precedent to rely on such a statement to the Doctor in such circumstances, when the Doctor makes no record about it, even if it be not required to be noted in the medico legal register.
We would consider it safe not to rely upon such a statement made to a casual question by the Doctor, the details of which statement are not clear.
The dying declaration made to the police has been ignored, the Sessions Judge considering that it was not made at all, or not made at the time the Sub Inspector deposed to have got the dying declaration from the deceased.
No significance attaches to this dying declaration in any case when it was recorded after the deceased had made a formal dying declaration to the Magistrate.
The dying declaration to the Magistrate has certainly been recorded with care.
The relevant statements made in this dying declaration are the following "I am suffering injuries of burning.
My husband is my enemy.
My husband has burnt me.
Kerosene was poured over my body and a match stick was lighted.
I was sleeping in the house.
He, i.e., my husband, beat me and then burnt me.
I shouted, but nobody came.
He was ill treating me.
He was harassing me and was causing me starvation for 786 the last 8 days.
I had complained about it to Pandu Genda and Shanta Pandu.
I did not send any information to my parents about the starvation.
The High Court has stated several times in its judgment that Sindhubai was sleeping when the accused set fire to her clothes.
The panchnama Exhibit No. 14.
prepared about the room, does not show that the bedding had any oil sprinkled over it or that it got burnt.
Quite a number of other clothes were burnt, which need not have caught fire.
Absence of oil on the bedding is not consistent with her statement that she was sleeping in the house when the thing happened.
This statement is also not consistent with the next statement made by her that her husband beat her and then burnt her.
Her statement that nobody came on her shouts because the door of the house was shut, does not fit in with her statement to the police in Exhibit 19 that the accused ran away on his work after he had set fire.
The probability too is that if the accused had set fire to her clothes he would run away just after setting fire as he could expect that the victim would shout and that her shouts would attract neighbours and persons passing by.
Even if the door was latched for some time while the accused remained there because he did go subsequently, that does not explain the non arrival of any person.
The persons could have come and could have knocked at the door.
It is really remarkable that in this case not a single witness of the neighbourbood has come to depose anything in support of the prosecution case.
There is no evidence at all from an outside source.
The investigation seemed to have revealed nothing whatever.
, There is nothing inthe case to lend assurance to any circumstance.
Surely, this cannot be the result of the accused 'sinfluence on the witnesses or the result of a general inclination not to speak the truth in the interests of justice, even when the 787 accused committed the dastardly act of setting fire to his own wife.
Their absence from the witness box may be due to their not standing what they knew to be untrue or did not consider to be true.
It is always a difficult question to speculate why deceased accused a certain person of committing the crime, or why a witness deposes against a person with whom he has no ostensible cause of enmity or why the police.
in the discharge of its public duty should influence persons to make inaccurate statements, when Courts come to the conclusion that the accusation or the evidence does not appear to be true and that there are reasons to suppose that the.
police had influenced the testimony of witnesses.
Anyway, the same difficulty occurs in the present case.
But it is clear that the relations between the wife and the husband were strained to such an extent that, according to the prosecution, the accused not only starved her, but also set fire to her clothes with the intention to cause her death.
Such a conduct of the husband cannot be on account of ordinary domestic unpleasantness, but must be the result of a very acute feeling of desperation and a desire not to live any more with his wife.
If such were the relations which one is inclined to infer from what the prosecution wants the Court to believe, it should not be difficult to imagine that the wife 's motives in charging the husband falsely may be equally strong.
She too must have been fed up with the misery of her life and might have committed suicide and put an end to her life, but when, as often happens, she was questioned, she accused her husband of setting fire to her clothes, not with a view to save herself from a conviction for attempting to commit suicide, but either on account of her feeling that her husband was responsible for all her troubles and that her disparate action was also due to the same cause or out of malice.
Any way, a dying declaration is not to be believed merely because no possible reason 788 can be given for accusing the accused falsely.
It, can only be believed if there are no grounds for doubting it at all.
Apart from the above considerations indicating that implicit reliance cannot be placed on the dying declaration, there are other circumstances which add to the feeling of uncertainty about the truth of the accusation made in the dying declaration.
The panchnama of the room shows that a few shirts and old trousers and pieces of two sarees lay near the southern wall of the room in a wet and half burnt condition There is no explanation why such clothes should have been burnt.
There was no point in the accused pouring kerosene oil on these clothes even if they just lay huddled near the wall.
If Sindhubai fell on the clothes lying there, that may burn some of them, but will not explain their getting wet.
There is no suggestion that anybody had poured water over the 'burnt clothes in order to extinguish the fire, because none came there at all.
In fact, Ranganath Sitaram, P.W. 6, one of the Panchs, states that the burnt clothes were also giving smell of rock oil.
The panchnama further notes : "On the eastern wall, two feet height from the ground there is a black spot caused due to the burning of the clothes and the same is recent one.
" There is no explanation why such a mark should be there.
Sindhubai could not have stood opposite the wall and, even if she did, there should have been marks of burning along the length of her body beside the wall and not at a certain spot only.
These two observations can be consistent only with somebody deliberately setting fire to the clothes and keeping some burning clothes beside the wall for a, little time, The appellant, or whoever 789 set fire to her clothes, would not have done this as he would have made a very quick exit after drenching Sindhubai with kerosene oil and setting fire to her clothes.
Sindhubai does not make any statement about such a conductor the accused in her dying declaration.
The only inference then possible is that she herself (lid all this, in accordance with her own inclinations.
Why she did this, one cannot say.
Sindhubai returned to her house with her daughter after taking her mid day meal at her mother 's house and sent back the daughter with Usha.
This is according to the statement of her mother.
She brought the child, when, according to her mother 's statement, she expected her husband to come to the house after taking his meal at his cousin 's place.
The conduct is unusual, as, ordinarily, the child used to remain with her maternal grand mother during the day time, as for some reason the accused probably felt aversion to her.
The conduct can 'be consistent with her intention to commit suicide.
She brought the child to her place to fondle with her for the last time and then sent her back to her mother.
Sindhubai 's running towards the house of Shantabai, her husband 's cousin, and not running towards her mother 's place, also appears to be unnatural.
It may be that in such troubles moments one need not be absolutely logical, but it is expected to be instinctive that when in trouble one thinks of one 's relations who are expected to be sympathetic, and helpful, on the occasion.
It is in the statement of her mother that the route to her house is different from the passage to the house of Shantabai.
It may be that the accused did not go to the house as expected, and went away to his job from his cousin 's place.
It was a day of festival.
Sindhubai might have felt this conduct badly set fire to her clothes, and then run towards 790 Shantabai 's house where she might have expected her husband to be present.
The time of the incident though said to be between 1 30 and 3 30 P.m., appears to have been near about 3 O ' clock.
The mother states to have got information about that time.
Tile police got information at about 3 45 P.m., and the ambulance took Sindhubai to the hospital at 4 15 P.M.
The accused was not expected to be at his house at 3 P.m.
The learned Judges of the High Court did not believe the defence evidence about the accused working at the house of Mulchand Rajmal from about 2 P.m. and to have gone to his house on receiving information from one Daga because Daga was.
not examined, the Munim of the house owner was not examined and the register of workers was not produced.
It is however the case for the prosecution that the accused used to go to work at 7 A.M., to return at 12 O 'clock and again go for work at 2 P.m., and then return at 6 P.m. Chandrabhaga, the mother of the deceased, deposes so.
There is therefore no good reason 'to think that the accused did not go to his duty at 2 P.M., that day as deposed to by D.W. I. Sindhubai herself stated in her statement to the police that the accused, after setting her on fire, ran away to his work.
If the time of the incident be calculated from the time the police was informed, i. e., from 3 45 P.m., the incident would have taken place some time between 3 and 3 30 P.m., and the accused would not have been at his house at that time.
In fact, it appears to us that it is to avoid this difficulty that at Rome stage an attempt was made to time the incident at about 1 30 P.m.
The incident could not have taken place before 2 P.m., as, in that case, information to the police would be very belated and in the normal course of events, it is not expected that Sindhubai would have tarried in the room for long or that the persons who must 791 have collected after her running towards Shantabai 's place and falling down there, Would not have taken steps to inform the police without any undue delay.
The mother 's statement that Sindhubai used to tell her that if the ill treatment continued, she would sever her connection with the accused and would earn her own living would support the view that she had really got tried of her living with the accused and that this could have prompted her to attempt suicide.
If Sindhubai was not actually asleep when the kerosene oil was poured on her, it does not stand to reason that she would not have made any attempt to run away and the possibility of the accused successfully setting fire to her clothes in the course of the struggle, would be remote, and even if he succeeded, it is a moot point whether he too would not have been singed, if not burnt.
Those are the various considerations which make us feel doubtful about the truth of the dying declaration and take the view that the appellant 's conviction on the basis of the dying declaration should not be maintained.
It appears from the High Court judgment that the case put before it was "sometime after 1.30 P.m., the accused latched the room from inside and while Sindhubai was sleeping he poured a large quantity of kerosene oil on her person.
Her clothes became wet with that kerosene oil and before she could struggle and get up he searched for a match stick, lighted it and set Sindhu 's clothes on fire '.
Such a case could not be made out from the dying declaration recorded by the Magistrate.
Sindhubai had said at first she was sleeping when it happened, but, in answer to the very next question, she said that her husband beat her and then burnt her.
If the burning followed the beating, there could be no question of throwing kerosene oil on 792 her while asleep.
No reason for this conduct was stated.
The, Magistrate who cleared the doubt full points failed to elicit why this deed was perpetrated.
Further, the searching for a match box is very improbable thing.
If the accused had decided to set fire to his wife, he would have got, a match box handy and if he did forget about it and had to search for it, that would give sufficient time to Sindhubai to make good her escape.
The aversion of Sindhubai to tell the name of her husband could not have been on account of any tender feeling for her husband, but was the natural act of a Hindu married woman not to tell her husband 's name.
This aversion to tell the name of her husband is no guarantee of the truth of her subsequent statement accusing her husband of the crime.
We do not find any justification for the following observation of the High Court, when considering the defence evidence : "The accused has led evidence and his case is that he was not responsible for this murder at all.
But in fact he was in the house when the incident took place.
" The High Court had made the latter statement as a statement of fact, though there was no evidence to support it.
Of course, on the basis of a dying declaration, the High Court had already held before discussing the defence evidence, that the accused was responsible for the murder of his wife.
If the defence evidence is to be adjudged on the basis of the final finding of the Court, there is no use for defence evidence.
It has to be taken into consideration before arriving at a final finding.
The conduct of the accused in travelling in the same ambulance car and in remaining in the 793 hospital is in his favour and is against the prosecution.
The accused stated in his examination that he paid the charges for the ambulance car.
We would like to remark that the learned Judges who heard the appeal should not have heard it when they, at the, time of admitting it, felt so strongly about the accused being wrongly acquitted 'of the offence of murder that they asked the Government Pleader to look into the papers to find out whether it was a case where the Government would like to file an appeal against the acquittal, under section 302, I.P.C. Government did file an appeal against that acquittal.
We do not know whether it was at the suggestion of the Government Pleader or not.
But, in these circumstances, it would have beep better exercise of discretion if this appeal against the acquittal had not been heard by the same Bench which, in a way, suggested the filing of the Government appeal.
In fact, to make such a suggestion, appears to be very abnormal.
We are therefore of opinion that it is not satisfactorily proved that the appellant committed the murder of his wife by setting fire to her clothes.
We would therefore allow the appeal.
, set aside the order of the Court below and acquit the appellant of this offence.
By COURT.
In accordance with the opinion of the majority, this appeal fails and is dismissed.
[/INST]The Supply and Prices of Goods Act, 1950, made provisions for the control of prices, supply and distribution of certain goods essential to the national economy.
Section 4(1)(c) empowers the Central Government to fix the maximum quantity of such goods which may be sold to any person in one transaction.
Sect ion 4(2)(a) provides that the maximum quantities may be fixed for the same goods differently in different localities or for different classes of dealers or producers.
Section 5(1)(c) provides that no dealer or producer shall sell or agree to sell or offer for sale goods exceeding the maximum fixed under section 4.
The Central Government issued a notification prohibiting dealers and producers from selling any non ferrous metal exceeding one ton except upon a declaration by the purchaser that the quantity did not exceed his requirements for three months.
The appellant entered into an agreement to sell to the respondent 300 tons of zinc.
The respondent did not take the entire quantity and the appellant filed a suit for damages for breach of contract.
The respondent resisted the suit on the ground that the agreement was void as it offended section 5(1)(c) of the Act.
The appellant contended that the notification was invalid as only an immutable arithmetical maximum could have been fixed for each non fer rous metal but the notification did not do so and also as it did not fix the maximum by reference to difference classes of dealers and producers according to section 4(2)(a).
It was further contended that the notification applied only to a sale and not to an agreement to sell and as such the agreement did not off end section 52(1)(c).
Held, that the notification was perfectly valid and that agreement was void as it offended section 5(1)(c) of the Act.
Section 4(1)(c) did not require the fixing of an immutable arithmetical maximum as a large number of goods were intended to be covered by the Act which would be required by different classes of persons under a variety of circumstances.
Section 4(2)(a) was merely an enabling provision and did not oblige the Government to fix the maximum differently for different classes of dealers and producers; section 4(z)(a) was not a proviso to section 4(1)(c).
Once the maximum was fixed, then by the combined operation of section 4(1)(c) and section 5(1)(c) an agreement to sell or an offer to sell such goods in excess of the maximum was immediately hit, 627
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<s>[INST] Summarize the judgementAppeals Nos. 466 and 407 of 1960.
Appeals by special leave 'from the judgment and decree dated October 30, 1956, of the former Nagpur High Court (Now Madhya Pradesh ' in F. A. Nos. 79 and 95 of 1949.
C. K. Daphtary, Solicitor general of India, J. B. Dadachanji, O. C. Mathur and Ravinder Narain, for the appellants (in C. A. No. 406/60) and Respondent Nos, 12 and 14 to 17 (in C.A. No. 407/60).
C. K. Daphtary, Solicitor General of India, J.B. Dadachanji, Rameshwar Nath, section N. Andley and P.L. Vohra, for the appellants (in C. A. No. 407/60) and respondent Nos. 1 to 3 (in C. A. No. 406/60).
B. Sen and I. N. Shroff, for respondent Nos. 5 and 6 (in C. A. No. 406/60) and Respondent Nos. 1 and 2 (in C. A. No. 407 of 60).
August 17.
The Judgment of the Court was delivered by DAS GUPTA, J.
This unfortunate litigation over a school which was started sixty years ago is one of the unhappy consequences of a feud that raised its ugly head in the Daudi Bohra Community many years ago.
The school was started at Burhanpur by certain members of the Daudi Bohra Community of Burhanpur in the year 1902.
It was named Madrasai Faize Hakimia and its object was to 625 impart religious and secular education to boys of the Daudi Bohra Community.
Funds were collected for the purpose of the school from the members of that community for the maintenance of the school.
In the year 1908 English classes were added to the school and in 1911 it was raised to the status of a High School under the name "Madrasai Hakimia and Coronation High School".
Some time before this on May 24, 1909 one Daudi Bohra of Surat of the name of Abdul Hussain Abdullali Faizullabhai Muchhala made a was of certain properties in Bombay for the benefit and advantage of this school at Burhanpur.
For the management of this, trust he appointed as trustees 12 gentlemen whom he mentioned as persons who had already been appointed trustees of the school.
Only a few months after this another trust came into existence for the benefit of the same school, by a deed executed by six persons, all Daudi Bohras and all belonging to Burhanpur describing themselves as managers of the school.
They created by the deed "Waqf and trust of their properties" which were mentioned in detail in the body of the deed.
Eighty persons, including themselves were named as the trustees.
It is further stated by the executants of the deed that all movable and immovable properties connected with the school shall vest in these trustees.
It is provided in the deed that the trustees hall be entitled to govern, manage and administer the affairs of the school and shall have the power of framing rules and regulations from time to time for the benefit and efficient running of the school ; and also have the power to appoint new trustees from time to time in accordance with such rules and regulations.
These trustees managed the school and also the properties belonging, to the school including the properties of which waqf was made in its favour by the trust deed of September 15, 1909 without any trouble till March 1917.
In the course of such management 626 some of the original trust properties were converted into new properties by the trustees with the help of additional donations received from members of the Daudi Bohra Community.
Trouble started in 1917 when some members of the Community started declaring that Mullaji Taher Saifuddin Saheb who, according to the main body of the Community was the Dai ul Mutalaq was not a Dai ul Mutalaq.
About the same time four out of the 18 who were appointed by the trust deed of September 15, 1909 joined three other members of the Daudi Bohra Community of Burhanpur to form a society by the name of "Madrasai Hakimia & Coronation Society", the main purpose of which was to run the Hakimia & Coronation High and Primary Schools at Burhanpur.
Among other objects were mentioned the development of branches of the school at different places ; opening library or libraries at suitable centres ; conducting newspaper or newspapers ; editing and compiling and publishing books.
In the Memorandum of Association it was provided that 12 persons named therein would form the governing body to whom the management of the affairs of the society shall be entrusted.
It was further provided that properties of each and every description acquired for or given to Madrasai Hakimia & Coronation High School shall be vested in this governing body.
The 10 persons who have been impleaded as defendants 2 to 11 ,ire members of the governing, body of the Society.
From the time they assumed the management of the Madrasai Hakimia & Coronation High School as members of the Society they have been administering the properties of which waqf was made in favour of the school by the six gentlemen who executed the trust deed of September 15, 1909.
The suit out of which these appeals have arisen was started under s.92 of the Code of Civil Procedure 627 by 4 Daudi Bohra muslims who claimed to be interested in the trust properties set out in the Schedule to the plaint as members of the Daudi Bohra Community.
Their main contention in the plaint is that the first defendant, the Hakimia Society and the 10 defendants, defendants Nos. 2 to 11 were not validly appointed trustees in respect of these trust properties.
They prayed in this suit for a declaration that these defendants are not vaildly appointed trustees ; for their removal from the management of these properties and for an order on them to render accounts on their administration of these properties.
There was also a prayer for the appointment of proper and fit persons for the management of these properties in accordance with the provisions of the trust deed of September 15, 1909, and for the framing of a scheme for the administration of the trust to which we shall latter refer as the Burhanpur Trust if it was necessary.
The ground on which the plaint claimed that these defendants were not validly appointed trustees was that they had not been appointed as such in accordance with the terms and conditions of the trust deed of September 15, 1909.
According to the plaint, whatever entrustment took place by the constitution of the Hakimia Society was invalid in law as the persons who got this registered as the Hakimia Society had no right in law to vest these properties in the Society or the members of the governing body of that Society.
As further ground for removal of these defendants from the management of these properties the plaint set out a number of acts said to have been committed by them which it was alleged amounted to a breach of trust.
One such act was the defendants ' action in throwing open the Madrasai Hakimia & Coronation High School to students other than the Daudi Bohra Community.
628 The trustees of the trust created by Mr. Muchhala were impleaded as defendants 12 to r7.
No relief was however asked for against defendants 12 to 17.
The main defences of defendants 1 to 11 were that they had been validly appointed trustees of the properties mentioned in the plaint under the trust deed.
of September 1909 in accordance with the rules framed under the trust deed.
They claimed that the properties of the institution vested in them and continued to remain vested after the registration of the Society.
The allegation of breach of trust was denied.
In that connection it was pleaded that the admission of non Bohra students did not amount to a breach of trust.
A large number of issues were framed; but it would be unnecessary to consider most of these for the decision of ' these appeals.
The principal question in controversy was whether defendants 1 to 11 were validly appointed trustees of the properties claimed as trust properties in the plaint.
The second question was as regards the allegation of breach of trust.
The first question was embodied in Issue No. 9 thus : "Are defendants 2 to 11 duly appointed trustees under the trust deed dated 15 9 1909 ?" The Trial Court answered this question in the affirmative.
Relying on the provisions of Para.
6 of the trust deed (of September 1909) for the framing of rules and regulations for management of the school and properties connected with the school, the Court held that the persons who were already trustees under the trust deed "had the power by a resolution" passed by the majority of the trustees at their meeting to (i) appoint new trustees,.
(ii) to appoint a charge of the trust properties, (iii) to get the body registered and, (iv) to frame rules and regulations such as were embodied in the Memorandum of, Association of the Hakimia Society.
It pointed out 629 that a majority of the trustees present at a meeting had passed a resolution regarding registration of the society and regarding the rules and regulations embodied in the Memorandum of Association.
This .registration in the opinion of the Court and the ' formation of the Committee of its management for the registered society was "one ' of the acts done by the trustees in the course of the managements 'and was in fact an act to secure more efficient management of the trust property and the trustees had the power to do it.
The Court further held that while it was true that the property which existed at the time the resolution to register the society was passed was then vested in the trustees then existing, there was nothing to prevent those trustees " 'who under the exhibit P 3 had the power to frame rules and regulations for the management of the school and the properties connected with it, from providing for the vesting of the property in the members of the governing body by a rule framed by them at a meeting of the trustees held according to the terms of exhibit P 3.
" According to the Court "the trustees had the power to vest the existing property in a governing body consisting of only some of them by a resolution passed at a meeting of trustees.
" Accordingly the Court held that defendants 2. to II who were members of the governing body of the Hakimia Society must be held to be validly appointed trustees according to the terms of the trust deed of September 15, in respect of all the properties endowed for the benefit of the school with the exception of Muchhala trust property.
The question of breach of trust by defendants 2 to 11.
was embodied in Issue No. 6 in these words "(a) Did the governing body of the School use the trust properties (mentioned in the plaintiffs ' list M) or any income therefrom for fighting out litigation in 1925 (C. section No. 32 of 1925)? 630 (b) Did they misappropriate the trust property or income therefrom? (c) Was the litigation for the benefit of the school" '? Another part of the allegation of breach of trust finds place in Issue No. 11 (c) thus : "Is the admission of the students who do not belong to the Daudi Bohra Community inconsistent with the object of the trust"? The Trial Court answered questions 6 (a) and (e) in the negative i.e., it found that the governing body did use trust properties or income therefrom for fighting out litigation in C. section No. 32 of 1925 and that the litigation was not for the benefit of the school.
Yet the Court answered Issue No. 6 (c) in the negative, finding that such expenditure did not amount to misappropriation.
The basis of this last finding is that though some part of the trust fund was misapplied in meetings part of the expenses of litigation which was not for the benefit of the school the defendants 2 to 11 believed, though wrongly, that by this litigation they would be safeguarding the rights of boys who were receiving education in the school and so the litigation was in the interests of the institution.
The Trial Court refused to make a declaration that defendants 1 to 11 were not validly appointed or for their removal.
It however gave a decree for the removal of defendants 12 to 72 to 17, the trustees of the Muchhala Trust.
Defendants 12 to 17 were further ordered to deposit into the Court the amount collected by them from the Muchhala trust property and were forbidden to recover any income from that property after the date of the decree.
The defendants 2 to 11 were ordered to deposit the sum of Rs. 15,596 5 8 which they were found to have misapplied.
It was ordered that if this amount was not paid by them they shall be removed and a: 631 scheme would be framed and a now trustee would be appointed to take charge of and manage the Madrasai Hakimia & Coronation High School and the properties endowed for its benefit.
A Commissioner was directed to be appointed to ascertain the amount paid by the managers of the Muchhala trust property to the trustees defendents 12 to 17 and to determine the amount in the hands of these defendants.
The same Commissioner was also directed to determine the amount spent by defendants 2 to 11 on religious education in accordance with the directions of the trust deed.
The amount was found due to be paid to defendants 2 to 11 to be then deposited, by them in a recognised bank for the benefit to the school.
Against this decree of the Trial Court the plaintiffs preferred an appeal to the High Court of Judicature at Nagpur.
Another appeal was preferred by defendants 12 to 17 against the Trial Court 's judgment in so far as it directed their removal and gave other reliefs against them.
Defendants 1,2,4,5, 9 and 10 filed cross objections in which they challenged the correctness of the Trial Court 's finding that there had been misapplication of the trust fund to the extent of Rs. 15,596 5 8 and Rs.900/ .
The High Court dismissed both the appeals as also the cross objections and affirmed the decision of the Trial Court in full.
Against the High Court 's decision two appeals have been filed before this Court one by the plaintiffs and the other by defendants 12, and 14 to 17 by special leave granted by this Court.
The appeal by defendants 12, and 14 to 17 can be easily disposed of.
Their contention is that the Trial Court as also the High Court erred in granting a decree against them when the plaintiffs in the suit had not asked for any such relief.
In our 632 opinion, this contention must be accepted as correct.
While it is true that these five appellants, Sheikh Abdul Kayum, Seth Abdulabhai, Mulla Abdulla Bhai, Mulla Mohammed, Bhai and Seth Hasanali along with Sheikh Fida Ali were impleaded as defendants no relief was sought against them nor was any averments made for that purpose.
The prayers in para.
26 asked for a declaration that "defendants" ' are not validly appointed trustees, that ." 'defendants" maybe removed from the management of the properties and that the 'defendants" may be ordered to render an account of their administration of the trust properties.
In para.
20 also the word "defendants" was used without any qualification when it was said that it was absolutely necessary in the interest of the said trust that the "defendants" are not properly appointed trustees of the said trust and that the "defendants" are trustees de sontort.
But when the plaint is read as a whole, especially the statements in para.
19 it becomes quite clear that the plaintiffs in the present suit are seeking relief only against defendant, 1, Hakimia Society and the defendants Nos. 2 and 11, the members of the Society.
The averments on which the case that defendants are not validly appointed trustees and are trustees de sontort are made.
in respect only of these 11 defendants.
The allegations of breach of trust are also made only against these defendants.
Paragraph 10 puts the matter in clear perspective in these words : "The plaintiffs say that defendant No. 1 and defendants 2 to 11 who are the present members of defendant No.1 Society are liable ' to be removed on the following grounds.
" This statement is followed by.an enumeration of six grounds all of which clearly and unmistakably refer only to these 11 defendants.
Common sense and ordinary rules of grammar therefore compel us to read the words "defendants" 633 in Paras 20 and 26 to mean only defendants Nos. 1 to 11.
We have no doubt therefore that the courts below misdirected themselves in thinking that the plaintiffs had asked for any relief as against defendants 12 to 17.
It was stated before us that the Muchhala trust was outside the jurisdiction of the Trial Court and ' that even if any relief had been asked for against defendants 12 to 17 the Trial Court would not have been competent in law to give such relief.
It is unnecessary for us to consider that aspect of the matter as it is abundantly clear that the plaintiffs did not ask for any relief against defendants 12 to 17 and for that reason alone the courts below acted illegally in passing any decree as against those defendants.
In the two appeals filed respectively by the plaintiffs and defendants 12, and 14 to 17 the appellants are represented by the learned Solicitor General and it is conceded by him for the plaintiffs that the plaint did not claim any relief against defts.
12 to 17.
The appeal No. 406 of 1960 which is by the original defendants 12 & 14 to 17 must therefore be allowed.
The appeal which has been numbered as 407 of 1960 is by the four plaintiffs.
The first contention raised on their behalf by the learned Solicitor Genera) is that the original trustees of the Burhanpur trust had no power in law to divest themselves of the property vested in them by the trust deed or to vest these properties in any society or its governing body, even though the society or the governing body might include some or all of the old trustees.
In the present case it was contended in the plaint and urged before us on behalf of the appellants that the evidence would show that all the old trustees had not joined in the act of 634 formation of the Hakimia Society and transfering the property vested in them to the society or its members.
Assuming, however, for the purpose of the present question that what was done should be deemed in law to be the act.
of the entire old body of the trustees, even so, the learned Counsel argues, the act had no legal validity and did not produce in law the consequence of constituting the Hakimia Society or its members trustees in place of the old trustees.
In our judgment, this contention must succeed.
There cannot, in our opinion, be any doubt about the correctness of the legal position that trustees cannot transfer their duties, functions and powers to some other body of men and create them trustees in their own place unless this is clearly permitted by the trust deed, or agreed to by the entire body of beneficiaries.
A person who is appointed a trustee is not bound to accept the trust, but having once entered upon the trust he cannot renounce the duties and liabilities except with the permission of the Court or with the consent of the beneficiaries or by the authority of the trust deed itself.
Nor can a trustee delegate his office or any of his functions except in some specified cases, The rules against renunciation of the trust by a trustee and against delegation of his functions by a trustee are embodied, in respect of trusts to which the Indian Trusts Act applies, in sa.
46 and 47 of that Act.
These sections run thus "46, A trustee who has accepted the trust can not afterwards renonce it except (a) with the permission of a principal Civil Court of Original Jurisdiction, or(b) if the beneficiary is competent to contract, with his consent, or (c) by virtue of a special power in the instrument of trust.
635 47.
A trustee cannot delegate his office or any of his duties either to a co trustee or to a stranger, unless (a) the instrument of trust so provides, or(b) the delegation is in the regular course of business, or (c) the delegation is necessary, or (d) the beneficiary, being competent to contract, consents to the delegation.
" It is true that section I of the Indian Trusts Act makes provisions of the Act inapplicable to public or private religious or charitable endowments; and so, these sections may not in terms apply to the trust now in question.
These sections however embody nothing more or less than the principles which have been applied to all trusts in all countries.
The principle of the rule against delegation with which we are concerned in the present case, is clear; a fiduciary relationship having been created, it is against the interests of society in general that such relationship should be allowed to be terminated unlilaterally.
That is why the law does not permit delegation by a trustee of his functions, except in cases of necessity or with the consent of the beneficiary or the authority of the trust deed itself; apart from delegation "in the regular course of business", that is, all such functions which a prudent man of business would ordinarily delegate in connection with his own affairs.
What we have got in the present case is not delegation of some functions only, but delegation of all functions and of all powers and is nothing short of abdication in favour of a new body of men.
Necessarily there is also the attempt by the old trustees to divest themselves of all properties vested in them by the settlor and vesting them in another body of persons.
We know of no principle of law and of no authority which permits such abdication of trust in favour of another body of persons.
636 In the deed itself there is no thing which contemplates or allows such an abdication and the substitution of the old trustees by a new body of trustees.
It is necessary in this connection to consider the terms of cl.5 of the trust deed, That clause is in these words: "5.
All the aforesaid trustees 3hall be entitled to govern, manage and administer the affairs of the school above.
These trustees shall have the power of framing rules and regulations from time to time for the benefit and the efficient running of the school, and they shall have the power to appoint new trustees from time to time in accordance with the rules and regulations on behalf hereof.
All the movable and immovable properties connected with the said school shall come to vest in the trustees and they shall be managed and administered in accordance with the rules and regulations framed on that behalf.
The trustees for the time being shall have the power to alter and cancel the rules and regulations and to frame new ones instead thereof at the time when necessary.
The treasurer shall have the power to open the cash account in some reliable bank and he shall always arrange for cash dealings to the benefit of the said school in accordance with the holy law of Islam.
(Shariat).
" The provisions for the appointment of new trustees cannot by any stretch of imagination be hold to mean the substitution of the old body of trustees by a new body.
That provision only permits the old trustees to add to their number.
Nor does the power to frame rules and regulations for the benefit and efficient running of the school authorise the trustees to give up the management of the school themselves or to divest themselves of the 637 properties entrusted to them by the trust deed and vest them in other persons.
We are satisfied therefore that cl.5 of the trust deed does not in any manner authorise the trustees appointed by deed to abdicat in favour of anthor body of persons or to constitute that body as trustees in their own place.
There is no question here also of the beneficiary, i.e., the school consenting to such abdication.
There is therefore no escape from the conclusion that the act of the trustees, who were appointed by the trust deed, in handing over the management of the school to the Hakimia Society and the properties of the school to the members of the governing body of the Hakima Society was illegal and void in law.
The members of the Society or the members of the governing body did not therefore be.
come trustees in respect of the properties which are covered by the Burbanpur trust.
This position in law is not seriously disputed by Mr. Son, who appeared before us on behalf of the respondents.
He has however taken before us a noval line for suporting the decision of the courts below.
He has tried to persuade us that the trust deed of September 1909 creates a trust only in respect of the properties that belonged to the six persons who executed the trust deed.
These properties have been set out in cls.
7 to 12 of the deed.
This deed therefore has not created any trust in respect of such of the properties mentioned in the plaint which do not fall within the properties mentioned in these clauses of the trust deed.
As regards cl.5 of the trust deed which has been set out above and which states that " 'All the movable and immovable properties connected with the said school shall come to vest in the trustees," the learned Counsel states that the six settlors who executed this trust deed of September 1909 have not been shown to have bad any title to these 638 movable and immovable properties connected with the school.
The school, argues the learned Counsel, is merely a beneficiary of the trust and the properties of the school do not become trust properties entrusted to these trustees merely because the settlors have createated a trust in respect of other properties.
There is no question therefore of any property other than the properties mentioned in Paras.
7 to 12 of the deed having been vested in the trustees appointed by the deed, or their divesting themselves of the same.
It is only in so far as the defendants 1 to 11 claim to be the trustees of the properties mentioned in cls.
7 to 12 of this deed that they can be considered to be not validly appointed trustees.
Mr. Sen submits that his clients do not claim to be trustees in respect of these properties, viz., those which are mentioned in cls.
7 to 12 of the deed.
In so far as they manage these properties an order, may be made against them removing them from the management of these and they may be asked to render accounts in respect of these properties, only.
In respect of other properties which according to Mr. Sen are the properties belongining to the beneficiary school, however, no order could properly be made, as they are outside the Burhanpur trust that came into existence by the trust deed of September 1909.
The argument appears attractive at first sight and even plausible.
Unfortunately, however, for the respondents, this case which their Counsel now seeks to make was never their case in the courts below.
Far from saying that some of the properties mentioned in the plaint as trust properties of the Burhanpur trust are not in fact covered by the trust deed, these respondents have all along made the definite case that they were validly appointed trustees of those properties in accordance with the trust deed of September, 1909.
Their case in this matter may 639 best be described in the words used in Para.
4 of the written statement thus "It is admitted that on or about 19th March, 1917, seven persons signed a memorandum of Association and registered themselves as members of the Society under Act XXI of 1860.
Defendant says that all these persons were the trustees and in the management of be trust properties under trust deed dated 15 9 1909 and were either appointed under that trust or under the rules framed thereunder, and in whom the properties of the institution vested and the same continued to be vested after the registration of the Society.
" This paragraph unambiguously accepts the plaintiffs ' case that all the properties specified in the Schedule M attached to the plaint are properties covered by the trust in question and it pleads that defendants 2 to ' 11 are validly appointed trustees of the said trust.
The Judgment of the Trial Court and the High Court also clearly show that before them, these defendants claimed to be trustees validly appointed in accordance with the trust deed of September 1909 of all the properties that were mentioned as trust properties of that deed in the plaint.
Nothing appears to have been pleaded either in the written statement or at the trial or during the arguments that the settlors of this deed of September 1909 could not create a trust in respect of "all the movable and immovable properties connected with the said school", as those properties ' did not belong to them.
On the contrary.
the respondents claimed all along to have become trustees in respect of.
not only of the properties mentioned in cls.
7 to 12 of the deed but also of all other properties of the school, on the strength of this very trust deed, Mr. Sen 's 640 contention that some items of the properties mentioned in the plaint as trust properties covered by the trust deed of September 15, 1909 were not so covered cannot therefore be accepted, We find it established therefore that defendants 1 to 11 were not validly appointed trustees in respect of the trust properties mentioned in the plaint.
Their possession and management of these properties must therefore be held to be only in the character of trustee de sontort.
They are liable there fore to account for their entire period of management.
From the very fact that they have no legal right to remain in possession of the trust properties, not having been validly appointed as trustees, it is equally clear that the plaintiffs are entitled to a decree that those defendants 1 to 11 be removed from the management of the properties.
The learned Solicitor General challenged the correctness of the findings of the courts below that these defendants (defendants 1 to 11 ) did not by their misapplication of trust funds to the extent of Rs. 15,596 5 8 and Rs. 9001 commit misappropriation and also that the admission of students who did not belong to the Daudi Bohra Community was not inconsistent with the object of the trust, We think it unnecessary however to consider these matters inasmuch as even if these findings of the courts below are correct the plaintiffs are entitled to the reliefs they have asked for in this suit.
Besides the amount of Rs. 15,000/ and odd has been already paid by defendants 2 to 11 under the decree of the Trial Courts.
It is necessary to mention the fact that an assurance was given to by the learned Solicitor General that in any case the interest of the non Bohra students will be safeguarded in this school.
Accordingly, we allow the appeal and order that it be declared that the defendants 1 to 11 are 641 not validly appointed trustees in respect of the trust properties mentioned in the list M annexed to the plaint ; that the defendants be removed from the management of these properties and they be ordered to render an account of their administration of these properties.
Necessary directions for the rendering of accounts will be made by the Trial Court and in doing so, credit will be given to defendants 2 to 11 of Rs. 15,000/and odd already paid by them.
The plaintiffs appellants admit that it is not necessary to frame any scheme for the administration of the trust and we agree that this is not necessary at least for the present.
It is necessary however that new trustees be appointed for the administration of the trust.
of the original 18 trustees all except one are dead and sole survivor is admittedly too old to carry on the administration successfully.
The very fact that for many year 's he has not discharged any functions as a trustee also makes it necessary that new trustees should be appointed.
We therefore direct that suitable persons be appointed by the Trial Court as new trustees after giving an opportunity to the plaintiffs and other responsible members of the Daudi Bohra Community to place their recomendations and objections in this matter.
Both the appeals are accordingly allowed, The Plaintiffs will get their costs here and also in the Trial Court and the High Court from defendants 1 to 11.
There will be one set of hearing fee for the two appeals.
Appeals allowed.
[/INST]In 1909 six persons created the Burhanpur Trust for governing, managing and administering the affairs of a school in Burhanpur.
Under the Trust deed 18 persons were appointed as the trustees and all movable and immovable properties connected with the school were vested in them.
Clause 5 of the Trust deed empowered the trustees "to appoint new trustees from time to time" and to frame rules and regulations for the benefit and efficient running of the school.
In 1917 the Hakimia Society was formed by the trustees for the purpose of running the school and 12 persons were named members of the governing council in which all the properties of the school were vested.
Since then ten members of the governing council have been administering the properties in respect of which a trust was created in 1909.
A suit under s.92 Code of Civil Procedure was filed for removal of the ten members of the governing council, inter alia, on the ground the Hakimia Society and the ten members of the governing council had not been validly appointed trustees of the trust properties.
Held, that the ten members of the governing council of the Hakimia Society were not validity appointed trustees of the Trust properties and were liable to be removed from the management thereof, The trustees of the Burhanpur Trust had no power to create another body of men as trustees in their own place.
Trustees who have once entered upon the trust cannot renounce their duties and liabilities except with the permission of the Court or with the consent of the beneficiaries or by the authority of the trust deed itself.
Nor can trustees delegate their offices or any of their functions except in some specified cases.
In the present case there was delegation of all the powers and functions of the trustees amounting to abdication in favour of a new body of men.
The trustees sought to divest themselves of the properties vested in them by the trust deed and to vest them in the 624 new body.
Such abdication could not be permitted.
There was nothing in.
the trust deed which allowed such an abdication and substitution of trustees.
, The provision in cl. 5 for appointment of new trustees only permitted the old trustees to add to their number.
Nor did the power to frame rules and regulations authorise the trustees to give up the management of the school themselves or to divest them.
selves of the properties entrusted to them by the trust deed and vest them in other persons.
</s>
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<s>[INST] Summarize the judgementivil Appeal No. 2318 of 1985 From the Judgment and Order dated 1.8.83 of the Gauhati High Court in S.A. No. 19 of 1978.
Appellant in person D.N. Mukherjee for the Respondents.
By a quirk of fate the appel lant who was holding a permanent post of Auditor in the Office of the Accountant General, Assam resigned his job and took up appointment as a Lecturer in an aided college in Meghalya only to find his appointment terminated in five months ' time for want of approval for the appointment by the Director 575 of Public Instruction.
The backdrop of events for this appeal are as narrated below.
The appellant who was a confirmed Auditor in the Office of the Accountant General, Assam responded to an advertise ment in the Assam Tribune dated 21.2.75 and offered himself as a candidate for appointment as a Lecturer in English in Lady Keane Girls College, Shillong.
Respondents 2 and 3 are respectively the Principal and the President of the Govern ing Body of the said College.
After being interviewed along with other candidates on 27.3.75 the appellant was selected for the post and was issued an order of appointment on 7.4.75.
The order of appointment, however, stated that the appointment was subject to the approval of the Director of Public Instruction, Meghalya, the first respondent herein.
On the appellant seeking clarification from the Principal about this condition he was assured that the sanction of approval was a formality and there was no jeopardy to his appointment.
Acting on this assurance the appellant resigned his post in the Accountant General 's Office and joined the College on 2.5.75.
To his shock he received a communication from the Principal on 11.9.75 enclosing a copy of letter of the first respondent dated 28.8.75 informing him that his services would be terminated with effect from 17.9.75.
By reason of the appellant 's representations the matter was kept in abeyance till 1.12.75 when he received a further communication stating that his services were being terminat ed with immediate effect for want of prior approval of the first respondent.
The appellant filed a suit in the Court of the Assist ant District Judge, Shillong to challenge the order of termination and sought the reliefs of declaration and perma nent injunction.
The trial court granted ad interim injunc tion and later made it absolute and in terms thereof the appellant continued to be in service till 20.4.77 on which date the trial court dismissed the suit and vacated the injunction.
The Assistant District Judge held that the appointment of the appellant without prior approval of the Director of Public Instruction was irregular and furthermore the ap pointment contravened the Government 's Resolution regarding the reservation of posts for backward sections of the people of the State and that the policy applied to all Government institutions as well as private institutions aided by the Government.
The trial court further held that in any event the appellant will not be entitled to a relief of declara tion regarding his continuance in service and that the remedy for the appellant under law, if any, is to file a suit for damages for wrongful dismissal and seek reliefs.
576 The appellant preferred an appeal to the District Judge, Shillong.
The learned Appellate Judge held that except the oral testimony of the Deputy Director of Public Instruction regarding the Government 's reservation policy there was no material on record to show the formation of any such policy and much less that the policy of the Government had been published or even communicated to the aided colleges prior to the appellant being appointed.
The learned Judge also held that in the absence of any notification or circular by the Government (of Meghalya) showing that the Assam Aided Colleges Management Rules, 1965, had been adopted it was not possible to hold that the Government had actually adopted the said rules.
The Appellate Judge, therefore, held that the Director of Public Instruction had acted wrongly in refusing to give approval to the appellant 's appointment and as such the order of termination of service of the appellant was manifestly wrong.
In accordance with such findings the Appellate Judge allowed the appeal and decreed the suit and declared the appellant 's continuance in service as a Lectur er in English in the second respondent 's college.
The judgment and decree of the Appellate Judge was challenged in Second Appeal before the Gauhati High Court by the first respondent.
A learned Single Judge of the High Court concurred with the findings of the Appellate Judge and held that the State of Meghalya had not adopted the Assam College Management Rules, 1960 at the time of the appel lant 's appointment and as such the termination of the serv ices of the appellant was unlawful.
However, on the question of relief that can be granted to the appellant the learned Judge differed from the view of the Appellate Judge and held that reinstatement of the appellant in service was not possible as the appellant did not belong to one of those categories for which alone reinstatement can be ordered viz. (1) Government servants, (2) industrial workmen and (3) employees of statutory bodies.
The learned Judge, therefore, held that the appellant would only be entitled to damages for wrongful termination of service.
Even then after taking into consideration the unnviable position of the appellant and his continuance in service for about one and half years during the pendency of the suit, the learned Judge awarded one year 's salary and allowances as damages and disposed of the appeal with the abovesaid modification.
It is against this judgment of the High Court the appellant has preferred this appeal.
The appellant appeared in person and argued the appeal before us.
He contended that neither in the advertisement made by the college authorities nor at the time of the interview, nor in the order of 577 appointment was there anything to show that the Government of Meghalya had adopted the Assam Aided College Management Rules, 1965 and the Assam Aided College Employees Rules, 1960 and as such he had reason to believe that when once the Selection Committee found him suitable for the appointment he would be confirmed in the post of Lecturer after his successful completion of probation.
He further stated that he verified from ,he Principal as to whether his appointment would be disapproved by the first respondent for any reason and he was assured by the Principal that the sanction of approval was only a formality and, therefore, his appoint ment would not be in jeopardy in any manner.
Having regard to all these factors he resigned his permanent post in the office of the Accountant General, Assam and had devoted himself fully to his task as a Lecturer in the college.
Therefore, it was a rude shock to him when he was issued an order of termination of service on the ground that the first respondent had not approved the appointment.
It was also urged by him that he had established in the trial of the suit that his was the first case where approval was not given and that there had been no previous instance of denial of approval of appointments made in any of the aided col leges in the State of Meghalya.
The appellant laid stress on the fact that the Appellate Court as well as High Court have both sustained his contentions and held that his appointment had not been made in contravention of any of the rules framed by the Government and as such the refusal of the first respondent to approve his appointment was wrong and the termination of his service was illegal.
The further submission of the appellant was that since the Appellate Court and the High Court have found the termination of his service to be wrong and illegal, he should have been granted the relief sought for in the suit viz. a declaration that he continued to be in service all along and that he was enti tled to reinstatement with full back pay and allowances.
The appellant also contended that though the Lady Keane Girls College is a private institution it was being provided aid by the Government and Government had full supervisory con trol over it and as such the college is for all practical purposes a Government institution and in such circumstances he is entitled to parity of treatment with a Government servant wrongly removed from service.
The prayer of the appellant, therefore, was that he should be granted a decla ration regarding his continuance in service so as to entitle him to all the benefits ensuing from such a declaration viz. reinstatement in service together with back pay, allowance 'and other benefits.
Opposing the arguments of the appellant the learned counsel for the first respondent argued that the Lady Keane Girls College is a 578 private institution and not a Government institution, that merely because it receives aid from the Government and the appointments made by the Management are subject to the approval of the first respondent, the college would not become a Government institution nor can the appellant claim parity of treatment with Government servants.
The learned counsel also stated that in spite of the findings of the Appellate Court and the High Court that the termination of service of the appellant was wrongful, the only remedy for the appellant is to file a suit and not to seek a declara tion of continuance in service because it would amount to seeking specific performance of a contract of service.
We have bestowed our anxious consideration to the argu ments advanced by the appellant because of the misfortune that has overtaken him partly due to his own hasty action in resigning his permanent post and partly on account of the first respondent disapproving the appellant 's appointment on the basis of rules which had not been formulated and commu nicated to the aided colleges.
On an examination we find that in spite of the sad plight of the appellant it will not be possible to grant him a relief of declaration as sought for by him.
The reasons for our view may now be set out.
The legal status of an employee in a privately managed college and whether a contract for personal service can be specifically enforced came up for consideration before this Court in Vaish College vs Lakshmi Narain, [1976] 2 S.C.R. 1006.
The facts in that case were as follows.
Vaish Degree College which was registered under the Registration of Cooperative Societies Act was initial affiliated to the Agra University and later to the Meerut University.
A Principal of the college who was appointed after obtaining formal approval of the Vice Chancellor was terminated from service about two years later.
The Principal challenged the order of termination in a suit filed by him on various grounds and he sought for a declaration regarding his continuous in serv ice.
The trial court dismissed the suit but the Appellate Court decreed the same.
In the second appeal there was a reference to a Full Bench regarding the jurisdiction of the civil court to entertain the suit and eventually the second appeal filed by the management was dismissed and the manage ment came up in appeal to this Court by special leave.
This Court held that the Executive Committee of the college was not a statutory body because it had not been created by or under the statute and did not owe its existence to a stat ute.
But on the contrary it was a body which came into existence on its own and was only governed by certain statu tory provisions for the proper mainte 579 nance and administration of the institution.
The Court summed up the law in the following words: "It is, therefore, clear that there is a well marked distinction between a body which is created by the statute and a body which after having come into existence is governed in accordance with the provisions of the statute.
In other words the position seems to be that the institution concerned must owe its very existence to a statute which would be the fountain head of its powers.
The question in such cases to be asked is, if there is no statute would the institution have any legal existence.
If the answer is in the negative, then undoubtedly it is a statutory body, but if the institution has a separate existence of its own without any reference to the statute concerned but is merely governed by the statu tory provisions it cannot be said to be a statutory body.
The High Court, in our opin ion, was in error in holding that merely because the Executive Committee followed certain statutory provisions of the University Act or the statutes made thereunder it must be deemed to be a statutory body.
" The Court then proceeded to consider the next question regarding a contract of personal service being specifically enforceable.
After referring to the decisions in S.R. Tewari vs District Board, Agra & Anr., ; , 59, Execu tive Committee of U.P. State Warehousing Corporation Ltd. vs Chandra Kiran Tyagi; , , 265; Bank of Baroda vs Jewan Lal Mehrotra, , 55 and Sirsi Municipality vs Kom Francis, ; , the Court held as follows: "On a consideration of the authorities men tioned above, it is, therefore, clear that a contract of personal service cannot ordinarily be specifically enforced and a Court normally would not give a declaration that the contract subsists and the employee, even after having been removed from service can be deemed to be in service against the will and consent of the employer.
This rule, however, is subject to three well recognised exceptions (i) where a public servant is sought to be removed from service in contravention of the provisions of article 3 11 of the Constitution of India; (ii) where a worker is sought to be reinstated on being dismissed under the Industrial Law; and (iii) where a 580 statutory body acts in breach of violation of the mandatory provisions of the statute.
" The matter again came to be considered in the case of J. Tewari vs Jwala Devi Vidya Mandir & Others, In that case the appellant, Smt.
J. Tewari was appointed as the Headmistress of the Jwala Devi Vidya Mandir, Kanpur which was a Society registered under the Societies Registra tion Act, 1860.
J. Tewari who later became the Princi pal of the institution challenged her order of suspension in an earlier suit and her order of termination from service in a later suit.
The second suit was partly decreed by the trial judge and he upheld that the termination of service of Mrs. J. Tewari was not legal and awarded her a sum of Rs. 15,250 as arrears of pay for a period of 3 years together with interest and provident fund contribution.
The High Court confirmed the decree but held that the sum awarded to her should be by way of damages and not towards arrears of salary since Smt.
J. Tewari will not be entitled to a decla ration that she continued to be in the service of the insti tution and to a consequent order of reinstatement.
In fur ther appeal to this Court by certificate it was contended that the institution was a statutory body and that Smt.
J. Tewari was entitled to a declaration regarding her continu ance in service.
This Court repelled the contention and held that the Vidya Mandir, in spite of being governed by the University regulations and the provisions of the Education Code framed by the State Government and also being aided by educational grants, still constituted only a private insti tution and as such Smt.
J. Tewari would only be entitled to a decree for damages, if her dismissal was wrongful and not to an order of reinstatement or a declaration that notwith standing the termination of her services she continued to be in service.
The law enunciated in these decisions stand fully at tracted to this case also.
Even though the Lady Keane Girls College may be governed by the statutes of the University and the Education Code framed by the Government of Meghalya and even though the college may be receiving financial aid from the Government it would not be a statutory body because it has not been created by any statute and its existence is not dependent upon any statutory provision.
The appellant, however, placed reliance on another decision of this Court in I.R. Gupta vs Inter College, Thora, ; In that case Shri I.P. Gupta who was appointed as Principal of the college on probation for one year was placed on further probation for one more year.
During the period of the extended probation his services 581 were terminated.
Although the order of termination was innocuous in its terms it was accompanied by an enclosure containing the resolution of the Managing Committee with a reference therein to an adverse report given by the Manager against the Principal.
It was, therefore, contended that the order of termination cast a stigma on the Principal and hence his services ought not to have been terminated without due notice and enquiry.
It was this contention which was the principal issue in that case.
Dealing with that contention this Court found that the college was an institution recog nised under the Intermediate Education Act and was governed by the provisions of the Act and the regulations made there under and that Regulations 35 to 38 prescribed the procedure to be followed before the services of an employee can be terminated by way of punishment.
The management, however, did not follow the procedure prescribed by the regulations which were virtually the same as provided by Article 311(2) of the Constitution.
This Court, therefore, held that the principles which should govern the case should be the same as those underlying Article 311(2).
It was in that view of the matter this Court allowed the appeal and restored the judgment of the Single Judge of the High Court declaring that the appellant contained to be in the service of the college and that he was entitled to all the benefits flowing from the declaration including the salary and allowances as if there was no break in his service.
The facts of the abovesaid case are clearly distinguishable because the case pertained to termination of service by way of disciplinary action.
In the instant case there is no such violation of the provisions of any Act or any Regulations made thereun der.
This is a case where the first respondent had proceeded on the erroneous assumption that the Assam Aided College Employees Rules, 1960 and the Assam Aided College Management Rules, 1965 had been adopted by the State of Meghalya and therefore, the appellant 's appointment was in contravention of the rules and consequently he should decline to approve the appointment of the appellant.
No doubt his action has been held to be wrongful but even so it is not in contraven tion of any statutory provisions or regulations or procedur al rules.
We are, therefore, unable to accept the appel lant 's contention that he should be granted a declaration that he continues to be in the service of the college and that he is entitled to all the benefits flowing from the declaration.
Notwithstanding this conclusion we feel that the pecul iar facts of the case which are indeed distressing, call for some relief being given to the appellant instead of a brusque dismissal of the appeal on account of the legal impediments for granting the relief of declaration of his continuance in service.
We have already set out the tragic situa 582 tion that has resulted on account of the appellant 's serv ices being terminated after he had closed his options to revert back to his service in the Accountant General 's Office.
The trial court which dismissed the suit and the High Court which has modified the decree of the Appellate Court have also noticed this position and expressed their compassion for the appellant.
It was on account of that the High Court has granted monetary compensation of one year 's salary to the appellant as damages.
We think that in the fact and circumstances of the case and in exercise of our powers under Article 136 of the Constitution we should enlarge the relief granted to the appellant by the High Court by directing the State of Meghalya represented by the first respondent to grant 3 years ' salary and allowances to the appellant at the rates prevalent when his services were terminated on 1.12.75.
Though the appellant had remained in service till 20.4.77 in spite of the termination order, the salary payable for that period is towards the services actually rendered by him in the college.
Hence no portion of that amount can be treated as damages.
If the appellant has not been paid the salary and allowances for any portion of the period between 1.12.75 to 20.4.77, the first respondent is further directed to release such sums of money as would be required to make good the unpaid salary and allowances.
We give this direction because we find a letter in the paper book written by the second respondent stating that they are unable to pay the salary and allowances due to the appellant on account of non release of funds by the first respondent.
The first respondent will make the payments indicated above on or before 30th June, 1987.
The grant of this relief will be in consonance with the reliefs granted by this Court to the affected parties in Vaish College case (supra) and Smt.
J. Tewari 's case (supra).
In the former case the Principal whose services were terminated was allowed to retain a total sum of Rs.21,100 deposited by the Educational Institution under orders of court during the pendency of the proceed ings.
In the latter case Smt.
J. Tewari had been granted 3 years ' salary by way of damages.
In addition to the payment of the abovesaid sums we also direct that in the event of there being a vacancy in the Lady Keane Girls College for the post of Lecturer in English and in the event of the Management willing to appoint the appellant as a Lecturer once again the Management should be permitted to do so by the first respondent by granting relaxation of rules and regulations currently in force governing the filling up of posts of Lecturers in aided colleges in the State of Megha lya.
To the extent, additional reliefs are given to the appellant the appeal will stand allowed.
The appellant will be entitled to costs in the appeal payable by the first respondent.
P.S.S. Appeal allowed.
[/INST]The prosecution alleged that the deceased had some land dispute with one of the accused and his two brothers, that the deceased was done away through the instrumentality of the appellant and that his body with the throat cut was found by the road side.
The brother in law of the deceased identified the dead body and lodged information with the police.
After investigation, the appellant and the other accused were arrested.
The weapon of offence was produced by the other accused.
Both the accused were remanded to judi cial custody for the alleged murder of the deceased.
The appellant escaped and was declared as absconder.
The other accused was discharged for want of prima facie case against him.
After a long lapse of time, the appellant was apprehend ed and was committed to sessions.
On the basis of circum stantial evidence that the appellant was seen with the deceased on the evening preceding the day on which the deceased was found dead, that a dhoti and shirt, stained with human blood, were recovered from his possession when he was arrested and that an extra judicial confession was made by him when he was arrested after absconding, he was con victed under Section 302 of the Indian Penal Code and sen tenced to imprisonment for life.
The High Court having confirmed the conviction and sentence, the appellant ap pealed to this Court.
Allowing the appeal by special leave, 1097 HELD: 1.
It is a settled rule of circumstantial evidence that each one of the circumstances has to be established beyond doubt and all the circumstances put together must lead to the only inference and that is of the guilt of the accused.
[1101E] 2.1(a) It is not in dispute that the appellant was seen with the deceased on the evening preceding the night when the deceased is alleged to have been killed.
This fact has been established by the evidence of P.Ws. 3 and 4 and the appellant himself has admitted it, even though his caSe Was that the throat of the deceased was cut by the other ac cused.
Even the wife of the deceased has deposed that the appellant had told her that her husband was lying dead.
It is clear that only on the basis of this circumstance the appellant could not have been convicted.
[1099C D] 2.1(b) As regards recovery of a shirt and dhoti with blood stains, there is no evidence in the report of the Serologist about the blood group and, therefore, the evi dence could not positively be connected with the deceased.
The evidence of blood group is only conclusive to connect the blood stains with the deceased.
In the absence of such evidence, this could not be a circumstance on the basis of which any inference could be drawn.
[110lB D] 2.1(c) Regarding the extra judicial confession by the appellant, made after a long lapse of time, no reliance could be placed on it, especially in view of the circum stances in which the appellant was apprehended and the statement made, and also because of the denial by one of the two witnesses that the appellant had made by confession.
[1100F 1101A] 2.2 The only circumstances which could be said to have been established is of the appellant being with the deceased in the evening and on that circumstance alone the inference of guilt could not be drawn especially in the circumstances of the case where another accused person from whom an in strument of offence was recovered and who had a grudge against the deceased, had been let off.
[1101F] 3.
The conviction and sentence passed against the appel lant are set aside.
[1101G]
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<s>[INST] Summarize the judgementAppeal No.4375 OF 1991.
From the Judgment and Order dated 3.9.1990 of the Karna taka Administrative Tribunal, Bangalore in Application No. 2564 of 1989.
M.K. Ramamurthy, section Ravindra, K.V. Mohan and S.R. Bhat for the Appellant.
Raju Ramachandran, M. Veerappa and Kh.
Nobin Singh (N.P.) for the Respondents.
The Judgment of the Court was delivered AHMADI, J.
Special leave granted.
The controversy which we are required to resolve in this appeal by special leave is regarding the appellant 's senior ity vis a vis respondents Nos.3 to 7.
The factual background which has given rise to this controversy, briefly stated, is as under: In the year 1966 posts of Junior Engineer (Mechanical) were created in the Department of Mines and Geology (Ground Water Surveys and Drilling Unit) of the State of Karnataka.
The appellant who was then working as a Rigman in the Drill ing Unit of the Department was appointed Junior Engineer (Mechanical) in the scale of Rs. 200 375 on one of the said posts by an order dated 14th August, 1967 issued by the Director of the department.
Subsequently, he was regularly recruited through the State Public Service Commission in the said post w.e.f. 4th May, 1970.
However, even though the Director had requested the State Government to frame Re cruitment Rules for the newly created post immediately after its creation, the Recruitment Rules were not finalised till the issuance of a Notification dated 26th June, 1973.
Before the appellant was regularly recruited through the State Public Service Commission in the year 1970 the Director had apprised the Government of the action which he proposed to 602 take to fill up the post.
The appointment order was issued after the Public Service Commission had advertised the post and had selected persons for appointment to the said posts.
The appellant was initially appointed on probation for one year and on his satisfactorily completing the probation period he was continued in service and was later confirmed in the said post by an order dated 13th June, 1974 w.e.f. 29th September, 1972.
Respondents Nos. 3 to 7 entered service as Drillers in 1964 65.
The appellant and the respondents Nos.
3 to 7 were promoted as Assistant Drilling Engineers by the Director 's order dated 16th December, 1974.
The Office Order No.676/74 75 shows that the appellant and one another were working as Junior Engineers at the relevant time whereas respondents Nos.
3 to 7 were working as Drillers before their promotions as Assistant Drilling Engineers.
The State Government did not approve of the Director 's action in promoting the appellant since he was a local candidate and directed that he be reverted.
However, no such reversion took place.
The State Government also did not take any further action.
The appellant was shown senior to respond ents Nos. 3 to 7 in the said cadre of Assistant Drilling Engineers.
The appellant was subsequently promoted by the State Government to the next higher post of Drilling Engi neer in 1980 and further as Chief Drilling Engineer in 1984 which post he was holding at the date when his seniority came to be disturbed.
The appellant was throughout shown senior to respondents Nos.
3 to 7 till the revised provi sional seniority list in regard to the cadre of Assistant Drilling Engineers was published on 31st December, 1987.
Since objections were invited the appellant objected to his being shown junior to respondents Nos.3 to 7 but to no avail.
Even in the final seniority list dated 4th May, 1989 he was shown junior to respondents Nos. 3 to 7.
Respondents Nos.3 to 7 were shown in both the provisional and final seniority list at Serial Nos.1 to 5 whereas the appellant was shown at Serial No.6.
Thus, for the first time, since his regular appointment in the year 1970, he was shown junior to respondents Nos. 3 to 7 under the provisional seniority list issued in 1987 and the final seniority sen iority list issued in 1989.
The appellant, therefore, chal lenged the provisional seniority list as well as the final seniority list by an Application No. 2564 of 1989 preferred to the Karnataka Administrative Tribunal.
The Tribunal by its order dated 3rd September, 1990 rejected his application holding that his initial entry into service as a Junior Engineer was itself irregular and since he did not have the requisite experience of three years as a regular incumbent he was not qualified to be promoted to the next higher post of Assistant Drilling Engineer because his regular employ ment could only be related from the date of framing of the Recruitment Rules for the adre which came to be notified on 23rd August, 1973.
In this view of 603 the matter, the Tribunal held that the service of the appel lant from 4th May, 1970 to 23rd August, 1973 could not be taken into consideration for the purpose of determining his inter se seniority vis a vis respondents Nos. 3 to 7.
The appellant feeling aggrieved by the dismissal of his applica tion, has approached this Court under Article 136 of the Constitution.
The appellant contends that the order of the Tribunal suffers from a number of fallacies, namely, firstly, the Tribunal has failed to realise that the appellant was re cruited as a regular employee on selection by the State Public Service Commission pursuant to an advertisement issued in this behalf and, therefore, the appellant 's em ployment was regular in nature and not that of a mere local candidate; secondly, the post to which he was appointed was a regularly created post and was a higher than that of respondents Nos. 3 to 7 even during the period there existed no recruitment rules and in any case after his confirmation w.e.f.
29th September, 1972 it was not open to the Tribunal to hold that his appointment was irregular and thirdly, the Tribunal had erred in overlooking the guideline issued by the state Government on 5th July, 1976 which specifically provided that 'all appointments made by the Government or under specific authority of Government either by direct recruitment or by promotion or on or after 1st November, 1956 but prior to the commencement of the Rules regarding recruitment to such cadres may be treated as regular '.
The appellant contends that in pursuance of this guideline issued by the State Government even if it is assumed that his initial appointment was irregular it had to be treated as regular throughout.
The appellant, therefore, contends that the Tribunal 's order suffers from certain patent in firmities and deserves to be set aside.
It appears that before the Tribunal respondents Nos.1, 2, 4, 6 and 7 did not file any counter challenging the appellant 's claim to sen iority but respondents Nos. 3 and 5 contested the appel lant 's claim while the State Government avoided entering into the arena by filing a counter but instead presented the relevant files to the Tribunal.
So far as respondents Nos. 3 and 5 are concerned, they supported the action taken by the state Government in preparing both the impugued provisional as well as the final seniority lists.
They contended that since they were regular employees and had entered service before the appellant and were promoted to the post of As sistant Drilling Engineers along with the appellant they were clearly senior to 'the appellant and the State Govern ment was, therefore, justified in showing them at Serial Nos.1 to 5 and the appellant at Serial No. 6 in the seniori ty list.
They, therefore, contend that this 604 appeal is without substance and needs to be dismissed.
We have heard counsel for the rival contestants.
Counsel of the State Government submitted that they had prepared the seniority list for reasons already stated but they would not like to take sides and would abide by the decision of this court.
In order to appreciate the controversy, it is necessary to refer to the Karnataka Civil Services (Classification, Control and Appeal) Rules, 1957.
According to Rule 5, the Civil Services of the State of Karnataka are classified into Class I, Class II, Class II and Class IV posts.
Class I and Class II are gazetted Posts whereas Class III and Class IV consist of non gazetted Posts.
So far as Class III posts are concerned the initial appointments have to be made by the authorities mentioned in Column 2 of Schedule II appended to the Rules.
In regard to the posts of Junior Engineers the lind Schedule makes the Director the Appointing Authority.
There can, therefore, be no doubt that the initial appoint ment of the appellant was by an authority competent to appoint.
It is indeed true that at the time when the appel lant was selected by the State Public Service Commission and appointed as Junior Engineer w.e.f.
4th May, 1970 there were no specific Recruitment Rules in existence for the post in question.
As stated earlier, the posts were created for the first time in 1966 and since then the Director had been in correspondence with the State Government for framing of the Recruitment Rules for the said posts.
Since the Recruitment rules were not framed for one reason or the other, in 1969 the Director wrote a letter to the State Public Service Commission to advertise the vacancies and select candidates for appointment.
Simultaneously, he wrote a letter informing the State Government of the action taken by him in request ing the State Public Service Commission to advertise the posts and select candidates for appointment.
Pursuant to the requisition sent by him the Commission selected candidates and forwarded the list to the Director who was the Appoint ing Authority under the Karnataka Civil Service (Classifica tion, Control and Appeal) Rules, 1957.
The Director who was competent to make the appointment by virtue of Rule 7 issued a letter of appointment dated 24th April, 1970 whereapon the appellant took charge w.e.f. 4th May, 1970.
It, therefore, becomes apparent that the posts were regularly created sometime in 1966 and the appellant was duly selected by the State Public Service Commission and appointed to the post in question in 1970.
The appellant being an engineering gradu ate was qualified for appointment to post in question.
The state Government 's approach while sliding down the appellant in seniority vis a vis the respondents Nos.
3 to 7 may be briefly noticed.
605 After the recruitment rules for Junior Engineers (Mechani cal) were framed and brought into effect w.e.f.
23rd August, 1973, it was felt that the two posts of Junior Engineers were filled by direct recruitment contrary to the said rules which provided a ratio of 50% by promotion from the cadre of Drillers and 50% by direct recruitment.
Since both the posts were filled by direct recruitment, it was felt that this ratio was violated.
The date of the appellant 's seniority was, therefore, reckoned from 23rd August, 1973 and since the appellant had not acquired experience of three years he was held ineligible for promotion to the next higher post of Assistant Drilling Engineer.
His entry into the promo tional post was, therefore, pushed down to 23rd August, 1976 and accordingly respondents Nos. 3 to 7 were placed above him in the seniority list.
The Tribunal concurred with this approach.
The Tribunal held that the initial appointment of the appellant as Junior Engineer (Mechanical) by the Direc tor was not supported by any rules and the Director not being the appointing authority for the said posts in 1970, the appellant 's appointment was not regular.
Secondly, the Tribunal concurred with the Government that the appellant 's entry into the cadre of Assistant Drilling Engineer must be assumed to be w.e.f.
23rd August, 1976 and hence respondents nos.
3 to 7 were clearly senior to him.
In short the Tribu nal approved of the Government 's approach in With respect we find it difficult to approve of the said approach.
As pointed out earlier, the posts were sanc tioned in 1966.
Initially the appellant was appointed as a local candidate but later the Director requested the State Public Service Commission to advertise the said two posts and select candidates for appointment to the said posts.
Pursuant to the advertisement so issued the appellant ap plied, was found qualified and was selected for appointment.
The Director, therefore, made the appointment as he was the appointing authority for Class III posts under the Karnataka Civil Services (Classification, Control & Appeal) Rules, 1957, vide Rule 7(2) read with Column 2 of Schedule II thereto.
That rule clearly shows that the Director is the appointing authority for Junior Engineers, a Class III post.
The Tribunal was, therefore, not right in holding that the appointment made was irregular as it was not by the appoint ing authority.
The Tribunal was wrong in holding that the Director was not the appointing authority for Junior Engi neers.
Strictly speaking, that was not the approach of the Government.
The Government held the appointment irregular as in its opinion it had exceeded the quota of 50% for direct recruits.
This view is based on the premise that the serv ices must be regularised applying the 1973 Rules retrospec tively.
Here there are two fallacies, firstly the appellant being senior of the two direct recruits appointed as Junior Engineers, he would fill the slot for the one post which 606 went to direct recruits on the 50% quota and secondly it was not permissible to question the appointment made in 1970 in 1987 when in the intervening period none had challenged the appellant 's appointment.
The objection which the Government had raised on his promotion to the next higher post was that he was a local candidate and not a regular appointee, an objection which was not pursued presumably on realising that he was selected by the State Public Service Commission before appointment.
Not only that the Government acquiesced in his appointment by promoting him to the next higher posts in 1980 and 1984.
Since the posts existed on the establish ment and selection for appointment was made by the State Public Service Commission and the Director was competent to make the appointment, it cannot be said that the absence of recruitment rules makes the appointment illegal or irregular when it is found that the appellant, a degree holder, was eligible for appointment to the post.
This is so also be cause irregular appointments were regularised by the Govern ment Memorandum dated 5th July, 1976, the relevant part whereof reads as under: "3(a).
All appointments made by Government or under specific authority of Government either by direct recruitment or by promotion on or after 1st November, 1956, but prior to the commencement of rules regulating recruitment to such cadres may be treated as regular".
This was clarified by the subsequent letter dated 17th September, 1977 as under: "Para 3(a) states that all the appointments made by Govern ment or under specific authority of Government either by direct recruitment or by promotion on or after 1.11.1956 and prior to the commencement of the Cadre and Recruitment Rules of the concerned cadre may be treated as regular, that is to say, the action taken by Government on other Appointing authorities in resorting either of the modes of recruitment is regular.
This para does not say that the appointment of local candidates as a stop gap arrangement is regular".
The Tribunal refused to place reliance on the above on the erroneous ground that the Director was not the appoint ing authority and the appellant was a local candidate.
Once both these are found to be erroneous there is no reason to brush aside the said guidelines.
It may also be appreciated that the services of local candidates in Class III cadre were regularised by Office Order No.177/71 72 dated 31s1 August, 1971 and had the 607 appellant not have been appointed as a regular candidate w.e.f. 4th May, 1970 his service would also have been regu larised as a local candidate.
From what we have discussed above it is obvious that the entire approach of the State Government and the Tribunal was erroneous.
Besides, the appellant was shown senior to re spondents Nos.
3 to 7 right from 1970 to 1987 when his seniority came to be disturbed.
During the said period of 17 years all attempts to disturb his seniority had 'failed.
No one successfully challenged it in Court.
The appellant 's seniority which had stabilised over a period of time and on the basis whereof he was granted promotions by the Govern ment could not be disturbed by doubting the.
regularity of the initial appointment after so many years.
It was not as if he had gained experience as an ad hoc employee in a stop gap arrangement that his experience as a Junior Engi neer could be overlooked.
We are, therefore, of the opinion that his seniority in the promotion post could not be upset on the ground that he did not possess the requisite experi ence till 23rd August, 1976.
In Direct Recruit Class H Engineering Officer 's Associa tion vs State of Maharashtra & Ors, ; , this Court held in paragraph 13 as under: "The principle for deciding inter se seniority has to conform to the principles of equality spelt out by Articles 14 and 16.
If an appointment is made by way of stop gap arrangement, without considering the claims of all the eligible available persons and without following the rules of appointment, the experience on such appointment cannot be equated with the experience of a regular appointee, because of the qualitative difference in the appointment.
To equate the two would be to treat two unequals as equal which would violate the equality clause.
But if the appointment is made after considering the claims of all eligible candidates and the appointee continues in the post uninterruptedly till the regularisation of his service in accordance with the rules made for regular substantive appointments, there is no reason to exclude the officiating service for purpose of seniority.
Same will be the position if the initial appoint ment itself is made in accordance with the rules applicable to substantive appointments as in the present case.
To hold otherwise will be discriminatory and arbitrary".
In the present case also the appellant 's appointment was made in 1970 after all eligible candidates were interviewed by the State Public Service Commission.
As pointed out earlier, the posts were borne on the establishment and the Director was the appointing authority who made the appoint ment pursuant to the selection made by the State Public Service Commission.
The appellant worked on that post unit erruptedly till he was 608 promoted to the next higher post along with respondents Nos. 3 to 7.
In these circumstances, his experience in the post of Junior Engineer (Mechanical) from 1970 till his promotion to the next higher post could not be ignored.
We are, there fore, of the opinion that the ratio laid down by the Consti tution Bench in the aforequoted paragraph applies with all force in the present case also.
In the result, we allow this appeal and set aside the order of the Tribunal.
We hold that the appellant 's seniori ty over respondents Nos.
3 to 7 as was obtaining before 31st December, 1987 when the provisional seniority list was published shall be restored and he shall be shown to be senior to respondents Nos.
3 to 7 by correcting the impugned final seniority list.
The appeal is allowed accordingly with no order as to costs.
T.N.A. Appeal allowed.
[/INST]The appellant landlord filed an application under Section 14(1)(b) of the Delhi Rent Control Act, 1958 for ejectment of the respondents and the three courts concurrently found that the respondent was the sole tenant.
Relying on an affidavit filed by tenant 's brother before Income Tax au thorities in which he claimed exclusive possession as ten ant, the Rent Controller and the Tribunal concluded that the admission made by the tenant 's brother was binding on the tenant as a result of which sub letting by tenant was proved and consequently allowed the landlord 's eviction petition.
But the High Court dismissed the eviction petition by holding that since the admission made by tenant 's brother was not binding on the tenant, the finding of sub letting by tenant was vitiated in law because it was based on inadmis sible evidence.
In appeal to this court it was contended on behalf of the landlord that (i) the admission made by tenant 's brother was binding on the tenant under section 18 of the Evidence Act; (ii) the High Court erred in interfering with the concurrent finding of fact.
Dismissing the appeal, this Court, 538 539 HELD: 1.
Section 18 of the Evidence Act postulates that statements made by a party to the proceeding, or by an agent to any such party, whom the Court regards, under the circum stances of the case, as expressly or impliedly authorised by him to make them, are admissions.
Equally statement made by a person who has any proprietary or pecuniary interest in the subject matter of the proceedings or persons having derivative interest make statements during the continuance of the interest also are admissions.
[540 H, 541 A B] 2.
In the instant case, admittedly, the respondent tenant was not a party to the affidavit signed by his broth er.
Therefore, the admission made by his brother that he is the tenant in exclusive possession of the demised premises does not bind the respondent tenant.
Once it is found that respondent alone is the tenant, his brother cannot claim to have any pecuniary or derivative interest in the demised premises.
He is not an agent of his tenant brother.
Since the admission made by tenant 's brother was inadmissible and not binding on the tenant, the High Court rightly held that the finding of sob letting or parting with possession of the premises in dispute was vitiated in law as it was primarily based on inadmissible evidence.
Consequently, it was open to the High Court to re examine and reappreciate the evidence on record.
[541 B E]
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<s>[INST] Summarize the judgementt Petition (Civil) No. 1244 of 1986.
(Under Article 32 of the Constitution of India).
WITH S.L.P. (Civil) No. 8948 of 1986.
From the Judgment and Order dated 1().4.
i986 of the Delhi High Court in C.W.P. No. 795 of 1986.
Jitender Sharma for the Petitioners.
T.U. Mehta and G.K. Bansal for the Respondents.
The Judgment of the Court was delivered by OZA, J.
This special leave petition is filed against the judgment of the Delhi High Court rejecting a petition filed by the petitioners.
A separate writ petition for the same relief is also filed in this Court.
The two matters raise a simple question about the age of retirement of the employees in the Delhi Transport Corporation, who were originally employed in the erstwhile Gwalior and Northern India Transport Company ( 'GNIT Company ' for short) in 1946 or before that.
PG NO 1005 It is not in dispute that before 1948 these petitioners were employed in the GNIT Company which was a company owned by the Rulers of Gwalior in the erstwhile native State of Gwalior.
The said company was operating the transport services in Delhi and areas around upto 13th May, 1948.
On 14th May, 1948 the transport services in Delhi were taken over by the Government of India, the Ministry of Transport and it was named as "Delhi Transport Service".
The services of all the employees of the erstwhile GNIT company were taken over by the Government of India but they were continued to be governed by the rules which were in force before taking over.
Subsequently it was taken over by the Delhi Municipal Corporation.
Later on by the Delhi Transport Undertaking which came to be termed as Delhi Transport Corporation".
Clause 7 of the agreement by which the GNIT services in Delhi were taken over by the Government of India provided that the services of the employees who were employed prior to 28th October, 1946 and were in continuous service till i4th May, 1948 shall not be taken over on the terms not less liberal than those they were governed and therefore the employees who were in employment prior to 28th October, 1946 were treated as protected employees.
These facts are not in dispute.
According to the petitioners, before they were taken over, the service conditions of the employees of GNIT Company were governed by the Gwalior State Civil Service Rules.
But the respondent denied that and said that they were governed by the Madhya Bharat Civil Service Rules.
Admittedly, Madhya Bharat came into existence in 1948 only.
Before that there was no State of Madhya Bharat.
Repeatedly opportunity was given to the respondent counsel to find out as to what rules were applicable to the employees of the GNIT company before Madhya Bharat was formed.
Ultimately they pleaded their inability to place any rule.
So far as Gwalior State Civil Service Rules are concerned, a copy of it in Hindi has been filed by the petitioners with the English translation thereof.
It is not disputed that these were the rules governing the civil servants in the Gwalior State.
It is also not disputed that GNIT Company was originally a Company incorporated in India where it was owned by the rules of the erstwhile Gwalior State.
According to petitioners Civil Service Rules of Gwalior were made applicable to these people.
In addition to what has been stated in the petition and which has not been controverted, they have also filed a judgment of the Industrial Court in Madhya Pradesh where this question about the conditions of service about retirement came into dispute after the formation of PG NO 1006 Madhya Bharat and the part of GNIT Company which was operating in the territories of the erstwhile State of Madhya Bharat was taken over by the State of Madhya Bharat Road Transport Corporation.
There too, a similar agreement was reached and the question arose as to whether the persons who were in employment before the taking over, were governed by the Rules of the Gwalior State Civil servants.
It was held that those were the rules and in those rules the normal age of retirement was 60 years.
In view of these circumstances it appears beyond doubt that these people who were employed in the GNIT Company before taking over in Delhi by the Government of India were governed by the Gwalior State Civil Service Rules.
The Gwalior Civil Service Rules provided: "CHAPTER l A 7(a)(1) Every employee has a right to seek retirement from service after attaining the age of 55 years.
(2) The Government also has authority not to allow any employee to continue in employment after attaining the age of 55 years and order his retirement.
(3) In case an employee does not seek retirement from service after attaining the age of 55 years of the government also does not order his retirement form service, than he shall continue in service till he attains the age of 60 years.
(4) Every employee shall compulsory retire after attaining the age of 60 years provided his services are not ordered to be terminated earlier.
(5) An employee who retires under these rules shall be entitled for pension or Gratuity to which he is entitled according to the rules.
Note (1): These Rules will not apply to the Police Personnels.
Note (2): The concerned Departments shall initiate retirement proceeding against those employees who have PG NO 1007 attained the age of 60 years at the time of enforcement of the rules but immediate action shall be taken for release of Pension or Gratuity in case of those who have become entitled for Gratuity or Pension and till pension or gratuity is not sanctioned they shall not be retired.
In future this procedure shall be followed that action for pension or Gratuity shall be initiated one year in advance to which he is entitled at the age of 60 years in case of an employee who retire at the age of 60 years so that there shall be no delay in retiring him after attaining the age of 60 years.
" The above rules it indicates clearly an employee who does not seek retirement from service after attaining the age of 55 years or if the Government does not order his retirement at that age, shall continue in service till he attains the age of 60 years.
It is also indicated with unmistakably terms that every employee shall compulsorily retire after attaining the age of 60 years provided his services are not ordered to be terminated earlier.
In other words the age of retirement was 60 years.
Option however was there for the employee to seek voluntary retirement at 55 years and for the Government to compulsorily retire him at 55.
Counsel for the respondent does not dispute the above provisions.
He, however, argued that the age of 55 years at which an employee could be asked to retire has been retired by the corporation from 55 to 58 and if an employee has been retired at 58 it was not prejudicial to him since he could have been retired at in his erstwhile.
company only at 55.
Our attention was invited to Service Regulation of the Corporation providing for these matters.
The argument is attractive but on a deeper consideration we find little merit in it.
If the Delhi Transport Corporation had exercised its right to retire the petitioners on attaining the age of 58 years, the argument would have been tenable.
But that was not done by the Corporation.
The Corporation retired the petitioners on the ground that they attained the age of superannuation at 58 years.
It is so stated by the notice (Annex.
E) dated January 2, 1986 issued by the Deputy Personnel Officer I to Hari Shankar Gaur petitioner in W.P. No. ]244/86.
The notice reads: DELHI TRANSPORT CORPORATION A GOVERNMENT OF INDIA UNDERTAKING l.
P. ESTATE: NEW DELHl No. PLD IX(PF)/85/128 Dt.
2.1.1986 PG NO 1008 Shri Hari Shankar Gaur s/o Shri M.L. Gaur, Office Supdt.
will attain the age of superannuation i.e. 58 years on 31.1.1986.
He shall, therefore, retire from the service of this Corporation with effect from 31.1.1986 in accordance with clause l0 of the D.R.T. Act (Conditions of AppointMent & Service) Regulations, 1952 read with office order No. PLD/2479 dated 7.3.1974.
He may avail earned leave due to him prior to 31.1.
1986, if he so desires.
" We are told similar notices were issued to other employees as well.
l hat means the Corporation was under the impression that the petitioners have no right to continue beyond the age of 58 years.
We are, therefore, of the opinion that the persons who originally were in the employment of GNIT and were employed prior to October 28, 1946 and who continued in service till May 14, 1948 and onwards will have the right to remain in service up to 60 years unless the option to retire was exercised by the person or by the Corporation at 55 years.
In the result the writ petition and the SLP are allowed to the extent indicated above.
No order as to costs.
G.N. Petitions allowed.
[/INST]The Gwalior and Northern India Transport Company (GNIT Company) was operating transport services in and around Delhi.
It was taken over on May 14, 1948 by the Government of India, Ministry of Transport and named as Delhi Transport Service.
The services of all employees of the (IT company were taken over by the Government of India, but they continued to be governed by the rules in force before the take over.
Subsequently it was taken over by the Delhi Municipal Corporation and later on by the Delhi Transport Undertaking and came to be known as Delhi Transport Corporation.
All employees of GNIT Company employed before 28.10.46 and were in continuous service at the time it was taken over by the Government of India were treated as protected employees as per clause 7 of the take over agreement.
Prior to the take over they were governed by the Gwalior State Civil Service Rules which stipulate the age of retirement at 60.
Option however was there for the employee to seek voluntary retirement at 55 years and for the Government to compulsorily retire an employee at 55.
The Delhi Transport Corporation retired the petitioners on the ground that they attained the age of superannuation at 58 years.
It was challenged in a writ petition before the Delhi High Court and the petitioners contended that option was there both for the Corporation as also the employees to retire at 55, but superannuation could be only on reaching 60, and not at 58 as claimed by the Corporation.
The Delhi High Court rejected the petition.
Against this, the petitioners have come to this Court by way of a special leave petition.
A writ petition has also been filed claiming the same relief.
Allowing the special leave petition as also the writ petition, this Court, PG NO 1003 PG NO 1004 HELD: The persons who were originally in the employment of GNIT Company and were employed prior to October 28, l946 and continued in service till May 14, l948 and onwards will have the right to remain in service upto 60 years unless the option to retire was exercised by the person or the Corporation at 55 years.
The argument that the age of 55 years at which an employee could be asked to retire has been raised by the Corporation to 58 years and if an employee has been retired at 58, it was not prejudicial to him since he could have been retired in his erstwhile Company only at 55, has little merit in it.
If the Delhi Transport Corporation had exercised its right to retire the petitioners on attaining the age of 58 years, the argument would have been tenable.
But that was not done by the Corporation.
The Corporation retired the petitioners on the ground that they attained the age of superannuation at 58 years.
That meant the Corporation was under the wrong impression that the petitioners had no right to continue beyond the age of 58 years.
[1008C D; 1007E G; 1008C]
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<s>[INST] Summarize the judgementAppeals Nos. 386 and 387 of 1966.
Appeal by special leave from the judgment and_decree dated April 16, 1963 of the Madhya Pradesh High Court in First Appeal No. 217 of 1959.
section V. Gupte, P. C. Bhartari and J. B. Dadachanji, for the appellants (in C.A. No. 386 of 1966) and the respondents (in C.A. No. 387 of 1966).
I. N. Shroff and Rama Gupta, for the State of Madhya Pradesh.
The Judgment of the Court was delivered by Ramaswami, J.
These appeals are brought by special leave from the judgment of the High Court of Madhya Pradesh dated 16th April, 1963 in ' First Appeal No. 217 of 1959, whereby the High Court modified partly the judgment of the first Additional District Judge, Jabalpur dismissing Civil Suit No. 10 A of 1954.
The suit was instituted against the State of Madhya Pradesh by Beohar Raghubir Singh and his three grand sons.
Beohar Raghubir Singh 's son, Beohar Rajendra Sinha, was a pro forma defendant.
A notice under section 80 of Civil Procedure Code had been given by Raghubir Singh on 11th January, 1954.
Plaintiffs 2, 3 and 4, his grand sons were joined as plaintiffs because in a partition made subsequent to the giving of the notice, they were each entitled to 1/5th share along with the first plaintiff.
Beohar, Rajendra Sinha was joined as a defendant because he did not choose to join as the plaintiff.
The plaintiffs sought a declaration (1) that the three nazul plots in suit had been in possession of the plaintiffs and the predecessors in their own right from time immemorial and their status was that of Raiyat Sarkar; and (2) that the order of the State Government in the Survey and Settlement Department refusing to recognise their possession over the plots was wrong and ultra vires.
The dispute relates to Phoota Tal a tank situated within the town of Jabalpur.
It was plot No. 282 in the settlement of 1863 A.D.
Its area then was 957 5.24 acres.
it was recorded as malkiat Sarkar and in the last column there was an entry showing possession of Aman Singh Thakur Prasad.
The next settlement took place in 1890 91.
The survey number of Phoota Tal was changed to plot No. 325.
Its area remained the same, it was recorded as "water (pani)" and in the last column, the entry showed the possession of Beohar Narpatsingh Raghubir Singh.
, The third settlement took placed in 1909 10.
The plot number of Phoota Tal was then , it was still recorded change to 327.
Its area remained the same it was still recorded as 'water", but there was no entry in favour of any one showing possession.
The nazul settlement took place in 1922 23.
In this settlement, the tank was given numbers 33, 34, 35, 36, 37 and 171.
Its area was recorded as 5.24 acres.
In this settlement about 2 acres of land was found to be occupied by the Municipal Committee, Jabalpur.
The land so found to be occupied was recorded in the possession of the Muncipal Committee, Jabalpur and the remaining land was again recorded as "Milkiat Sarkar".
There was no entry regarding possession in the remarks column so far as the remaining land was concerned.
The plaintiffs alleged that Thakur Prasad and Aman Singh were their ancestors, that they had been in continuous possession of the disputed landand the omission to record their possession in the last two settle ments of 1909 10 and 1922 23 was due to some oversight.
In 1948 the first plaintiff made an application for correction to the Deputy Commissioner, Jabalpur who made an order in his favour exhibit P 5.
The order of the Deputy Commissioner was however set aside by the State Government on 28th May, 1953 and it was held that the plaintiffs had no title to the disputed land.
The plaintiff therefore prayed for a declaration of the title to the disputed plots and for the correction of the entry in the settlement record showing the status of the plaintiff as that of "Raiyat Sarkar".
The suit was contested by the State of Madhya Pradesh.
It was urged that the plaintiff had no possession over the disputed land and the order of the State Government dated 28th May, 1953 was correct.
It was contended that plaintiffs 2, 3 and 4 had no right to institute the suit because no notice under section 80 of the Civil Procedure Code was given on their behalf.
The suit was not contested by the second defendant Beohar Rajendra Sinha.
By its judgment dated 24th January, 1959 the trial court held that there was no documentary evidence from 1891 to 1932 to support the possession of the ancestors of the plaintiffs regarding Phoota Tal.
The trial court also held that in all the settlement entries, the land was recorded as belonging to the Government "Milkiat Sarkar".
In any event, between 1891 to 1932 there was no evidence regarding the user of the property by the plaintiffs and in the subsequent years a part of the property was found in possession of the Municipal Committee.
The trial court dismissed the suit.
Against the judgment of the trial court 958 the plaintiffs preferred an appeal to the High Court.
The High Court held in the first place the notice exhibit P 8 was not in conformity with section 80 of the Civil Procedure Code.
The High Court held that Beohar Raghubir Singh had lost the right to represent the joint family as karta at the time of institution of the suit because there had been a severence of joint status and the notice served by Beohar Raghubir Singh could not ensure to, the benefit of the other plaintiffs.
On the merits of the case, the High Court found that the plaintiffs had established their possession for the statutory period of 60 years.
The High Court held that the plaintiffs had acquired the right of Raiyat Sarkar and that the order of the State Government refusing to correct the revenue record was illegal.
On these findings the High Court modified the judgment of the trial court to the extent that there was a declaration in favour of the plaintiffs that they were entitled to 1/5th share of the property in dispute and the claim regarding the 4/5th share was dismissed The order of the State Government dated 28th May, 1953 refusing to recognise the possession of the plaintiffs was held to be wrong and illegal.
The first question to be considered in these appeals is whether the High Court was right in holding that the notice given under section 80 of the Civil Procedure Code by the first plaintiff was effective only with regard to Raghubir Singh and.
the notice was ineffective with regard to the other plaintiffs and therefore Raghubir Singh alone was entitled to a declaration as regards the 1/5th share of the dispute plot.
On behalf of defendant No. 1 it was contended by Mr. Shroff that at the time of giving notice the plaintiffs and the second defendant were joint and plaintiff No. 1 Raghubir Singh was karta of the joint family.
The notice was given on 11th January, 1954 and the suit was instituted on 20th July, 1954.
It was admitted that between these two dates there was a disruption of the joint family of which Raghubir Singh was a karta.
It was argued that the right of the first plaintiff to represent the family had come to an end before the institution of the suit, and hence plaintiffs 2, 3 and 4 had to comply individually with the provisions of section 80 of the Civil Procedure Code before appearing as plaintiffs in the suit, In our opinion, there is no justification for this argument.
, We consider that there is substantial identity between the person giving the notice and the persons filing the suit in the present case.
At the time of giving notice the first plaintiff Beohar Raghubir Singh was admittedly the eldest member of the joint family and being a karta he was entitled to represent the joint family in all its affairs.
The cause of action had accrued at the time of giving of the notice and it was not necessary to give a second notice merely because there was a severence of the joint family, before 20th July, 1954 when the suit was actually instituted.
It is obvious 959 that the notice was given by Beohar Raghubir Singh as a representative of the joint family and in view of the subsequent partition the suit had to be instituted by, all the divided members of the joint family.
We are of the opinion that the notice given by Beohar Raghubir Singh on 11th January, 1954 was sufficient in law to sustain a suit brought by all the divided coparceners who must be deemed to be as much the authors of the notice as the karta who was the actual signatory of the notice.
There is substantial identity between the person giving the notice and the persons bringing the suit in the present case and the argument of defendant No. 1 on this point must be rejected.
The object of the notice under section 80, Civil Procedure Code is to give to the Government or the public servant concerned an opportunity to reconsider its or his legal position and if that course is justified to make amends or settle the claim out of court.
The section is no doubt imperative; failure to serve notice complying with the requirements of the statute will entail dismissal of the suit.
But the notice must be reasonably construed.
Any unimportant error or defect cannot be permitted to be treated as an excuse for defeating a just claim.
In considering whether the provisions of the statute are complied with, the Court must take into account the following matters in each case (1) whether the name, description and residence of the plaintiff are given so as to enable the authorities to identify the person serving the notice; (2) whether the cause of action and the relief which the plaintiff claims are set out with sufficient particularity; (3) whether a notice in writing has been delivered to or left at the office of the appropriate authority mentioned in the section; and (4) whether the suit is instituted after the expiration of two months next after notice has been served, and the plaint contains a statement that such a notice has been so delivered or left.
In construing the notice the Court cannot ignore the object of the legislature, viz., to give to the Government or the public servant concerned an opportunity to reconsider its or his legal position.
If on a reasonable reading of the notice the plaintiff is shown to have given the information which the statute requires him to give, any incidental defects or irregularities should be ignored.
In the present case, the notice was served on 11th January, 1954 by Beohar Raghubir Singh.
The notice stated the cause of action arising in favour of the joint family.
The requirements as to cause of action, the name, description and residence of the plaintiff were complied with and the reliefs which the plaintiff claimed were duly set out in the notice.
It is true that Beohar Raghubir Singh did not expressly describe himself as the karta.
But reading the contents of the notice exhibit P 8 in a reasonable manner it appears to us that the claim of Beohar Raghubir Singh 960 was made on behalf of the joint family.
It is true that the term of section 80 of the Civil Procedure Code must be strictly complied but that does not mean that the terms of the notice should be scrutinised in an artificial or pedantic manner.
In Dhian Singh Sobha , Singh & Anr.
vs The Union of India & Anr.
(1) Bhagwati, J. observed in the course of his judgment : "We are constrained to observe that the approach of the High Court to this question was not well founded.
The Privy Council no doubt laid down in Bhagchand Dagadusa vs Secretary of State (2) that the terms of this section should be strictly complied with.
That does not however mean that the terms of the notice should be scrutinised in a pedantic manner or in a manner completely divorced from common sense.
As was stated by Pollock C. B. in Jones vs Nicholls(3) We must impprt a little common sense into notices of this kind '.
Beaumonth, C.J., also observed in Chandu Lal Vadilal vs Government of Bombay(4) "One must construe section 80 with some regard to common sense and to the object with which it appears to have been passed. ." As already pointed out, the suit was instituted in the present case by the divided members of Hindu joint family on 20th July, 1954.
The notice had been given on 11th January, 1954 by Beohar Raghubir Singh who was the karta of the undivided joint family.
In our opinion there was identity between the person giving a notice and the persons filing the suit because it must be deemed in law that each of the plaintiffs had given the notice under section 80 of the Civil Procedure Code through the karta Beohar Raghubir Singh.
It is not disputed that the cause of action set out in the notice remained unchanged in the suit.
It is also not said that the relief set out in the plaint is different from the relief set out in the notice.
We are accordingly of the opinion that the notice given by the karta was sufficient to sustain the suit brought by the divided coparceners and the decision of the High Court on this point must be over ruled.
The view that we have expressed is borne out by the judgment of this Court in State of Andhra Pradesh vs Gundugola Venkata Suryanarayan Garu(5).
In that case, the Government of Madras applied the provisions of the Madras Estates Rent Reduction Act, 1947 to the lands in the village Mallindhapuram on the ground that the grant was of the whole village and hence an estate within the meaning of section 3 (2) (d)of the Madras Estates (1) ; (2) [1927] L.R. 54 I.A. 338.
(3) ; , 363; ; ,150.(4) I.L.R. (5) ; 961 Land Act, 1908.
The respondent and another person served a notice under section 80 of the Code of Civil Procedure upon the Government of the State of Madras in which they challenged the above mentioned notification and asked the Government not to act upon it.
Out of the two persons who gave the notice, the respondent alone filed the suit.
The trial court held that the original grant was not of the entire village and was not so confirmed or recognised by the Government of Madras and as it was not an "Estate" within the meaning of section 3 (2) (d) of the Madras Estates Land Act, the Madras Rent Reduction Act, 1947 did not apply to it.
But the suit was dismissed on the ground that although two persons had given notice under section 80 of the Code of Civil Procedure, only one person had filed the suit.
The High Court agreed with the trial court that the grant was not of an entire village but it also held that the notice was not defective and the suit was maintainable as it was a representative suit and the permission of the Court under 0.1, r. 8 had been obtained in this case.
The High Court granted the respondent the relief prayed for 'by him.
Against the order of the High Court the appellant appealed to this Court which dismissed the appeal holding that in the circumstances of the case there was no illegality even though the notice was given by two persons and the suit was filed by only one.
If the Court grants permission to one person to institute a representative suit and if the person had served the notice under section 80, the circumstance that another person had joined him in serving the notice but did not join him in the suit, was not a sufficient ground for regarding the suit as defective.
At page 953 of the Report Shah, J. observed as follows : "The notice in the, present suit was served by the plaintiff and Yegneswara Sastri.
They raised a grievance about the notification issued by the Government of Madras on May 16, 1950; it was not an individual grievance of the two persons who served the notice but of all the Inamdars or agrahamdars.
The relief for which the suit was intended to be filed was also not restricted to their personal claim.
The notice stated the cause of action arising in favour of all the Inamdars, and it is not disputed that the notice set out the relief which would be claimable by all the Inamdars or on their behalf in default of compliance with the requisition.
The plaintiff it is true alone filed the suit, but he was permitted to sue for and on behalf of ' all the Inamdars by an order of the Court unuder O. 1, r. 8 of the Code of Civil Procedure.
The requirements as to the cause of action, the name, description and place of residence of the plaintiff was therefore 962 complied with and the relief which the plaintiff claimed was duly set out in the notice.
The only departure from the notice was that two persons served a notice under section 80 informing the Government that proceedings would be started, in default of compliance with the requisition, for violation of the rights of the Inamdars, and one person only out of the two instituted the suit.
That in our judgment is not a defect which brings the case within the terms of section 80".
On behalf of respondent No. 1 reference was made, to the two decisions of the Judicial Committee in Vellayan Chettiar & Ors.
vs Government of the Province of Madras and Anr.(1) and Government of the Province of Bombay vs Pestonji Ardeshir Wadia & Ors.(2) But the 'principle of these decisions has no bearing on the question presented for determination in the present case.
In Vellayan Chettiar 's case(1) a notice was given by one plaintiff stating the cause of action, his name, description and place of his residence and the relief which he claimed although the suit was instituted by him and another.
It was observed by the Judicial Committee: "The section according to its plain meaning requires that there should be in the language of the High Court of Madras 'identity of the person who issues the notice with the person who brings the suit ' : See Venkata Rangiah Appa Rao vs Secretary of State(3) and on appeal Venkata Rangiah Appa Rao vs Secretary of State (4).
To hold otherwise would be to admit an implication or exception for which there is no jurisdiction" Two persons had sued for a declaration that certain lands belonged to them, and for an order setting aside the decision of the Appellate Survey Officer in regard to those lands.
It was found that one alone out of the two persons had served the notice.
The relief claimed by the two persons was personal to them and the right thereto arose out of their title to the land claimed by them.
It was held by the Judicial Committee that without a proper notice under section 80 the suit could not be instituted for to hold otherwise would be to admit an, implication or exception for which there was no justification.
In the other case, in Pestonji Ardeshir Wadia 's case(2) two trustees of a trust served a notice in October, 1933 upon the Government of Bombay under section 80 intimating that the trustees intended to institute a suit against the Government on the cause of action and for the relief set out (1) A.I.R. 1947 P.C. 197.
(2) 76 I.A. 85.
(3) I.L.R. Mad 416.
(4) 963 therein.
One of the trustees died before the plaint was lodged in court, and two more trustees were appointed in the place of the deceased trustee.
Thereafter the two now trustees and the surviving trustee filed the suit out of which the appeal arose which was decided by the Judicial Committee.
No notice was served on the Government on behalf of the two new trustees.
The Judicial Committee accepted the view of the High Court that where there were three plaintiffs, the names and addresses of all of them must be given in the notice.
Their Lordships observed that : "the provisions of section 80 of the Code are imperative and should be strictly complied with before it can be said that a notice valid in law has been served on the Government.
In the present case it is not contended that any notice on behalf of plaintiffs 2 and 3 was served on the Government before the filing of the suit".
It is clear that the principle of these two decisions of the Judicial Committee has no application in the present case because the material facts are different.
We proceed to consider the next question arising in these appeals viz., whether the High Court was right in holding that the plaintiffs had established their title as raiyat sarkar with regard to 1/5th share in nazul plots Nos.
34/3, 33 and 171/1 mentioned in the Deputy Commissioner 's order dated 7th May, 1948 in Revenue Case No. 9/45 46.
It was argued on behalf of defendant No. 1 that there was no evidence to show that the plaintiffs were in possession of the land from 1909 to 1932, and the plaintiffs had not established their title by prescription for the statutory period of 60 years.
It was contended that the High Court had no justification for holding that the plaintiffs had established the title of "Raiyat Sarkar" and the finding of the High Court was not based upon any evidence.
In our opinion, the argument put forward on behalf of defendant No. 1 is wellfounded and must be accepted as correct.
In the settlement of the names of Amansingh and Thakurprasad were noted in the remarks column.
But the column regarding tenancy right is definitely blank.
The owner is shown in the Khasra as the State "Milkiat Sarkar".
In the settlement of 189091 Amansingh Narpatsingh is again shown in the remarks column of the khata.
But the column regarding any kind of tenancy right is again blank.
It is clear that in the settlements of 1860 and 1890 91 the ownership of the land is recorded as that of the Government.
The possession of the plaintiffs or of their ancestors could not be attributed to ownership or tenancy right of the property.
In the settlement of 1909 10, exhibit
P 3 there is no entry in the remarks column showing the possession of the ancestors of the plaintiffs.
It was said on behalf of the plaintiffs that no (1) 76 I.A. 85.
L11 Sup.
C.I./69 12 96 4 notice was given to them of the proceedings of the. settlement of 1909 10.
Even assuming that this allegation is correct, the entries of the khasra P 3 cannot be treated to be a nullity and of no effect.
In any event, it was open to the plaintiffs to adduce other reliable evidence to prove their possession between the years 1909 to 1932.
But the plaintiffs have failed to produce any such evidence.
ln the nazul settlement of 1922 23 the tank was given new plot numbers 33, 34, 35,36, 37 and 171 and its area was recorded as 5.24 acres.
In this settlement about 2 acres of land was found to be occupied by the Municipal Committee, Jabalpur.
The land so found to be occupied was recorded in the possession of the Municipal Committee, Jabalpur and the remaining land was again recorded as "Milkiat Sarkar".
There is no entry as regards the remaining land recording anybody 's possession in the.
remarks column.
Actually proclamations were made during this settlement and objections were invited as per exhibit
ID 14.
A date was fixed upto 31 8 1924 but no one came forward.
The proclamation clearly recited that the vacant sites which were not in possession of anybody were not recognised as belonging to any person.
It is impossible to believe that the plaintiffs or their ancestors were unaware of such a proclamation.
Had they been in possession they would not have failed to make a claim.
For the period after 1933 34 the plaintiffs produced account books to show that they exercised certain rights.
Certain receipts were also proved but they also relate to a period after 1939.
We have gone through the oral evidence produced by the plaintiffs and it appears to be unreliable.
The result is that for the period 1891 till 1932 there is no reliable oral or documentary evidence to prove that the plaintiffs or their ancestors had any possession over the disputed land.
On the contrary the disputed land i.e. Phoota Tal was always recognised as Milkiat Sarkar and the State Government was justified in holding that the order of the Deputy Commissioner dated 7th May, 1948 should be set aside.
In the course of the argument reference was made by Mr. Gupte to the following passage in the Central Provinces Settlement Instructions (Reprint of 1953) page 213 "In dealing with proposed method of the settlement of titles it will be convenient in order to remove all causes for misapprehension among residents, to lay emphasis on the policy of Government in making these settlements.
That policy was defined in the Chief Commissioner 's Resolution No. 502 B X dated the 19th October, 1917, in the Revenue & Scarcity Department, but its main principles will bear repetition.
As it is not the intention of Government in making the settlement to disturb long possession, but only to 965 obtain an accurate record of the lands which are its property and to secure its right to any land revenue to which it may be entitled, long possession even without clear proof of a definite grant from Government will be recognised as entitled the holder to possession.
In deciding what constitutes long possession in any individual town, regard will be had to the special circumstances of the place, and while this point will be dealt with more particularly in the Deputy Commissioner 's report, the following general principles will ordinarily be observed : (1) all occupants who are able to prove possession to any land prior to 1891 or such later date as may be fixed for each town, either by themselves or by a valid title from a previous holder, and all occupants who can prove a definite grant or lease from Government will be recorded as entitled to hold such land as against Government (paragraph 6 of the Resolution) On the basis of this passage it was argued that it was the duty of the settlement officer to treat the plaintiffs as having established their title because they were shown to be in possession in the settlement of the year 1890 91.
We are unable to accept this argument as correct.
The passage quoted above only applies to a case where the ownership of the land was unknown i.e. where possession is proved for a long time, but its original title could not be traced, and not to a case where the land is recorded as Government land.
For the reasons expressed, we hold that the suit brought by the plaintiffs being Civil Suit No. 10 A of 1954 should be dismissed.
Civil Appeal 386 of 1966 is accordingly dismissed and Civil Appeal 387 of 1966 is allowed with costs in favour of defendant No. 1 i.e. State of Madhya Pradesh.
There will be one hearing fee.
R.K.P.S. Civil Appeal 386/66 dismissed.
Civil Appeal 387/66 allowed.
[/INST]Manoharlal s/o Jai Jai Ram commenced an action in the Court of the Subordinate Judge, for valuer of timber supplied to the defendant.
The action was instituted in the name of 'Jai Jai Ram Manohar Lal ' which was the name in which the business was carried on.
The plaintiff signed and verified the plaint as 'Jai Jai Ram Manohar Lal, by the pen of Manohar lal. ' Later he applied to the Court for leave to amend the plaint.
In the application he averred that the business carried on under the name Jai Jai Ram Manohar Lal was a joint Hindu family business and the name was not an assumed or fictitious one as it contained his name and that of his father.
On these averments he prayed that he be allowed to describe him ' self in the cause title as Manohar Lal proprietor of Jai Jai Ram Manohar Lal and in paragraph 1 to state that he carried on the business in timber in the name of 'Jai Jai Ram Manohar Lal '.
The application was 'allowed by the trial Judge.
The defendant then filed a supplementary written statement raising two additional contentions : (1) that the plaintiff was not the sole owner of the business and that his other brothers were also the owners of the business; and (2) that the amendment took effect from the ' date on which it was made and if so, the suit was barred by limitation.
The trial court rejecting these contentions decreed the suit.
The High Court in appeal took the view that the action having been instituted in the name of a nonexisting person ', and Manohar Lal having failed to aver in the application for amendment that the action was instituted in the name of 'Jai Jai Ram Manohar Lal ' on account of a bona fide mistake or omission, the Subordinate Judge was incompetent to grant leave to amend the plaint.
The High Court further held that the amendment allowed by the trial Court took effect only from the date of amendment, and the action was barred by limitation.
Against the judgment of the High Court the plaintiff, by special leave, appealed to this Court.
HELD : (i) The order passed by the High Court could not be sustained.
Rules of procedure are, intended to, be a handmaid to the administration of justice.
A party cannot be refused relief merely because of same mistake, negligence, inadvertence or even infraction of the rules of procedure.
The Court always gives leave to amend the pleading of a party, unless it is satisfied that the party applying was acting mala fide , or that by his blunder he had caused injury to his opponent which may not be com pensated for by an order of costs.
However negligent or careless may have been the first omission and however late the proposed amendment, the amendment may be allowed if it can be made without injustice to the other side.
[25 C E] Purshottam Umedbhai & Co. V. M/S. Manilal and Sons, ; , explained and applied.
Amulakchand Mewaram & Ors.
vs Babulal Kanalal Taliwala, , applied.
23 In the present case the plaintiff was carrying on business as commission agent in the name of 'Jai Jai Ram Maryohar Lal '.
The plaintiff was competent to sue in his own name as manager of the Hindu undivided family to which the business belonged; he claimed to have filed the suit on behalf of the family in the business name.
The observations made by the High Court that the application for amendment of the plaint could not be granted, because there was no averment therein that the misdescription was 'On account of a bona fide mistake, and on that account the suit must fail, could not be accepted.
There is no rule that unless in an application for 'amendment of the plaint it is expressly averred that the error, omission or misdescription is due to a bona fide mistake the court has no power to grant leave to amend the plaint.
The power to grant amendment of the pleadings is intended to serve the ends of justice and is not governed by any such narrow or technical limitations.
[57 B D] (ii) Since the name in which the action was instituted was merely a misdescription of the original plaintiff, no question of limitation arose and the plaint must be deemed on amendment to have been instituted in the name of the real plaintiff on the date on which it was originally instituted.
[27 E] (iii)The defendant raised and persisted in a plea which had no merit even after the amendment was allowed by the trial court.
In the circumstances he must pay the costs in this Court and the High Court.
[27 F G]
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<s>[INST] Summarize the judgementivil Appeal No. 2047 of 1982.
690 From the Judgment and Order dated 16.3.
1982 of the Delhi High Court in Civil Rev. No. 147 of 1982.
W.A. Quadri and Kailash Mehta for the Appellant.
M.C. Dhingra for the Respondents.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J.
This is an appeal by special leave against the judgment and order dated the 16th March, 1982 of the High Court of Delhi in Civil Revision No. 147 of 1982 directing eviction of the premises in question under Section 14(1)(e) of the Delhi Rent Control Act on the ground of bonafide requirement of the landlord.
The special leave was sought for and obtained from this Court on the ground that Civil Appeal No. 1051/81 and special leave petition (civil) No. 2290/82 were pending at that time.
It appears that the said appeal has been disposed of by this Court in Ravi Dutt Sharma vs Ratan Lal Bhargava, ; where this Court held that Sections 14A, 14(e), 25A, 25B and 25C of the Delhi Rent Control Act are special provisions so far as the landlord and tenant are concerned and further in view of the non obstante clause in the section these provi sions override the existing law so far as the new procedure is concerned.
In that view of the matter we are of the opinion that the would have no application in cases covered by Sections 14A and 14(1)(e) of the Delhi Rent Control Act especially in view of the provisions which were added by the Amending Act of 1976.
This Court held that there is no difference either on principle or in law between section 14(1)(e) and 14A of the Rent Act even though these two provisions relate to eviction of tenants under different situations.
This Court further held that in view of the procedure in Chapter IIIA of the Rent Act, the Slum Act is rendered inapplicable to the extent of inconsistency and it is not, therefore, necessary for the landlord to obtain permission of the Competent Authority under Section 19(1)(a) of the Slum Act before instituting a suit for eviction and coming within Section 14(1)(e) or 14A of the Rent Act.
In the premises the appeal fails and is dismissed.
There will be no order as to costs.
691 The decree for eviction shall not be executed before 30.11.87 provided the appellant files an undertaking in the usual form within four weeks from today.
A.P.J. Appeal dismissed.
[/INST]The appellants, who had let out the premises in question to the respondent Riled a suit for eviction inter alia on the ground that the tenant had erected unauthorised struc tures of a permanent nature in violation of the provisions of cl.
(p) of section 108 of the and section 13(1)(b) of the Bombay Rents.
Hotel and Lodging House Rates Control Act, 1974 and was using the premises for unauthorised purposes.
The alleged permanent structures consisted of lofts and rooms which had been constructed by sinking pillars and stanchions into the flooring and the tenant admitted that these had been constructed after it had taken the premises from the landlord.
After discussing the evidence tendered in detail, including the deposition of the architect who had prepared the plan of the constructions in question and who had deposed that the constructions consist ed of permanent structures, the Judge of the Court of Small Causes held that the structures were of a permanent nature and ordered eviction of the tenant on the ground of perma nent construction.
The respondent 's appeal was dismissed by the Appellate Bench of the Court of Small Causes which, on a detailed reappraisal of the evidence on record, not only confirmed the decree for eviction on the ground of permanent construction but granted eviction on the ground of change of user as well.
The respondent went in appeal against the order of the appellate court.
The High Court, dealing with the matter under article 227 of the Constitution, reversed the concurrent findings of the courts below and allowed the respondent 's petition.
Allowing the appeal and restoring the order of the lower appellate court, 594 HELD: 1.
(a) Interference by the High Courts under article 227 of the Constitution must be within limits.
This question has been considered by this Court from time to time and principles laid down.
The power under article 227 is one of judicial superintendence and it cannot be exercised to upset the conclusions of facts, however erroneous these may be.
It is possible that another Court may be able to take a differ ent view of the matter by appreciating the evidence in a different manner, if it determinedly chooses to do so.
That will not be justice administered according to law to which courts are committed.
[605D E] (b) In exercise of jurisdiction under article 227 ' of the Constitution, the High Court can go into questions of facts or look into the evidence if justice so requires it.
But the High Court should decline to exercise that jurisdiction to look into the facts in the absence of clear cut reasons where the question depends upon the appreciation of evi dence.
The High Court should not interfere with a finding within the jurisdiction of the inferior tribunal or court except where the finding is perverse in law, in the sense that no reasonable person properly instructed in law could have come to such a finding, or there is misdirection in law, or view of fact has been taken in the teeth of prepon derance of evidence, or the finding is not based on any material evidence or it resulted in manifest injustice.
Except to the extent indicated above the High Court has no jurisdiction.
[606B D] Satyanarayan Laxminarayan Hegde & Ors.
vs Mallikarjun Bhavanappa Tirumale, [1960] 1 S.C.R. 890; India Pipe Fitting Co. vs Fakruddin M.A. Baker & Anr., ; ; Ganpat Ladha vs Shashikant Vishnu Shinde, [1978] 3 S.C.R. 198; Mrs. Labhkuwar Bhagwani Shah & Ors.
vs Janardan Mahadeo Kalan & Anr., and Chandavarkar Sita Ratna Rao vs Ashalata section Guram, ; ; re ferred to. 2.
No hard and fast rule can be laid down for determin ing the question whether a particular structure put up by the tenant is a permanent structure for the purpose of cl.
(p) of section 108 of the as it is dependent on the facts of each case.
One must look to the nature of the structure, the purpose for which it was in tended and take a whole perspective as to how it affects the enjoyment, the durability of the building, etc.
and other relevant factors and come to a conclusion.
[601D E; 602D E] Surya Properties Private Ltd. & Ors.
vs Bimalendu Nath Sarkar & Ors., and M/s Surya Proper ties Private Ltd. 595 vs Bimalendu Nath Sarkar, A.I.R. 1965 Calcutta 408, ap proved.
Khureshi Ibrahim Ahmed vs Ahmed Haji Khanmahomad, A.I.R. 1965 Gujarat 152 and Ramji Virji & Ors.
vs Kadarbhai Esufa li, A.I.R.1973 Gujarat 110, referred to.
In this case, on an analysis of the evidence the trial court as well as the appellate court had held that the structures were permanent.
All the relevant factors had been borne in mind by the learned trial Judge as well as the Appellate Bench of the Court of Small Causes.
The view taken by them was a possible view.
A different view might have been taken but that is no ground which would justify the High Court to interfere with the findings.
[600F]
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<s>[INST] Summarize the judgementCivil Appeal No. 424 1971.
Appeal from the Judgment and Order dated the 22 2 1971 of Madras High Court in W.P. No. 3125 of 1970.
M. Natesan, and (Mrs).
section Gopalakrishanan, for the Appel lant.
K.S. Ramamurthi, A. T.M. Sampath, M.M.L. Srivastava and E.C.Agarwala, for Respondent No. 1.
The Judgment of the Court was delivered by KRISHNA IYER, J.
This appeal, without any merit, deserves to be dismissed without much ado.
The few facts of the case are that the appellant and the respondent, both operators Of stage carriages, applied for a permit on an 86 Km.
route.
Marks were awarded to both under the relevant Motor Vehicles Rules to settle their compara tive merit.
The appellant secured 8.79 marks and the re spondent 12.08.
The latter thus secured an easy arithmeti cal victory over the former and the sense of the scheme would have ordinarily led to the award of the permit to the respondent.
However, the Road Transport Authority preferred the candidate with the lesser marks on the compassionate ground that the rival with the larger marks had already got a permit a couple of months before, on an overlapping route of 53 Km.
On appeal, the Appellate Tribunal set aside this award and granted 10 1546 SCI/76 408 the permit to the one who had more merit.
This has been affirmed throughout, repelling the challenge by writ peti tion.
The aggrieved appellant contends that his permit should not have been set aside, the ground being that the respondent had got an earlier permit on a part of the route.
We are not persuaded about this ground being good.
Permits cannot be equated with distribution of patron age.
We must remember that public interest is at stake when public transport services are operated.
The scheme of the statute, viz., the is that he who can serve the travelling public best, is to be chosen as the permit holder.
Considerations of grace, charity and compas sion at the expense of public interest are an act of unfairness to the Act.
The conclusion, therefore is that the appellant 's claim was rightly rejected and the respond ent 's award was rightly made.
We dismiss the appeal but in the circumstances without costs.
P.H.P. Appeal dis missed.
[/INST]The appellant and the respondent applied for a permit of stage carriages.
The respondent secured higher marks than the appellant.
The Road Transport Authority preferred the appellant on the compassionate ground that the respondent already had another permit on a route which was partly over lapping over the route in question.
On an appeal the Appellate Tribunal set aside the order of the Transport Authority and granted the permit to the respondent.
Dismissing the appeal, HELD: Permits cannot be equated with distribution of patronage.
Public interest is at stake when public trans port services are operated.
The scheme of the Motor Vehi cles Act and the Rules is that he who can serve the travel ling public best is to be chosen as the permit holder.
Considerations of grace, charity and compassion at the expense of public interest are an act of unfairness to the Act.
[408B C]
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<s>[INST] Summarize the judgementAppeal No. 182 of 1952.
Appeal by special leave from the Judgment and Order dated 2nd August, 1951, of the High Court of Judicature at Nagpur in Miscellaneous Petition No. 187 of 1950 under articles 226 and 227 of the Constitution.
N. C. Chatterjee (R. M. Hajarnavis, with him) for the appellant.
R. Ganapathy Iyer for the State of Madhya Pradesh.
February 23.
The Judgment of the Court was delivered by DAS J.
On the 28th November, 1947, the appellant Hoosein Kasam Dada (India) Ltd., (hereinafter referred to as the assessee) submited to the Sales Tax Officer, Akola, a Sales Tax return in Form IV for the first quarter.
Notice in Form XI calling upon the assessee to produce evidence in support of the said return having been issued by the Sales Tax Officer, the assessee produced his account books.
Not being satisfied by the inspection of the account books as to the correctness of the return and being of opinion that the taxable turnover exceeded rupees two lacs the Sales Tax Officer submitted the case to the Assistant Commissioner of Sales Tax, Amravati, for assessment, 989 On the 25th January, 1949, the Assistant Commissioner issued a fresh notice in Form XI under section 11 and fixed the case for disposal on the 5th February, 1949.
After various adjournments and proceedings to which it is not necessary to refer, the hearing commenced on the 9th June, 1949, when an agent of the assessee appeared with books of account of the Akola Branch.
Eventually after various further proceedings the Assistant Commissioner on the 8th April, 1950, assessed the assessee, to the best of his judgment, in the sum of Rs. 58,657140 and a copy of the order in Form XIV was sent to the assessee.
Being aggrieved by the order of assessment the assessee on the 10th May, 1950, preferred an appeal to the Sales Tax Commissioner, Madhya Pradesh, under section 22(l) of the Central Provinces and Berar Sales Tax Act, 1947 (hereinafter referred to as the Act).
The appeal not having been accompanied by any proof of the payment of the tax in respect of which the appeal had been preferred, the authorities, after giving the assessee several adjournments, declined to admit the appeal.
The assessee moved the Board of Revenue, Madhya Pradesh, by a revision application against the order of the Sales Tax Commissioner contending that his appeal was not governed by the proviso to section 22(l) of the Act as amended on the 25th November, 1949, by the Central Provinces and Berar Sales Tax (Second Amendment) Act (Act LVII of 1949) but was governed by the proviso to section 22(l) of the Act as it stood when the assessment proceedings were started, i.e., before the said amendment.
The Board of Revenue took the view that as the order of assessment was made after the amendment of the section and the appeal was filed thereafter such appeal must be governed by the provisions of law as it existed at the time the appeal was actually filed and that the law as it existed before the filing of the appeal could not apply to the case.
The assessee thereupon moved the High Court of Madhya Pradesh under articles 226 and 227 of the Constitution of India praying, amongst other things, for a writ of mandamus or an appropriate 128 990 order directing the Sales Tax Commissioner to admit and hear the appeal without demanding payment of the amount of sales tax assessed by the Assistant Commissioner of Sales Tax.
The High Court dismissed the application on the 2nd August, 1951.
The assessee applied to the High Court for leave to appeal to this Court which was also dismissed by the High Court on the 14th March, 1952. 'The assessee thereupon applied to this Court for special leave to appeal on the 12th May, 1952.
This Court granted special leave to appeal, but such leave was, by the order granting such leave, limited to the question of the effect of the amendment to section 22 of the Act on the petitioner 's appeal to the Sales Tax Commissioner, Madhya Pradesh.
This Court took the view that the other questions sought to be raised by the assessee would have to be decided by the Sales Tax Commissioner in case the appeal succeeded.
The appeal has now come up for final disposal before us and in this appeal we are concerned only with the limited question of the effect of the amendment to section 22 of the Act.
Section 22(l) of the Act was originally expressed in the following terms : "22.
(1) Any dealer aggrieved by an order under this Act may, in the prescribed manner, appeal to the prescribed authority against the order: Provided that no appeal against an order of assessment, with or without penalty, shall be entertained by the said authority unless it is satisfied that such amount of tax or penalty or both as the appellant may admit to be due from him, has been paid." The relevant portion of section 22 as amended runs as follows: "22.
(1) Any dealer aggrieved by an order under this Act may, in the prescribed manner, appeal to the prescribed authority against the order: Provided that no appeal against an order of assessment, with or without penalty shall be admitted by the said authority unless such appeal is accompanied by a satisfactory proof of the payment of the tax, with 991 penalty, if any, in respect of which the appeal has been preferred.
" It is clear from the language used in the proviso to section 22 (1) as it stood prior to the amendment that an aggrieved assessee had only to pay such amount of tax as he might admit to be due from him, whereas under the proviso to section 22(l) as amended the appeal has to be accompanied by satisfactory proof of payment of the tax in respect of which the appeal had been preferred.
The contention of the present assessee is that as the amendment has not been made retrospective its right of appeal under the original section 22(l) remains unaffected and that accordingly as it does not admit anything to be due it was not liable to deposit any sum along with its appeal and the Commissioner was bound to admit its appeal and had no jurisdiction or power to reject it on the ground that it had not been accompanied by any proof of payment of the tax assessed against the appellant as required under the amended proviso and the Board of Revenue and the High Court were in error in not directing the Commissioner to admit the appeal.
That the amendment has placed a substantial restriction on the assessee 's right of appeal cannot be disputed, for the amended section requires the payment of the entire assessed amount as a condition precedent to the admission of its appeal.
The question is whether the imposition of such a restriction by amendment of the section can affect the assessee 's right of appeal from a decision in proceedings which commenced prior to such amendment and which right of appeal was free from such restriction under the section asit stood at the time of the commencement of the proceedings.
The question was answered in the negative by the Judicial Committee in Colonial.
Sugar Refining Co., Ltd. vs Irving(1).
In that case the Collector of Customs acting under an Act called the Excise Tariff Act, 1902, required the appellants to pay pound 20,100 excise duty on 6,700 tons of sugar.
The appellants disputed the claim.
So they deposited (1) 992 the money with the Collector and then brought the action by issuing a writ on the 25th October, 1902.
A special case having been stated for the opinion of the Supreme Court, that Court on the 4th September, 1903, gave judgment for the Collector.
In the meantime the Judiciary Act, 1903, was passed and received Royal assent on the 25th August, 1903, that is to say about 10 days before the judgment was delivered.
By section 39(2) of that Act the right of appeal from the Supreme Court to the Privy Council given by the; Order in Council of 1860 was taken away and the only appeal therefrom was directed to lie to the High Court of Australia.
The appellants having with the leave of the Supreme Court filed an appeal to the Privy Council the respondents filed a petition taking the preliminary point that no appeal lay to the Privy Council and praying that the appeal be dismissed.
in dismissing that application Lord Macnaghten who delivered the judgment of the Privy Council said: "As regards the general principles applicable to the case there was no controversy.
On the one hand, it was not disputed that if the matter in question be a matter of procedure only, the petition is well founded.
On the other hand, if it be more than a matter of procedure, if it touches a right in existence at the passing of the Act, it was conceded that, in accordance with a long line of authorities extending from the time of Lord Coke to the present day, the appellants would be entitled to succeed.
The Judicary Act is not retrospective by express enactment or by necessary intendment.
And therefore the only question is, was the appeal to His Majesty in Council a right vested in the appellants at the date of the passing of the Act, or was it a mere matter of procedure ? It seems to their Lordships that the question does not admit of doubt.
To deprive a suitor in a pending action of an appeal to a superior tribunal which belonged to him as of right is a very different thing from regulating procedure.
In princi ple, their Lordships see no difference between abolishing an appeal altogether and transferring the appeal to a new tribunal.
In either case there is an interference 993 with existing rights contrary to the well known general principle that statutes are not to be held to act retrospectively unless a clear intention to that effect is manifested.
" The principle of the above decision was applied by Jenkins C.J. in Nana bin Aba vs Sheku bin Andu (1) and by the Privy Council itself in Delhi Cloth and General Mills Co. Ltd. vs Income tax Commissioner, Delhi( ').
A Full Bench of the Lahore High Court adopted it in Kirpa Singh vs Rasaldar Ajaipal Singh (3).
It was there regarded as settled that the right of appeal was not a mere matter of procedure but was a vested right which inhered in a party from the com mencement of the action in the Court of first instance and such right could not be taken away except by an express provision or by necessary implication.
In Sardar Ali vs Dalimuddin (4), the suit out of which the appeal arose was filed in the Munsiff 's Court at Alipore on the 7th October, 1920.
The suit having been dismissed on the 17th July, 1924, the plaintiffs appealed to the Court of the District Judge but the appeal was dismissed.
The plaintiffs then preferred a second appeal to the High Court on the 4th October, 1926.
That second appeal was heard by a Single Judge and was dismissed on the 4th April, 1928.
In the meantime Clause 15 of the Letters Patent was amended on the 14th January 1928 so as to provide that no further appeal should lie from the decision of a Single Judge sitting in second appeal unless the Judge certified that the case was a fit one for appeal.
In this case the learned Judge who dismissed the second appeal on the 4th April, 1928, declined to give any certificate of fitness.
The plaintiffs on the 30th April, 1928, filed an appeal on the strength of clause 15 of the Letters Patent as it stood before the amendment.
The contention of the appellants was that the amended clause could not be applied to that appeal, for to do so would be to apply it retrospectively and to impair and indeed to defeat a substantive right which was in existence (1) Bom.
(3) A. I. R 1928 Lah.
(2) (1927) L.R. 54 I.A. Lah.
(4) Cal.
994 prior to the date of the amendment.
The apppllants claimed that on the 7th October, 1920, when the suit was filed they had vested in them by the existing law a substantive right to a Letters Patent appeal from the decision of a Single Judge and that an intention to interfere with it, to clog it with a new condition or to impair or imperil it could not be presumed unless it was clearly manifested by express words or necessary intendment.
In giving effect to the contentions of the appellants Rankin C.J. observed at p. 518: Now, the reasoning of the Judicial Committee in The Colonial Sugar Refining Company 's case is a conclusive authority to show that rights of appeal are not matters of procedure, and that the right to enter the superior court is for the present purpose deemed to arise to a litigant before any decision has been given by the inferior court.
If the latter proposition be accepted, I can see no intermediate point at which to resist the conclusion that the right arises at the date of the suit.
" It was held that the new clause could not be given retrospective effect and accordingly the date of pre sentation of the second appeal to the High Court was not the date which determined the applicability of the amended clause of the Letters Patent and that the date of the institution of the suit was the determining factor.
As against the last mentioned decision of the Calcutta High Court Sri Ganapathy Aiyar, appearing for the respondent, refers us to the decision of a Bench of the Bombay High Court in the case of Badruddin Abdul Rahim vs Sitaram Vinayak Apte (1), where it was held that the amendment of clause 15 of the Letters Patent operated retrospectively.
That case followed an earlier decision of the same High Court in Fram Bomanji vs Hormasji Barjorji (2).
The decision in the old case proceeded upon two grounds, namely, (1) that the question was one of procedure and (2) that sec (1) Bom.
753; A.I.R. (1928) Bom.
(2) (1866) Bom.
H.C. (O.C.J.) 49. 995 tion 2 of the New Letters Patent of 1865 gave retrospective operation to the Letters Patent by making it applicable to all pending suits.
In so far as the first ground is concerned it clearly runs counter to the decision of the Privy Council in Colonial Sugar Refining Co. Ltd. vs Irving (supra) and must be taken as overruled as Fawcett J. himself acknowledged at page 756.
As regards the second ground it is inapplicable to the case before us and it is not necessary to express any opinion as to the. soundness and validity of that ground.
It may be mentioned here that in Shaikh Hasan Abdul Karim vs King Emperor (1) another Bench of the same High Court expressly dissented from the decision in Badruddin Abdul Rahim vs Sitaram Vinayak Apte (supra).
The principle laid down in the Colonial Sugar Refining Co. 's case (supra) was followed by a Special Bench of Madras in In re Vasudeva Samiar (2).
A Full Bench of the Allahabad High Court in Ram Singha vs Shankar Dayal (3) fell into line and held that the earlier decision on this point of that Court in Zamin Ali Khan vs Genda (4) stood overruled by the Privy Council decision in the Colonial Sugar Refining Co. 's case.
A Full Bench of Nagpur High Court in Radhakisan vs Shridar (5 ) has also taken the same view.
The Punjab High Court has also adopted the same line in Gordhan Das vs The Governor General in Council (1).
The case of Nagendra Nath Bose vs Mon Mohan Singha Roy (7) is indeed very much to the point.
In that case the plaintiffs instituted a suit for rent valued at Rs. 1,30615 and obtained a decree.
In execution of that decree the defaulting tenure was sold on the 20th November, 1928, for Rs. 1,600.
On the 19th December, 1928, an application was made, under Order XXI, rule 90 of the Code of Civil Procedure, by the present petitioner, who was one of the judgment debtors, (1) I.L.R (2) A I.R. ; (3) All. 965; A.I.R. (1928) All.
(4) All. 375.
(5) A.I.R. (1950) Nag.
(6) A.I.R, (1952) Punjab 103 (F.B.), (7) 996 for setting aside the sale.
application having been dismissed for default of his appearance the petitioner preferred an appeal to the District Judge of Hoogly who refused to admit the appeal on the ground that the amount recoverable in execution of the decree had not been deposited as required by the proviso to section 174, clause (c), of the Bengal Tenancy Act as amended by an amending Act in 1928.
The contention of the petitioner was that the amended provision which came into force on the 21st February, 1929, could not affect the right of appeal from a decision on an application made on the 19th December, 1928, for setting aside the sale.
Mitter J. said at page 1011: " We think the contention of the petitioner is wellfounded and must prevail.
That a right of appeal is a substantive right cannot now be seriously disputed.
It is not a mere matter of procedure.
Prior to the amendment of 1928 there was an appeal against an order refusing to set aside a sale (for that is the effect also where the application to set aside the sale is dismissed for default) under the provisions of Order 43, rule (1), of the Code of Civil Procedure.
That right was unhampered by any restriction of the kind now imposed by section 174(5), Proviso.
The Court was bound to admit the appeal whether appellant deposited the amount recoverable in execution of the decree or not.
By requiring such deposit as a condition precedent to the admission of the appeal, a new restriction has been put on the right of appeal, the, admission of which is now hedged in with a condition.
There can be no doubt that the right of appeal has been affected by the new provision and in the absence of an express enactment this amendment cannot apply to proceedings pending at the date when the new amendment came into force.
It is true that the appeal was filed after the Act came into force, but that circumstance is immaterial for the date to be looked into for this purpose is the date of the original proceeding which eventually culminated in the appeal." 997 The, above decisions quite firmly establish and our decisions in Janardan Reddy vs The State (1) and in Ganpat Rai vs Agarwal Chamber of Commerce Ltd. (2) uphold the principle that a right of appeal is not merely a matter of procedure.
It is matter of substantive right.
This right of appeal from the decision of an .inferior tribunal to a superior tribunal becomes vested in a party when proceedings are first initiated in, and before a decision is given by, the inferior court.
In the language of Jenkins C.J. in Nana bin Aba vs Shaik bin Andu (supra) to disturb an existing right of appeal is not a mere alteration in procedure.
Such a vested right cannot be taken away except by express enactment or necessary intendment.
An [intention to interfere with or to impair or imperil such a vested right cannot be presumed unless such intention be clearly manifested by express words or necessary implication.
Sri Ganapathy Aiyar urges that the language of section 22(1) as amended clearly makes the section ret.
rospective.
The new proviso, it is pointed out, peremptorily requires the authority not to admit the appeal unless it be accompanied by a satisfactory proof of the payment of the tax in respect of which the appeal is preferred and this duty the authority must discharge at the time the appeal is actually preferred before him.
The argument is that after the amendment the authority has no option in the matter and he has no jurisdiction to admit any appeal unless the assessed tax be deposited.
It follows, therefore, by necessary implication, according to the learned Advocate, that the amended provision applies to an appeal from an assessment order made before the date of amendment as well as to an appeal from an order made after that date.
A similar argument was urged before the Calcutta Special Bench in Sardar Ali vs Dalimuddin (supra), namely, that after the amendment the court had no authority to entertain an appeal without a certificate from the Single Judge.
(1) (2) 129 998 Rankin C.J. repelled this argument with the remark at page 520: " Unless the contrary can be shown, the provision which takes away jurisdiction is itself subject to the implied saving of the litigants ' right." In our view the above observation is apposite and applies to the case before us.
The true implication of the above observation as of the decisions in the other cases referred to above is that the pre existing right of appeal is not destroyed by the amendment if the amendment is not made retrospective by express words or necessary intendment.
The fact that the pre existing right of appeal continues to exist must, in its turn, necessarily imply that the old law which created that right of appeal must also exist to support the continuation of that right.
As the old law continues to exist for the purpose of supporting the pre existing right of appeal that old law must govern the exercise and enforcement of that right of appeal and there can then be no question of the amended provision preventing the exercise of that right.
The argument that the authority has no option or jurisdiction to admit the appeal unless it be accompanied by the deposit of the assessed tax as required by the amended proviso to section 22(1) of the Act overlooks the fact of existence of the old law for the purpose of supporting the pre existing right and really amounts to begging the question.
The new proviso is wholly inapplicable in such a situation and the jurisdiction of the authority has to be exercised under the old law which so continues to exist.
The argument of Sri Ganapathy lyer on this point, therefore, cannot be accepted.
The learned Advocate urges that the requirment as to the deposit of the amount of the assessed costs does not affect the right of appeal itself which still remains intact, but only introduces a new matter of procedure.
He contends that this case is quite different from the case of Sardar Ali vs Dalmuddin (supra), for in this case it is entirely in the power of the appellant to deposit the tax if he chooses to do so whereas it was not 999 within the power of the appellant in that case to secure a certificate from the learned Single Judge who disposed of the second appeal.
In the first place the onerous condition may in a given case prevent the exercise of the right of appeal, for the assessee may not be in a position to find the necessary money in time.
Further this argument cannot prevail in view of the decision of the Calcutta High Court in Nagendra Nath Bose vs Mon Mohan Singha (supra).
No cogent argument has been adduced before us to show that that decision is not correct.
There can be no doubt that the new requirement "touches" the substantive right of appeal vested in the appellant.
Nor can it be overlooked that such a requirement is calculated to interfere with or fetter, if not to impair or imperil, the substantive right.
The right that the amended section gives is certainly less than the right which was available before.
A provision which is calculated to deprive the appellant of the unfettered right of appeal cannot be regarded as a mere alteration in procedure.
Indeed the new requirement cannot be said merely to regulate the exercise of the appellant 's pre existing right but in truth whittles down the right itself and cannot be regarded as a mere rule of procedure.
Finally, Sri Ganapathy lyer faintly urges that until actual assessment there can be no 'lis ' and, therefore, no right of appeal can accrue before that event.
There are two answers to this plea.
Whenever there is a proposition by one party and an opposition to that proposition by another a 'lis ' arises.
It may be conceded, though not deciding it, that when the assessee files his return a 'lis ' may not immediately arise, for under section 11 (1) the authority may accept the return as correct and complete.
But if the authority is not satisfied as to the correctness of the return and calls for evidence, surely a controversy arises involving a proposition by the assessee and an opposition by the State.
The circumstance that the authority who raises the dispute is himself the judge can make no difference, for the authority raises the dispute in the interest of the State and in so acting only represents the State.
It 1000 will appear from the dates given above that in this case the 'lis ' in the sense explained above arose before the date of amendment of the section.
Further, even if the 'lis ' is to be taken as arising only on the date of assessment, there was a possibility of such a 'lis ' arising as soon as proceedings started with the filing of the return or, at any rate, when the authority called for evidence and started the hearing and the right of appeal must be taken to have been in existence even at those dates.
For the purposes of the accrual of the right of appeal the critical and relevant date is the date of initiation of the proceedings and not the decision itself.
For all the reasons given above we are of the opinion that the appellant 's appeal should not have been rejected on the ground that it was not accompanied by satisfactory proof of the payment of the assessed tax.
As the appellant did not admit that any amount was due by it, it was under the section as it stood previously entitled to file its appeal without depositing any sum of money.
We, therefore, allow this appeal and direct that the appeal be admitted by the Commissioner and be decided in accordance with law.
The appellant is entitled to the costs of this appeal and we order accordingly.
Appeal allowed.
Agent for appellant: Rajinder Narain.
Agent for respondent: G. H. Rajadhyaksha.
[/INST]The right of appeal is a matter of substantive right and not merely a matter of procedure, and this right becomes vested in a party when the proceedings are first initiated in, and before a decision is given by, the inferior Court and such a right cannot be taken away except by express enactment or necessary intendment.
Section 22(l.) of the Central Provinces and Berar Sales Tax Act, 1947, provided that no appeal against an order of assessment should be entertained by the prescribed authority unless it was satisfied that such amount of tax as the appellant might admit to be due from him, had been paid.
This Act was amended on the 25th November, 1949, and section 22(l) as amended provided that no appeal should ])a admitted by the said authority unless such appeal was accompanied by satisfactory proof of the payment of the tax in respect of which the appeal had been preferred.
On the 28th of November, 1947, the appellant submitted a return to the Sales Tax Officer, who, finding that the turnover exceeded 2 lacs, submitted the case to the Assistant Commissioner for disposal and the latter made an assessment on the 8th April, 1950.
The appellant preferred an appeal on the 10th May, 1950, without depositing the amount of tax in respect of which he had appealed.
The Board of Revenue was of opinion that section 22(l.) as amended applied to the case as the assessment was made, and the appeal was preferred, after the amendment came into force, ' and rejected the appeal.
Held, (i) that the appellant had a vested right to appeal when the proceedings were initiated, i.e., in 1947, and his right to appeal was governed by the law as it existed on that date ; (ii) that the amendment of 1950 cannot be regarded as a mere alteration in procedure or an alteration regulating the exercise of the right of appeal, but whittled down the right itself, and it had no retrospective effect as the Amendment Act of 1950 did not expressly or by necessary intendment give it retrospective effect, and the 988 appeal could not therefore be rejected for non payment of the tax in respect of which the appeal was preferred.
Colonial Sugar Refining Co. Ltd. vs Irving , Nanabin Aba vs Sheku bin Andu (I.L.R. , Delhi Cloth and General Mills Co. Ltd. vs Income tax Commissioner, Delhi (54 I.A. 421), Kirpa Singh vs Rasaldar Ajaipal Singh (A.I.R. 1928 Lab. 627), Sardar Ali vs Dalimuddin (I.L.R. applied.
Badraddin Abdul Rahim vs Sitaram Vinayak Apte (I.L.R. disapproved.
In re Vasudeva Samiar (A.I.R. 1929 Mad. 381), Ram Singha vs Sankar Dayal (I.L.R. 50 All. 965), Radhakisan vs Sri Dhar (A.I.R. , Gordhan Das vs Governor General in Council (A.I.R. 1950 Punj. 103) and Nagendra Nath Bose vs Monmohan referred to.
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<s>[INST] Summarize the judgementAppeal No. 22 of 1960.
Appeal by special leave from the judgment and order dated March 19, 1958, of the Allahabad High Court in F. A. No. 62 of 1954.
section N. Andley, Rameshwar Nath and P. L. Vohra, for the appellant.
G. section Pathak, section K. Kapur, B. N. Kirpal and Ganpat Rai, for the respondent.
April 27.
The Judgment of the Court was delivered by section K. DAs, J.
This is an appeal by special leave granted by this Court on December 8, 1958.
On July 19, 1950, Satya Deo Gupta, respondent before us, made an application under a. 14 of the (Act V of 1940) (hereinafter referred to as the Act) for registration of the trade name of a biochemical medicinal preparation, commonly known as 'Laksbmandhara ', in Class 5 of the Fourth Schedule to the Trade 486 Marks Rules, 1942.
The application was made by the respondent as the sole proprietor of Rup Bilas Company situate, at Dhankutti in Kanpur.
The averments made in the application were that the said medicinal preparation had been in use by the name of "Lakshmandhara ' since 1923 and was sold throughout the length and breadth of India as also in some foreign markets; the mark or name 'Lakshmandhara ' was said to be distinctive to the article, and it was stated that the approximate annual turnover was Rs. 40,000/ .
Notice of the application was given by the Registrar of Trade Marks, Bombay, and the Amrit dhara Pharmacy, a limited liability company and appellant before us, filed an application in opposition.
In this application the appellant stated that the word 'Amritdhara ' was already registered as a trade name for the medicinal preparation of the appellant, and that medicinal preparation was introduced in the market so far back as in the year 1901; on account of its great popularity many people advertised similar medicines with slight variations of name to pass off their goods as 'Amritdhara '.
It was averred that the composite word Lakahmandhara ' was used to denote the same medicine as Amrit, dhara '; and the single word dhara , it was stated, was first used in conjunction with 'Amritdhara ' to denote the medicine of the appellant and the medicine 'Lakahmandhara ' being of the same nature and to quality could be easily passed off as 'Amritdhara ' to the ultimate purchaser.
The appellant contended that as 'Amritdhara ' was already registered and 'Lakshmandhara ' being a similar name was likely to receive the public, registration should be refused.
On behalf of the respondent a counter affidavit was made in which it was stated that "Amritdhara ' and Lakshinandhara ' were two distinctly different names and no one could pass off one for the other.
487 It was further stated that during the long period of introduction and sale of Lakshmandhara ' since 1923, no objection was ever raised from any quarter, from the appellant or anybody else, to the use of the name 'Lakshmandhara '.
It was denied by the respondent that the composite word 'Lakshmandhara ' was likely to deceive the public or could by any stretch of imagination be taken or mistaken for 'Amritdhara '.
The respondent further alleged that the single word 'dhara ' had no particular significance in relation to the medicine, nor did that word mean or convey any special or exclusive meaning or effect in relation to the medicine.
It was also stated that apart from the difference in name, the phial, label and packing of 'Lakshmandhara ' had exclusive designs of their own and were not likely to be confused with 'any other medicine of similar nature, least of all with 'Amritdhara ' whose packing was distinctly different in colour, design and layout.
The Registrar of Trade Marks dealt with the application and the opposition thereto by his order dated September 10, 1953.
It appears that apart from the affidavits filed, no other evidence was led on behalf of either party; but certified copies of certain decisions in earlier cases (to which the respondent was not, however, a party) given in favour of the appellant in support of its claim of infringement of its registered trade mark 'Amritdhara ' were filed.
A list of such cases has been printed as annexure 'A '.
These cases showed that a number of medicines with the word 'Amrit ' or 'dhara ' as part of their names had been introduced in the market since 1947; and the appellant 'successfully took action against them for infringement of its trade mark.
Even in the Trade Marks Registry the appellant successfully opposed the introduction of names which contained the word 'dhara ' as part of the,trade name.
A question has 488 been raised before us whether the Registrar of Trade Marks was justified in taking into consideration the decisions in those cases.
To that question we shall advert later.
The Registrar found that in 1901 Pandit Thakur Datta Sharma commenced to do business at Lahore in a particular ayurvedic medicine which was meant for alleviation for of headaches, diarrohea, constipation and other complaints.
This medicine was first sold under the mark 'Amrit Ki Dhara ', but in 1903 the name was changed to "Amritdhara ', Pandit Thakur Datta Sharma formed a limited liability company in 1942 and the name 'Amritdhara ' became a well known popular name for the medicine.
The sale of the medicine went up to about Re. 4 lacs a year.
The business was done in Lahore but when partition came in 1947, the appellant established its business in Dehradun.
The Registrar expressed the view that if the matter had rested on section 8 and section 10(1) of the Act, he world have no hesitation in allowing the opposition and dismissing the application.
This could only mean that the Registrar was of the view that the name 'Lakshmandhara ' so nearly resembled the trade mark 'Amritdhara ' that it was likely to deceive the public or cause confusion to the trade.
We are saying this because the High Court through that the Registrar did not express his own opinion whether the name 'Lakshmandhara ' was likely to cause deception to the public or confusion to the ' trade.
The respondent, however, relied also on two other circumstances, viz. (a) honest concurrent user of the name 'Lakshmandhara ' since 1923, and (b) acquiescence on the part of the appellant in the user of the name Lakshmandhara '.
The respondent contended that these two circumstances brought the case With in the meaning of special circumstances ' in A. 10(2) of the Act, which permitted the registration by more than one Proprietor of trade marks which are identical or 489 nearly resemble each other, subject to such condition and limitations, if any, as the Registrar might think fit to impose.
On the point of honest concurrent user the Registrar found in favour of the appellant.
As to acquiescence he, however, found in favour of the respondent and expressed his finding in these words.
"In the case before me it is not disputed that the applicant commenced his user in a small way in 1923 and it may even be said that up to about 1942 the applicant 's user was insignificant.
In paragraph 12 of the appli cant 's affidavit dated the 30th March, 1953 he has given details of advertisements in directories, pamphlets, newspapers etc.
in which both the applicant 's and the opponents ' marks were advertised.
The facts given in the affidavit go to show that from 1938 right up to the date of the applications by the applicant he has been advertising through mediums which were common to both the applicant and the opponents.
Here we have a case in which Pandit Thakur Datta Sharma states that he had no notice of the applicant 's mark.
He has, however, admitted that he had about 12 persons in his factory which constituted the clerical staff and amongst them were persons who were in charge of advertising the opponents mark.
It seems to me that the opponents and their agents were well aware of the advertisements by the applicant and did not raise any protest till the applicant 's mark was advertised in the Trade Mark Journal.
In other words the opponents stood by and, allowed the applicant to develop his business and, as I have shown, from small beginning he began to sell these medicines to the extent of about Rs. 43,000/ in 1949.
In my opinion, this is 490 acquiescence which would come under, the phrase 'or other special circumstances ' in section 10(2) of the and, that appears to me to be fatal to the case of the opponents.
" Before the Registrar it was admitted on behalf of the respondent that his goods were sold mainly in, Uttar Pradesh and there were, at the most, only sporadic sales in other States.
Taking that circumstance into consideration the Registrar passed an order allowing registration of 'Lakshmandhara ' for sale in the State of Uttar Pradesh only.
From the decision of the Registrar two appeals were referred to the High Court of Judicature at Allahabad under section 76 of the Act: one appeal Was referred by the respondent and ' the other by the appellant.
The respondent complained of the registration being limited to Uttar Pradesh only and the appellant pleaded that registration should: have been refused altogether, The learned Judges of the High Court held that the words 'Amrit ' and 'dhara ' were common, words in the Hindi language and the combined word 'Amritdhara ' meant current of nectar ' or the flow of nectar '; the two words 'Lakshman ' and 'dhara 'were also well known common words and combined, together they meant "current or flow of Lakshman '.
The learned Judges, then said: "There is no possibility of any Indian confusing the two ideas.
Even phonetical differences are wide enough not to confuse anybody.
The claim of the Amritdhara pharmacy that both the words Amrit and dhara ' have become so associated with their goods that the use of each part separately or in any combination is ' likely to mislead is an, untenable claim.
The whole phrase 'Amritdhara ' had been registered and the Monopoly ' has to be 491 confined only to the use of the whole word.
The words of common language like "Amrit ' and 'dhara ' cannot be made the monopoly of any individual.
We, therefore see no reason to disallow registration of the trade mark "Lakshmandhara '.
" As to honest concurrent user from 1923 to 1942 the learned Judges again held in favour of the respondent.
But on the point acquiescence they held against the respondent and found in favour of the appellant.
They said that from the fact that both the medicines were being advertised in the same journals or periodicals it did not, following that the attention of the appellant was, drawn to@ the use of the word 'Lakshmandhara ' by the respondent.
In view, however, of their finding that the two names were not likely to cause any confusion and that the ' respondent had been an honest concurrent user from 1923 onwards, they held that there was no justification for refusing registration to the trade mark 'Lakshmandhara ' for the whole of India.
They accordingly allowed the appeal of the respondent and dismissed that of the appellant by their judgment dated March 19, 1958.
The appellant then obtained special leave from this Court and the present appeal has been filed in pursuance of the leave granted by this court.
Two points have been agitated before us.
The first point is whether the name 'Lakshmandhara ' was likely to deceive the public or cause confusion to trade within the meaning of section 8 and section 10 (1) of the Act.
The second point is whether there was Such, acquiescence on) behalf of the appellant in the use of the name 'Lakshmandhara ' in the.
State of Uttar Pradesh as to bring it within the, expression 'special circumstances ' mentioned in sub section
10 of the Act.
We shall deal with these two points in the order in which we have stated them, 492 We may first read the relevant sections of the Act, viz.s. 8 and 10. 8.
Prohibition of registration of certain matter.
No trade mark nor part of a trade mark shall be registered which consists of, or contains, any scandalous design, or any matter the use of which would. (a) by reason of its being likely to deceive or to cause confusion or otherwise, be disentitled to protection in a Court of justice ; or (b) be likely to hurt the religious susceptibilities of any class of the citizen of India or (c) be contrary to any law for the time being in force, or to morality.
Prohibition of registration of identical or similar trade mark. (1) Save as provided in sub section (2), no trade mark shall be registered in respect of any goods or description of goods which is identical with a trade mark belonging to a different proprietor and already on the register in respect of the same goods or description of goods or which so nearly resembles such trade mark as to be likely to deceive or cause confusion.
(2) In case of honest concurrent use or of other special circumstances which, in the opinion of the Registrar, make it proper so to do he may permit the registration by more than one proprietor of trade marks which are identical or nearly resemble each other in respect of the same goods or description of goods, subject to such conditions and limitations if any, as the Registrar may think fit to impose.
(3) 493 It will be noticed that the words used in the sections and relevant for our purpose are "likely to deceive or cause confusion.
" The Act does not lay down any criteria for determining what is likely to deceive or cause confusion.
Therefore, every case must depend on its own particular facts, and the value of authorities lies not so much in the actual decision as in the tests applied for determining what is likely to deceive or cause confusion.
On an application to register, the Registrar or an opponent may object that the trade mark is not registerable by reason of cl.
(a) of section 8, or sub section
(1) of section 10, as in this case.
In such a case the onus is on the applicant to satisfy the Registrar that the trade mark applied for is not likely to deceive or cause Confusion.
In cases in which the tribunal considers that there is doubt as to whether deception is likely, the application should be refused.
A trade mark is likely to deceive or cause confusion by the resemblance to another already on the Register if it is likely to do so in the course of its legitimate use in a market where the two marks are assumed to be in use by traders in that market.
In considering the matter, all the circumstances of the case must be considered.
As was observed by Parker, J. in Pianotist Co. s Application (1), 'which was also a case of the comparison of two words "You must take the two words.
You must Judge them, both by their look and by their sound.
You must consider the goods to which they are to be applied.
You must consider the nature and kind of customer who would be likely to buy those goods.
In fact you must consider all the surrounding circumstances and you must further consider what is likely to happen if each of those trade marks is used in a normal way as a trade mark for the goods of the respective owners of the marks (1) ,777.
For deceptive resemblance two important questions are: (1) who are the persons whom the resemblance must be likely to deceive or confuse, and (2) what rules of comparison are to be.
adopted in judging whether such resemblance exists.
As to confusion, it is perhaps an appropriate description of the state of mind of a customer who, on seeing a mark thinks,that it differs from the mark on goods which ' he has previously bought, but is doubtful whether that impression is Dot due to imperfect recollection.
(See Kerly on Trade Marks, 8th edition, p. 400.) Let us apply these tests to the facts of the case under our consideration.
It is not disputed before use that the two names 'Amritdhara ' and 'Lakahmandhara ' are in use in respect of the same description of goods, namely, a medicinal preparation for the alleviation of various ailments, Such medicinal preparation will be purchased mostly by people who instead of going to a doctor wish to purchase a medicine for the quick alleviation of ;their suffering, both villagers and townsfolk, literate as well as illiterate.
As we said in Corn Products Refining Co. vs Shangrila Food Products Ltd (1); the question has to be approached from the point of view of a man of average intelligence and imperfect recollection.
To such a man the overall structural and phonetic similarity of the ,two names 'Amritdhara ' and 'Lakshmandbara ' is, in our, opinion likely.
t o deceive or ; cause confusion.
We must consider, the overall similarity of the two composite words 'Amritdhara ' and 'Lakshman dhara '.
We do not think that the learned Judges of the High Court were right in Paying that no Indian would mistake one 'for the other.
An unwary purchaser of average intelligence and imperfect recollection would not, as the High Court supposed, split the name into its component parts and consider the etymological meaning thereof or 495 even consider the meanings of the composite words as 'current of nectar ' or current of Lakshman '.
He. would go more by the overall structural and phonetic similarity and the nature of the medicine he has previously purchased, or has been told about, or about which has other vise learnt and which he wants to purchase.
Where the trade relates to goods largely sold to illiterate or badly educated persons, it is no answer to say that a person educated in the Hindi language would go by the entymological or ideological meaning and, see the difference between 'current of nectar ' and current of Lakshman '. 'Current of Lakshman in a literal sense has no meaning to give it meaning one must further make the inference that the 'current or stream ' is as pure and strong as Lakshman of the Ramayana.
An ordinary Indian villager or townsmen will perhaps know Lakshman, the story of the Ramayana being familiar to him but we doubt if he would etymologine to the extent of seeing the so called ideological difference between 'Amritdhara 'and 'Lakshmandhara '.
He would go more by the similarity of the two names in the context of the widely known medicinal preparation which he wants for his ailments.
We agree that the use of the word 'dhara ' which literally means 'Current or stream ' is not by itself decisive of the matter.
What we have to consider here is the overall similarity of the composite words, having regard to the circumstance that the goods bearing the two names are medicina l preparations of the same description.
We are aware that the admission of a mar is not to be refused, because unusually stupid people, "fools or idiots", may be deceived.
A critical comparison of the two names may disclose some points of difference.
but an unwary purchaser of average intelligence and imperfect recollection would be deceived by the overall similarity of the two names having regard 496 to the nature of the medicine he is looking for with a somewhat vague recollection that he had purchased a similar medicine on a previous occasion with.
a similar name.
The trade mark is the whole thing the whole word has to be considered a the case of the application to register 'Erectiks ' (opposed by the proprietors of the trade mark 'Erector ') Farwell, J. said in William Bailey (Bir mingham) Ltd.8 Application (1) : "I do not think it is right to take a part of the word and compare it with a part of the other Word; one word must 'be considered as a whole and compared with the other word as a whole. . .
I think it is a danger ous method to adopt to divide the word up, and seek to distinguish a portion of it from a portion of the other word".
Nor do we think that the High Court was.
right in thinking that the appellant was claiming a. monopoly in the common Hindi word 'dhara '.
We do not think that is quite the position here.
What the appellant is claiming is its right under section 21 of the Act, the exclusive right to the use of its trade mark, and to oppose the registration of a trade mark which go nearly resembles its trade mark that it is likely to deceive or cause confusion.
A large number of decisions relating to the use of composite words, such as Night Cap and RedCap, Limit and Summit, Rito and Lito, Notrate and Filtrate, etc. were cited in the High Court.
Some more have been cited before us.
Such deci sions, examples of deceptive resemblance arising out of contrasted words, have been summarised at page 429 to 434 in Karly on Trade Marks, 8th Edition.
No useful purpose will be served by referring to them all.
As we have said earlier, each case must be decided or its own fact.
What degree of ' (1) 497 resemblance is necessary to deceive or cause confusion must the nature of things be incapable of definition a priori.
As to the decisions in annexure 'A ', it has been argued before us that they were not at all admissible by reason of sections 40 to 43 of the .
On behalf of the appellant it has been contended that they were admissible under section 13 of the Evidence.
Act as showing the particular instances in which the appellant claimed its right under section 21 of the Act.
We consider it unnecessary to decide this question for the purposes of this case because those decisions even if they are admissible under section 13 do not throw any light on the question whether 'Amritdhara ' and 'Lakshmandhara ' so nearly resemble each other as to cause deception or confusion.
That is a, question which we must determine as a case of first impression and irrespective of the earlier decisions.
On a consideration of all the circumstances, we have come to the conclusion that the overall similarity between the two names in respect of the same description of goods was likely to cause deception or confusion within the meaning of section 10(1) of the Act and Registrar was right in the view he expressed.
The High Court was in error taking a contrary view.
We know go the second question, that of acquiescence.
Here again we are in agreement with the Registrar of Trade Marks, who in a paragraph of his order quoted earlier in this judg ment has summarised the facts and circumstances on which the plea of acquiescence was based.
The matter has been put thus in Halsbury 's Laws of England, Vol.
32 (second edition) pages 659 657, paragraph 966.
" If a trader allows another person who is acting in good faith to build up a reputa 498 tion under a trade name or mark to which he has rights, he may lose his right to complain, and may even be debarred from himself using such name or work.
But even long user by another, if fraudulent, does not affect the plaintiff 's right to section final injunction on the other hand prompt warning or action before.
the defendant has built up any good will may materially assist the plaintiff 's case".
We do not think that there was any fraudulent user by the respondent of his trade name 'Lakshmandbara '.
The name was first used in 1923 in a small way in Uttar Pradesh.
Later it was more extensively used and in the same journals the two trade marks were publicised.
The finding of the Registrar is that the appellant and its agent were well aware of the advertisements of the respondent, and the appellant stood by and allowed the respondent to develop his business till it grew from a small beginning in 1923 to an annual turnover of Rs. 43,000/ in 1946.
These circum stances establish the plea of acquiescence and bring the case within sub section
(2) of section 10, and in view of the admission made on behalf of the respondent 'that his goods were sold mainly in Uttar Pradesh, the Registrar was right in imposing the limitation which he imposed.
For these reasons, we would allow the appeal, set aside the Judgment and order of the High Court, and restore those of the Registrar of Trade Marks, Bombay, dated September 10. 1953.
In the circumstances of this case, there will be no order for costs.
Appeal allowed.
[/INST]The respondent applied for registration of the trade name "Lakshmandhara" in relation to the medicinal preparation manufactured by him at Kanpur since 1923.
It was admitted that the respondent 's product was mainly sold in the State of Uttar Pradesh.
The appellant opposed the registration on the ground that it had an exclusive proprietary interest in the trade mark "Amritdhara" in relation to a similar medicinal preparation which had acquired considerable repu tation since 1903 and that the respondent 's trade name "Lakshmandhara" was likely to deceive and cause confusion and therefore the registration was prohibited by section 8 of the Trade Marks Act.
The Registrar of Trade Marks held that there was sufficient similarity between "Amritdhar 'a ' and "Lakshamandhara" so as to cause confusion and it was likely to deceive the public, but the acquiescence of the appellant in the use of the trade name "Lakshmandhara" by the respondent in the relation to his product for a long period to the knowledge of the appellant was special circumstance under section 10(2) entitling the respondent to have his name registered along with the appellant 's trade name.
He, however, confined the registration to sales with the State of Uttar Pradesh.
Both the appellant and the respondent appealed to the High Court which allowed the respondent 's appeal holding that the words "Amrit" and "dhara" were common words in the Hindi language as also the words "Lakshman" and "dhara" and that there was no possibility of any Indian confusing the two ideas.
The High Court further held there had been honest concurrent user by the respondent.
,, On the question of acquiescence it held against the respondent.
On appeal by special leave.
Held, that the question whether a trade name is likely to deceive or cause confusion by its resemblance to another al.
ready registered is a matter of first impression and one for decision in each case and has to be decided by taking an over.
all view of all the circumstances.
The standard of comparison to be adopted in judging the resemblance is from the point of 485 view of a man of average intelligence and imperfect recollection.
Pianotist Co. 's Application, , referred to.
Corn Products Refining Co., vs Shangrila Food Product8 Ltd., , referred to.
Held, further, that the two names as a whole should be considered for comparison and not merely the component words thereof separately.
William Bailey (Birmingham) Ltd. '8 application, (1935) 52 R. P. C. 137, referred to.
Held, also, that in the present case the similarity in the two name in respect of the same description of goods was likely to deceive or cause confusion; but the facts found by the Registrar established the plea of acquiescence so a to bring the case within sub s.(2) of section 10, and the Registrar was right in imposing the limitation which he imposed.
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<s>[INST] Summarize the judgementCivil Appeal No. 2481 of 1978.
Appeal by Special Leave from the Judgment and order dated 10 10 67 of the Jammu and Kashmir High Court in Civil First Appeal No 18 of 1966 Lal Narain Sinha, E. C. Agarwala, M. M. L. Srivastava, R. Satish and Altaf Ahmed for the Appellant.
section N. Andley, B. P. Maheshwari and Suresh Sethi for the Respondent The Judgment of the Court was delivered by FAZAL ALI, J.
This is a plaintiffs ' appeal by special leave against a judgment dated 10th October, 1966 of the Jammu & Kashmir High Court dismissing the plaintiff 's suit.
4 The facts of the case lie within a very narrow compass and after hearing counsel for the parties we propose to decide only one point, viz., the question as to whether or not the plaintiffs were entitled to a decree of ejectment against the defendants in respect of the house in question on the ground of personal necessity, and, therefore, we shall narrate only those facts which are germane for this purpose.
The property in suit was a four storeyed building situated at Maisuma Lal Chowk, Srinagar and belonged to one Peer Ali Mohammad, the ancestor of the plaintiffs.
This building was leased out to the defendants by a registered lease deed dated 1st December 1947 for a period of 10 years.
Under the lease the lessor had provided some furniture and crockery to the lessees.
Furthermore, it was clearly stipulated that the building was leased out for the purpose of running a hotel by the lessees, and for this purpose the lessees were given the right to make suitable alterations in the same, but were prohibited from making any alteration which may affect the durability or damage the building.
On the expiry of the period of the lease, the appellants demanded possession of the building from the respondents and despite certain notices given by the appellants the respondents failed to give possession of the building.
Hence the plaintiff 's suit.
The plaintiffs had taken three main grounds in support of their contention for ejectment of the defendants from the suit premises.
In the first place, the appellants alleged that they required the building in order to extend their business by running a hotel there themselves; secondly, as the lease had expired by efflux of time, the respondents were legally bound to surrender possession.
Thirdly, it was averred by the plaintiffs that the Jammu & Kashmir Houses and Shops Rent Control Act, 1966 (hereinafter referred to as the Act) was wholly inapplicable to the premises in dispute, because the yearly income of the defendants far exceeded Rs. 20,000 and that running a hotel did not fall within the purview of section 2(3) of the Act.
The suit was resisted by the respondents who took, inter alia, a number of objections to the grant of the relief to the appellants.
In the first place, it was pleaded that tho income of the respondents being less than Rs. 20,000/ per year the suit was clearly covered by the Act.
Secondly, it was averred that the definition of the word 'house ' in section 2(3) of the Act was wide enough to include a hotel.
It was next averred that the plaintiffs had no personal necessity and had filed the suit merely for the purpose of getting a higher rent.
Lastly, it was contended that as the plaintiffs required the house for running a hotel, such a purpose did not fall within the ambit of section ll(h) of the Act which applied only to such a case where the landlord required the house for his occupation and, at any 5 rate, having regard to the comparative advantages or disadvantages of the landlord and the tenant, there was no equity on the side of the plaintiffs.
The case was tried by the City Judge, Srinagar who accepted the case of the defendants (respondents) and dismissed the plaintiffs ' suit.
The plaintiffs thereupon filed an appeal before the High Court of Jammu & Kashmir which held that the plaintiffs had not proved their personal plaintiffs filed an application for leave to appeal to this Court and the same having been refused, they obtained special leave of this Court and hence the appeal before us.
In support of the appeal Mr. Lal Narayan Sinha, counsel for the appellants submitted three points.
In the first place, he contended that there was sufficient evidence to indicate that the income of the defendants respondents was more than Rs. 20,000/ a year, and, therefore, the provisions of the Act were not applicable and as the leave has expired due to efflux of time, the plaintiffs were entitled to a decree for ejectment straightway.
Secondly, it was argued that the word 'house ' used in section 2(3) of the Act cannot include a hotel, and, therefore, the Act was not applicable.
Lastly, it was submitted that the High Court committed a grave error of law in holding that the plaintiffs hold not been able to prove personal necessity" although the High Court gave a clear finding that the plaintiffs had undoubtedly proved that they had a strong desire to occupy the building for running a hotel.
It was argued that the finding of the High Court was not based on a discussion of the evidence and circumstances of the case and the High Court has taken an erroneous view of law on the nature of the need of the appellants as also on the question of the comparative advantages or disadvantages of the landlord and the tenant if a decree for eviction followed.
After having heard counsel for the parties we are clearly of the opinion that the appeal must succeed on the third point raised by learned counsel for the appellants, i.e., the question of personal necessity and in this view of the matter we refrain from expressing any opinion on the applicability of the Act to the suit premises as averred by the respondents.
Learned counsel for the appellants contended that there was sufficient material before the Court to show that the plaintiffs did not merely have a desire to occupy the building, but they actually needed the same and their need is both genuine and reasonable.
In this connection, reliance was placed on the evidence of the witnesses for the plaintiffs which does not appear to have been considered by the High Court.
We find that the plaintiffs had clearly mentioned in their plaint 6 that they required the house for the purpose of running the hotel business.
On behalf of the plaintiffs P.W. Mohd. Yusuf had made it absolutely clear that they required the lease property for their personal need as they wanted to run the hotel themselves.
The witness had further explained that this was necessary, because the plaintiffs could not maintain themselves from the income of the leased property.
It is true that the plaintiffs were doing a small business, but the witness had made it clear that their income was very low so much so that they paid income tax of only Rs. 70 to Rs. 80/ per annum.
These facts have not been demolished either in the cross examination of the witness or in the evidence of rebuttal given by the defendants.
The above evidence of the plaintiffs is corroborated by the other witnesses examined by them.
P.W. Girdhari Lal has clearly stated that the plaintiffs want to extend their business and want to have the hotel in their own possession to run the same.
He has further stated that the plaintiffs are running their business on a small scale, and he categorically stated that he had personally observed that there is very little work at the plaintiff 's shop now a days.
That is why they want to run a hotel.
The witness is a neighbour of the plaintiffs.
shop and was, therefore, competent to depose to the facts mentioned above which have not been shaken in cross examination.
P.W. Peer Ahmad Ullah has also stated that now a days people give up other occupations and take up hotel business because hotel business is itself a profitable business.
The witness added that the plaintiff also want to extend their business and start a hotel in this building.
P.W. Ghulam Nabi Dar also says that although the plaintiffs had a l? Boot shop they also want to run the hotel themselves, because their business has become dull.
P W. Ghulam Mohd. whose shop is in front of the shop of the plain tiffs states as follows: "The plaintiffs require the suit property for their own use, as they have been telling me for the last two or four years Previously, the business at Boot shops was running well but now it has become dull.
The plaintiffs intend to run the hotel themselves. . .
As for plaintiffs I say that they are in need of the hotel.
The plaintiffs require the; hotel in order to extend their business".
Another neighbour of the plaintiffs P.W. Yash Paul states that the plaintiffs say that they will start a hotel in the suit property.
He fur 7 ther deposes that there is little work in the shop of the plaintiffs, and, therefore, they want to start a hotel, P.W. Ghulam Mohd. who is the brother in law of P.W. Pir Ali.
Mohd., father of the plaintiffs and was looking after his children on the death of P.W. Pir Ali Mohd. has also stated that the plaintiffs want to start business in the shape of a hotel in the house and they also want to run the shop.
It is, therefore, proved by the evidence discussed above ( 1 ) that the plaintiffs required the house for their personal necessity in order to augment their income, (2) that as their income from the Boot shop is very small and they are not able to maintain themselves.
so they want to run the hotel business in the suit premises.
The High Court has not at all discussed this part of the evidence of the plaintiffs, but at the some time being impressed by the fact that the need of the plaintiffs was genuine the High Court gave a finding to at the plaintiffs had a strong desire to occupy the house and use it for commercial purposes.
Thereafter the High Court appears to have lost itself in wilderness by entering into a hair splitting distinction between desire and need.
Here the High Court has misdirected itself.
If the plaintiffs had proved that their necessity was both genuine and reasonable, that the present premises which belonged to them were required for augmenting their income as the income so far received by them was not sufficient for them to make the two ends meet, there could be no question of a mere desire, but it is a case of real requirement or genuine need.
In fact the irresistible inference which could be drawn from the facts is that the plaintiffs had a pressing necessity of occupying the premises for the purposes of conducting hotel business so as to supplement their income and maintain themselves property.
The Act is a piece of social legislation and aimed at easing the problem of accommodation, protecting the tenants from evictions inspired by profit hunting motives and providing certain safeguards for the tenants and saving them from great expense, inconvenience and trouble.
But the Act does not completely overlook the interest of the landlord and has under certain conditions granted a clear right to the landlord to seek eviction on proof of the grounds mentioned in section 11 of the Act.
Thus, the Act appears to have struck a just balance between the genuine need of the landlord on the one hand and great inconvenience and trouble of the tenant on the other.
It was also not disputed that the defendants had taken the property on lease only for a period of 10 years and now they have been in possession of the same for over 30 years.
If the plaintiffs found that their present business had become dull and was not yielding sufficient income to maintain themselves and, therefore, it was necessary to occupy the house so as to run a hotel business, it cannot by any stretch of imagination be said that the plaintiffs had merely a desire rather than 8 a bonafide need for evicting the tenants.
We therefore, disagree with the finding of he High Court that the plaintiffs had not proved that they had a bonafide need for occupation of the building in dispute.
Moreover section 11(h) of the Act uses the words 'reasonable requirement ' which undoubtedly postulate that there must be an element of need as opposed to a mere desire or wish.
The distinction between desire and need should doubtless be kept in mind but not so as to make even the genuine need as nothing but a desire as the High Court has done in this case.
It seems to us that the connotation of the term 'need ' or 'requirement should not be artificially extended nor its language so unduly stretched or strained as to make it impossible or extremely difficult for one landlord to get a decree for eviction.
Such a course would defeat the very purpose of the Act which affords the facility of eviction of the tenant to the landlord on certain specified grounds.
This appears to us to be the general scheme of all the Rent Control Acts, prevalent in other State in the country.
This Court has considered the import of the word requirement and pointed out that it merely connotes that there should be an element of need.
In the case of Phiroze Ramanji Desai vs Chandrakant N. Patel & Ors.
(1) Justice Bhagwati speaking for the Court observed as follows: The District Judge did not misdirect himself in regard to the true meaning of the word 'requires ' in section 13(1) (g) and interpreted it correctly to mean that there must be an element of need before a landlord can be said to 'require ' premises for his own use and occupation.
It is not enough that the landlord should merely desire to use and occupy the premises.
What is necessary is that he should need them for his own use and occupation.
" Thus, this Court has held that in such cases the main test should be whether it was necessary for the landlords to need the premises for their use or occupation.
In the case of B. Balaiah vs Chandoor Lachaiah(2) a Division Bench of the High Court observed as follows: "As long as such requirement is bona fide, the petitioner can certainly claim for a direction for eviction of the tenant".
It had become necessary for us to enter into the evidence led by the plaintiffs, because the High Court has in a general way made a sweeping obvervation that although the plaintiffs had a strong desire, they (1) [1974] I S.C.C. 661 (2) A.I.R 1965 A.P 435. 9 were not able to prove reasonable requirement and the High Court came to this finding without at all considering the evidence of competent and important witnesses examined by the plaintiffs on this point which has been discussed above.
For these reasons, therefore, we are clearly of the opinion that in the instant case the plaintiffs had proved that the requirement for the house for starting a hotel business was both genuine and reasonable and even imperative, because the scanty income of the plaintiffs was not sufficient to maintain them or to afford them a decent or comfortable living.
This brings us to the next limb of the argument of the learned counsel for the respondents regarding the interpretation of section 11 ( 1 ) (h) of the Act.
Section ll(l)(h) of the Act runs thus: 11(1)(h) . . . . where the house or shop is reasonably required by the landlord either for purposes of building or re building, or for his own occupation or for the occupation of any person for whose benefit the house or shop is held; Explanation: The Court in determining the reasonableness of requirement for purposes of building or rebuilding shall have regard to the comparative public benefit or disadvantage by extending or diminishing accommodation, and in determining reasonableness of requirement for occupation shall have regard to the comparative advantage or disadvantage of the landlord or the person for whose benefit the house or shop is held and of the tenant".
It was submitted by Mr. Andley learned counsel for the respondents that the words used in section ll(l)(h) are "that the house should be required by the landlord for his own occupation or for the occupation of and person for whose benefit the house or shop is held.
" It was argued that the words `own occupation ' clearly postulate that the landlord must require it for his personal residence and not for starting any business in the house.
We are, however, unable to agree with this argument.
The provision is meant for the benefit of the landlord and, therefore, it must be so construed as to advance the object of the Act.
The word 'occupation ' does not exclude the possibility of the landlord starting a business or running a hotel in the shop which also would amount to personal occupation by the landlord.
In our opinion, the section contemplates the actual possession of the landlord, whether for his own residence or for his business.
It is manifest that even if the landlord is running a hotel in the house, he is undoubtedly in possession or occupation of the house in the legal sense of the term.
2 817SCI/78 10 Furthermore, the section is wide enough to include the necessity of not only the landlord but also of the persons who are living with him as members or the same family.
In the instant case there can be no manner of doubt that the house was required for the personal residence or occupation of all the three plaintiffs who admittedly were the owners of the house.
The fact that the plaintiffs wanted to occupy the property for running hotel would not take their case out of the ambit of personal necessity as already indicated above, occupation of a house may be required by the owner for personal purposes.
He may choose to reside himself in the house or run a business in the house or use it as a paying guest house and derive income therefrom.
In all these cases even though the owner may not physically reside in the house, the house in law would nevertheless be deemed to be in actual occupation of the owner.
Having regard, therefore, to the circumstances mentioned above, we are unable to subscribe to the view that the words 'own occupation 'must be so narrowly interpreted so as to indicate actual physical possession of the landlord personally and nothing short of that.
We, therefore, overrule the argument of the respondents on this point.
The last argument that was advanced before us by Mr. Andley for the respondents was that taking an overall picture of the various aspects of the present case, it cannot be said that the balance of comparative advantages and disadvantages was in favour of the landlord.
In this connection, our attention was drawn to the evidence led by the defendants that the main source of their income is the hotel business carried on by them in the premises and if they are thrown out they are not likely to get any alternative accommodation.
The High Court has accepted the case of the defendants on this point, but does not appear to have considered the natural consequences which flow from a comparative assessment of the advantages and disadvantages of a landlord and the tenant if a decree for eviction follows.
It is no doubt true that the tenant will have to be ousted from the house if a decree for eviction ii passed, but such an event would happen whenever a decree for eviction is passed and was fully in contemplation of the legislature when section ll(l)(h) of the Act was introduced in the Act.
This by itself would not be a valid ground for refusing the plaintiffs a decree for eviction.
Let us now probe into the extent of the hardship that may be caused to one party or the other, in case a decree for eviction is passed or is refused.
It seems to us that in deciding this aspect of the matter each party has to prove its relative advantages or disadvantages and the entire 11 Onus cannot be thrown on the plaintiffs to prove that lesser disadvantages will be suffered by the defendants and that they were remediable.
This matter was considered by this Court in an unreported decision in the case of M/s Central Tobacco Co. vs Chandra Prakash(l) where this Court observed as follows: "We do not find ourselves able to accept the broad pro position that as soon as the landlord establishes his need for additional accommodation he is relieved of all further obligation under section 21 sub section
(4) and that once the landlord 's need is accepted by the court all further evidence must be adduced by the tenant if he claims protection under the Act.
Each party must adduce evidence to show what hardship would be caused to him by the granting or refusal of the decree and it will be for the court to determine wether the suffering of the tenant, in case a decree was made, would be more than that of the landlord by its refusal.
The whole object of the Act is to provide for the control of rents and evictions, for the leasing of buildings etc.
and section 21 specifically enumerates the grounds which alone will entitle a landlord to evict his tenant.
The onus of proof of this is certainly on the landlord.
We see no Sufficient reason for holding that once that onus is discharged by the landlord it shifts to the tenants making it obligatory on him to show that greater hardship would be caused to him by passing the decree than be refusing to pass it.
In our opinion both sides must adduce all relevant evidence before the court; the landlord must show that other reasonable accommodation was not available to him and the tenant must also adduce evidence to that effect.
It is only after shifting such evidence that the court must form its conclusion on consideration of all the circumstances of the case as to whether greater hardship would be caused by passing the decree than by refusing to pass it".
This case was followed in Phiroze Ramanji Desai vs Chandrakant N. Patel & Ors (supra).
In the case of Kelley vs Goodwin(2) Lynskey, J. Observed as follows: "The next matter one has to consider is whether there was evidence on which the county court judge could come to the conclusion that there would be greater hardship in mak (1) C.A. 1175 of 1969 decided on 23 4 1969.
(2) 12 ing the order than not making the order.
He has taken into account, in relation to that question, first, the position of the landlord, and, secondly, the position of the tenant.
He has taken into account the financial means of the tenant.
It is argued before us that he was wrong in doing that.
In my view, he was quite entitled, in considering hardship, to have regard to the financial means of the tenant in considering whether he could obtain other accommodation because, by reason of his means, he was in a position, not merely to rent, but to buy a house.
It seems to me also that, on this question cf hardship, the judge was entitled to take into account the fact that the tenant had taken no real steps to try and find other accommodation or no real steps to buy a house".
To the same effect is the decision in the case of K. Parasuramaiah vs Pokuri Lakshmamma(1) where a Division Bench of the High Court narrated the mode and circumstances in which the comparative advantages and disadvantages of the landlord and the tenant could be weighed.
In this connection, the Court observed as follows: "Thus the hardship of the tenant was first to be found out in case eviction is to be directed.
That hardship then has to be placed against the relative advantages which the land lord would stand to gain if an order of eviction is passed .
What is however required is a careful consideration of all the relevant factors in weighing the relative hardship which is likely to be caused to the tenant with the likely ad vantage of the landlord on the basis of the available material on record. '.
The proviso however should not be read as if it confers a practical immunity on the tenant from being evicted.
That would destroy the very purpose of Sec. 10(3)(c).
Likewise the requirement of the land lord in accordance with that provision alone cannot be given absolute value, because that would mean to underestimate the value of the proviso to that section.
Keeping in view therefore the purpose of the provision and the necessity of balancing the various factors each individual case has to be decided in the light of the facts and circumstances of that case ' '.
In view of our findings it has been established that the landlords have not only a genuine requirement to possess the house, but it is necessary for them to do so in order to augment their income and maintain themselves properly.
Being the owners of the house they (1) A.I.R. 1965 A.P.220 13 cannot be denied eviction and be compelled to live below the poverty line merely to enable the respondents to carry on their flourishing hotel business, at the cost of the appellants.
This shows the great prejudice that will be caused to the plaintiffs if their suit is dismissed.
The plaintiffs have already produced material before the court to show that their income does not exceed more than Rs. 8000 to Rs. 9000/ per year as the yearly income tax paid by them is Rs. 70 to Rs. 80 only.
There is no other means for them to augment their income except to get their own house vacated by the defendants so as to run a hotel business.
It was vehemently contended by Mr. Andley that there is nothing to show that the plaintiff Mohd. Yusuf or his mother had any experience of running the hotel, and, therefore, it is fruitless to allow them to run the hotel by evicting the respondents.
Mohd. Yusuf is admittedly doing shoe business, and has got sufficient experience of business.
Nothing has been brought on the record to show that he is incapable of running a hotel in the premises.
The building belongs to him and there is Do reason for us to think that he cannot establish a hotel business.
On the other hand the defendants have been running the hotel for the last 30 years and must have made sufficient profits.
To begin with, the defendants had taken the lease only for 10 years which now by virtue of the statute has been extended to 30 years which is a sufficiently long period for which the plaintiffs have been deprived the possession of the house.
There is thus no equity in favour of the respondents for continuing in possession any further.
It was then submitted by Mr. Andley, counsel for the respondents that if the respondents are evicted they will be thrown out on the road; that hotel is the only source of their sustenance and they are not likely to get any alternative accommodation on being evicted.
If the defendants had proved that they will not be able to get any accommodation any where in the city where they could set up a hotel, this might have been a weighty consideration, but the evidence of all the witnesses examined by the defendants only shows that the defendants may not get alternative accommodation in that very locality where the house in dispute is situated.
There is no satisfactory evidence to prove that even in other business localities there is no possibility of the defendants getting a house.
To insist on getting an alternative accommodation of a similar nature in the same locality will be asking for the impossible.
The defendants are tenants and had taken the lease only for 10 years but had overstayed for 20 years and they cannot be allowed to dictate to the landlord that they cannot be evicted unless they get a similar accommodation in the very same locality.
14 G. M. Khan the defendant himself has stated that if he is evicted from the house, he cannot get such a place any where.
Great stress is laid that he must get a house of the size of the house in dispute.
It was suggested to him that if one of the houses of the plaintiffs is given to him that will be sufficient for him, to which he said that the said house situated in Hari Singh High Street is not suitable because he can not run his hotel business there.
The witness has further stated towards the end that the defendants cannot get any place for the purpose of running a hotel in this Ilaqa (locality).
D.W. Ghani Hajam also says that the defendants cannot get any other building for the purpose of the hotel at this place like the one under dispute.
Similarly, D. W. Ghulam Mohd. Khan, another witness for the defendants says that the defendants will not get such a building in this Ilaqa for running a hotel.
D.W. Haji Noor Mohd. also endorses the fact that if the defendants are ejected, it is difficult for them to get such a building in this place.
D.W. Mohd, Ramzan deposes that if the defendants are ejected from the building, they will not get such a building in this locality for running a hotel.
To the same effect is the evidence of D. W. Rasool Dar who says that it is impossible for the defendants to get a house like the suit house for the purposes of running a hotel at the site or nearabout where the suit house is situated.
D. W. Ghulam Mohd. has made a similar statement in his deposition when he says that the defendants will not get such a building nor is there any such building vacant in the locality.
It is true that there are some witnesses like D. W. Aslam Khan, Ghulam Hassan, Mohd. Abdullah Pandey who has said that the defendants might not get any other place for running a hotel but the evidence is extremely vague and nebulous.
D. W. Abdul Kabir however merely says that he had no knowledge that the defendants could get any other house.
Thus, what is established from the evidence of the defendants is that if they are ejected, they might not get a house as big as the house in dispute in the very locality where the disputed house is situated.
There is no clear evidence in the first place to show that there is no other business locality in the city at all or that if there is any other business locality attempts were made by the defendants but they Were unable to get any house.
Furthermore, as indicated above, the plaintiff necessity is imperative and their requirement is undoubtedly reasonable, because the income which they are receiving including the rent of the house which is in the region of Rs. 5000/ per year, is not sufficient to maintain them.
Thus, on a careful comparison and assessment of the relative advantages and disadvantages of the landlord and the tenant it seems to us that the scale is tilted in favour of the plaintiffs.
15 The inconvenience, loss and trouble resulting from denial of a decree for eviction in favour of the plaintiffs far outweigh the prejudice or the inconvenience which will be caused to the defendants.
The High Court has unfortunately not weighed the evidence from this point of view.
Before closing the judgment we would like to observe that normally this Court does not interfere with concurrent findings of facts but as the High Court as also the Trial Court have made a legally wrong approach to this case and have committed a substantial and patent error of law in interpreting the scope and ambit of the words "reasonable requirement" and "own possession" appearing in section 11 (1) (h) of the Act and have thus misapplied the law and overlooked some of the essential features of the evidence as discussed by us, we had to enter into the merits of the case in order to prevent grave and substantial injustice being done to the appellants.
For the reasons given above, the appeal is allowed.
The judgment and decree of the High Court are set aside, and a decree for ejectment of the defendants from the house in dispute is hereby passed against the defendants.
In the peculiar circumstances of this case, there will be no order as to costs.
S.R. Appeal allowed.
[/INST]The facts of only one petition are set out because they are similar to facts in other petitions.
Excel Wear is a partnership firm manufacturing garments for export.
About 400 workmen were employed in the petitioners ' factory.
The case of the petitioners is that the relations between the management and the employees started deteriorating and became very strained from 1976.
The workmen became very militant, aggressive, violent and indulged in unjustifiable or illegal strikes.
Various incidents have been mentioned in the Writ Petition in support of the said allegations.
However, since those facts were seriously challenged and disputed by the workmen, the Court did not refer to them in any detail nor expressed any view one way or the other.
(2) According to the petitioners it became almost impossible to carry on the business.
The petitioners, therefore, served a notice dated 2nd May, 1977 on the Government of Maharashtra, respondent No 2 for previous approval of the intended closure of the undertaking in accordance with section 25(O)(1).
The State Government refused to accord the approval on the ground that the intended closure was prejudicial to public interest.
(3 ) The petitioners contended: (a) A right to close down a business is an integral part of the right to carry on a business guaranteed under article 19(1)(g) of the Constitution.
The impugned law imposes a restriction on the said fundamental right which is highly unreasonable.
excessive and arbitrary.
It is not a restriction but almost amounts to the destruction or negation of that right.
The restrictions imposed is manifestly beyond the permissible bounds of article 19(6) of the Constitution.
(b) A right to carry on a business includes a right not to carry on a business which is like any other right mentioned under Article 19(1) such as the right to freedom of speech includes a right not to speak and the right not to form an association is inherent under the right to form association.
(c) The restrictions are unreasonable because (i) Section 25(o) does not require giving of reasons in the order.
(ii) No time limit is to he fixed while refusing permission to close down.
(iii)Even if the reasons are adequate and sufficient, approval can be denied in the purported public interest of security of labour.
Labour is bound to suffer because of unemployment brought about in almost every case of closure.
1010 (iv) It has been left to the caprice and whims of the authority to decide one way or the other.
No guidelines have been given.
(v) Apart from the civil liability which is to be incurred under sub section (5), the closure, however, compulsive it may be, if brought about against the direction given under sub section (2) is visited with penal consequences as provided in section 25 R. (vi) There is no deemed provision as to the according of approval in sub section (2) as in sub section (4).
(vii)Refusal to accord approval would merely mean technically that the business continues but a factory owner cannot be compelled to carry on the business and go on with the production and thus one of the objectives sought to be achieved by this provision cannot be achieved.
(viii)There is no provision of appeal, revision or review of the order even after sometime.
(ix) Restriction being much more excessive than is necessary for the achievement of the object is highly unreasonable.
(x) There may be several other methods to regulate and restrict the right of closure by providing for extra compensation over and above the retrenchment compensation if the closure is found to be mala fide and unreasonable.
(xi) To direct the employer not to close down is a negation of the right to close.
It is not regulatory.
(xii)If carrying on any business is prohibited in public interest, a person can do another business.
But to prohibit the closure of a running business is destruction of the right to close.
(xiii) The reasonableness of the impugned restrictions must be examined both from procedural and substantive aspects of the law.
Sub section (2) of section 25 D does not make it obligatory for any higher authority of the Government to take a decision.
It may be taken even by a lower officer in the hierarchy.
(4) The respondents ' contentions: (a) Some counsel for the respondents did not dispute that the right to close down a business is an integral part of the right to carry on a business.
They however, contended that the restrictions imposed by the impugned law are quite reasonable and justified to put a stop to the unfair labour practice and for the welfare of the workmen.
It is a progressive legislation for the protection of a weaker section of society.
(b) Some other counsel for the respondents, however, did not accept that a right to close down a business is an integral part of the right to carry on any business.
According to them, the total prohibition of closure only affects a part of the right to carry on the business and not a total annihilation of this.
The restriction imposed was in public interest and there is a presumption of reasonableness in favour of a statute.
Reliance was also placed on social and welfare legislation as expounded by renowned jurists and judges abroad.
It was also contended that the legislation was protected by Article 31C of the Constitution.
1011 (5) Allowing the petitions, the Court ^ HELD: The right to close down a business cannot be equated with a right not to start or carry on n business at all.
The extreme proposition urged on behalf of the employer by equating the two rights and placing them at par is not quite apposite and sound.
If one does not start a business at all, then perhaps under no circumstances, he can be compelled to start one.
Such a negative aspect of a right to carry on a business may be equated with the negative aspect of the right embedded in the concept of the right to freedom of speech, to form an association or to acquire or hold property.
Perhaps under no circumstances, a person can be compelled to speak, to form an association or to acquire or hold a property.
But by imposing reasonable restrictions, he can be compelled not to speak, not to form an association or not to acquire or not to hold property.
A total prohibition of business is possible by putting reasonable restrictions under Article 19(6) on the right to carry on a business.
[1027 B D, 1028 A] Cooverjee B. Bharucha vs The Excise Commissioner and the Chief Commissioner, Ajmer & Ors.; ; ; Narendra Kumar & ors.
vs The Union of India & ors. ; relied on.
However, the greater the restriction, the more the need for strict scrutiny by the Court.
The contention put forward on behalf of the labour unions that the right to close down a business is not an integral part of the right to carry on a business or that it is not a fundamental right at all is also wrong.
In one sense the right does appertain to property.
But such a faint overlapping of the night to property engrafted in article 19(1)(f) or article 31 must not be allowed to cast any shade or eclipse on the simple nature of the right.
However, the right to close down is not an absolute right.
It can certainly be restricted, regulated or controlled by law in the interest of the general public.
[1027 1028 A C] Concept of socialism or socialistic state has undergone changes from time to time, from country to country and from thinkers to thinkers.
But some basic concept still holds the field.
In the case of Akadasi Padhan the question for consideration was whether a law creating a state monopoly is valid under the latter part of Article 19(6).
The Court pointed out the difference between the doctrinaire approach to the problem of socialism and the pragmatic one.
But so long as the private ownership of an industry is recognised governs an overwhelmingly large proportion of our economic structure, it is not possible to say that principles of socialism and social justice can be pushed to such an extreme so as to ignore completely or to a very large extent the interests of another section of the public namely the private owners of the undertakings.
[1030 G H. 1031 E G] Akadasi Padhan vs State of Orissa, [1963] Suppl.
2 SCR 691 referred to.
There are creditors and depository and various other persons connected with or having dealings with the undertaking, whose rights are also affected by the impugned legislation.
[1031 G] Section 25 O (2) does not require the giving of reasons in the order.
In two of the orders in the present cases, it is merely stated that the reasons for the intended closure are prejudicial to public interest suggesting thereby that the reasons given by the employers are correct, adequate and sufficient, yet they are prejudicial to the public interest.
In case of bona fide closures, it would be 1012 generally so.
Yet the interest of labour for the time being is bound to suffer because it makes a worker unemployed.
Such a situation as far as reasonably possible should be prevented.
Public interest and social justice do require the protection of the labour.
But it is not reasonable to give them protection against all unemployment after affecting the interests of so many persons interested including persons who have no connection with the management.
It is not possible to compel the employers to manage the undertaking even if they find that it is not safe or practicable to do so.
They cannot be asked to go on facing tremendous difficulties of management even at the risk of their person and property.
They cannot be compelled to go on incurring losses year after year.
[1032 C F] In the third Writ Petition, the Government has given two reasons, for refusing to grant permission.
Both of them are too vague to give an exact idea in support of the refusal of permission, to, close down.
It says that the reasons are not adequate and sufficient and that the intended closure is prejudicial to the public interest.
The latter reason will be universal in all cases of closure.
The former demonstrates to what extent the order can be unreasonable.
If the reasons given by the petitioner in great detail are correct, as the impugned order suggests they are, it is preposterous to say that they are not adequate and sufficient for a closure.
Such an unreasonable order was possible to be passed because of the unreasonableness of the law.
Whimsically and capriciously, the authority can refuse permission to close down.
[1033 B E] If the Government order is not communicated to the employer within 90 days, strictly speaking, criminal liability in section 25(R) may not be attracted, if on the expiry of that period an employer closes down the undertaking.
But it seems the civil liability under Section 25(O) (5) will come into play even after the passing of the order of refusal of permission to close down on the expiry of the period of 90 days.
Provision in Chapter V(B) of the Act suggests that the object of carrying on production can be achieved by the refusal to grant permission although in the objects and reasons of the amending act such an object seems to be there although remotely and secondly it is highly unreasonable to achieve the object by compelling the employee not to close down in public interest for maintaining production.
The order passed by the authority is not subject to any scrutiny by any higher authority or tribunal either in appeal or revision.
The order cannot be reviewed either.
[1033 F H, 1034 A B] It is not always easy to strike the balance between the parallel and conflicting interest, and it is not fair to unreasonably tilt the balance in favour of one interest by ignoring the other.
In the case of fixation of minimum wages this Court has repeatedly rejected the contention of the employers that he has no capacity to pay minimum wages and therefore his right to carry on the business is affected.
[1034E, 1035 A B] U. Unichoyi & Ors.
vs The State of Kerala. ; relied on.
But this principle, rather, in contrast, illustrates the unreasonableness of the present impugned law.
Nobody has got a right to carry on business if he cannot pay even the minimum wages.
He must then retire from business, But to tell him to pay and not to retire if he cannot pay is pushing the matter to an extreme.
It has been observed that where an industry had been closed and the closure was real and bona fide, there cannot be an industrial dispute after closure.
[1035 B D] 1013 Pipraich Sugar Mills Ltd. vs Pipraich Sugar Mills Mazdoor Union, referred to.
The law may provide to prevent and regulate unfair unjust or mala fide closure.
[1036 C] The reasonableness has got to be tested both from the procedural and substantive aspects of the law.
It is true that Chapter V (B) deals with certain comparatively bigger undertakings and for a few types only but with all this it has not made the law reasonable.
It may be a reasonable law for saving the law from violation of article 14 but certainly it does not make the restriction reasonable within the meaning of article 19(6).
Not to permit the employer to close down is essentially an interference with the fundamental right to carry on the business.
[1036 D, H, 1037 A, G] If a law is otherwise good and does not contravene any of the fundamental rights of the non citizens, non citizens cannot take advantage of the voidness of law for the reason that it contravenes the fundamental rights of the citizens and claim that there is no law at all.
In the case of Ambica Mills this Court has not said that even if there is violation of the fundamental rights guaranteed by article 19(1)(b) and not saved by clause (6) of the said right has been conferred only on the citizens of India and not upon the corporate bodies like a company.
[1()38 A D] State of Gujarat and Anr.
vs Shri Ambica Mills Ltd., Ahmedabad, etc.
; explained.
Bennet Coleman & Co. & ors.
vs Union of India & Ors.
, ; , Rustom Cavasjee Cooper vs Union of India, ; relied on.
It was laid down in the case of Bennet Coleman & Co. & Ors.
and Rustom Cavasjee Cooper that if a shareholder 's right is impaired the State cannot impair the right of the shareholder as well as of the company and the Court can strike down the law for violation of fundamental right guaranteed only to the citizens if the challenge is by the company as well as by the shareholders.
The partners can challenge the validity in the name of firm.
In the present case where company is petitioner a shareholder has also been joined with the company to challenge the law. [1038 E F, H, 1039 A] The impugned law is not for giving effect to the policy of the State towards securing any of the principles in Articles 39(1) or 41.
The law does not fit in with the said directive principles.
The argument that it is protected by article 31(C) is not sustainable.
The amendment was prospective and not retrospective.
[1039 H, 1040 A B, E] The argument that when the amendment was brought the proclamation of emergency was in operation and thereafter before emergency was lifted, the amend article 31C had come into force and thus by the continuous process the latter became immune on the ground of violation of article 19 is not maintainable.
[1042 C] As soon as the emergency is lifted the law becomes bad because it was bad when it was enacted, although it could not be taken to be so during the period 1014 of Emergency.
Therefore, article 31C cannot protect the law.
Apart from the fact that article 31C has no application the law was bad for violation of article 19(1)(b) when it was enacted but it was not taken to be bad during the period of emergency.
Its invalidity sprouted out with full vigour on the lifting of emergency.
[1041 H, 1042 C D] Keshavan Madhava Menon vs The State of Bombay, ; Dhirubha Devi Singh Gohil vs The State of Bombay ; ; M.P.V. Sunderaramier & Co. vs The State of A. P. & Anr., ; , Jagannath etc., etc.
vs Authorised Officer, Land Reforms and Ors.
; , ; distinguished.
Bhikaji Narain Dhakras and Ors vs The State of M.P. & Anr., ; ; Basheshar Nath vs The Commissioner of Income Tax, Delhi and Rajasthan and Anr., [1959] Suppl.
1 SCR 528; Deep Chand vs The State of U.P. & ors.
, [1559] Suppl.
2 SCR 8; Mahendra Lal Jaini vs The State of U.P. and ORS.
, [1963] Suppl.
1 SCR 912 referred t(b.
The Court declared section 25 (o) as a whole and Section 25R in so for as it relates to the awarding of punishment for infringement of the provisions of Section 25(o) constitutionally bad and invalid for violation of article 19(1) of the Constitution.
The Court declared the impugned order passed in all the cases to be void and restrained the respondents from enforcing them.
The Court however did not express any opinion on the merits of the case, since the orders fall on the ground of constitutional invalidity.
[1046 A C]
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<s>[INST] Summarize the judgementAppeal No. 24 of 1958.
Appeal by special leave from the judgment and order dated October 4, 1956, of the former Bombay High Court in I.T.A. No. 49 of 1956.
R.J. Kolah, section N. Andley, J. B. Dadachanji, Rameshwar Nath and P. L. Vohra, for the appellant.
K.N. Rajagopal Sastri and D. Gupta, for the respondent.
September 22.
The Judgment of the Court was delivered by S.K. DAS J.
For the assessment year 1946 47 the appellant Homi Jehangir Gheesta was assessed to income tax on a total income of Rs. 87,500 under section 23(3) of the Indian Income tax Act, 1922.
The circumstances in which he was so assessed were the following.
The appellant 's case was that M. H. Sanjana, maternal grand father of the appellant, died on or about May 10, 1920.
There was litigation between his widow Cursetbai and Bai Jerbanoo, Sanjana 's daughter by his first wife, about the validity of a will left by Sanjana.
Bai Jerbanoo was the appellant 's mother.
The litigation was compromised and the appellant 's mother got one third share in the estate left by Sanjana the total value of which estate was about Rs. 9,88,000.
Bai Jerbanoo died in 1933, leaving her husband Jehangirji (appellant 's father), her son Homi (appellant) and a daughter named Aloo.
It was stated, though there was no evidence thereof, that Bai Jerbanoo left an estate worth about Rs. 2,10,000 when she died.
The appellant was a minor at the time of 772 his mother 's death.
He had two uncles then, Phirozeshaw and Kaikhusroo.
Phirozeshaw was the eldest member of the family.
On his mother 's death the appellant 's share of the estate was Rs. 70,000.
Phirozeshaw took charge of it and made investments.
He died on December 12, 1945.
Kaikhusroo, younger brother of Phirozeshaw and one of the executors of his will, took charge of the estate of Phirozeshaw.
When he opened a safe belonging to Phirozeshaw he found a packet with the name of the appellant on it.
That packet contained high denomination currency notes of the value of Rs. 87,500.
On January 24, 1946, the appellant tendered those notes for encashment and made a declaration which was then necessary and in the declaration he said: "Legacy from my mother who died in 1933 when I was minor and money whereof was invested from time to time by my father and late uncle Phirozeshaw who recently died." When the appellant received a notice from the Income tax Officer to submit a return of his income for the relevant year, he submitted a return showing " nil " income.
When asked about the high denomination notes which he had uncashed, he said in a letter dated January 7, 1947, that his uncle Phirozeshaw who used to manage his estate during his minority handed over to him and his father the sum of Rs. 87,500 sometime before his (i. e., Phirozeshaw 's) death in 1945.
This was a story different from the one later given, about the opening of the safe by Kaikhusroo after Phirozeshaw 's death and the finding of a packet there in the name of the appellant.
The appellant also filed an affidavit before the Income tax Officer on September 29, 1949, which also contained contradictory statements.
On a consideration of all the materials before him, the Income tax Officer did not accept the case of the appellant but came to the conclusion that the true nature of the receipt of Rs. 87,500 was not disclosed.
He treated the amount as appellant 's income from some source not disclosed and assessed him accordingly.
The appellant preferred an appeal to the Assistant 773 Commissioner of Income tax.
At the appellate stage the statements of the appellant 's father and uncle were taken by the Income tax Officer, D 11 Ward, Bombay, and a further statement of the appellant 's uncle Kaikhusroo was taken by the appellate authority.
That authority came to the same conclusion as the Income tax Officer had come to.
Then there was an appeal to the Income tax Appellate Tribunal, which again reviewed the facts of the case.
The Tribunal pointed out the following important discrepancies in the case sought to be made out by the appellant: "(i) Declaration dated 24 1 1946 by the assessee says that mother 's legacy was invested " by my father and my late uncle Phirozeshaw ".
His letter dated 7 1 1947 says that his uncle (i. e., Phirozeshaw) only managed his estate.
The object of this variation is obviously to shield his father from inconvenient examination.
The uncle had already departed for his eternal home.
(ii)Assessee 's letter dated 7 1 1947 says that the uncle Phirozeshaw handed over money " to me and my father " before his death.
The affidavit dated 29 9 1949 tells another story, viz., the executor Kaikhusroo handed over money to the assessee after Phirozeshaw 's death.
In another part of the said affidavit it is said that the said executor handed over money to assessee 's father.
The affidavit assures us that the declaration regarding high denomination notes was made on the information given him by his father.
The assessee son nowhere refers to any " packet ".
Indeed, the theory of " packet " was pronounced by the Executor Kaikhusroo only when he appeared before the Income tax Officer on 22 2 1952.
(iii) In his statement dated 22 2 1952 Mr. Kaikhusroo says that he " found an envelope containing Rs. 87,500 1 took charge of this money and handed over the money to Homi." Before the Appellate Assistant Commissioner H. Range, the same Mr. Kaikhusroo later on said: " I handed over the packets as they were.
I did 774 not count the Dotes or verify the contents.
" Some of the answers given as to " receipts " and " inventory " by the executor Kaikhusroo show that he did not take even the reasonable precautions that an ordinary person would take, not to talk of an executor.
" The Tribunal then expressed its conclusion thus: " We have, in these circumstances, no hesitation whatever in holding that the assessee has miserably failed to explain satisfactorily the source of the sum of Rs. 87,500.
It is properly taxed as income.
" It dismissed the appeal by its Order dated October 7, 1955.
The appellant then moved the Tribunal to refer certain questions of law to the High Court, which questions according to the appellant arose out of the Tribunal 's order.
The Tribunal held that no question of law arose out of its order dated October 7, 1955, and by its order dated March 8, 1956, dismissed the application of the appellant for a reference under section 66 of the Income tax Act, 1922.
The appellant unsuccessfully moved the Bombay High Court by means of a petition under section 66(2).
This petition was summarily dismissed by the High Court on October 4, 1956.
The appellant then filed a petition for special leave to appeal to this Court.
By an order dated December 3, 1956, this Court granted Special Leave to Appeal to this Court from the order of the Bombay High Court dated October 4, 1956, but made no order at that stage on the petition for special leave to appeal from the orders of the Tribunal dated October 7, 1955, and March 8, 1956.
The present appeal has been filed pursuant to the special leave granted by this Court.
The short point for consideration is this was the High Court right in summarily rejecting the petition under section 66 (2) ? In other words, did the order of the Tribunal dated October 7, 1955, on the face of it raise any question of law ? On behalf of the appellant it has been argued that the principles laid down by this Court in Dhirajlal Girdharilal vs Commissioner of Income tax, Bombay (1) apply, because though the decision of the (1) 775 Tribunal is final on a question of fact, an issue of law arises if the Tribunal arrives at its decision by consider ing material which is irrelevant to the enquiry, or by considering material which is partly relevant and partly irrelevant, or bases its decision partly on conjectures, surmises and suspicions.
It is contended that on the face of it the decision of the Tribunal suffers from all the three defects mentioned above.
Learned Counsel for the appellant has made a grievance of that part of the order in which the Appellate Tribunal states: " We were also not told why the deceased uncle, if he took charge of the minor 's money, did not hand it over to Bai Aloo when she became major in 1939 or even when she got married in 1944 ".
It is contended that this was an irrelevant consideration, and Bai Aloo herself made a statement before the Income tax Officer, D II Ward, Bombay, on February 22, 1952, in which she indicated the cir cumstances how she also received a sum of Rs. 85,000 from her uncle Phirozeshaw before the latter 's death.
She further stated that she also submitted a return to the Income tax Officer but was not subjected to any assessment on the sum received.
The argument of learned Counsel for the appellant is that it was not a relevant consideration as to why Phirozeshaw did not hand over the money to Bai Aloo in 1939 or in 1944, and if Bai Aloo 's statements were to be taken into consideration, they were in favour of the appellant in as much as no assessment was made on Bai Aloo in respect of the sum she had received.
We do not consider that the circumstances referred to by the Tribunal in connection with Bai Aloo 's statement were irrelevant.
What the Tribunal had to consider was the correctness or otherwise of a story in which the mother was stated to have left Rs. 2,10,000 out of which the heirs got one third share each.
The Tribunal had to consider each aspect of the story in order to judge of its probability and from that point of view it was a relevant consideration as to why Bai Aloo 's money was not paid when she became major or when she got married.
It was also a relevant consideration as to what the father of the appellant did with his 776 share of the money and the Tribunal rightly pointed out that the father took cover tinder "mixing of investments ".
These were relevant considerations for judging the probability of the story.
The Tribunal also rightly pointed out that the fact that Bai Aloo was not assessed did not make the story any more probable.
The Tribunal stated in its order that a summons was issued to the father by the Income tax Officer to appear before the latter on June 23, 1950.
The father failed to comply with the summons.
This circumstance, it is argued, should not have been used against the appellant, because the record showed that the summons was served on the father on June 22, 1950, for attendance on the next day and the father wrote a letter stating that it was not possible for him to attend on the next day and, therefore, asked for another date.
We do not think that this circumstance vitiates the order of the Tribunal which was based on grounds much more substantial than the failure of summons issued against him.
The father was actually examined later and his statements were taken into consideration.
One point made by the Tribunal was that no explanation was forthcoming as to why the uncle took charge of the share of the appellant and his sister when their father was alive and why the father allowed himself to be effaced in the matter of custody and management of the funds belonging to his children.
We consider that this circumstance was also a relevant consideration, and if the father was in a position to give an explanation, he should have done so when he made his statement before the Income tax Officer, D 11 Ward, Bombay, on February 8,1952.
The Tribunal states: " We were also told that the assessee was taking his education between 1943 and 1950 and as such he bad no opportunity to earn any income.
In a place like Bombay and particularly in the family of a businessman, a person may earn even when he learns.
" These observations of the Tribunal has been very seriously commented on by learned Counsel for the appellant.
Learned Counsel has stated that certificates from the school, college and 777 university authorities were produced by the appellant right upto 1950 which showed that the appellant was a student till 1950 and after seeing the certificates the Tribunal should not have said " We were also told etc.
" According to learned Counsel this showed that, the finding of the Tribunal was coloured by prejudice.
We are unable to agree.
Even if it be taken that the appellant satisfactorily proved that he was a student till 1950, we do Dot think that it makes any real difference as to the main question at issue, which was whether the appellant received the sum of Rs. 70,000 from the estate of his mother, later increased by investments to Rs. 87,500 in 1945.
The Tribunal rightly pointed out that no evidence was given of the value of the estate left by the mother, though there was some evidence of what the mother received from the estate of her father Sanjana; nor was there any evidence of the investments said to have been made which led to an addition to the original sum of Rs. 70,000.
It has been argued that it was a mere surmise on the part of the Tribunal to say that in a place like Bombay a person may earn when be learns.
Even if the Tribunal is wrong in this respect, we do not think that it is a matter of any consequence.
We must read the order of the Tribunal as a whole to determine whether every material fact, for and against the assessee, has been considered fairly and with the due care; whether the evidence pro and con has been considered in reaching the final conclusion ; and whether the conclusion reached by the Tribunal has been coloured by irrelevant considerations or matters of prejudice.
Learned Counsel for the appellant has taken us through the entire order of the Tribunal as also the relevant materials on which it is based.
Having examined the order of the Tribunal and those materials, we are unable to agree with learned Counsel for the appellant that the order of the Tribunal is vitiated by any of the defects adverted to in Dhirajlal Girdharilal vs Commissioner of Income tax, Bombay (1) or Omar Salay Mohamed Sait vs Commissioner of Income tax, Madras(2).
We must make (1) (2) 778 it clear that we do not think that those decisions require that the order of the Tribunal must be examined sentence by sentence, through a microscope as it were, so as to discover a minor lapse here or an incautious opinion there to be used as a peg on which to hang an issue of law.
In view of the arguments advanced before us it is perhaps necessary to add that in considering probabilities properly arising from the facts alleged or proved, the Tribunal does not indulge in conjectures, surmises or suspicions.
It has also been argued before us that even if the explanation of the appellant as to the sum of Rs. 87,500 is not accepted, the Department did not prove by any direct evidence that the amount was income in the hands of the appellant.
We do not think that in a case like the one before us the Department was required to prove by direct evidence that the sum of Rs. 87,500 was income in the hands of the appellant.
Indeed, we agree that it is not in all cases that by mere rejection of the explanation of the assessee, the character of a particular receipt as income can be said to have been established; but where the circumstances of the rejection are such that the only proper inference is that the receipt must be treated as income in the bands of the assessee, there is no reason why the assessing authorities should not draw such an inference.
Such an inference is an inference of fact and not of law.
For the reasons given above we are of the view that no question of law arose from the order of the Tribunal and we see no grounds for interference with the judgment and order of the Bombay High Court, dated October 4, 1956.
The appeal accordingly fails and is dismissed with costs.
Appeal dismissed.
[/INST]The firm consisting of the appellant and another, carrying on managing agency business, was on March 31, 1951, assessed to excess profits tax for the year 1942 and the broken period from January, 1943 to March 4, 1943.
The prescribed notices were served not on the appellant but on the other partner who, under the terms of the partnership deed, was the managing partner.
On March 4, 1943, the managing partner gave notice of dissolution of the firm and thereupon the appellant sued him for dissolution from such date as might be specified by the court.
The trial Court upheld the dissolution as and from the date notified by the managing partner but on appeal the High Court by its judgment rendered in 1953 fixed March 10, 1949, as the date of the dissolution.
An appeal taken to the Supreme Court from this decision of the High Court was still pending.
The appellant challenged the validity of the order of assessment and the consequent proceedings for recovery of the tax assessed, under article 226 of the Constitution on the grounds, (a) that there was a dissolution of the firm on March 4, 1943, and that notices served thereafter on the managing partner would not bind him, (b) that there was no demand of the tax due from him under section 29 of the Indian Income tax Act and that, consequently, the tax could not be recovered from him under section 46(2) of the Act, but the High Court dismissed his application.
Held, that the appellant could not be allowed to plead a prior dissolution and the assessment was binding on him.
Even assuming that the partnership stood dissolved on the date of the assessment, his position would not be different.
Under the Excess Profits Tax Act, 1940, the unit of assessment was not the firm but the business, and an order of assessment passed after notice to the managing partner would be valid and binding on the appellant under section 44 of the Indian Income tax Act, 1922, as modified by the Central Board of Revenue under section 21 of the Excess Profits Tax Act, 1940.
A.G. Pandu Rao vs Collector of Madras, (1954) 26 I.T. R. 99 and Bose vs Manindra Lal Goswami, , approved.
789 No separate notice of demand under section 29 of the Indian Income tax Act, specifically addressed to the appellant, was necessary in order to recover the tax by the mode prescribed by section 46(2) of the Act.
Under the proviso to section 21 of the Excess Profits Tax Act, 1940, the appellant was an assessee within the meaning of section 29 of the Indian Income tax Act, 1922, and the notice of demand served on the managing partner was notice to the appellant by virtue of section 63 of the latter Act made applicable by section 21 of the former.
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<s>[INST] Summarize the judgementAppeal No.426 of 1957.
Appeal from the judgment and order dated April 21, 1955, of the Orissa High Court at Cuttack in Special Jurisdiction Case No. 179 of 1951.
A. N. Kripal, R. H. Dhebar and D. Gupta, for the appellant.
A. V. Viswanatha Sastri, M. section K. Sastri and R. Jagannatha Rao, for the respondent.
October 14.
The Judgment of the Court was delivered by VENKATARAMA AIYAR, J.
This is an appeal against the judgment of the High Court of Orrissa in a reference under section 66(1) of the Indian Income tax Act, 1922, hereinafter referred to as the Act, and the point for decision is whether income received by the respondent by the sale of trees growing in his forests is agricultural income exempt from taxation under section 4(3)(viii) of the Act.
The respondent is the proprietor of the impartable zamin of Jaipur in Koraput District.
The estate is of the area of 12,000 sq.
miles of which 1540 sq.
miles are reserve forest and 100 sq. miles, protected forest.
The respondent derives income from the forests by the sale of timber such as teak, salwood, lac, myrabolam, tamarind, cashewnuts and firewood.
There is no 23 178 dispute either as to the receipt of such income or as to its quantum.
All tat appears in the account books of the respondent.
The point in controversy is as to whether this income is chargeable to tax.
It is the contention of the respondent that this is agricultural income as defined ins.
2(1) of the Act, and that it is, in consequence, exempt under section 4(3)(viii).
By his 31, 1943, the Income tax order dated January Officer held that the forests in question had not been proved to have been planted by the respondent, that the trees were of spontaneous growth, and that the income therefrom was not within the exemption under section 4(3)(viii); and this order was confirmed on appeal by the Appellate Assistant Commissioner.
The respondent took the matter in further appeal to the Appellate Tribunal, and there put forward the contention that the Incometax Officer had failed to take into account a letter of the Dewan dated June 3, 1942, which gave a detailed account of the operations carried on by the estate in the rearing and maintenance of forests and that on the facts mentioned in that letter, his finding that there had been no plantation of trees was errolieous.
By its order dated April 9, 1946, the Tribunal accepted this contention, and directed a fresh enquiry into the facts mentioned in the said letter.
Pursuant to this order, the Income tax Officer again enquired into the matter.
He observed that though he gave ample opportunities to the respondent to prove that there was plantation of trees by the estate, no materials were placed in proof of that fact and that neither plantation books nor any working plans for timber plantation had been produced.
He accordingly held that the forests had grown naturally, and that the income therefrom was assessable to tax.
On this report, the appeal again came up for hearing before the Tribunal.
The main contention urged by the respondent at the hearing was that the facts showed that the forests which had yielded income during the year, ' of account could not have been the virgin forests which had originally grown spontaneously on the hills, because they had been periodically denuded by the hill tribes in the process of Podu cultivation carried on by 179 them.
What this Podu cultivation means is thus stated in the ]District Gazetteer, Vishakapatnam, 1907: " This consists in felling a piece of jungle, burning the felled trees and undergrowth, sowing dry grain broadcast in the ashes (without any kind of tilling) for two years in succession, and then abandoning the plot for another elsewhere.
" The argument of the respondent was that as a result of the Podu cultivation, the original forests should have disappeared and that the trees that had subsequently grown into forest and sold as timber must have been planted by human agency and their sale proceeds must accordingly be agricultural income.
Dealing with this contention, the Tribunal observed that though there had been extensive destruction of forests in the process of Podu cultivation, nevertheless, considerable areas of virgin forests still survived, that the evidence of actual cultivation and plantation by the zamin authorities was meagre and unsubstantial, that no expenses were shown to have been incurred on this account prior to 1904, that the amount shown as spent during that year was negligible, that the trees planted then could not have been the trees sold as timber during the assessment years, and that the respondent bad failed to establish facts on which he could claim exemption.
It should be mentioned that this order covered the assessments for five years from 1942 43 to 1946 47, the facts relating to the character of the income being the same for all the years.
On the application of the respondent, the Tribunal referred the following question for the decision of the High Court : " Whether on the facts and in the circumstances the income derived from forest in this case is taxable under the Indian Income tax Act.
" The reference was heard by Panigrahi, C. J., and Misra, J., who answered it in the negative.
They observed : " It appears to us that the cases as set out by both parties have been put too high.
The department takes the view that unless there is actual cultivation of the 180 soil the income from the forest trees cannot be regard.
,led as agricultural income.
The fact that the assessee has spent some money and planted valuable trees in some areas is not sufficient to free the income out of the extensive forests which owe their existence to spontaneous growth, from its liability to taxation.
The assessee on the other hand seeks to create an impression that there is not a single tree of spontaneous growth, in these forests, and such trees as now constitute forests have sprung up out of the stumps left by the hillmen as a result of the system of I Podu ' cultivation adopted by them.
It appears to us that neither of these claims can be regarded as precise or correct." The learned Judges then observed that the forests in the Koraput area had been under Podu cultivation for a long period, and that as the result of that cultivation they had practically disappeared even by the year 1870, that the trees had subsequently grown into forests and they had also been destroyed by about the year 1901, and that therefore there could not have been any virgin forest left surviving.
Then they referred to the fact that the respondent had been maintaining a large establishment for the preservation of the forests, and that there had been organised activities (1) " in fostering the growth of the trees and preserving them from destruction by man and cattle; (2) in cultivation of the soil by felling and burning trees from time to time; (3) in planned exploitation of trees by marking out the areas into blocks; (4) in systematic cutting down of trees of particular girth and at particular heights; (5) in planting new trees where patches occur; and (6) in watering, pruning, dibbling and digging operations carried on from time to time ".
And they stated their conclusion thus: " All these and similar operations which have been undertaken by the assessee through his huge forest establishment, show that there has been both cultivation of the soil as well as application of human skill and labour, both upon the land and on the trees themselves.
It cannot be assumed therefore that all the trees are of spontaneous growth.
The indications, on 181 the other hand, appear to be that most of them are sprouts springing from burnt stumps.
There is no basis for the assumption made by the Income tax Department that all the trees are forty years old and that they owe their existence to spontaneous growth.
Apart from that it will be noticed that what distinguishes the present case from all the reported decisions is that practically the whole of the forest area has been subjected to process of 'Podu ' cultivation spreading over several decades so that it is impossible to say that there is any virgin forest left.
The onus was certainly upon the department to prove that the income derived from the forest was chargeable, to tax and fell outside the scope of the exemption mentioned in Section 4(3)(viii).
" In this view, they held that the Department had failed to establish that the income derived from the sale of trees was not agricultural income, and answered the reference in favour of the respondent.
The learned Judges, however, granted a certificate to the appellant under section 66(A)(2) of the Act, and that is how the appeal comes before us.
At the very outset, we should dissent from the view expressed by the learned Judges that the burden is on the Department to prove that the income sought to be taxed is not agricultural income.
The law is well settled that it is for a person who claims exemption to establish it, and there is no reason why it should be otherwise when the exemption claimed is under the Income tax Act.
The learned Judges were of the opinion that their conclusion followed on the principle of the law of Income tax that " where an exemption is conferred by a statute, the State must not get the tax either directly or indirectly ", and support for this view was sought in the following observations of Lord Somervell, L. J., in Australian Mutual Provident Society vs Inland Revenue Commissioners (1): " The rule must be construed together with the exempting provisions which, in our opinion, must be regarded as paramount.
So far as the rule, if taken (I) 182 in isolation, would have the effect of indirectly depriving the company of any part of the benefit of the exemption, its operation must be cut down, so as to prevent any such result, and to allow the exemption to operate to its full extent.
" These observations have, in our opinion, no bearing on the question of burden of proof.
They merely lay down a rule of construction that in determining the scope of a rule, regard must be had to the exemptions engrafted thereon, and that the rule must be so construed as not to nullify those exemptions.
No such question arises here.
There is ample authority for the view that the principle that a person who claims the benefit of an exemption has to establish it, applies when the exemption claimed is under the provisions of the Income tax Act.
Vide the observations of the Lord President and of Lord Adam in Maughan vs Free Church of Scotland (1) and the observations of Lord Hanworth, M. R., in Keren Kayemeth Le Jisroel Ltd. vs The Commissioners of Inland Revenue (2) at p. 36 that " the right to exemption under Section 37 must be established by those who seek it.
The onus therefore lies upon the Appellants ", and of Lord Macmillian at p. 58 that, " In my opinion, the Appellants, have failed to bring it within any one of these categories and consequently have failed in what was essential for them to make out, namely, that this Company is a body of persons established for charitable purposes only.
" The decisions of Indian Courts have likewise ruled and quite rightly that it is for those who seek exemption under section 4 of the Act to establish it.
Vide Amritsar Produce Exchange Ltd. In re (3) and Sm.
Charusila Dassi and others, In re (4).
So far as exemption under section 4(3) (viii) is concerned, the matter is concluded by a decision of this Court given subsequent to the decision now under appeal.
In Commissioner of Income tax vs Venkataswamy Naidu (5), this Court held, reversing the judgment of the High Court of Madras, that it (1) , 21 O. (2) (3) , 327.
(4) , 370.
(5) , 534. 183 was for the assessee to prove that the income sought to be taxed was agricultural income exempt from taxation under section 4(3)(viii).
Bhacgwati, J., delivering the ' judgment of the Court observed: " . the High Court erroneously framed the question in the negative form and placed the burden on the Income tax Authorities of proving that the income from the sale of milk received by the assessee during the accounting year was not agricultural income.
In order to claim an exemption from payment of incometax in respect of what the assessee considered agricultural income, the assessee had to put before the Income tax Authorities proper materials which would enable them to come to a conclusion that the income which was sought to be assessed was agricultural income.
It was not for the Income tax Authorities to prove that it was not agricultural income.
It was this wrong approach to the question which vitiated the judgment of the High Court and led it to an erroneous conclusion.
" On the inerits, the question what is agricultural income within section 2(1) of the Act is the subject of a recent decision of this Court in The Commissioner of Income tax, West Bengal, Calcutta vs Raja Benoy Kumar Sahas Roy (1).
There, it was held that before an income could be held to be agricultural income, it must be shown to have been derived from land by agriculture or by one or the other of the operations described in cls.
(i) and (ii) of section 2(1)(b) of the Act, that the term St agriculture " meant, in its ordinary sense, cultivation of the field, that in that sense it would connote such basic operations as tilling of the land, sowing of trees, plantation and the like, and that though subsequent operations such as weeding, pruning, watering, digging the soil around the growth and removing undergrowths could be regarded as agricultural operations when they are taken in conjunction with and as continuation of the basic operations mentioned before, they could not, apart from those operations, be regarded as bearing the character of agricultural operations.
(1) ; , 155, 158, 160.
184 It is only " observed Bhagwati, J., delivering the judgment of the Court, " if the products are raised from the land by the performance of these basic operations that the subsequent operations attach themselves to the products of the land and acquire the characteristic of agricultural operations. " " But if these basic operations are wanting the subsequent operations do not acquire the characteristic of agricultural operations.
" Dealing with trees which grow wild, Bhagwati, J., observed : " It is agreed on all hands that products which grow wild on the land or are of spontaneous growth not involving any human labour or skill upon the land are not products of agriculture and the income derived therefrom is not agricultural income.
There is no process of agriculture involved in the raising of these products from the land.
" The law being thus settled, in order to decide whether the income received by the respondent by the sale of trees in his forests was agricultural income or not, the crucial question to be answered is, were those trees planted by the proprietors of the estate, or did they grow spontaneously ? If it is the latter, it would be wholly immaterial that the respondent has maintained a large establishment for the purpose of preserving the forests and assisting in the growth of the trees, because ex hypothes, he performed no basic operations for bringing the forests into being.
Now, the Tribunal has clearly found that there were no plantations of trees by the estate authorities worth the name, and that the trees, the income from which is the subject matter of the assessments, must have been of sponta neous growth.
That is a finding of fact which is binding on the Court in a reference under section 66(1) of the Act.
The learned Judges declined to accept this finding, because they considered that the Tribunal had not appreciated the true significance of Podu cultivation.
That, in our opinion, is a misdirection.
If the point for decision had been whether the forest was a virgin forest or whether it had subsequently sprung up, the evidence relating to Podu cultivation would have 185 been very material.
But the point for decision is not whether the forests were ancient and primeval, but whether they had been planted by the estate authorities, and on that, the Podu cultivation would have no bearing.
As a result of the Podu cultivation, the original forests would have disappeared.
But the question would still remain whether the forest which again sprang up was of spontaneous growth, or was the result of plantation.
Now, there is no evidence that as and when the jungle had disappeared under Podu cultivation, the estate intervened and planted trees on the areas thus denuded.
On the other hand, the learned Judges themselves found that after the destruction of the original forests in the process of Podu cultivation, there was a fresh growth of forests from the stumps of the trees which had been burnt.
If that is the fact, then the new growth is also spontaneous and is not the result of any plantation.
In fairness to the learned Judges, it must be observed that at the time when they heard the reference there was a conflict of judicial opinion on the question whether subsequent operations alone directed to the preservation and improvement of forests would be agricultural operations within section 2(1) of the Act; and the view they took was that such operations when conducted on a large scale as in the present case would be within section 2(1) of the Act.
It was in that view that they observed that "it is therefore idle to regard tilling as the sole and indispensable test of agriculture ".
The decision of the learned Judges was really based on the view that though trees in the forest had not been planted by the estate authorities, the latter had performed subequent operations of a substantial character for the maintenance and improvement of the forest, and that, in consequence, the income was agricultural income.
This view is no longer tenable in view of the decision of this Court in The Commissioner of Income tax, West Bengal, Calcutta vs Raja Benoy Kumar Sahas Roy (1).
It is contended by Mr. Viswanatha Sastri for the (1) ; , 155, 158, 160.
24 186 respondent that on the facts established in the evidence, the proper conclusion to come to is that the trees sold by the respondent had been planted by the estate authorities, and that the decision of the High Court that the income thus realised is within the exemption under section 4(3)(viii) could be supported even on the view of law taken in The Commissioner of Income tax, West Bengal, Calcutta vs Raja Benoy Kumar Sahas Roy (1).
The argument was that there was unimpeachable evidence that the old forests had disappeared under Podu cultivation, that the estate had been regularly engaged in planting trees at least from the year 1904 as is shown by the accounts of the zamin, that it was a reasonable inference to make that there had been similar plantations even during the years prior to 1904 notwithstanding that no accounts were produced for those years, because it would not be reasonable to expect that such accounts would now be available, that though the amount shown as spent for plantation might not be considerable, that was understandable when regard is bad to the fact that the agricultural operations were conducted on the hills and not on the plains, that, on these facts, it would be proper to conclude that the forests were in their entirety the result of plantation.
It would be ail erroneous approach, it was argued, to call upon the assessee to prove tree by tree that it was planted.
Now, these are matters of appreciation of evidence on what is essentially a question of fact, viz., whether the trees were of spontaneous growth or were products of plantation.
On this, the Tribunal has given a clear finding on a consideration of all the material evidence, and its finding is final and not open to challenge in a reference under section 66 (1) of the Act.
Even the learned Judges of the High Court who considered themselves free to review that finding and, as already pointed out, without justification, could only observe that the trees must have mostly grown from the slumps left when the forests were burnt for purposes of Podu cultivations finding which is fatal to the contention now urged for the respondent that they (I) ; , 155, 158, 160.
187 were the result of plantation.
We are of opinion that there are no grounds on which the finding of the Tribunal could be attacked in these proceedings.
It remains to deal with one other contention urged on behalf of the respondent, and that is based on the fact that the amounts spent in the upkeep of the forrests were large in comparison with the receipts therefrom.
The following are the figures relating to the forest receipts and expenses for the years with which the present assessments are concerned: Years Receipts Expenses 1942 43 Rs. 438,894 Rs. 174,437 1943 44 Rs. 407,447 Rs. 209,895 1944 45 Rs. 552,122 Rs. 228,830 1945 46 Rs. 372,971 Rs. 247,216 1946 47 Rs. 689,366 Rs. 460,369 The argument is that from the high proportion of the expenses in relation to the receipts it could be inferred that the income from trees planted by the estate formed a substantial portion of the income derived from the forests.
And support for this conclusion is sought in the following observations in The Commissioner of Income tax, West Bengal, Calcutta vs Raja Benoy Kumar Sahas Roy (1): " The expenditure shown by the assessee for the maintenance of the forest is about Rs. 17,000 as against a total income of about Rs. 51,000.
Having regard to the magnitude of this figure, we think that a substantial portion of the income must have been derived from trees planted by the proprietors themselves.
" To appreciate the true import of these observations, we must have regard to the context in which they occur.
The facts found in that case were that portions of the forest which was originally of spontaneous growth had gradually been denuded, that the propritor had planted trees in the areas so denuded, that this had gone on for a period of over 150 years, and that therefore " the whole of the income derived from (1) ; , 155, 158, 160.
188 the forest cannot be treated as non agricultural income ".
It was then observed that " If the enquiry had been directed on proper lines, it would have been possible for the Income tax authorities to ascertain how much of the income is attributable to forest of a spontaneous growth and how much to trees Planted by the proprietors ", but that, in view of the long lapse of time, it was not desirable to remand the case for enquiry into the matter.
Then follow the observations on which the respondent relies, and when read in the light of the findings that the plantations made by the proprietors were not negligible, they mean nothing more than that out of the total income a substantial portion was likely to be agricultural income, and that it was therefore not a fit case for ordering fresh enquiry These observations do not lay down that if considerable amounts are expended in the maintenance of forests, then it must be held that the trees were planted by the proprietors.
They only mean that if a considerable portion of the forests is found to have been planted, a substantial portion of the forest income may be taken to have been derived therefrom.
And this too, it must be remarked, is only a presumption of fact, the strength of which must depend on all the facts found.
In the face of the clear finding in the present case that the forests with which the assessment years are concerned were of spontaneous growth, the observations quoted above can be of no assistance to the respondent.
It is scarcely necessary to add that the observations " If the enquiry bad been directed on proper lines, it would have been possible for the Income tax authorities to ascertain how much of the income is attributable to forest of spontaneous growth and how much to trees planted by the proprietors " quoted above cannot be read, as was sought to be done for the respondent, as throwing on the Department the burden of showing that the income sought to be taxed was not agricultural income.
That, in their context, is not the true meaning of the observations, and the law is as laid down in Commissioner of Income tax vs Venkataswamy Naidu (1) , 534. 189 In the result, this appeal is allowed, the order of the Court below is set aside and the reference is answered in the affirmative.
The respondent will pay the costs of the appellant here and in the Court below.
Appeal allowed.
[/INST]The two petitioners were apprehended while attempting to smuggle a huge amount of Indian and foreign currency and other contraband goods out of India and the Collector of Central Excise and Land Customs passed orders confiscating the seized goods and imposing heavy personal penalties on both of them under 275 section 167(8) of the Sea Customs Act.
On a subsequent complaint made by the Customs Authorities on the same facts, the petitioners were convicted and sentenced by the Additional District Magistrate to various terms of imprisonment under section 23, read with section 23B, of the Foreign Exchange Regulation Act, section i67(8I) of the Sea Customs Act and section 120B of the Indian Penal Code.
The Additional Sessions judge in appeal affirmed the said orders of conviction and sentences and the High Court refused to interfere in revision.
It was contended on behalf of the petitioners, who had, at an earlier stage, made an unsuccessful attempt to move this Court under article 32 and have the prosecutions quashed, that the orders of conviction and sentences passed on them by the Courts below infringed the constitutional protection against double jeopardy afforded by article 20(2) Of the Constitution.
Held, (Per Das, C. J., Bhagwati, B. P. Sinha and Wanchoo, Jj., Subba Rao, J., dissenting) that the contention was without substance and must be negatived.
In order to sustain a plea of double jeopardy and to avail of the protection of article 20(2) of the Constitution it was incumbent to show that (1) there was a previous prosecution, (2) a punishment and (3) that for the same offence, and unless all the three conditions were fulfilled the Article did not come into operation.
The word 'prosecution ' as used in that Article contemplated a proceeding of a criminal nature either before a court or a judicial tribunal.
Maqbool Hussain vs The State of Bombay, ; , relied on.
The insertion of section 187A into the Sea Customs Act by the amending Act of 1955, left no scope for doubt that the hierarchy of Authorities under that Act functioned not as Courts or judicial tribunals but as administrative bodies, even though in recording evidence or hearing arguments they acted judicially.
The words " offences " and " penalties " used by the Act could not have the same meaning as in Criminal Law and a penalty or confiscation ordered under section 167(8) of the Act could not be a punishment such as is inflicted by a Criminal Court for a criminal offence.
Sewpujanrai Indrasanrai Ltd. vs The Collector of Customs and others; , , referred to.
Nor were the Customs Authorities invested with the powers of a Criminal Court under the Schedule to section 167 and the procedure laid down by Ch.
XVII of the Act, and any orders passed by them either in rem or in personal, by way of confiscation of the goods or imposition of penalties on the person, could only be in the nature of administrative ones made in the interest of revenue and could not bar a criminal prosecution.
Morgan vs Devine, ; and United States of America vs Anthony La Franca, ; , considered.
276 The proceedings against the petitioners before the Collector of Customs under section 167(8) of the Sea Customs Act could.
not therefore, be a prosecution within the meaning of article 20(2) Of the Constitution and the petitioners were not put to double jeopardy.
Per Subba Rao, J.
The prosecution of 'the petitioners before the Magistrate and the punishment inflicted on them directly infringed article 20(2) of the Constitution.
There can be no inconsistency in an authority under an Act functioning in an administrative capacity in respect of certain specified duties while it acts as a judicial tribunal in respect of others, and the question as to which of them it discharges in a judicial capacity has to be decided on the facts of each case and in the light of well settled characteristics of a judicial tribunal.
Cooper vs Wilson, and Venkataraman vs Union of India; , , relied on.
Although this Court has held that the Sea Customs Autho rities in adjudging confiscation do not function as judicial tribunals but as mere administrative authorities, the question as to whether imposing personal penalties they act as judicial tribunals still remains open.
Maqbool Hussain vs The State.
of Bombay, ; and Sewpujanrai Indrasanrai Ltd. vs The Collector of Customs, ; , explained.
An examination of the entire scheme of the Sea Customs Act leaves no manner of doubt that the Customs Authorities act as judicial tribunals so far as offences under section 167 Of the Act are concerned.
The word 'prosecuted ' used in article 20(2) of the Constitution is comprehensive enough to include a prosecution before an authority other than a Magistrate or a Criminal Court, and the offences described in section 167 Of the Sea Customs Act are offences within the meaning of the General Clauses Act and the Indian Penal Code and the penalties prescribed therefor are nothing but punishments inflicted for those offences either by the Customs Authorities or the Magistrate.
The question of the identity of an offence has to be deter mined on the facts of each particular case and the real test is whether the previous prosecution and punishment were based on the same facts on which rested the subsequent prosecution and punishments
</s>
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<s>[INST] Summarize the judgementCivil Appeal No. 854, of 1977.
Appeal by Special Leave from the Judgment and order dated 2 8 1976 of the Madhya Pradesh High Court in S.A. No. 440/71.
section section Khanduja and Lalit Kumar Gupta for the Appellant.
T. P. Naik and section K. Gambhir for the Respondent.
The Judgment of the Court was delivered by CHINNAPPA REDDY, J.
The respondent landlord sought eviction of the appellant tenant from the suit premises an two grounds: (i) failure to pay arrears of rent of Rs. 158.25 despite service of notice of demand and (ii) bonafide requirement of premises for landlord 's personal occupation.
The second ground was rejected by all the sub ordinate courts and we are no longer concerned with that ground.
In regard to the first ground, the trial Court found that the tenant was 336 in arrears of payment of rent but that the tenant was entitled to the Protection of section 12(3) of the Madhya Pradesh Accommodation Control Act, 1961, as the tenant had deposited the arrears of rent within the time allowed by the Court on his application.
When the appeal preferred by the landlord was pending before the Additional District Judge, Satna, the tenant filed an application for condonation of delay R in depositing the rent, month by month, which had become payable after the filing of the suit, as stipulated by section 13(1) of the Act.
It appears that, on several occasions, when the suit and the appeal were pending before the trial court and the appellate court respectively, the tenant had deposited the monthly rent a day or two or three, beyond the prescribed date.
The amount had been received by the court and drawn out by the landlord, apparently without any protest.
Taking advantage of the filing of the tenant 's application for condonation of delay, the landlord contended that the court had no power to extend the time for deposit of the monthly rent and that he was entitled to a decree for eviction consequent on the non compliance with the provisions of section 13 ( 1 ) of the Madhya Pradesh Accommodation Control Act.
The appellate court negatived the landlord 's contention and dismissed the appeal.
The landlord preferred a Second Appeal to the High Court of Madhya Pradesh.
The High Court, holding that the court had no power to extend time, decreed the suit for eviction.
The tenant, having obtained special leave, has appealed to this Court.
Shri Khanduja, learned counsel for the appellant, raised two contentions before us.
The first contention was that the High Court was wrong in holding that the Court had no power to condone the delay in depositing the monthly rent falling due after the filing of the suit for eviction.
The second contention was that, in the circumstances of the case.
the respondent must be considered to have waived or abandoned the right to insist on dis entitling the tenant of the protection to which he was otherwise entitled.
Shri Naik, learned counsel for the respondent, contended to the contrary on both the questions.
The Madhya Pradesh Accommodation Control Act, 1961, was enacted, as recited in the statement of objects and reasons, "for the purpose of controlling, letting of and rents of residential and nonresidential accommodation and giving adequate protection to tenants of such accommodation in areas where there is dearth of accommodation".
Section 12(1) of the Act provides that no suit shall be filed ill any civil court against a tenant for his eviction from any accommodation except on one or more of the grounds specified therein.
Several grounds are specified, such as, failure to pay the arrears of rent after the service of notice of demand, unlawful sub letting of the whole or 337 part of the accommodation, creation of a nuisance, bonafide requirement of the accommodation by the landlord for his own occupation, causing of substantial damage to the accommodation etc.
The ground with which we are concerned is that mentioned in section 12(1) (a) and it is: "that the tenant has neither paid nor tendered the whole of the arrears of rent legally recoverable from him within two months of the date on which a notice of demand for the arrears of rent has been served on him by the landlord in the prescribed manner".
Thus, where a tenant is in arrears of rent, a landlord is obliged, before instituting a suit for eviction on that ground, to serve a notice of demand calling upon the tenant to pay or tender the whole of the arrears of rent within two months of the date of service of the notice.
section 12(3) provides that an order for the eviction of a tenant shall not be made on the ground specified in section 12(1) (a), if the tenant makes payment or deposit as required by section 13.
section 13,sub sections
(1), (5) and (6) which are relevant for the present purpose are as follows: "13.
(1) on a suit or proceeding being instituted by the landlord on any of the grounds referred to in section 12, the tenant shall, within one month of the service of the writ of summons on him or within such further time as the Court may, on an application made to it, allow in this behalf, deposit in the Court or pay to the landlord an amount calculated at the rate of rent at which it was paid, for the period for which the tenant may have made default including the period subsequent thereto up to the end of the month previous to that in which the deposit or payment is made and shall thereafter continue to deposit or pay, month by month, by the 15th of each succeeding month a sum equivalent to the rent at that rate.
xx xx xx xx xx (5) If a tenant makes deposit or payment as required by sub section (1) or sub section (2), no decree or order shall be made by the Court for the recovery of possession of the accommodation on the ground of default in the payment of rent by the tenant, but the Court may allow such cost as it may deem fit to the landlord.
(6) If a tenant fails to deposit or pay any amount as required by this section, the Court may order the defence against eviction to be struck out and shall proceed with the hearing of the suit.
" 338 It is true that in order to entitle a tenant to claim the protection of section 12(3), the tenant has to make a payment or deposit as required by section 13, that is to say, the arrears of rent should be paid or deposited within one month of the service of the writ of summons on the tenant or within such further time as may be allowed by the court, and should further deposit or pay every month by the 15th, a sum equivalent to the rent.
It does not, however, follow that failure to pay or deposit a sum equivalent to the rent by the 15th of every month, subsequent to the filing of the suit for eviction, will entitle the landlord, straight away, to a decree for eviction.
The consequences of the deposit or payment and non payment or non deposit are prescribed by sub sections
(5) and (6) of section 13.
Since there is a statutory provision expressly prescribing the consequence of non deposit or non payment of the rent, we must look to and be guided by that provision only to deter mine what shall follow.
section 13 (6) does not clothe the landlord with an automatic right to a decree for eviction; nor does it visit the tenant with the penalty of a decree for eviction being straightaway passed against him.
section 13(6) vests, in the court, the discretion to order the striking out of the defence against eviction.
In other words, the Court, having regard to all the circumstances of the case, may or may not strike out the defence.
If section 13 were to be construed as mandatory and not as vesting a discretion in the Court, it might result in the situation that a tenant who has deposited the arrears of rent within the time stipulated by section 13(1) but who fails to deposit thereafter the monthly rent on a single occasion for a cause beyond his control may have his defence struck out and be liable to summary eviction.
We think that section 13 quite clearly confers a discretion, on the court, to strike out or not to strike out the defence, if default is made in deposit or payment of rent as required by section 13(1).
If the court has the discretion not to strike out the defence of a tenant committing default in payment or deposit as required by section 13(1), the court surely has the further discretion to condone the default and extend the time for payment or deposit.
Such a discretion is a necessary implication of the discretion not to strike out the defence.
Another construction may lead, in some cases, to a perversion of the object of the Act namely, 'the adequate protection of the tenant '.
section 12(3) entitles a tenant to claim protection against eviction on the ground specified in section 12(1) (a) if the tenant makes payment or deposit as required by section 13.
On our construction of section 13 that the Court has the power to extend the time for payment or deposit, it must follow that payment or deposit within the extended time will entitle the tenant to claim the protection.
of section 12(3).
One of the arguments advanced before us was that there was no express provision for extension of time for deposit or payment.
339 of monthly rent subsequent to the filing of the suit whereas there was such express provision for payment or deposit of arrears of rent that had accrued before the filing of the suit.
Obviously, express provision for extension of time for deposit or payment of rent falling due after the filing of the suit was not made in section 13(1) as the consequence of non payment was proposed to be dealt with by a separate sub section.
namely section 13(6).
Express provision had to be made for extension of time for deposit or payment of rent that had accrued prior to the filing of the suit, since that would ordinarily be at a very early stage of the suit when a written statement might not be filed and there would.
therefore, be no question of striking out the defence and, so, there would be no question of section 13(6) covering the situation.
In Jagdish Kapoor vs New Education Society, a full bench of the Madhya Pradesh High Court held that section 13((6) of the Madhya Pradesh Accommodation Control Act did not make it obligatory for the court to strike out the defence but vested in the court a discretion to strike out or not to strike out the defence.
Having so held, the full bench stopped short of giving full effect to their conclusion by holding D. that the Court could condone the default and refuse to strike out the defence but it could not give the benefit of section 12(3) or 13(5) to the tenant.
We do not see any justification for adopting this narrow construction of sections 12 and 13.
In our view the discretion given to the court under section 13(6) must be held to imply a discretion to condone the delay and extend the time in making deposit or payment under section 13(1).
In B. C. Kame vs Nem Chand Jain, a tenant had committed default both in payment of arrears as well as in payment of the monthly rent which became payable after the filing of the suit.
This Court took the view that on an application made by the tenant time for deposit or payment could be extended.
Though the observations made by the Court read as if they were made with reference to the default in payment.
Of arrears, a reference to the facts of the case as set out in the very judgment shows that there was default both in payment of the arrears of rent that had accrued before the filing of the suit and in payment of the monthly rent that fall due after the filing of the suit.
We are accordingly of the opinion that the Court has the jurisdiction to extend time for deposit or payment of monthly rent falling due after the filing of the suit.
In that view it is not necessary to express our opinion on the question of waiver or abandonment.
The appeal is allowed with costs and the suit for eviction is dismissed.
N.V.K. Appeal allowed.
[/INST]The respondent landlord sought eviction of the appellant tenant from the suit premises for failure to pay arrears of rent, despite service of notice of demand.
The trial court found that the tenant was in arrears o. payment of rent, but the tenant having deposited the arrears of rent within the time allowed by the court on his application the tenant was entitled to avail the protection of section 12(3) of the Madhya Pradesh Accommodation Control Act.
and dismissed the suit for eviction.
The landlord preferred an appeal and while the same was pending? the tenant filed an application under section 13(1) of the Act for condonation of delay in depositing,, the rent, month by month.
which had become payable after the filing of the suit.
On several occasions, when the suit and the appeal were pending before the trial court and the appellate court respectively, the tenant had deposited the monthly rent a day or two or three beyond the prescribed date, and the same had been received by the court and drawn out by the landlord, without any protest.
The landlord, taking advantage of the filing of the tenant s application for condonation of delay, contended that the court had no power to extend the time for deposit of the monthly rent and that he was entitled to a decree for eviction consequent on the non compliance with the provisions of section 13(1) of the Act.
The appellate court negatived this contention and dismissed the appeal.
In the second appeal preferred by the landlord, the High Court held that the Court had no power to extend time and decreed the Suit for eviction.
In the tenant 's appeal to this Court on the question whether the Court ha(l.
the power to condone the delay in depositing the monthly rent falling due after the filling of the suit for eviction.
^ HELD :1.
The court had the jurisdiction to extend time for deposit or payment of monthly rent falling due after the filing of the suit.
[338 G] 2.
In order to entitle a tenant to claim the protection of section 12(3).
the tenant had to make payment or deposit as required by section 13.
The arrears of rent should be paid or deposited within one month of the service of the writ of summons on the tenant or within such further time as may he allowed by the court, and should further deposit or pay every month by the 15th.
a sum equivalent to the rent.
[338 A B].
335 3.
Failure to pay or deposit a sum equivalent to the rent by the 15th of every month, subsequent to the filing of the suit for eviction will not entitle the landlord, straightaway, to a decree for eviction.
The consequences of the deposit or payment and non payment or non deposit are prescribed by subsection and (6) of section 13.
[338 B] 4.
A discretion is vested in the court under section 13(6) to order the striking out of the, defence against eviction.
[338 D] 5.
If the court has the discretion not to strike out the defence or a tenant committing default in payment or deposit of rent as required by section 13(1), the court surely has the further discretion to condone the default and extend the time for payment or deposit.
Such a discretion is a necessary implication of the discretion not to strike out the defence.
Any other construction may lead, to a perversion of the object of the Act.
namely, 'the adequate protection of the tenant. ' [338 F G] 6.
Section 12(3) entitles a tenant to claim protection against eviction on the ground specified in section 12(1)(a) if he makes payment or deposit as required by section 13.
As the court has under section 13, the power to extent: the time for payment or deposit, payment or deposit, within the extended time will entitle the tenant to claim the protection of section 12(3).
[338 H] 1 7.
Express provision for extension of time for deposit or payment or rent falling due after the filing of the suit was not made in section 13(1! as the consequence of non payment was dealt with by a separate sub section, section 13(6).
The discretion given to the court under section 13(6) must imply a discretion to condone the delay and extend the time in making deposit or payment under section 13(1).
[339A, E] Jagdish Kapoor vs New Education Society disapproved.
B. C. Kame vs Nem Chand Jain, A.I.R. 1970 S.C. 981.
referred to.
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<s>[INST] Summarize the judgementAppeal No. 283 of 1960.
Appeal from the judgment and decree dated, November 20, 1958, of the Allahabad High Court (Lucknow Bench) in First Civil Appeal No. 3 of 1956.
C. B. Agarwala and C. P. Lal, for the appellant.
R. Ganapathy Iyer and T. M. Sen, for the respondent.
March 16.
The Judgment of the Court was delivered by DAs GUPTA, J.
The appellant, a clerk in the service of the East Indian Railways was compulsorily ' retired from service with effect from June 30, 1948, on attaining the age of 55 years.
His prayer for further retention in service on the ground that he was entitled to be retained under Rule 2046/2 of the Railway Establishment Code having been rejected he brought the suit which has given rise to this appeal in the court of the Civil Judge, Lucknow, alleging that he was entitled to be retained under the above rule, and the order for compulsory retirement on attaining the age of 55 years was.
void and inoperative in law.
He accordingly prayed for a declaratory decree that the order of his compulsory retirement was illegal and void and for a money decree for, arrears of pay on the basis that he had continued in service.
The main defence was a denial of his right to be retained in service under the rules.
The Trial Court accepted the plaintiff 's contention ' as regards the effect; of the rule, gave him a declaration as prayed for and ' also decreed the claim for money in part.
On appeal the High Court took a different view of Rule 2046 and held that that rule gave the plaintiff no right to continue in service beyond the age of 55 years.
The High Court therefore allowed the appeal.
and dismissed the plaintiffs suit.
Against this decision the 376 plaintiff has preferred the present appeal on a certificate granted by the High Court under article 133(1) (c) of the Constitution.
The main question therefore is whether on a proper interpretation of Rule 2046/2 (a) of the Railway Esta blishment Code, which is identical with the fundamental rule 56 (b) (i), the plaintiff had the hight to be retained in service till the age of 60 years.
It is necessary to mention that the plaintiff 's case that he continued to be efficient even after attaining the age of 55 years has not been disputed by the respondent, the Union of India.
Consequently the question is: assuming the plaintiff so 'continued to be efficient whether he had the right to be retained in service till he attained the age of 60 years.
Rule 2046 (1) of the Code deals with the question of retirement of railway servants other than ministerial and provides that such Railway servant, that is, one who is not a ministerial servant, will be compulsorily retired on attaining the age of 55 years; but may be retained in service after that date "with the sanction of the competent authority on public grounds" which must be recorded in writing.
A further provision is made that he must not be retained after the age of 60 years except in very special circumstances.
Rule 2046/2 deals with cases of ministerial servants.
It has two clauses of which ol.
(b) deals with (i) ministerial servants who entered Government service on or after April 1, 1938, or (ii) who though in Government service on March 31, 1938, did not hold a lien or a suspended lien on a permanent post on that date.
These also, like the Railway servants, who are not ministerial servants have to retire ordinarily at the age of 55 years and cannont be, retained after that age except on public grounds to be recorded in writing and with the sanction of the competent authority; and must not be retained after attaining the age of 60 years except in very special circumstances.
Clause (a) deals with railway ministerial servants other than those who entered Government service on or after April 1, 1938, or those in Government service on March 31, 1938, who, did not hold a lien or a 377 suspended lien on a permanent post on that date.
The exact words of the rule are: "A ministerial servant who is not governed by sub cl.
(b) may be required to retire at the age of 55 years but should ordinarily be retained in service if he continues to be efficient up to the age of 60 years.
He must not be retained after that age except in very special circumstances which must be recorded in writing and with 'the sanction of the competent authority.
" It is obvious that the rule as regards compulsory retirement is more favourable to ministerial servants who fall within el.
(a) of rule 2046/2 than those who fall under el.
(b) of the same rule or railway servants who are not ministerial servants.
For whereas in the case of these, viz., railway servants Who are not ministerial servants, and ministerial servants under cl.
(b) retention after the age of 55 itself is intended to be exceptional to be made on public grounds which must be recorded in writing and with the sanction of the competent authority, in the case of ministerial servants who fall under cl.
(a) of Rule 2046/2 their retention after the age of 60 is treated as exceptional and to be made in a similar manner as retention in the case of the other railway servants mentioned above after the age of 55.
It is clear therefore that whereas the authority appropriate to make the order of compulsory retirement or of retention is given, no discretion by itself to ' retain a ministerial railway servant under cl.
(b) if he attains the age of 55 years, that is not the position as regards the ministerial servants who fall under cl.
The appellant 's contention however goes very Much further.
He contends that in the case of ministerial servants who come within cl.
(a) and after attaining the age of 55 years continue to be efficient it is not even a case of discretion of the appropriate authority to retain him or not but that such ministerial servants have got a right to be retained and the appropriate authority is bound to retain him, if efficient.
The first clause of the first sentence of the relevant 48 378 rule taken by itself certainly gives the appropriate authority the right to require a ministerial servant to retire as soon as he attains the age of 55 years.
The question is: Whether this right is cut down by the second clause, viz., "but should ordinarily be retained in service if he continues to be efficient up to the age of 60 years".
On behalf of the appellant it is urged that the very use of the conjunction "but" is for the definite purpose of the cutting down of the right conferred by the first clause; and that the effect of the second clause is that the right to require the Government servant to retire at 55 is limited only to cases where he does not retain his efficiency; but where he does retain his efficiency the right to retire him is only when he attains the age of 60 years.
We are con strained to say that the language used in this rule is unnecessarily involved; but at the same time it is reasonably clear that the defect in the language creates no doubt as regards the intention of the rulemaking authority.
That intention, in our opinion, is that the right conferred by the first part is not in any way limited or cut down by the second part of the sentence; but the draftsman has thought fit by inserting the second clause to give to the appropriate authority an option to retain the servant for five years more, subject to the condition that he continues to be efficient.
If this condition is not satisfied the appropriate authority has no option to retain the servant; where however the condition is satisfied the appropriate authority has the option to do so but is not bound to exercise the option.
If the intention had been to out down the right conferred on the authority to retire a servant at the age of 55 years the proper language to express such intention would have been may be required to retire at the age of 55 years provided however that he shall be retained in service if he continues to be efficient up to the age of 60 years" or some such similar, words.
The use of "should ordinarily be retained in service" is sufficient index to the mind of the rule making authority that the right conferred by the first clause of the sentence remained.
Leaving out for the present the word "ordinarily" the rule would read thus: 379 "A ministerial servant who is not governed by sub clause (b) may be required to retire at the age of 55 years but should be retained in service if he continues to be efficient up to the age of 60 years.
" Reading these words without the word "ordinarily" we find it unreasonable to think that it indicates any intention to cut down at all the right to require the servant to retire at the age of 55 years or to create in the servant any right to continue beyond the age of 55 years if he continues to be efficient.
They are much more appropriate to express the intention that as soon as the age of 55 years is reached the appropriate authority has the right to require the servant to retire but that between the age of 55 and 60 the appropriate authority is given the option to retain the servant but is not bound to do so.
This intention is made even more clear and beyond, doubt by the use of the word "ordinarily".
"Ordinarily" means "in the large majority of cases but not invariably".
This itself emphasises the fact that the appropriate authority is not bound to retain the servant after he attains the age of 55 even if he continues: to be efficient.
The intention of the second clause 1 therefore clearly is that while under the first clause the appropriate authority has the right to route the ' servant who falls within clause (a) as soon as he attains the age of 55, it will, at that stage, consider whether or not to retain him further.
This option to retain for the further Period of five years can only be exercised if the servant continues to be efficient; but in deciding whether or not to exercise this option the authority has to consider circumstances other than the question of efficiency also; in the absence of special circumstances he "should" retain the servant; but, what are special circumstances is loft entirely to the authority 's decision.
Thus, after the age of 55 is reached by the servant the authority has to exercise ' its discretion whether or not to retain the servant; and there is no right in the servant to be retained, even if, he continues to be efficient.
Reliance was placed by learned counsel on an observation of Mukherjea, J. (as he then was), in Jai 380 Ram vs Union of India (1) when speaking for the Court as regards this rule his Lordship said: "We think it is a possible view to take upon the language of this rule that a ministerial servant coming within the purview has normally the right to be retained in service till he reaches the age of 60.
This is conditional undoubtedly upon his continuing to be efficient.
We may assume therefore for purposes of this case that the plaintiff had the right to continue in service till 60 and could not be retired before that except on the ground of inefficiency.
" It would be wholly unreasonable however to consider this as a decision on the question of what this rule means.
Dealing with an argument that as the plaintiff under this rule has the right to continue in service till 60 and could not be retired before that except on the ground of inefficiency certain results follow, the Court assumed for the sake of argument that this interpretation was possible and proceeded to deal with the learned counsel 's argument on that basis.
It was not intended to say that this was the correct interpretation that should be put on the words of the rule.
The correct interpretation of Rule 2046 (2) (a) of the code, in our opinion, is that a railway ministerial servant falling within this clause may be compulsorily retired on attaining the age of 55 but when the servant is between the age of 55 and 60 the appropriate authority has the option to continue him in service, subject to the condition that the servant continues to be efficient but the authority is not bound to retain him even if a servant continues to be efficient.
It may be mentioned that this interpretation of the rule has been adopted by several High Courts in India ' [Basant Kumar Pal vs The Chief Electrical Engineer Kishan Dayal vs General Manager, Northern Railway and Raghunath Narain Mathur vs Union of India (4)].
We therefore hold that the High Court was right in holding that this rule gave the plaintiff no right to continue in service beyond the age of 55.
(1) A.I.R. 1954 S.C. 584.
(3) A.I.R. 1954 Punj.
(2) A.I.R. 1956 Cal.
(4) A.I.R. 1953 All.
381 It was next urged by Mr. Aggarwal, though faintly, that the notification of the Railway Board dated October 19, 1948, and the further notification dated April 15, 1952, as a result of which ministerial servants who were retired under rule 2046(2)(a) before attaining the age of 60 after September 8, 1948, have been given special treatment are discriminatory.
It appears that on September 8, 1948, the Government of India came to a decision that no ministerial Government servant to whom the fundamental rule 56(b)(i) applied and who has attained the age of 55 years but has not attained the age of 60 years could be required to retire from service unless he has been given a reasonable opportunity to show cause against the proposed retirement and unless any representation that he may desire to make in this connection has been duly considered.
This decision was communicated to different departments of the Government of India and it was directed that this should be noted "for future guidance".
On October 19, 1948, the Ministry of Railways issued a notification for dealing with cases of retirement of ministerial servants governed by Rule 2046(2)(a) (which corresponded to fundamental rule 56(b)(1) in the manner as directed by the Government of India 's notification dated September 8, 1948.
This notification of October 19, 1948, again made it clear that it had been decided not to take any action in respect of ministerial servants who had already been retired.
Again, in a notification dated April 15, 1952, the Railway Board communicated a decision that "such of the ministerial servants who had been retired after 8th September, 1948, but before attaining the age of 60 years without complying with article 311 (2) of the Constitution should be taken back to duty" under certain conditions.
The appellant 's contention is that the denial of this advantage given to other ministerial servants falling within rule 2046(2)(a) who had been retired after September 8, 1948, is unconstitutional.
We do not think that this contention has any substance.
What happened was that on September 8,1948, the Government took a decision that ministerial servants should 382 not be retired under the rule in question on attainment of 55 years of age if they were efficient without giving them an opportunity of showing cause against the action and accordingly from that date it changed its procedure as regards the exercise of the option to retire servants between the age of 55 and 60.
The decision that nothing should be done as regards those who had already retired on that date cannot be said to have been arbitrarily made.
The formation of a different class of those who retired after September 8, 1948, from those who had retired before that date on which the decision was taken is a reasonable classification and does not offend article 14 of the Constitution.
This contention is therefore also rejected.
The High Court was therefore right in our opinion in holding that there was a reasonable classification of the ministerial servants who had been retired under Rule 2046 (2) (a) on attaining the age of 55 into two classes: one class consisting of those who had been retired after September 8, 1948, and the other consisting of those who retired up to September 8, 1948.
There is, therefore, no denial of equal protection of laws guaranteed by article 14 of the Constitution.
In the result, the appeal fails and is dismissed.
There will be no order as to costs, as the appellant is a pauper.
We make no order under Order XIV, rule 9 of the Supreme Court Rules.
Appeal dismissed.
[/INST]The appellant who was a clerk under the East Indian Railways was compulsorily retired from service on attaining the age of 55 years.
His prayer for further retention in service having been rejected he filed a suit alleging that he was entitled to be retained in service up to the age of 60 years under Rule 2046 (2)(a) of the Railway Establishment Code, which runs as follows: "Clause (a) A ministerial servant who is not governed by sub cl.
(b) may be required to retire at the age of 55 years but should ordinarily be retained in service if he continues to be efficient up to the age of 60 years.
He must not be retained after that age except in very special circumstances which must be recorded in writing and with the sanction of the competent authority.
" His suit was decreed by the Trial Court but the High Court reversed it holding that the plaintiff appellant had no right to continue in service beyond the age of 55 years.
On appeal with the certificate of the High Court.
Held, that the correct interpretation of Rule 2046(2)(a) is that a railway ministerial servant falling within this clause may be compulsorily retired on attaining the age of 55 but when the servant is between the age of 55 and 6o years the appropriate authority has the option to continue him in service, subject to the condition that the servant continues to be efficient but the authority is not bound to retain him even if he continues to be efficient.
This rule does not give the servant a right to be retained in service beyond the age of 55 years even if he continues to be efficient.
jai Ram vs Union of India, A.I.R. 1954 S.C. 584, explained.
Basant Kumar Pat vs The Chief Electrical Engineer, A.I.R. , Kishan Dayal vs General Manager, Northern Railway, A.I.R. 1954 Punj.
245 and Raghunath Narain Mathur vs Union of India, A.I.R. 1953 All. 352, approved.
375 The formation by the Railway Board of two classes of ministerial servants, namely, one of, those who retired after September 8, 1948, and the other of those who had already retired before that date was a reasonable classification and (lid not offend article 14 of the Constitution.
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<s>[INST] Summarize the judgementvil Appeal Nos.
2780 81 of 1982 From the Judgment and Order dated 11.6.
1982 of the Karnataka High Court in Writ Petition No.3386 and 3387 of 1981 K.S. Cooper, Dr. Y.S. Chitale, Mrs. P.S. Shroff, S.S. Shroff and Mrs. Kiran Chaudhary for the Appellants.
M. Veerappa, A.K. Sharma, K.N. Singh, S.S. JavaIi, G.P. Shivaprakash and B.P. Singh for the Respondents.
The Judgment of the Court was delivered by CHINNAPPA REDDY, J.
Bangalore was a beautiful city once.
It was a city with magic and charm, with elegant avenues, gorgeous flowers, lovely gardens and plentiful spaces.
Not now.
That was before the invasion of concrete and steel, of soot and smoke, of high rise and the fast buck.
Gone are the flowers, gone are the trees, gone are the avenues.
gone are the spaces.
We are now greeted with tail puffing 1062 chimneys and monstrous high rise buildings, both designed to hurt the eye, the environment and the man.
But they are thought by many as symbols of progress and modernity.
They have come to stay.
Perhaps they are necessary.
Nostalgic sentiments, we suppose, must yield to modern societal re quirements.
Smoking Chimneys produce much needed goods.
High rise buildings save much scarce space.
They have a place in the scheme of things.
But where, how, to what extent, at what cost, are the questions raised by some aggrieved citizens of Bangalore.
They want congestion to be prevented, population density to be controlled, lung spaces to be provided where people can breath, existing recreation al facilities to be preserved and improved, pollution and health hazards to be removed, civic and social amenities to be provided etc.
All these require a balanced use of avail able land.
It is with that object that the Mysore Town and Country Planning Act was enacted in 1961 and it is with the interpretation of some of the provisions of that Act that we are concerned in these appeals.
The problem and the pain have been well brought out by the Chairman of the Bangalore Urban Arts Commission (4th respondent before the High Court) in the Chairman 's response to an editorial in a local newspaper.
It is extracted in the Additional Statement filed in the High Court by the Writ Petitioners.
He says, "when we speak of saving Bangalore 's skyline and its cherished character, we are apt to be misun derstood even by some well meaning citizens.
Vested inter ests and busybodies with an easy conscience would in any case rubber wall any consideration of argument because the present time, with the skyrocketing property value, is a great opportunity for them to "make hay".
They would rather sell the city than dwell on its future.
We are not speaking only of the central areas of the city even when we regard them, understandably enough as more precious than the rest of the city.
Nor are we trying to guard the City 's supposed "colonial solitude" which, we know, vanished many decades ago.
We are not afflicted with irrational nostalgia and have no fetish about bungalows and court yards.
We are aware of the dynamics of a modern city.
All that we want and it was ably summed up in your editori al is that we must prevent any more ugliness and haphazard ness, of which we have had more than what Bangalore can take if it is to stay as the City Beautiful, with its planned spaciousness and (still) largely unclustered skyline.
We also want, without any further delay, a vigilant, clearly speltout and scrupulously honest system to ensure an orderly growth of the city, in "Keeping with the capacity of its services, like water supply, drainage and roads".
1063 I entirely agree that for new areas we must provide for more density of population if we are to get adequate mileage from per capital expenditure, and if we are to release sufficient lung spaces for recreational and community activ ities.
In fact, we have long back suggested to City Planners to plan for self contained and self sufficient clusters of multiple storey blocks, with their own plazas, shopping and recreational centers, in carefully selected locations and in keeping with the available services.
Again, there is no doubt that coverage per plot must be systematically reduced through imaginatively formulated bye laws, if we are to continue the garden city character of the City 's new areas.
It is utterly mystifying however, that such obviously valid thoughts and suggestions should end with the plea for "concentrated growth" presumely in the central area of the city and preferably with high rise buildings.
Such growth which is bound to obliterate what we have still left of this beautiful city and put further strains on its traffic, water supply and drainage, is cer tainly not going to help the proletarian office goer or house seeker.
It will serve only the big time builder, the high spending rich and last but not least the fast buck chasing wheeler dealers and busybodies mentioned above. "Now that the State Government has announced a clear policy in this behalf, there is no reason why we should not expect the best.
This Commission has made its own contribu tion to the formulation of a new set of building bye laws which aim at the much needed regulation on fully modern lines of this City 's future growth, and which leave minimum scope for corruption.
We hope that these will be adopted soon.
We look forward to a new approach and a new era free from the stench of corruption.
We hope that these will be adopted soon.
We look forward to a new approach and a new era free from the strench of corruption, innuendoes and loose talk of "motives", and characterised by future think ing.
After all, we have the City Beautiful because of the future thinking and hard work of the planners and adminis trators." Raj Mahal Vilas Extension is a sparsely developed area of the city of Bangalore which the Bangalore Improvement Trust Board desired to develop under the provisions of the city of Bangalore Improvement Act, 1945.
Land was acquired and plots were allotted to several people.
A lay out was prepared and conditions were imposed for construction of houses on the sites.
The present appellants as well as the petitioners before the High Court were all of them allottees 1064 from the Improvement Trust Board.
One of the conditions of allotment was that the sites were not to be sub divided and not more than one dwelling house was to be constructed on each of the sites.
Apparently multistoreyed, high rise buildings were not within the contemplation of either the Improvement Trust Borad or the allottees at the time of allotment.
However, the petitioners before the High Court were dismayed to find such high rise buildings coming up in the Raj Mahal Vilas Extension.
Apprehending that there was going to be an invasion of the privacy of the residents of the locality, a disturbance of the peace and tranquility of the residential area, an interference with basic civic amenities consequent on haphazard rise of high rise build ings, and exposing of the residents to all manners of health hazards and interference with their way of living, a number of residents of the locality submitted a memorandum to the Governor and the Chief Minister of the State to take appro priate action to prevent the construction of high rise buildings in a residential area such as the Raj Mahal Vilas Extension.
There was no response from the authorities.
In desperation, some of the persons who submitted the memoran dum resorted to 'Public Interest Litigation ' and filed the writ petitions out of which the present appeals arise.
Their principal complaint was that the Outline Development Plan for Bangalore which had been published in the prescribed manner had been ignored by the authorities in granting permission to the appellants to construct the high rise buildings.
The first of the grounds mentioned in the writ petitions was that permits had been granted to construct eight floor residential buildings going to a height of 80 feet whereas under the regulations the maximum permissible height of a building was only 55 feet.
The inconveniences, discomforts and the hazards to which such a high rise build ing in a residential locality would expose the other resi dents of the locality were explained in the writ petition and writs were sought to quash the permits granted for construction and to restrain the present appellants from constructing the eight floor buildings and to direct them to demolish the structures already put up.
There was also a prayer to require the Bangalore Urban Arts Commission to recommend to the State of Karnataka against the construction of high rise buildings in any of the existing extensions of Bangalore.
Writ Petition No. 3386 of 1981 out of which arises Civil Appeal No. 2780 of 1982 and Writ Petition No. 3387 of 1981 out of which arises Civil Appeal No. 2781 of 1982 were filed on 25.2.81.
In Writ Petition No. 3386 of 1981 an interim order was initially refused by a learned Single Judge but on appeal a Division Bench of the High Court granted an interim order restraining the appellants in Civil Appeal No. 2780 of 1982 from raising further construc tion.
However, in the special leave petition filed by 1065 the appellants the order of the learned Single Judge was restored subject to an undertaking given by the appellants that in the event of the original writ petition being al lowed and the construction being required to be pulled down, the appellants will not raise any objection and will not plead the construction during the pendency of the writ petition as a defence to the pulling down of the construc tion.
The order of the Supreme Court was made on 2.6.81.
In W.P. No. 3387 of 1981 the High Court made an interim order on 24.7.81 permitting the appellants in Civil Appeal No. 2781 of 1982 to proceed with the construction subject to the appellants giving an undertaking similar to the undertaking given by the appellants in the other connected appeal.
We find from the judgment of the High Court that in W.P. No. 3386 of 1981 only excavation work had been done by the time of the filing of the petition and that the work was complet ed only after the undertaking was given to the Supreme Court.
In the other case the ground floor had been con structed and pillars had been put up for the next floor when the writ petition was filed.
The work was completed after the undertaking was given to the Division Bench of the High Court.
We may add that again in this Court when the appel lants sought interim orders to enable them to complete the construction during the pendency of the present appeals they gave an undertaking that they would complete the construc tion work of the 4th, 5th, 6th, 7th, and 8th floors at their own risk and cost and that they will raise no objection whatever to this Court passing an order for demolition of the said floors if the Court was ultimately inclined to pass such an order and that they would claim no compensation for demolition, if ordered.
The present appellants contested the writ petitions.
The writ petitions appeared to have been argued in the first instance before a learned single Judge who after hearing the petitions for some considerable time referred them for hearing by a Division Bench.
The Division Bench commenced hearing the writ petitions on 16.3.82 and on 22.3.82 a further contention was raised by the appellants that the Outline Development Plan and the Regulations were never published, consequently they have never become effective and, therefore, there was no need for any compliance with the requirements of the plan and the regulations.
As it turns out this is the only contention which was finally argued before the High Court and before us.
The High Court overruled the contention and declared the licences granted for construction illegal and directed the Commissioner, Corporation of the City of Bangalore to modify the licences so as to bring them in conformity with the Outline Develop ment Plan and the Zonal Regulations appended thereto promul gated under Section 13(4) of the Karnataka 1066 Town and Country Planning Act and take all consequential action in accordance with law.
Shri Cooper, learned counsel for the appellants urged that publication of the Outline Development Plan and the Regulations in the prescribed manner, that is, in the Offi cial Gazette was mandatory under Section 13(4) and that failure to so publish the Outline Development Plan and the Regulations rendered them ineffective.
The licences already granted to the appellants could not be cancelled or directed to be modified so as to be in accord with the Outline Devel opment Plan and the Regulations.
It was further urged that the Regulations were distinct from the Outline Development Plan and that in the case of the Regulations, there was no attempt whatever at publication.
It was submitted that the High Court was in error in holding that Section 76J cured whatever defect there was in regard to the publication of the Plan and the Regulations.
It was said that the High Court was also in error in holding that the Outline Develop ment Plan and the Regulations became effective as soon as they were approved by the Government under Section 13(3) of the Act irrespective of the date of publication under Sec tion 13(4).
On the other hand, it was submitted by Shri Javali, learned counsel for the writ petitioners in the High Court that there was sufficient publication of the Plan and the Regulations, that the Plan and the Regulations were always kept available for inspection at the office of the concerned authorities and that it was not the case of the appellants originally that there was no publication and that they had no knowledge of the Plan and the Regulations.
It was only after thought, put forward in the course of the arguments at the final stage of the hearing of the writ petitions.
It was submitted that such defect as there was in the publication of the Plan and the Regulations was effec tively cured by Section 76J and the passage of time.
It was also pointed out that the Regulations were an integral part of the Outline Development Plan.
In order to appreciate the rival contentions of the parties, it is necessary to refer to the relevant statutory provisions.
In 1961 the Bangalore Metropolitan Planning Board was formed.
The Board prepared an Outline Development Plan (For short, O.D.P.).
In February 1963 the Mysore Town and Country Planning Act, 1961 came into force with effect from January 15, 1965.
Section 81 A(a) of the Act provides that the Outline Development Plan for the Bangalore Metropolitan Area prepared by the Bangalore Metropolitan Planning Board shall be deemed to be the Outline Develop 1067 ment Plan of the Planning Area comprising the City of Banga lore, prepared under the Act, by the Planning Authority of the Area.
Section 81 (a) further provides that the said plan along with the particulars specified in clauses (ii), (iii), (iv) and (v) of Section 12(2) shall be published and submit ted to the State Government for provisional approval.
Sec tion 81 A(b) provides that on receipt of the plan and particulars, the State Government shall after making such modifications as it deems fit, return the plan and the particulars to the Planning Authority, which shall thereupon take further action in accordance with the provisions of Section 13.
Section 2(3) defines 'land use ' to mean the major use to which a plot of land is being used on any specified date.
Section 2(4) defines 'notification ' to mean a notification published in the Official Gazette. 'Planning Area ' is de fined by Section 2(6) to mean the area declared to be a local planning area under the Act in the case of the local planning area comprising the city of Bangalore. 'Planning Authority ' is defined to mean the Planning Authority consti tuted under the Act.
Section 2(9) defines 'prescribed ' to mean prescribed by rules made under the Act.
Section 2(11) defines 'regulations ' to mean the Zonal Regulations govern ing land use made under the Act.
Chapter III of the Act deals with Outline Development Plan (O.D.P.).
Section 9(1) empowers the Planning Authority to prepare and publish in the prescribed manner an Outline Development Plan for the area within its jurisdiction and submit it to the State Government for provisional approval.
Section 9(4) prescribes that a copy of the O.D.P. sent to the State Government under sub section(1) shall be kept open for inspection by the public at the head office of the Planning Authority before carrying out a survey for the purpose of preparing an O.D.P. for such an area.
A Planning Authority is required by Section 10 to make a declaration of its intention to prepare such plan and to despatch a copy of the same to the State Government for publication in the Official Gazette and is also required to publish in the prescribed manner an invitation to the public to make sug gestions.
All suggestions made in response to the invitation within the prescribed period are required to be considered by the Planning Authority before submitting the plan to the State Government.
Section 12 deals with the contents of Outline Development Plan and we think it necessary to ex tract here the whole of the section.
Section 13 deals with approval of the Outline Development Plan and we think that it is necessary to extract Section 13 also.
Sections 12 and 13 are as follows: 1068 "section 12.
Contents of Outline Development Plan (1) An Outline Development Plan shall generally indicate the manner in which the development and improvement of the entire planning area within the jurisdiction of the Planning Authority are to be carried out and regulated.
In particular it shall include, (a) a general land use plan and zoning of land use for residential, commercial, indus trial, agricultural, recreational, educational and other public purposes; (b) proposals for roads and highways; (c) proposals for the reservation of land for the purposes of the Union, any State, any local authority or any other authority estab lished by law in India; (d) proposals for declaring certain areas as areas of special control, development in such areas being subject to such regulations as may be made in regard to building line, height of buildings, floor area ratio, architectural features and such other particulars as may be prescribed; (e) such other proposals for public or other purposes as may from time to time be approved by the Planning Authority or directed by the State Government in this behalf.
Explanation 'building line ' means the line up to which the plinth of a building adjoining a street may lawfully extend and includes the lines prescribed, if any, in any scheme.
(2) The following particulars shall be published and sent to the State Government through the Director along with the Outline Development Plan, namely: (i) a report of the surveys carried out by the Planning Authority before the preparation of such plan; (ii) a report explaining the provisions of such Plan; (iii) regulations in respect of each land use zone to enforce 1069 the provisions of such plan and explaining the manner in which necessary permission for developing any land can be obtained from the Planning Authority; (iv) a report of the stages by which it is proposed to meet the obligations imposed on the Planning Authority by such a plan; (v) an approximate estimate of the cost in volved in the acquisition of lands reserved for public purposes." "S.13.
Approval of the Outline Development Plan (1) On receipt of the Outline Develop ment Plan with the particulars referred to in Section 12 from the Planning Authority under sub section (1) of Section 9, or after such plan and particulars are prepared and pub lished under subsection (2) of Section 9 the State Government after making such modifica tions as it deems fit or as may be advised by the Director, shall return through the Direc tor, the plan and the particulars to the Planning Authority, which shall thereupon pub lish, by notification, the plan and the par ticulars inviting public comments within one month of such publication.
(2) If within one month of the publication under subsection (1) any member of the public communicates in writing to the Planning Au thority any comments on the plan and the regulations, the Planning Authority shall consider such comments and resubmit the plan and the regulations to the State Government, through the Director with recommendations for such modifications in the plan and regulations as it considers necessary in the light of the public comments made on the plan and regula tions.
(3) The State Government, after receiving the plan and the regulations and the recommen dation for modifications from the Planning Authority, shall in consultation with the Director, give its final approval to the plan and the regulations with such modifications as the Director may advice in the light of the comments and the recommendations of the Plan ning Authority or otherwise.
(4) The Planning Authority, shall then publish in the 1070 prescribed manner the Outline Development Plan and the Regulations as approved by the Govern ment.
The plan and the particulars shall be permanently displayed in the offices of the Director and the Planning Authority and a copy shall be kept available for inspection of the public at the office of the Planning Authori ty.
" Section 14 speaks of 'Enforcement of the Outline Devel opment Plan and the Regulations '.
Section 14(1) prescribes that on and from the date on which a declaration of inten tion to prepare an outline is published under sub section (1) of Section 10, every land use, every change in land use and every development in the area shall conform to the provisions of the Act, the Outline Development Plan and the Regulations as finally approved by the State Government under subsection (3) of Section 13.
The only other provision of the Act to which reference is necessary is, what we may call the, "Ganga" clause*, Section 76J which provides for 'Validation of acts and proceedings '.
It is as follows: "76 J. Validation of acts and proceedings No act done or proceeding taken under this Act shall be questioned on the ground merely of, (a) the existence of any vacancy in, or any defect in the constitution of the Board or any Planning Authority; (b) any person having ceased to be a member; (c) any person associated with the Board or any planning authority under section 4F having voted in contravention of the said section; or (d) the failure to serve a notice on any person, where no substantial injustice has resulted from such failure; or (e) any omission, defect or irregularity not affecting the merits of the case.
" We may also refer here to the rules relating to publica tion.
Rule 32 provides for "publication of Outline Develop ment Plan under sub 1 ' According to Hindu tradition the waters of the Ganga purify, cleans the sins and remedy all insufficiencies.
1071 section (1) and sub section (2) of Section 9".
It prescribes that the publication shall be made by making a copy of the Plan available for inspection and displaying a notice in Form II, (a) at the office of the Planning Authority and (b) at such other places as may be specified by the Planning Authority.
The Planning Authority is also required to pub lish a notice in Form II in the Official Gazette and in one or more newspapers.
The publication under Section 9(2) is also required to be made in the same manner except that reference to Planning Authority is to be construed as a reference to the Director.
Rule 33 provides for 'Publication of Outline Development Plan and Regulations under Section 13(4) ' and stipulates that the Outline Development Plan and the Regulations as approved by the State Government under subsection (3) of Section 13 shall be published in the Official Gazette.
Form 11 referred to in Rule 32 is as follows: FORM NO.
II (Rule 32) NOTICE OF PUBLICATION OF OUTLINE DEVELOPMENT PLAN Notice is hereby given that an Outline Development Plan of . . . area has been prepared under the Mysore Town and Country Planning Act, 1961 (Mysore Act 11 of 1963) and a copy thereof is available for inspection at the office of the Planning Authority during office hours.
If there be any objection or suggestion in respect of the Outline Development Plan, it should be lodged on or before the . .
Every such objection or suggestion should either be presented in the office of the Planning Authority or sent by registered post to the Planning Authority.
" We said earlier that the Outline Development Plan for the Bangalore Metropolitan Area was prepared by the Banga lore Metropolitan Planning Board and that under Section 81J of the Mysore Town and Country Planning Act, it was deemed to be the Outline Development Plan of the planning area comprising the city of Bangalore, prepared under the Act, by the Planning Authority of such 1072 area.
A 'Notice of publication of Outline Development Plan ' was published in the Mysore Gazette on 21.12.1967 in Form II.
It was as follows: "OFFICE OF THE PLANNING AUTHORITY BANGALORE CITY, PLANNING AREA, BAN GALORE 9 Notice of Publication of Outline Development Plan Notice is hereby given that an Outline Development Plan of Bagalore City Planning Area has been prepared under the Mysore Town and Country Planning Act, 1961 (Mysore Act 11 of 1963) and a copy thereof is available for inspection at the office of the Planning Authority in Seshadri Road, Bangalore City during office hours.
If there be any objection or sugges tion in respect of the Outline Development Plan, it should be lodged on or before the 15th day of February, 1968.
Every such objection or suggestion should either be presented in the office of the Planning Authority or sent by registered post to the Planning Authority.
K. Balasubramanyam CHAIRMAN" After the State Government provisionally approved the Plan 'Notice of publication of Outline Development Plan ' was published in the Mysore Gazette dated 10.10.68 again in Form II.
The Notification was in the following terms: "OFFICE OF THE CHAIRMAN, PLANNING AUTHORITY BANGALORE CITY PLANNING AREA, BANGALORE 9 Notice of Publication of Outline Development Plan.
Notice is hereby given that an Out line Development Plan of Bangalore City Plan ning Area has been prepared under the Mysore Town and Country Planning Act, 1961 (Mysore Act 11 of 1963).
The said Plan has been provi sion 1073 ally approved by the Government of Mysore as per Section 13(1) of the above Act.
A copy of the above approved plan and the report are available for inspection at the office of the Planning Authority in Seshadri Road, Bangalore City during office hours.
If there be any objection or sugges tion in respect of the Outline Development Plan it should be lodged within 30 days from the date of publication of this notice in the Gazette.
Every such objection or suggestion should either be presented in the office of the Planning Authority or sent by registered post to the Planning Authority.
CHAIRMAN PLAN NING AUTHORITY" It appears that in response to the invitation to file objec tions, as many as 600 representations and objections were received from individuals, institutions, associations, Chambers of Commerce etc.
The Outline Development Plan was finally approved by the Government and a notification to that effect was published in the Mysore Gazette dated 13.7.
1972 in the following terms: "OFFICE OF THE CHAIRMAN, PLANNING AUTHORITY BANGALORE CITY PLANNING AREA, BANGALORE 9.
Dated, 27th June 1972.
Notice of Publication of Outline Development Plan.
In pursuance of Rule 33 of the Mysore Planning Authority Rules 1965 Notice is hereby given that an Outline Development Plan of Bangalore City Planning Area has been prepared under the Mysore Town and Country Planning Act, 1961 (Mysore Act 11 of 1963).
The said plan has been finally approved by the Govern ment of Mysore as per Section 13(3) of the above Act.
A copy of the above approved plan and the report are available for inspection at the office of the Planning Authority in Sesha dri Road, Bangalore City, during office hours.
1074 M.S. Ramachandra Chairman Planning Authority.
" It is seen that 'at every stage the public were informed by notices published in the Official Gazette that the Outline Development Plan was available for inspection at the office of the Planning Authority, though it is not disputed that the Plan and the Regulations themselves were never published as such in the Gazette.
The question for consideration is whether the intimation to the public through the Official Gazette that the Outline Development Plan was available for inspection at the office of the Planning Authority is a sufficient compliance with the requirement of Section 13(4) regulating the publication of the approved Plan and Regula tions? There can be no doubt about the proposition that where a law, whether Parliamentary or subordinate, demands compli ance, those that are governed must be notified directly and reliably of the law and all changes and additions made to it by various processes.
Whether law is viewed from the stand point of the 'conscientious good man ' seeking to abide by the law or from the standpoint of Justice Holmes 's 'Uncon scientious bad man ' seeking to avoid the law, law must be known, that is to say, it must be so made that it can be known.
We know that delegated or subordinate legislation is all pervasive and that there is hardly any field of activity where governance by delegated or subordinate legislative powers is not as important if not more important, than governance by Parliamentary legislation.
But unlike Parlia mentary Legislation which is publicly made, delegated or subordinate legislation is often made, unobtrusively in the chambers of a Minister, a Secretary to the Government or other official dignitary.
It is, therefore, necessary that subordinate legislation, in order to take effect, must be published or promulgated in some suitable manner, whether such publication or promulgation is prescribed by the parent statute or not.
It will then take effect from the date of such publication or promulgation.
Where the parent statute prescribes the mode of publication or promulgation that mode must be followed.
Where the parent statute is silent, but the subordinate legislation itself prescribes the manner of publication, such a mode of publication may be sufficient, if reasonable.
If the subordinate legislation does not prescribe the mode of publication or if the subordinate legislation prescribes a plainly unreasonable mode of publi cation, it will take effect only when it is published through the customarily recognised official channel, namely, the Official Gazette or some other reasonable mode of publi cation.
There may be subordinate legislation which is con cerned with a 1075 few individuals or is confined to small local areas.
In such cases publication or promulgation by other means may be sufficient.
* In the present case Section 13(4) has prescribed the mode of publication of the Outline Development Plan and the Regulations.
It requires the Outline Development Plan and the Regulations to be published in the prescribed manner and the Plan and particulars to be permanently displayed in the offices of the Director and the Planning Authority and a copy to be kept available for the inspection of the public at the office of the Planning Authority.
The particulars referred to, we presume, are the particulars mentioned in Section 12(2) of the Act consisting of various reports, including the Regulations. 'The prescribed manner ' is what is prescribed by Rule 33, that is, publication in the Offi cial Gazette.
If we now turn to Section 9(1) and 9(2), we find that there too the the Outline Development Plan is required to be published in 'the prescribed manner '.
The prescribed manner for the purposes of sub sections (1) and (2) of Section 9 is that prescribed by Rule 32.
Rule 32 we have seen prescribes making a copy of the Plan available for inspection, publishing a notice in Form No. II in the Offi cial Gazette and in one or more newspapers and displaying a notice in Form No. II at the office of Planning Authority and at other specified places.
It is true that Rule 33 speaks of publication of approved Outline Development Plan and Regulations in the Official Gazette, suggestive of a requirement that the Outline Development Plan and Regula tions should bodily be incorporated in the Official Gazette.
But if the entire scheme of the Act and the rules is consid ered as an integral whole it becomes obvious that what Section 13(4) contemplates besides permanently displaying the plan and the particulars in the offices of Director and Planning Authority and keeping available a copy for the inspection of the public at the office of Planning Authority is a public notice to the general public that the Plan and Regulations are permanently displayed and are available for inspection by the public.
Such public notice is required to be given by a publication in the Official Gazette, This is how it was understood by the authorities and everyone else concerned and this is how it was done in the present case.
This appears to be a reasonable and a rational interpreta tion on Section 13(4) and Rule 33 in the setting and the scheme.
We are of the view that there was compliance with the requirements of Section 13(4) and Rule 33.
We have earlier mentioned that Section 13(1) requires the provision al Outline Development Plan * See Narayana Reddy, vs State of Andhra Pradesh = 1969 (1) Andhra Weekly Reporter 77.
1076 and particulars to be published by notification in the Official Gazette, with a view to invite comments from the public.
What was published in the present case under Section 13(1) was also a notice in Form No. II and not the whole of the Plan and particulars.
Such publication evoked considera ble public response.
As many as 600 representations from individuals and institutions were received.
That is why we said that everyone concerned, that is, the Government, the Director, the Planning Authority and the public, individual and institution alike, thought that publication of a notice in the Gazette inviting the attention of the public to the display and the availability for inspection of the Plan and particulars was all that was contemplated by the provisions providing for publication.
We do not think that there is any reason or justification for us to adopt an interpretation which departs from common understanding of the Act and the Rules.
Shri Cooper invited our attention to Shalagram Jhajharia vs National Co. Ltd. & Ors., and Firestone Tyre & Rubber Co. vs Synthetics & Chemicals Ltd. & Ors., [1971] 41 Company cases 377 to urge that offer of inspection cannot be a substitute for publication.
We do not think that these two cases are of assistance to Shri Cooper.
What was laid down in those cases was the mandatory require ment of a full and frank disclosure of the relevant facts, in the explanatory note attached to the notice convening a general meeting of the company cannot be circumvented by an offer of inspection.
Another case to which Shri Cooper drew our attention was Municipal Board, Pushkar vs State Trans port Authority, Rajasthan & Ors., [1963] Suppl.
2 S.C.R. 373.
In that case the question arose as to what was to be treated as the date of the order of the Regional Transport Authority.
Was it the date of the resolution of the Regional Transport Authority or was it the date on which the resolu tion was brought into effect by publication of the notifica tion? The answer was that it was the date of the publication of the notification.
In Joint Chief Controller of Imports & Exports, Madras vs M/s. Aminchand Mutha etc.
; , another case on which Shri Cooper relied, the Court held that there was no order prohibiting the import of fountain pens, since in fact no such order had been pub lished and no such order was brought to the notice of the Court.
All that was available was an entry 'nil ' against fountain pens in the declaration of policy as to import.
We are unable to see how these two cases can be of any help to Shri Cooper.
Shri Cooper also invited our attention to cases drawing a distinction between mandatory and directory statu tory requirements but those cases again are of no avail to him in the view that we have taken.
We also desire to state that the effect of the non perfor 1077 mance of a duty imposed by a statute in the manner pre scribed by the statute is not discovered by a simple answer to the question whether the statute is mandatory or directo ry.
These are not simple chemical reactions.
The question whether a statutory requirement is mandatory or directory cannot itself be answered easily as was pointed out more than a century ago in Liverpool Borough vs Turner, ; Many considerations must prevail and the object and the context are the most important.
The High Court was of the view that such defect as there was in regard to publication of the Plan was cured by Sec tion 76J, ' the Omnibus Curative clause to which we earlier made a reference as the 'Ganga ' clause.
Provisions similar to s.76J are found in several modern Acts and their object is to put beyond challenge defects of constitution of statu tory bodies and defects of procedure which have not led to any substantial prejudice.
We are inclined to agree with the High Court that a defective publication which has otherwise served its purpose is not sufficient to render illegal what is published and that such defect is cured by Section 76J.
The High Court relied on the two decisions of this Court Bangalore Woollon, Cotton & Silk Mills Co. Ltd. Bangalore vs Corporation of the City of Bangalore and Municipal Board, Sitapur vs Prayag Narain Saigal & Firm Moosaram Bhagwandas, ; In the first case objection was raised to the imposition of octroi duty on the ground that there was failure to notify the final resolution of the imposition of the tax in the Government Gazette as required by Section 98(2) of the City of Bangalore Municipal Corporation Act.
A Constitution Bench of the Court held that the failure to publish the final resolution in the Official Gazette was cured by S.38(1)(b) of the Act which provided that no act done or proceeding taken under the Act shall be questioned merely on the ground of any defect or irregulari ty in such act or proceeding, not affecting the merits of the case.
The Court said that the resolution had been pub lished in the newspapers and was communicated to those affected and failure to publish the resolution did not affect the merits of its imposition and failure to notify the resolution in the Gazette was not fatal to the legality of the imposition.
In the second case it was held that the non publication of a special resolution imposing a tax was a mere irregularity, since the inhabitants had no fight to object to special resolutions and had otherwise clear notice of the imposition of the tax.
It is true that both these cases relate to non publication of a resolution regarding imposition of a tax where the imposition of a tax was other wise well known to the public.
In the present case the situation may not be the same but there certainly was an effort to bring the Plan 1078 and regulations to the notice of the public by giving notice of the Plan in the Official Gazette.
Non publication of the Plan in the Official Gazette was therefore a curable defect capable of being cured by Section 76J.
It is here that the failure of the appellants to plead want of publication or want to knowledge in the first instance assumes importance.
In the answer to the Writ Petitions, the appellants took up the substantial plea that they had complied with the re quirements of the Outline Development Plan and the Regula tions but not that they had no knowledge of any such re quirement.
It can safely be said that the defect or irregu larity did not affect the merits of the case.
Finally, one last submission of Shri Cooper requires to be examined.
Shri Cooper submitted that Section 13(1) used the words "the Plan and the particulars", Section 13(2) used the Words "the Plan and the Regulations," Section 13(3) used the words "the Plan and the Regulations" and Section 13(4) used the words, "the Outline Development Plan and the Regu lations" as well as the words, "the Plan and the Regula tions".
This, according to Shri Cooper, signified that the particulars and the Regulations are not to be treated as part of the Plan but as creations distinct from the Plan.
We do not think that we are entitled to split the unity and identity of the plan as suggested by the learned counsel.
The Outline Development Plan and the Regulations are not distinct from each other.
The regulations are born out of the Plan and the Plan thrives on the Regulations.
The Plan is the basis for the Regulations and the Regulations are what make the plan effective.
Without the Regulations, the plan virtually becomes a dead letter.
The reference in the four clauses of Section 13, whenever the word 'Plan ' or the 'Outline Development Plan ' is used, is to the core plan, without the particulars and the Regulations and not the whole of the Outline Development Plan which must include the Regulations.
What the different phraseology is meant to convey is to emphasise the different parts of the Plan which have to be forwarded to the Government, considered by the Government made available for inspection by the public, as the case may be and to the extent necessary.
Merely because the words "and Regulations" are added to the word 'Plan ', the Regulations are not to be treated as not constituting part of the Plan even as when a building is sold along with the fixtures, it does not mean that the fixtures are not treated as part of the building.
Shri Cooper drew the dis tinction between the Plan and the Regulations to suggest that in the notice published on 27.6.72, the Planning Au thority mentioned that the Plan was available for inspection at the office of the Planning Authority but made no refer ence to the Regulations and, therefore, it must be consid ered that the Regulations were not made 1079 available for inspection and so never published.
We do not think that it is possible to reach the conclusion suggested by Shri Cooper from the absence of the reference to the Regulations in the notice.
The Authorities justifiably always treated the Plan as including the Regulations and we are satisfied that what was kept for inspection was the Plan along with the Regulations.
Shri Cooper argued that neither the Municipal Corpora tion nor any other civic authority appeared to be aware of the Outline Development Plan and the Regulations as was evident from the circumstance that in the years that passed since the approval of the Plan by the Government and before the writ petitions were filed, as many as 57 building li cences had admittedly been issued in contravention of the Regulations.
It may be that notwithstanding the Regulations some building licences were granted in contravention of the Regulations but that only exposes the deplorable laxity of the concerned authorities and emphasises the need for great er public vigilance.
The present Writ Petitions, we hope, are forerunners of such vigilance.
In the result we find no merit in the appeals which are accordingly dismissed with costs.
The judgment of the High Court will now be given effect by the authorities, taking note of the several undertakings given to the High Court and this Court at various stages.
A.P.J. Appeals dismissed.
[/INST]In 1961 the Bangalore Metropolitan Board was formed.
The Board prepared an Outline Development Plan (O.D.P.).
In February, 1963, the Mysore Town and Country Planning Act, 1961 came into force with effect from January 15, 1965.
Section 81 A(a) of the Act provides that the Outline Devel opment Plan for the Bangalore Metropolitan Area prepared by the Bangalore Metropolitan Planning Board shall be deemed to be the Outline Development Plan of the Planning Area com prising the City of Bangalore, prepared under the Act, by the Planning Authority of the Area.
Section 81 A(a) further provides 'that the said plan alongwith the particulars specified in clauses (ii), (iii), (iv) 1055 and (v) of section 12(2) shall be published and submitted to the State Government for provisional approval.
Section 81 A(b) provides that on receipt of the plan and the particulars, the State Government shall after making such modifications as it deems fit, return the plan and the particulars to the Planning Authority for taking further action in accordance with the provisions of section 13.
Section 13 deals with approval of the Outline Development Plan.
Section 76J provides for "validation of acts and proceedings".
Rule 32 of the Mysore Planning Authority Rules, 1965 provides for "publication of Outline Development Plan under sub.s.(1) and sub s.(2) of s.9.
" It prescribes that the publication shall be made by making a copy of the Plan available for inspection and displaying a notice in Form II, (a) at the office of the Planning Authority and (b) at such other places as may be specified by the Planning Authority.
The Planning Authority is also required to publish a notice in Form II in the Official Gazette and in one or more newspapers.
The Publica tion under s.9(2) is also required to be made in the same manner.
Rule 33 provides for 'Publication of Outline Devel opment Plan and Regulations under s.13(4), and stipulates that the Outline Development Plan and the Regulations as approved by the State Government under sub s.(3) ors.13 shall be published in the Official Gazette.
A 'Notice of publication of Outline Development Plan ' was published in the Mysore Gazette dated 21.12.1967 in Form II.
After the State Government provisionally approved the Plan, 'Notice of publication of Outline Development Plan ' was published in the Mysore Gazette dated 10.10.1968 again in Form II.
In response to the invitation to file objec tions, as many as 600 representations and objections were received from individuals, institutions, associations, Chambers of Commerce etc.
The Outline Development Plan was finally approved by the Government and a notification to that effect was published in the Mysore Gazette dated 13.7.72.
The Bangalore Improvement Trust Board desired to develop Raj Mahal Vilas Extension under the provisions of the City of Bangalore Improvement Act, 1945.
Land was acquired and plots were alloted to several people.
A lay out plan was prepared and conditions were imposed for construction of houses on the sites.
One of the conditions of allotment was that the sites were not to be sub divided and not more than one dwelling house was to be constructed on each of the sites.
Apparently multistoreyed, high rise buildings were not within the contemplation of either the Improvement Trust Board or the allotees at the time of allotment.
However, High buildings came up.
A number of residents of the locali ty submitted a memorandum to the Governor and 1056 the Chief Minister to take an appropriate action to prevent construction of high rise buildings in residential area of Raj Mahal Vilas Extention.
Since there was no response some persons resorted to 'Public Interest Litigation, by filing writ petitions alleging that the Outline Development Plan for Bangalore which had been published in the prescribed manner had been ignored by the authorities in granting permission to the appellants to construct the high rise buildings and that permits had been granted to construct eight floor residential buildings going to a height of 80 feet whereas under the regulations the maximum permissible height of a building was only 55 feet.
Writs were sought to quash the permits granted for construction, to restrain the appellants from constructing the eight floor buildings, to direct them to demolish the structures already put up and to require the Bangalore Urban Area Commission to recommend to the State Government against the construction of highrise buildings in any of the existing extensions of Banglore.
The High Court allowed the petitions and declared the licences granted for constructions illegal and directed the Commissioner, Corporation of the City of Bangalore to modify the licences os as to bring them in confirmity with the Outline Development Plan and the Zonal Regulations appended thereto promulgated under s.13(4) of the Karnataka Town and Country Planning Act and take all consequential actions in accordance with law.
In the appeal to this Court, on behalf of the appellants it was contended: (1) that publication of the Outline Devel opment Plan and the Regulations in the prescribed manner, that is, in the Official Gazette was mandatory under section i3(4) and that failure to so publish the Outline Development Plan and the Regulations rendered them ineffective.
The licences already granted to the appellants could not be cancelled or directed to be modified so as to be in accord with the Outline Development Plan and the Regulations; (2) that the Regulations were distinct from the Outline Develop ment Plan and that in the case of the Regulations, there was no attempt whatever at publication; (3) that the High Court was in error in holding that s.76 J cured whatever defect there was in regard to the publication of the Plan and the Regulations and that the Outline Development Plan and the Regulations became effective as soon as they were approved by the Government under section 13(3) of the Act irrespective of the date of publication under s.13(4); (4) that offer of inspection cannot be a substitute for publication; (5) that section 13(1) used the words "the Plan and the particulars", section 13(2) used the words "the Plan and the the Regulations".
s.13(3) used the words "the Plan and the Regulations" and s.13(4) used the words "the Out 1057 line Development Plan and the Regulations" as well as the words "the Plan and the Regulations" and this signified that the particulars and the Regulations are not to be treated as part of the plan but as creations distinct from the Plan.
In the notice published on 27.6.1972, the Planning Authority mentioned that the Plan was available for inspection at the office of the planning authority but made no reference to the Regulations and, therefore, it must be considered that the Regulations were not made available for inspection and so never published; and (6) that neither the Municipal Corporation nor any other Civic Authority appeared to be aware of the Outline Development Plan and the Regulations as was evident from the circumstances that in the years that passed since the approval of the Plan by the Government and before the writ petitions were filed, as many as 57 build ings licences had admittedly been issued in contravention of the Regulations.
On behalf of the respondents it was contended: (1) that there was sufficient publication of the Plan and the Regula tions, that the Plan and Regulations were always kept avail able for inspection at the office of the concerned authori ties and that it was not the case of the appellants origi nally that there was no publication and that they had no knowledge of the Plan and the Regulations: (2) that the defect in the publication of the Plan and the Regulations was effectively cured by s.76J and the passage of time; and (3) that the Regulations were integral part of the Outline Development Plan.
Dismissing the Appeal, HELD 1.
There was compliance with the requirements of section 13(4) of the Mysore Town and Country Planning Act, 1961 and Rule 33 of the Mysore Planning Authority Rules, 1965.
[1075G] 2.
At every stage the public were informed by notices published in the Official Gazette that the Outline Develop ment Plan was available for inspection at the office of the Planning Authority.
[1078H] 3.
The Authorities justifiably always treated the Plan as including the Regulations and what was kept for inspec tion was the Plan alongwith the Regulations.
[1079A B] 4.(i) Where a law, whether Parliamentary or subordinate, demands compliance, those that are governed must be notified directly and reliably of the law and all changes and addi tions made to it by various processes.
Whether law is viewed from the standpoint of the 1058 'conscientious good man ' seeking to abide by law or from the standpoint of Justice Holmes 's 'unconscentious bad man ' seeking to avoid the law, law must be known, that is to say, it must be so made that it can be known.
[1074C E] 4.(ii) Delegated or subordinate Legislation is all pervasive and there is hardly any field of activity where governance by delegated or subordinate legislative powers is not as important if not more important, than governance by Parliamentary legislation.
But unlike Parliamentary Legisla tion which is publicly made, delegated or subordinate Legis lation, is often made unobtrusively in the chambers of a Minister, a Secretary to the Government or other official dignitary.
It is, therefore, necessary that subordinate Legislation, in order to take effect, must be published or promulgated in some suitable manner, whether such publica tion or promulgation is prescribed by the parent statute or not.
[1074E F] 4.(iii) Where the parent statute prescribes the mode of publication or promulgation that mode must be followed.
Where the parent statute is silent, but the subordinate Legislation itself prescribes the manner of publication such a mode of publication may be sufficient, if reasonable.
If the subordinate Legislation, does not prescribe the mode of publication or if the subordinate Legislation prescribes a plainly unreasonable mode of publication it will take effect only when it is published from the customarily recognised official channel, namely, the Official Gazette or some other reasonable mode of publication.
There may be subordinate Legislation which is concerned with a few individuals or is confined to small local areas.
In such cases publication or promulgation by other means may be sufficient.
[1074F H; 1075A] 4.(iv) In the present case, s.13(4) has prescribed the mode of publication of Outline Development Plan and the Regulations.
It requires the Outline Development Plan and the Regulations to be published in the prescribed manner and the Plan and particulars to be permanently displayed in the office of the Director and the Planning Authority and a copy to be kept available for the inspection of the public at the office of the Planning Authority.
The particulars referred to presumably are the particulars mentioned in section 12(2) of the Act consisting of various reports, including the Regula tions. 'The prescribed manner ' is what is prescribed by Rule 33, that is, publication in the Official Gazette.
[1075A C] 4.(v) Under s.9(1) and 9(2) also the Outline Development Plan is 1059 required to be published in 'the prescribed manner '.
The prescribed manner for the purposes of sub s.(1) and (2) of s.9 is that prescribed by Rule 32.
Rule 32 prescribes making a copy of the Plan available for inspection, publishing a notice in Form No. II in the Official Gazette and in one or more newspapers and displaying a notice in Form No.11 at the office of the Planning Authority and at other specified places.
[1075C E] 4.(vi) Rule 33 speaks of publication of approved Outline Development Plan and Regulations in the Official Gazette suggestive of a requirement that the Outline Development Plan and Regulations should bodily be incorporated in the Official Gazette.
But if the entire scheme of the Act and the rule is considered as an integral whole it becomes obvious that what section 13(4) contemplates besides permanently displaying the Plan and the particulars in the offices of Director and Planning Authority and keeping available a copy for the inspection of the public at the office of Planning Authority, is a.public notice to the general public that the Plan and Regulations are permanently displayed and are available for inspection by the public.
Such public notice is required to be given by a publication in the Official Gazette.
This is how it was understood by the authority and everyone else concerned and this is how it was done in the present case.
This appears to be a reasonable and a rational interpretation of s.13(4) and Rule 33 in the setting and the scheme.
[1075D H] 4.(vii) Section 13(1) requires the provisional Outline Development Plan and particulars to be published by notifi cation in the Official Gazette with a view to invite com ments from the public.
What was published in the present case under s.13(1) was also a notice in Form No. II and not the whole of the Plan and particulars.
Such publication evoked considerable public response.
As many as 600 repre sentations from individuals and Institutions were received.
Therefore everyone concerned, i.e., the Government, the Director, the Planning Authority and the public, individual and institution alike, thought that publication of a notice in the Gazette inviting the attention of the public to the display and availability for inspection of the Plan and particulars was all that was contemplated by the provisions providing for publication.
There is no reason or justifica tion to adopt an interpretation which departs from common understanding of the Act and the Rules.
[1075H; 1076A C] Shalagram Jhajharia vs National Co. Ltd. & Ors., , Firestone Tyre & Rubber Co. vs Syn thetics & Chemicals Ltd. & Ors., ,Municipal Board, Pushkar vs State Transport Authority, Rajasthan & Ors., [1963] Suppl.
2 1060 S.C.R. 373 and Joint Chief Controller of Imports & Exports, Madras vs M/s. Aminchand Mutha etc.
; , , distinguished.
The effect of the non performance of a duty imposed by a statute in the manner prescribed by the statute is not discovered by a simple answer to the question whether the statute is mandatory or directory.
These are not simple chemical reactions.
The question whether a statutory re quirement is mandatory or directory cannot itself be an swered easily.
Many considerations must prevail and the object and the context are the most important.
[1077A B] Liverpool Borough vs Turner, ; , referred to.
6.(i) The High Court was of the view that such defect as there was in regard to publication of the Plan was cured by s.76J, the Omnibus Curative clause, called by this Court as the "Ganga" clause.
Provisions similar to s.76J are found in several modern Acts and their object is to put beyond chal lenge defects of constitution of statutory bodies and de fects of procedure which have not led to any substantial prejudice.
A defective publication which has otherwise served its purpose is not sufficient to render i1legal what is published and that such defect is cured by Section 76 J. [1077B D] Bangalore Woollen, Cotton & Silk Mills Co. Ltd. Banga lore vs Corporation of the City of Bangalore, and Municipal Board, 'Sitapur vs Prayag Narain Saigal & Firms Moosaram Bhagwandas, ; , followed.
6.(ii) In the present case, there certainly was an effort to bring the Plan and Regulations to the notice of the public by giving notice of the Plan in the Official Gazette.
Non publication of the Plan in the Official Gazette was, therefore, a curable defect capable of being cured by s.76J. [1077H; 1078A B] 7.
Failure of the appellants to plead want of publica tion or want of knowledge assumes importance.
In the answer to the Writ Petitions, the appellants took up the substan tial plea that they had complied with the requirements of the Outline Development Plan and the Regulations but not that they had no knowledge of any such requirement.
It can safely be said that the defect or irregularity did not effect the merits of the case.
[1078B] 8.
The Outline Development Plan and the Regulations are not 1061 distinct from each other.
The Regulations are born out of the Plan and the Plan thrives on the Regulations.
The Plan is the basis for the Regulations and the Regulations are what make the plan effective.
Without the Regulations, the Plan virtually becomes a dead letter.
The reference in the four clauses of s.13, where the word 'Plan ' or the 'Outline Development Plan ' is used, is to the core plan, without the particulars and the Regulations and not the whole of the Outline Development Plan which must include the Regulations.
What the different phraseology is meant to convey is to emphasise tile different parts of the Plan which have to be forwarded to the Government, considered by the Government, made available for inspection by the public, as the case may be and to the extent necessary.
Merely because the words "and Regulations" are added to the word 'Plan ', the Regula tions are not to be treated as not constituting part of the Plan even as when a building is sold along with the fix tures, it does not mean that the fixtures are not treated as part of the building.
[1078D G] 9.
Notwithstanding the Regulations some building li cences were granted in contravention of the Regulations but that only exposes the deplorable laxity of the concerned authorities and emphasises the need for greater public vigilance.
The present Writ Petitions are forerunners of such vigilance.
[1079C D]
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<s>[INST] Summarize the judgementivil Appeal No. 1135 of 1981.
From the Judgment and Order dated 15.12.1980 of the Allahabad High Court in Civil Writ Petition No. 1096 of 1974.
R.N. Trivedi, R. Ramachandran and Ms. Sadhna Ramachan dran (N.P.) for the Appellant.
Anil Deo Singh, Gopal Subramanium, Ms. section Dikshit, S.S. Hussain, S.A. Syed, R.S.M. Verma and Shakil Ahmed Syed for the Respondents.
The Judgment of the Court was delivered by KULDIP SINGH, J.
Karamat Husain Muslim Girls College, Luc know (hereinafter called the 'College ') is being managed by Anjuman Muslimat e Hind which is a society registered under the .
The avowed object of the society is to advance the cause of education among the women of India.
The College has been recognised by the State of Uttar Pradesh as a religious 701 minority institution within the meaning of Article 30(1) of the Constitution of India and is an affiliated associate of Lucknow University.
The post of lady Principal in the degree section of the college was advertised on April 5, 1974 indicating the following qualifications/ requirements: (1) First or good second class Masters Degree in any of the subject taught in the institution; (2) At least five years experience of teaching degree classes as also administrative experience; (3) Must possess working knowledge of Urdu; (4) Willing to reside in the college premises.
In response to the advertisement the appellant along with others applied for the post.
The appellant did not fulfil the qualification of five years experience.
She alone appeared for the interview and the Selection Committee relaxed the qualification of experience in her favour and selected her.
The Management thereafter sought the approval of the University to appoint the appellant as required under Section 31(11) of the Uttar Pradesh State Universities Act, 1973 (hereinafter called the 'Act ').
The University, howev er, declined to approve and directed the management to re advertise the post.
The appellant challenged the decision of the University by way of a writ petition under Article 226 of the Constitution of India before the Lucknow Bench of the Allahabad High Court on the ground that the college being a minority institution any interference by the University under the Act is violative of Article 30(1) of the Constitu tion.
It was also contended that there was no basis or justification to withhold the approval.
The High Court rejected the attack on the ground of Article 30 of the Constitution of India by holding that the provisions of the Act are regulatory and are primarily for the purpose of maintaining uniformity, efficiency and stand ards of education in the minority institutions.
On the merits the High Court held that the Selection Committee was not justified in relaxing the qualification without reserv ing that fight to itself in the advertisement.
The High Court also found that the qualification "possessing working knowledge of Urdu" was unjust On the above findings the writ petition was dismissed.
This 702 is how the appellant is before us via Article 136 of the Constitution of India.
The High Court has tightly held the relaxation granted by the Selection Committee to be arbitrary.
In the absence of statutory rules providing power of relaxation, the adver tisement must indicate that the Selection Committee/Appoint ing Authority has the power to relax the qualifications.
Regarding "Working knowledge of Urdu" we do not agree with the High Court that the said qualification is unjust.
The college being a Muslim minority institution prescribing the said qualification for the post of Principal, is in conform ity with the object of establishing the institution.
In the view which we are taking in this case it is not necessary to go into the argument based on Article 30(1) of the Constitution of India.
We heard the arguments in this case on February 23, 1990 and adjourned the case with the following order: "It is admitted by the parties that as a result of the Court orders the appellant Ms. Shainda Hasan is continuing to work as Principal in the Karamat Husain Muslim Girls College, Lucknow since 1974.
Having served the institution for over 16 years it would be unjust to make her leave the post.
Under the circumstances let the University reconsider the whole matter sympathetically.
" The case was taken up in Chambers on April 20, 1990 when Mrs. Shobha Dixit learned counsel for the State after ob taining instructions from the University agreed with us that asking the appellant to leave the job after sixteen years would be doing injustice to her.
Keeping in view the facts and circumstances of the case and in the interest of justice we direct the Lucknow Univer sity and its Vice Chancellor to grant the necessary approval to the appointment of the appellant as Principal of Karamat Husain MusIim Girls College, Lucknow, with effect from the date she is holding the said post.
We further direct that the appellant shall be entitled to the salary,allowances and all other consequential benefits to which a regular princi pal of the said college would have been and is entitled.
We dispose of the appeal with the above directions.
There shall be no order as to costs.
T.N.A. Appeal dis missed.
[/INST]The respondent college, a religions minority institu tion, invited application for the post of Principal from candidates possessing First or Second class Master 's Degree, five years teaching experience and possession of working knowledge of Urdu.
The Selection Committee selected the appellant by relaxing the qualification of experience in her favour but the University declined its approval to the appointment under Section 31(11) of the Uttar Pradesh State Universities Act, 1973 and directed the Management Committee to readvertise the post.
The appellant challenged the University 's decision before the High Court contending that the college being a minority institution any interference by the University under the Act was violative of Article 30(1) of the Consti tution and that there was no justification to withhold the approval.
The High Court rejected the attack on the ground of Article 30 by holding that the provisions of the Act were regulatory but held that the Selection Committee was not justified in relaxing the qualification and that the quali fication 'possessing working knowledge of Urdu ' was unjust.
Hence this appeal by special leave.
700 Dismissing the appeal, this Court, HELD: 1.
In the absence of statutory rules providing power of relaxation, the advertisement must indicate that the Selection Committee/Appointing Authority has the power to relax the qualifications.
The High Court has rightly held the relaxation granted by the Selection Committee to be arbitrary.
[702B] 2.
The college being a Muslim minority institution, the prescribing of the qualification of possession working knowledge of Urdu for the post of Principal, is in.
conform ity with the object of establishing the institution.
The said qualification is not unjust.
[702B] [In the interest of justice and in view of the facts and circumstances of the case, the Lucknow University and its Vice Chancellor are directed to grant the necessary approval to the appointment of the appellant to the post of Principal of College, which the appellant is holding as a result of the Court orders, with effect from the date she is holding the said post, and the appellant shah be entitled to salary, allowances and all other consequential benefits to which a regular Principal of the said college would have been enti tled.] [702G]
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<s>[INST] Summarize the judgementl Appeals Nos.
1549 to 1552 of 1968.
Appeals from the judgment and order dated September 28, 1964 of the Calcutta High Court in Income tax Reference No. 18 1961.
Sukumar Mitra, section K. Aiyar, R. H. Dhebar, R. N. Sachthey and B. D. Sharma, for the appellant (in all the appeals).
806 M. C. Chagla, T. A. Ramachandran and D. N. Gupta, for the respondent (in all the appeals).
The Judgment of the Court was delivered by Ramaswami, J.
These appeals are brought by certificate from the judgment of the Calcutta High Court dated 28th September, 1964 in Income Tax Reference No. 18 of 1961.
The respondent (hereinafter called the assessee) is a private limited company incorporated in India and is a subsidiary of the Imperial Chemical Industries, London, which holds the entire share capital of the assessee.
The business of the assessee consists mainly of acting as selling agents in India for a large variety of goods such as chemicals, dyes, explosives etc.
, manufactured or purchased by its London principals and sold in India.
The Imperial Chemical Industries (Export) Glasgow [hereinafter referred to as the I.C.I. (Export) Ltd.] is another subsidiary of I.C.I. London which holds the entire share capital of I.C.I. (Export) Ltd. The I.C.I. (Export) Ltd. had appointed as their selling agents in India four companies, viz., (1) Gillanders Arbuthnot & Co. Ltd., Calcutta, (2) Best & Co. Ltd., Madras, (3) Anglo Thai Co. Ltd. Bombay and (4) Shaw Wallace & Co. Ltd. With effect from 1st April, 1948, the I.C.I. (Export) Ltd. terminated the services of the aforesaid selling agents and appointed the assessee as its sole selling agent.
The I.C.I. (Export) Ltd. had agreed to pay to the former selling agents compensation at the rate of two fifth, two fifth and one and two fifths of the commission earned by the assessee for the three years from 1st April, 1948.
The compensation was paid to the four companies through the accounts of the assessee.
For this purpose the modus operandi adopted was as follows : The compensation payable to the former agents was spread over a period of three years and on the assumption that the turnover was constant, the compensation payable to the selling agents was on an average, an amount equal to the 11/15th of the commission earned by the assessee at the normal rates.
In order to arrive at the amount of commission to be credited to the assessee 's profit and loss account each year the assessee in the first place credited the commission account and debited the I.C.I. (Export) Ltd. account with the full amount of compensation earned by it at normal rates on sales effected during the year.
Next, the assessee transferred from the commission account to a special reserve account called the 'Explosives Ex Agents Compensation Reserve Account ', the proportion payable to the ex agents as compensation, namely, 11/15th (2/5+2/5+7/5= 11/5 X 1/3 = 11/15) (leaving 4/15th towards commission account) so that funds might be accumulated for payment to the four companies from time to time.
807 The year of account of the assessee is from 1st October to 30th September every year.
As a result of the above method of accounting, the following figures appeared in the assessee 's books of accounts Gross Transfer toNet Commission Reserve forCommission compensa tion Rs. Rs. Rs. 1st April 1948 to 30th September 1948 2,91,396 2,03,503 87,893 Year ending 30th September 1949 7,67,294 5,41,526 2,25,768 Year ending 30th september 1950 7,52,204 5,29,284 2,22,920 year ending 30 th september 1951 10,20,922 4,00,052 6,20,870 TOTAL 28,31,816 16,74,365 11,57,451 For the assessment years 1949 50, 1950 51, 1951 52 and 1952 53 the assessee showed the net amounts of commission earned on the selling agencies by the I.C.I. (Export) Ltd. adding a foot note that the amounts were arrived at after deducting the amount of compensation payable to the out going agents.
By his order dated 28th January, 1957 for the assessment year 1951 52 the Income Tax Officer held that the deductions were not permissible.
In an appeal preferred by the.
assessee the Appellate Assistant Commissioner confirmed the assessment by his order dated 25th November, 1957.
The assessee took the matter in further appeal to the Appellate Tribunal which dismissed the appeal.
The Appellate Tribunal held that there was no justification for the absence of a written agreement between the I.C.I. (Export) Ltd. and the assessee when the former selling agencies were terminated and the assessee was appointed as the sole selling agent.
It was observed that the assessee was not collecting any commission on behalf of the outgoing agents and it was not their legal obligation to pay compensation to the out going agents.
If the assessee was not entitled to more than 3/5th of commission during the first two years, it should have credited that amount whereas the assessee had actually credited four fifteenth on a notional basis which was not in consonance with the arrangement.
The conclusion reached by the Appellate Tribunal was that "there was no agreement between the assessee and the I.C.I. (Export) Ltd. and if there was one it was not acted upon".
It was held by the Appellate Tribunal that the payment of compensation was not because of an overriding title created either by the act of the parties or by operation of law.
At the instance of the assessee the following question of law was referred to the High Court under section 66(1) of the Income Tax Act, 1922 (hereinafter called the Act): 808 "Whether the inclusion by the Income Tax officer.
of Rs. 2,03,503, Rs. 5,411,526, Rs. 5,29,284 and 4,00,052 in the assessment for the years 1949 50, 1950 51, 1951 52 and 1952 53, for relevant accounting years ending the 30th Sept. 1948, 1949, 1950 and 1951 respectively in the computation of the total income of the assessee is justified and correct ?" The High Court answered the question in the negative in favour of the assessee holding that the inclusion of the amount of compensation in the total income of the assessee for the relevant assessment years was not justified.
On behalf of the appellant it was contended that the High Court had no legal Justification for interfering with the finding of the Appellate Tribunal that there was no proof of the agreement between the assessee and the I.C.I. (Export) Ltd. with regard to the quantum of commission to be paid to the assessee for the period between 1st April, 1948 and 31st March, 1951.
On this point reference was made by Mr. Chagla to (a) the letter dated 11th March, 1947 from the I.C.I. (Export) Ltd. to M/s. Gillanders Arbuthnot & Co., (b) the affidavits of Mr. W. A.Bell and Mr. J. W. Donaldson and (c) the letter dated 3rd January, 1958 of M/s. Lovelocke and Lewes, Chartered Accountants, Calcutta.
It was argued that these documents established that there was an agreement between the I.C I. (Export) Ltd. and the assessee, that for the period 1st April 1948 to 31st March, 1951 the assessee was entitled to receive as its commission only the amounts representing the, difference between the normal rates of commission and the compensation payable to the former agents during that period.
The Appellate Tribunal had considered all these documents and reached the conclusion that there was no agreement between the I.C.I. (Export) Ltd. and the assessee and 'if there was one it was not acted upon '.
The Appellate Tribunal remarked that the letter dated 11th March, 1947 from the I.C.I. (Export) Ltd. set forth only the terms and conditions subject to which the selling agencies of the out going agents were terminated.
It was silent on the crucial question of commission to be paid to the assessee during the three years from the date of its appointment as sole selling agent.
The affidavits of Mr. Bell and Mr. Donaldson were produced for the first time before the Appellate Assistant Commissioner.
The affidavits were made many years 'after the crucial date of the appointment of the assesee as the sole selling agent of the I.C.I. (Export) Ltd. The affidavits did not mention the amount of commission to be paid to the out going agents and the affidavits were also not consistent with the entries in the books of accounts of the assessee.
The letter of M/s Lovelocke and Lewes was produced at a very late stage during the hearing of the appeal before the Tribunal and even, otherwise the 809 letter merely explains the method of accounting adopted by the assessee and did not carry the matter any further in the circumstances, the Appellate Tribunal held that there was no agreement between the assessee and the I.C.I. (Export) Ltd. and if there was any such agreement it was not acted upon.
It is manifest that the finding of the Appellate Tribunal on this question is a finding on question of fact and the High Court was not entitled to interfere with this finding.
It is well established that the High Court is not a Court of Appeal in a reference under section 66(1) of the Act and it is not open to the High Court in such a reference to embark upon a reappraisal of the evidence and to arrive at findings of fact contrary to those of the Appellate Tribunal.
It is the, duty of the High Court while hearing the reference to confine itself to the facts as found by the Appellate Tribunal and to answer the question of law in the context of those facts.
It is true that the finding of fact will be defective in law if there is no evidence, to support it or if the finding is perverse.
But in the hearing of a reference under section 66(1) of the Act it is not open to the assessee to challenge such a finding of fact unless he has, applied for the reference of the specific question under s.66(1).
In India Cements Ltd. vs Commissioner of Income Tax( ') it was held by this Court that in a reference the High Court must accept the findings of fact reached by the Appellate Tribunal and it is for the party who applied for a reference to challenge those findings of fact, first, by an application under section 66(1).
If the party concerned has failed to file an application under section 66(1) expressly raising the question about the validity of the finding of fact, he is not entitled to urge before the High Court that the finding is vitiated for any reason.
The same view has been expressed by this Court in Commissioner of Income Tax vs Sri Meenakshi Mills Ltd.(2) and Commissioner of Income Tax, Bombay City I vs Greaves Cotton & Co. Ltd.(3).In the present case the assessee has in his application under s.66(1) expressly raised the question about the validity of the finding of the Appellate Tribunal as regards the agreement but the question was not referred by the Appellate Tribunal to the High Court and the contention of the assessee with regard to the question must be deemed to have been rejected.
The assessee did not thereafter move the High Court under section 66(2) of the Act requiring it to call for a statement of the case on that specific question.
We are therefore of opinion that the High Court was in error in embarking upon a reappraisal of the evidence before the Appellate Tribunal and setting aside the finding of the Appellate Tribunal that "there was no agreement as alleged in the affidavits of Mr. W. A. Bell and Mr. J. W. Donaldson and "if there was such an agreement it was not acted upon".
(1) (2) (3) 810 It was argued by Mr. Chagla that even if the agreement was not established,, the amount, Paid by the assessee as compensation to the ex agents was an expenditure laid out wholly and exclusively for the purpose of the business such is allowable under s.10(2) (xv) of the Act.
The contrary view point was urged on behalf of the appellant,.
It was pointed out that the assessee was acting as the agent of the I.C.I. (Export) Ltd. for the payment of compensation of the ex agents and the payment was made not in the character of a trader but in the character of the agent of its Principal.
The contention of the appellant was that the assessee got the right to sell goods after 1st April 1948 and for getting that right the assessee parted with a portion of its commission for the first two years after 1st April 1948 and paid very much more than the commission earned in the third year.
This position was borne out by the accounts of the respondent which show that the assessee received the commission at full rates and out of it created a reserve account of which these compensations were made to the ex agents.
We have already referred to the finding of the Appellate Tribunal that no agreement between the assessee and the I.C.I. (Export) Ltd. has been proved.
In the absence of proof of the exact terms and conditions of the 'agreement it is not possible to accept the argument of the assessee that the amount paid as compensation to the ex agents was an "expenditure laid out wholly and exclusively for the purpose of the business" under section 10(2) (xv) of the Act.
It was finaly contended on behalf of the respondent that by virtue of an overriding title the income was diverted before it reached the assessee, and so, the amount of compensation paid to the ex agents did not form part of the income of the assessee.
In other words, the contention was that the compensation payable to the ex agents was diverted from the income of the assessee by ,an overriding title arising under the agreement between the assessee and the I.C.I. (Export) Ltd. The argument was stressed that the commission payable as compensation to the ex agents did not form part of the income of the assessee.
We are unable to accept this argument as correct.
We have already pointed out that the finding of the Appellate Tribunal is that the precise terms of the agreement between the assessee and the I.C.I EXPORT Ltd. have not been established.
In any event, even on basis of the affidavits of Mr. Bell and Mr. Donaldson the payment of compensation to the " agents was apparently made by the assessee for and on behalf of the I.C.I. (Export) Ltd. The assessee 's documents suggest that the payment of compensation was the exclusive liability of the I.C.I. (Export) Ltd. and the assessee was not under a legal obligation to pay the amount of compensation to the out .going agents.
It is not established that the payment of compensation ,was by an overriding title ,created either by the act of the parties 811 or by the operation of law.
An obligation to apply the income in a particular way before it is received by the assessee or before it has accrued or arisen to the assesses results in the diversion of income.
An obligation to apply income accrued, arisen or received amounts merely to the apportionment of income and the income so applied is not deductible.
The true test for the application of the rule of diversion of income by an overriding title is whether the amount sought to be deducted 'in truth never reached the assessee as his income.
The leading case on the subject is Raja Bejoy Singh Dudhuria vs Commissioner of Income Tax(1) where the step mother of the Raja had brought a suit for maintenance and a compromise decree was passed in which the step mother was to be paid Rs. 1,100 per month, which amount was declared a charge upon the properties in the hands of the Raja by the Court.
The Raja sought to,deduct this amount from his assessable income, which was disallowed by the High Court at Calcutta.
On appeal to the Judicial Committee Lord Macmillan observed as follows "But their Lordships do not agree with the learned Chief Justice in his rejection of the view that the sums paid by the appellant to his step mother were not 'income ' of the appellant at all.
This in their Lordships ' opinion is the true view of the matter.
When the Act by section 3 subjects to charge 'all income ' of the individual, it is what reaches the individual as income which it is intended to charge.
In the present case the decree of the court by charging the appellant 's whole resources with a specific payment to his step mother has to that extent diverted his income from him and has directed it to his step mother; to that extent what he receives for her is not his income.
It is not a case of the application by the appellant of part of his income in a particular way, it is rather the allocation of a sum out of his revenue before it becomes income in his hands".
Another case of the Judicial Committee is reported in P. C. Mullick vs Commisisoner of Income Tax(2), where, a testator appointed the appellants as executors and directed them to pay Rs. 1,00,000 out of the income on the occasion of his addya sradh.
The executors paid Rs. 5,537 for such expenses, and sought to deduct the amount from the assessable income.
The Judicial Committee confirmed the decision of the Calcutta High Court disallowing the deduction and observed that the payments were made out of the income of the estate coming to the hands of the executors and in pursuance of an obligation imposed upon them by the testator.
The Judicial Committee observed that it was not a case in which (1) (2) 812 a portion of the income had been diverted by an overriding title from the person who would have received it otherwise and distinguished Bejoy Singh Dudhuria 's case(1).
In Commissioner of Income Tax Bombay City II vs Sitaldas Tirathdas(2), Hidayatullah, J., speaking for the Court observed as follows "There is a difference between an amount which a person is obliged to apply out of his income and an amount which by the nature of the obligation cannot be said to be a part of the income of the assessee.
Where by the obligation income is diverted before it reaches the assessee, if is deductible; but where the income is required to 'be applied to discharge an obligation after such income reaches the assessee, the same consequence, in law, does not follow.
It is the first kind of payment which can truly be excused and not the second.
The second payment is merely an obligation to pay another a portion of one 's income, which has been received and is since applied.
The first is a case in which the income never reaches the assessee, who even if he were to collect it, does so, not as part of his income, but for and on behalf of the person to whom it is payable".
In view of the principle laid down in these authorities we are of ,opinion that the payment of compensation by the assessee to the ex agents was not by an overriding title created either by act of the parties or by operation of law.
We accordingly reject the argument of Mr. Chagla on this aspect of the case.
For the reasons expressed we hold that the judgment of the Calcutta High Court dated 28th September, 1964 should be set aside and the question referred by the Appellate Tribunal should be answered in the affirmative and against the assessee.
The appeals are accordingly allowed with costs.
One hearing fee.
G.C. Appeals allowed.
[/INST]The respondent landlord let out to the appellant four shops and later one let out to him two more shops.
The respondent filed a suit alleging that subsequent to the letting of the shops, by a contract, the rent was consolidated and increased and that the shops were sub let by the appellant, so the appellant be ejected from all the six shops under section 13 (1) (e) of the Rajasthan Premises (Control of Rent and Eviction) Act.
The appellant denied the contract and denied the subletting altogether.
The trial court dismissed the suit, and the first appellate court affirmed the decree.
Both these courts concurrently found that new contract of tenancy was not created, it was only an increase of rent, the other terms of the tenancy remained unaltered, and that the two shops were sub let but with the permission of the landlord.
The High Court, in second appeal, reversed the decree of the courts below, and held that there was one integrated tenancy of all the shops, that the four shops were sub let with the permission of the landlord, but the later two were sub let without permission, and that having sub let a part of the premises without the permission, the decree for possession of all the shops must be passed.
appeal to this Court, the appellant tenant contended that (i) the tenancy of all the six shops were not one integrated; (ii) two shops were not sublet without the permission of the landlord; and (iii) the sub letting was before the Jaipur Rent Control Order, 1947 came into force, which was repealed and continued by the promulgation of the Rajasthan Premises (Control of Rent & Eviction) Act, 1950, and therefore ejectment could not be claimed under section 13(1) (e) of the Act.
HELD : The appellant could not be ejected from four shops, but ought to be ejected from the two shops.
(i) A mere increase or reduction of rent does not necessarily import the surrender of the existing lease and the grant of a new tenancy.
In the present case the first two courts on a review of the entire evidence came to the conclusion that the increase of rent did not import a new demise.
This finding of fact was binding on the High Court in second appeal and it erred in holding that there was one integrated tenancy of the six shops.
[991 H 992 B] (ii) In the absence of any pleading and any issue on the question of sub letting, the first two courts were in error in holding that the two shops were sub let with the permission of the landlord.
The permission of the landlord for the sub letting cannot be established from the mere fact that the landlord realised rent after the sub letting in the absence of proof that the landlord had then clear knowledge of the sub lease.
[992 D] The date of the sub letting of the two shops is not mentioned in the plaint.
In the absence of any pleading and any issue on this question the 990 High Court was error in recording the finding that the two shops were sub let towards the end of 1947 after the Jaipur Rent Control Order 1947 came into force.
It can only be said that the sub letting was sometime after 1945.
[992 E] (iii) Section 13(1)(e) of the Act was intended to apply to sub letting before the Act came into force.
If the tenant had sub let the premises without the permission of the landlord either before or after the coming into force of the 'Act, he was not protected from eviction under section 13(1) (e), and it matters not that he had the right to sub let the premises under section 108(j) of the Transfer of Property Act.
The present perfect tense, by words "has sub let" in section 13(1)(e) of the Act contemplates a completed event connected in some way with the present time.
The words take within their sweep any sub letting which was made in the part and has continued up to the present time.
It did not matter that the subletting was either before or after the Act came into force.
Further sections 26 and 27(1) of the Act contemplated that grounds of eviction mentioned in section 13 may have arisen before the Act came into force.
[993 D 994 A]
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